Science Go Me!
posted by April 23 at 16:42 PMon
I also have a new column up in this week’s paper, explaining the financial crisis through junk food.
Many modern financial investments—whose number and amount of money invested within increased dramatically after the depression-era financial controls were dismantled in the 1990s—are more like processed foods than produce. Investors just figured this out. And they’ve started to get nervous about where their cash has gone.
Take the mortgage-backed securities at the center of this crisis—in which thousands of mortgages were blended together, sliced into pieces, and then sold to millions of investors. Compared to the traditional mortgage lent out by a single bank to a single investor, these are the pizza-flavored low-fat Pringles to a baked potato.