A child’s-eye view of the impending collapse of the U.S. economy

If you’re like me you’re probably not too familiar with the details of the U.S. sub-prime lending fiasco. All the news coverage has made you aware of the broad strokes, of course, namely that American banks (in a fit of exceptional short-sightedness and stupidity) approved loans to people who couldn’t actually pay them. But did you actually know about how the banks sold off those loans, which were then split up and sold off and split up and sold off some more, such that many more times the original value of the loan was resting on the ability of the loan’s recipient to pony up and pay it off? And now I will abandon the second person since it’s fairly obvious I only bothered to scan the headlines and thought the underlying details were too complicated. Well, the Asia Sentinel has got my back with an explanation addressed to a hypothetically interested child. Titled “It’s All Gumdrops,” it uses the sale of a gumdrop to a sticky-fingered kid to illustrate how exactly the whole thing works. The short answer is that it’s another iteration of the age-old pyramid scheme; the long answer is – well, read the dang article.