Mmm, financial turmoil is tasty!

I would be the first to admit that I have absolutely no idea what on earth is going on in the global financial markets at the moment. This is because finance - once it gets past the concept of "here is your money. We will keep your money safe and pay you interest" - becomes completely opaque to me.

What, precisely, does it mean for a company to be "worth" a certain amount of money when that money is actually tied up somewhere in shares and can't be used? If share prices go up - and the company is therefore worth more - where did that extra value come from? Money surely can't be created out of nothing, so if I'm a CEO who's become an overnight millionaire, who's just lost out? And how can that value just as suddenly vanish, taking people's money with it?

Things get even more bizarre once you get into very high-level finance. At this point, you don't just get banks giving or lending each other money, they also trade risks, insurance, and even debts. How can you buy someone else's debt? And why would it benefit you to buy the right to pay someone else?

It's not very surprising, really, that us mere mortals who just don't understand the city end up finding other ways of treating the recent news. So, with that in mind...who else has noticed that "Northern Rock" and "Credit Crunch" both sound like you should be able to buy them in a sweetshop?








chocolates image by gracey taken from Morguefile