The Crisis Of Credit

A brilliant visual explanation so simple everyone can understand.
1 min

This one’s been around for a while, but after a discussion with a colleague a few weeks ago it got me thinking about the crisis again and I returned to this video just for interest’s sake.

I think what makes this so amazing is it strips finance of its pretension and complexity. This is one of my personal passions; when people can break exceptionally complex topics into their basic principles and “find clever solutions to complex problems”. The video explains this complex problem in such a way that anyone can understand it, and in itself makes a few important points clear and transparent for all:

The madness of the credit bubble cannot be blamed on just one or two people; it was an entire system that was at fault, interlinked through financial flows (or, in the case of his art, stick figures, boxes, and arrows).

Secondly, when the aura of mystery is stripped away from this system of financial flows it is clear just how unsustainable the entire pattern had become; the comic nature of the patterns shows us that a collapse was inevitable.

In retrospect, the only thing that is more striking than the scale of last decade’s credit bubble is the fact that the madness went on so long–unnoticed. Or to put it another way, if more people such as Jarvis had produced videos like this a decade ago, with chirpy green screens and laughable stick-figure bankers, the public might never have turned such a blind eye to finance–and let the bubble swell to such a monstrous size.