If you've accidentally looked at a newspaper in the last couple days, you may have noticed confusing headlines screaming about market turmoil and woe.
Large fonts scream at you about banks going out of business and the accompanying pictures of downward trending graphs and mopey men wearing ties look worrying to you. But you're far too simple-minded to make heads or tails of what's going on. The articles are all gibberish to you - "counterparty risk" sounds like something you have to be mindful of before engaging in certain sadomasochistic sex acts. Evidently "safe words" aren't a viable solution in the financial world.
So who do you turn to for help in this confusing time? Fucking Cracked.com that's who. We've got your back Chester. Below we present a completely artificial Q&A session to help you wrap your head around something that is so much bigger and more important than you, that it's actually kind of sad.
What do you mean by "financial meltdown?"
A financial meltdown is when banks - whose entire business is repeatedly phoning other banks and then declaring they've made or lost money based on those phone calls - suddenly realize that all the money they made is partially fictional. At the same time, they find out that all the money they borrowed from other banks is worryingly real - at least according to those other banks, who are saying as much over the phone in shrill tones. If that sounds confusing to you, don't worry. It's confusing to those inside the business as well, and completely impenetrable to outside observers. Sort of like a crowded sauna with poor lighting.
The end result of all this is that banks can eventually start to fail, and in the process drag other banks down with them. This continues until you get to a situation that looks a little bit like this.