The Credit Crisis Story: An educational, witty, and lighthearted visualization

[ View Part II of The Credit Crisis Story. ]

Everywhere I speak, I ask for people in the audience to raise their hands if they understand the esoteric reasons behind the current economic crisis.  I almost always get about one or two bold people to raise their hands no matter how large the crowd may be.  I imagine that even the few who raised their hands are not so sure and cannot explain the crisis in simple words because their hands go up with much timidity.  I suppose they are scared that I may ask them to explain it to the group.  Understanding this economic quagmire is one thing; explaining it is another. 

I mention this peculiarity because my audience always finds it very helpful to receive a good explanation of the underlying circumstances that caused the economic crisis.  I would guess that around 95% of Americans have no idea what the technical roots and causes of this mess are!  After every time I explain the crisis, I look out into the audience and see huge smiles and hear epiphanic moans.  Likewise, I often hear comments like, “Wow! I am going to share this with my Dad!” or “Now I get it!”  My explanation provides understanding, perspective, and a much better context for my presentation and the discussion of credit.

The coolest tool I have used sometimes in explaining the crisis is a video available on YouTube.  Jonathan Jarvis, a graduate student in Pasadena, California, created a short and simple story of the credit crisis using visual media.  The almost twelve-minute story is succinct, humorous, and easy-to-understand.  It goes over well with everyone, except for the few economic gurus who say it is oversimplified.  Sometimes they fail to acknowledge that in order to explain complex terms like CDOs (Collateralized Debt Obligations) and Credit Default Swaps, you have to start with simpler concepts and visualizations. 

Anyway, I have posted Jonathan’s story in its entirety (two separate parts on YouTube) at the request of some college students at my presentation today so they can view it and pass it along.  Now you can view it as well. Take a look and tell me what you think of it.    

Comments

[Carole May]

I agree with Sharon. However, my experience with Chase was not like hers. The woman I spoke was rude and obnoxious. Because of this, I closed my savings and checking accounts at WaMu (now owned by Chase) and moved my money to a credit union where I am treated the way a person should be treated.

I've also noticed that on the financial shows on TV, they are no longer telling people to call their credit card companies to negotiate. Rather, they are telling people to just pay the minimum and bank their money. Of course, the only problem with that is that you will never get these cards paid off.

[Sharon Barlow]

Prior to a few months ago, I was just plugging along paying down my credit card balances, and believing that every was just fine. Then Chase changed the amount I had to pay each month from 2% of the balance to 5%. That's about the time I heard about New Credit Rules in a GMA article online. I now realize that the whole credit industry has shifted its paradigm.

My husband and I watched the video--which is excellent, by the way--and what I get from it is that banks loaned money they really didn't have and now they are groping in the dark to get some revenue. In my opinion, they are ruining the economy a second time by their poor business practices. Who wants to go out and "stimulate the economy" when you don't know what the credit card company is going to demand next? Or what they are going to do next. Sometimes their practices are just downright mean. (In all fairness, every time I've talked to a Chase employee he or she has been very courteous.They don't always get it right, but at least they are nice about it!)

Even after looking at this stuff for about three months I don't know everything but I also realize that if people haven't educated themselves at all, they are making a big mistake. I pity the poor person who calls the CC company and tries to renegotiate their interest rate. They may as well put their head on the chopping block. And there is still plenty of people giving that very advice.Everything you talk about helps me put things in a better perspective and influences what I do.

Thank you, Kevin, for all of your valiant efforts. I truly think you are making a big difference.You are still my hero.

[Daniel]

Hey Kevin,

Very good video...I wanted to learn about this stuff, and now I know a little more. Keep up the good work sir!