How Payday lending works
Most of us have borrowed to buy something. Credit cards, in particular, can be quite convenient (but dangerous if not used in moderation). This tutorial explains credit card interest, how credit card companies make money and a far more silly way of borrow
What it means when the market value of a stock is different from its book value.
In 2008, the entire financial system was at a potential breaking point because of a popping housing bubble. This tutorial breaks down how the government attempted to address this (historical note: Sal made these videos as the crisis was unfolding).
Floating Exchange Resolving Trade Imbalance
This tutorial contains short videos that explain how China and the United States are intertwined through currency and debt. This is key for understanding the current global macro picture.
Basic difference between traditional open market operations and quantitative easing.
You know that the Federal Reserve (or central banks in general) controls the money supply and short-term interest rates. But how exactly do they do this. Even more, how is quantitative easing different than regular open market operations. This tutorial
Why Warren Buffett called Credit Default Swaps financial weapons of mass destruction
How to interpret the market price of a futures contract relative to the fair value in the premarket
In many commodities markets, it is very helpful for buyers or sellers to lock-in future prices. This is what both forwards and futures allow for. This tutorial explains how they work and what the difference is between the two.
Why yields go down when prices go up
Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the
How you can have deflation even if the money supply increases
Prices don't always go up. They often go down. This might seem like a good thing, but it could be disastrous for a modern economy is it goes too far. This tutorial explains what deflation is, how it happens and what the effects of it might be.
More on the Geithner Plan. The problem of banks buying the assets from themselves.
The poop really started to hit the fan in the fall of 2008. When the new administration took office in early 2009, the poop was still there. This is tutorial explains an attempt--probably not a well thought out one--to clean the poop and slow the fan. Vid
Understanding an insurance company's sense of my chances of dying.
It is a bit of a downer to think about, but we are all going to die. Do we care what happens to our loved ones (if they really are loved than the answer is obvious). This tutorial walks us through the options to insure our families against losing us. Th
Comparing depreciation and amortization
How do you account for things that get used up or a cost that should be spread over time. This tutorial has your answer. Depreciation and amortization might sound fancy, but you'll hopefully find them to be quite understandable.
Introduction to the treasury yield curve.
Overview of how hedge funds are different than mutual funds
Hedge funds have absolutely nothing to do with shrubbery. Their name comes from the fact that early hedge funds (and some current ones) tried to hedge their exposure to the market (so they could, in theory, do well in an up or down market as long as
How bubbles destroy wealth.
This tutorial talks about how the housing-bubble-induced credit crisis unfolded with a focus on the derivative securities that helped pump the bubble.
What leverage is. Why it is is good or bad. Leverage and insolvency.
We all use money and most of us use banks. Despite this, the actual working of the banking system is a bit of a mystery to most (especially fractional reserve banking). This older tutorial (bad handwriting and resolution) starts from a basic society looki
Basics of how a mortgage back security works
What started out as a creative way to spread risk ended up fueling a monster housing bubble. This tutorial explains what mortgage-backed securities are and how they work.
Compounding interest multiple times a year.
This is an older tutorial (notice the low-res, bad handwriting) about one of the coolest numbers in reality and how it falls out of our innate desire to compound interest continuously.
Economics of a simple business leading up to a discussion on inflation/deflation. Touching on income statements.
This tutorial starts with a very micro view of when firms decide to raise (or lower prices). It then jumps back to the macro view to discuss how capacity utilization can impact prices.
How credit default swaps can be used as hedges, insurance or side-bets