The Rise and Fall of the American Banking System
This visualization is intended to illustrate the sequence and dynamics of the current financial crisis, including the major actors and factors in the crisis, from mortgage borrowers and lenders, the trade in mortgage-backed securities and other derivatives, the government and the related agencies.
By design and necessity, this is a simplification - the full scope of this crisis touches nearly every aspect of the global economy. This highlights the growing bubble in real estate values, bank assets, profits and trading activity, and the subsequent implosion and fallout, including falling home prices, foreclosures, bank losses and bankruptcies and the bailouts. The visualization shows the relative scale of the various elements of the crisis, and the timing of the major events.
The purpose of presenting this information is first to understand the links between the players in the financial crisis, to see it unfold, and to raise questions about causes, effects and why the system failed.
How could this crisis been averted? What warning signs were there, and at what time, to mitigate the disaster? What parts of the system should be monitored and regulated to avoid a repeat?
This project was built in Flex and ActionScript and runs in Flash as well as AIR. Data was collected from a wide variety of sources (see right), though some of the most relevant information (data about mortgage-backed securities, and certain derivatives such as collateralized debt obligations are mostly owned by the banks and their financial partners such as AIG).
Click here to start the visualization. Use the ? button on the lower right to see an overview of the elements of the visualization.
The size of the housing bubble is estimated by starting with the median price of single-family houses in each metropolitan area in 2000, then scaling them by the growth in the Case-Shiller Home Price Index. Each metropolitan area's bar's width is proportional to the total size of its housing market.
Atwood, Margaret. Payback: Debt and the Shadow Side of Wealth (Anansi: 2008)
Cooper, George. The Origin of Financial Crises: Central Banks, Credit Bubbles, and the Efficient Market Fallacy, (Vintage: 2008)
Krugman, Paul. The Return of Depression Economics and the Crisis of 2008, (W.W. Norton: 2008)
Morris, Charles R. The Two Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash (Public Affairs: 2009).
Philippon, Thomas. Stern on Finance: Overview of the Crisis.
Inside the Meltdown (PBS/Frontline documentary) http://www.pbs.org/wgbh/pages/frontline/meltdown/cron/
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