Financial Meltdown

Shit is certainly hitting fan right now in the United States. It's important to note, however, that it is not only within our borders that the financial problems are booming. European banks are also failing and Asian markets are struggling as their primary markets (the West) take a nosedive.

What is occurring is truly fascinating. The problems are so complicated that most of the population does not understand a problem that may cause total financial crisis. Shoot, even some of the most brilliant minds disagree on the cause and certainly disagree with the best solutions. Though I have read much about what is going on, my understanding still remains fairly rudimentary. At its core--if you want the nickel version--the financial markets are locking up because there is no cash for loans. Much of what makes our financial system go around is that banks are able to hand out credit left and right. Now, however, there is no money to dish out. Credit is nearly unavailable and our financial system has started locking up: available credit is to the financial system as motor oil is to an engine.

So here we are with a financial crisis that nearly no lay person understands yet those very people will be affected, some with devastating results. With the government's solution locked up in Congress we can only sit on our hands. Enjoy the wait.

UPDATE: For those wondering, the reason, it seems, that banks are not willing to extend credit is because they don't trust that other banks will be able to repay the loan. Why? Because no one knows which banks own how much in bad bad bad bundled mortgages (We've all heard about falling home prices and foreclosers, right?). The essence of the bailout plan, I believe, is for the government to buy up all those bad mortgages from banks that are drowning in them so as bring everyone afloat with credibility. Capiche?