If you read nothing else, read this account of what is happening in the markets. If only television news and other news commentators could be so lucid as this blog entry is.

As an economist, I am supposed to have something intelligent to say about the current financial crisis. To be honest, however, I haven’t got the foggiest idea what this all means. So I did what I always do when something related to banking arises: I knocked on the doors of my colleagues Doug Diamond and Anil Kashyap, and asked them for the answers. What they told me was so interesting and insightful that I begged them to write their explanations down for a broader audience. They were kind enough to take the time to do so. In what follows, they discuss what has happened in the financial sector in the last few days, why it happened, and what it means for everyday people.

[From Diamond and Kashyap on the Recent Financial Upheavals - Freakonomics - Opinion - New York Times Blog]