A Visual Guide to the Financial Crisis

Posted on 11. Dec, 2008 by Jess in charts and graphs, economics, government

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You may have seen this around. It’s some client work I did for mint.com, originally posted here. This financial crisis is quite difficult to pin down because there are many factors involved, chain reactions, and negligence abound. So I created this primer to help people get their heads around it. It is a loose flow chart and fairly simple. Each item could have been split into many sub-items but I didn’t want to lose people along the way.

P.S. The last chance to get a free Death and Taxes poster by Christmas coming up. See here for details. Support your local make-cool-things-with-data guy. Thanks!

Tags: bailout, client work, economy, flow chart

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16 Comments

Udo, December 15, 2008:

Great illustrations about the financial crisis. Would be great to have this as a slide show to be used in college.
Udo, December 15, 2008:

And I wanted to add that this is superbly explained in ‘The Giant Pool of Money’ with Ira Glass from NPR.
Check this out and listen. I listened and read the transcript to grasp the biggest fraud in history.
http://www.thislife.org/Radio_Episode.aspx?sched=1242
The budget deficit will pale compared to this giant rip-off.
Nat, December 15, 2008:

Great graphic, as always! As a nitpicky issue, “overcapitalization” is misspelled towards the end of the first section.
Robanne Harrison, January 4, 2009:

When will the Visual Guides to the Financial Crisis be available in poster or powerpoint formats. I teach economics and I could sure use them in class this semester!!
Phil Cantor, January 6, 2009:

Great work.

Now, if you could just do a graphic that shows all the steps required to get the economy on track toward real sustainability and send it to the Obama team.
Gerald Littlejohn, January 16, 2009:

So who is going to Jail for the fraudulent creation of CDO and the AAA BBB ratings applied to them. The regulators or the creators or the sellers. Indeed are the buyers (guys running my bank and pension funds) standing up for blame in terms of mismangement and failure of duty?
Yale, January 16, 2009:

Very nice … ditto to comment from GL. The actions of the rating agencies and their impact do not get enough attention. How did the the banks “secure … ratings” that resulted in the perception of “safe” investments?
Uskas, January 18, 2009:

Great illustrations about the past / current financial crisis. Would be great to have the next step… What will come next ?
Francois Gregory, January 21, 2009:

It’s time for white-collar crimes of this magnitude to be punishable in a manner up to or including the death penalty(if you believe in it). I’m serious. The level of destruction doesn’t compare to a murder in a bank heist or a train derailment.
albert, February 26, 2009:

very nice! is it possible to embed this in my website. if so, please provide me the code

thanks
kengpdx, March 1, 2009:

thanks….nice work!
Peter Z, March 2, 2009:

Very nice. Yeah - those AAA ratings are one of many problems. Made the risk of default look too low. Well it would have been okay if AIG actually priced it’s backing of the debt correctly AND also kept money to pay in the event of default - like most insurance companies have to do.
Crysis, March 5, 2009:

Funny thing. I saw this exact same explanation in video format in YouTube.com a few days ago. I guess the video owner constructed it through the steps in this illustration. Anyway, very nice explained.
Alec Epting, March 8, 2009:

Great visuals. You need to include several other things: 1) presidential pressure for Fannie Mae and Freddie Mac to loosen lending requirements as a way to broaden home ownership; 2) FASB 157 mark-to-market accounting which greatly undervalues CDO’s; 3) repeal of Glass-Steagall Act which had prevented banks from engaging in investment banking; 4) SEC lifting leverage restrictions on investment banking
sami, April 5, 2009:

Good work and explanation…. It’s amazing how people blind themselves and try to keep their dreams alive even when all of the evidences say the contrary.
Eugene, May 11, 2009:

A great piece of work….thank you!