A pretty amazing reshaping of the landscape of Wall Street occurred during the weekend. Major finance bank Merrill Lynch was forced to sell itself for a cool $50 billion and another, Lehman Brothers, filed for bankruptcy. Both have lost huge amounts of money from bad debts. They lent money to people who never had the means to pay it back.
This American Life has a great non-technical and entertaining podcast on how they (and we) got in this situation and why the banks did what they did.
A special program about the housing crisis produced in a special collaboration with NPR News. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money.
It is an hour long and well worth listening to if you want to have a better understanding of the "credit crunch".