Brushing up on the economy

I'm busy today, but I thought you shouldn't miss this opportunity to get some easy to digest info on the economy. So here I go, just reprinting a post from Salon's War Room blog:

The Fed and commercial paper funds

I’m not an economist and have no background in finance. I therefore may be having just as much, if not more trouble, than you comprehending all the finance-related angles of the proposed bailout.

For example, if news that the Federal Reserve is about to take control of the Commercial Paper Fund Facility makes you scratch your head wondering, “what the hell are commercial paper funds?”, you certainly should read our own Andrew Leonard who explains how this part of the financial world works.

But in addition there’s also a great, unofficial Finance-for-Dummies radio program with which, I suspect, many Salon readers are already all too familiar: "This American Life." (Confession: I’m addicted to the show.)

This week’s episode, “Another Frightening Show About the Economy,” explains why the collapse of the mortgage-backed securities market has since been exacerbated by the collapse of the commercial paper fund market.

Actually, if you are not entirely certain why the mortgage-backed securities market crisis collapsed in the first place -- and no, it’s not just that people took out home loans they couldn’t afford to pay, though that’s certainly a big part of it -- before listening to the latest TAL episode you may want to check out the equally fascinating, “Global Pool of Money” episode.

― Thomas Schaller