Wednesday, April 21, 2010

Merle Hazard Explains the Financial Crisis



The WaPo is running a primer on financial derivatives today, hoping to educate the public on the complicated matters that lie at the heart of the civil suit against Goldman Sachs for securities fraud. An informed public needs a working knowledge of collateralized debt obligations, credit-default swaps, and such, in order to follow that news story.

But forget it! You'll learn less from that dry and boring - not to mention rudimentary - primer than you can learn from my favorite country singer, Merle Hazard. Merle is the only country singer to write songs about mortgage-backed securities, and his first big hit, H-E-D-G-E, will teach you about everything in that WaPo article plus more. Seriously.

Merle's website has lots more good music and financial infotainment. In particular, check his extras page for a link to an academic presentation that breaks down the lyrics of H-E-D-G-E and explains them in a less poetic but still succinct style.



Here's Merle's follow-up to H-E-D-G-E, which is about what happened to over-leveraged bond traders after their CDOs got marked down to market. And if you aren't sure what the terms 'over-leveraged' and 'CDO' and 'marked down to market' mean, then you are Merle's target audience.

5 comments:

A Daring Adventure said...

I saw this book review and thought of you:

http://changesandcolours.blogspot.com/2010/04/small-world.html

The last paragraph really cinched it for me. If the book references all those things (Shakespeare?) then I figured it might be up your alley!

TSB said...

I see it has "melodrama, suspense, elements of a fair tale, adventure, exalted emotions, sexual liaisons and philosophical discussions on the nature of text and literature in general."

WOW. All stuff that I like.

Thanks!

A Daring Adventure said...

Oh, dear.

Umm... maybe didn't do my homework on that one. Just saw "Shakespeare" and thought of you. Maybe... wasn't thinking too deeply about it and... didn't look too closely.

Whoops.

In other news, Blogger's word for the day that I have to type in is "mermolo." And a "mermolo" would be - - ?

TSB said...

No, that really is stuff that I like. An academic satire sounds good. A favorite novel of mine is Lucky Jim, which is set among English academics.

I'm drawing a blank on "mermolo." The "mer" part could refer to the sea, but I get any meaning out of "molo" or "olo."

A Daring Adventure said...

Yeah. The closest I got to "olo" was "Rolo," as in the small caramel chocolate candy things. Put that with MER and we gots ourselves issues.

Now I'm just procrastinating.

And if I'd known how much you liked Take Your Kid To Work Day, I totally would have sent you at least one of my kids. Neither of them can go in with their Daddy today. Guess we'll have to focus super-hard on celebrating Earth Day to make up for the lack of - how did you put it? - fluffy feel goodness? ROTFL!

BTW, loved, loved, LOVED your comment on Diplopundit about the Greek DS guy. Showed it to my husband over his Earth Day Rice Krispies. Even better: my husband was born in Greece. :)

Okay - back to the task at hand...