The Credit Crisis and the Bailout in Plain English

via kuro5hin.org on 10/16/08

This is an explanation of economics. There's no way to avoid some boring details and glazed eyes when talking about such things. However, I promise to avoid some of the jargon which will send you running to wikipedia, if you in turn forgive me for some oversimplification. The purpose of this article is to explain specific jargon. It will explain the role of FNMA (Fannie Mae) and FHLMC (Freddie Mac), mortgage-backed securities, Credit Default Swaps (CDS), Collateralized Debt Obligations (CDO), mark to market, prime, subprime, a run, the Community Reinvestment Act, and liquidity in the current situation. These terms will be introduced as gently as possible. There's a lot of ground to cover, but what follows is a resource which will help you to understand these frequently used buzz words.

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