The Essence of the Credit Crisis, Visualized

How do you distill the essence of a complex and complicated set of data without watering it down so much the information become worthless? Jonathan Jarvis faced that question two years ago when he created the Crisis of Credit Visualized, “the Short and Simple Story of the Credit Crisis”.

I admit that I read the news reports endlessly when the housing market began to tank in 2007. I had lived in Los Angeles c. 2004-2006, and had thought the entire housing market was “off”. (No, that isn’t just hindsight. I used to get into arguments with my colleagues who believed housing prices would go up indefinitely!) Once the housing market began to go down and the poor financial practices were revealed, I was horrified at what I read — at the bankers for engaging in poor business practices, at consumers who took on loans they could not afford, and at government regulators for not paying attention. It was and is a mess that we, the taxpayers, will be sorting out for years to come. (“Understatement.”)

Jarvis bravely takes on the entire mess in a 10 minute animation of the financial crises. Watching this video reminded me that taming data isn’t just about displaying the facts and figures — or storing, retrieving, preserving and accessing it. Managing data is also about determining what to say and what not to say, so that you can describe the crux of the information you are displaying in a way that is accurate, simple, but still precise.

Or, as the author writes:

The goal of giving form to a complex situation like the credit crisis is to quickly supply the essence of the situation to those unfamiliar and uninitiated.

The visualization of the credit crises is below. (If you’d prefer to watch a larger version, you may visit Jarvis’ site, crisisofcredit.com.)

I’m not an economist and I have never worked in finance. I don’t know if his portrayal of the process that led to the credit crisis is accurate. Based on what I have read about the crisis myself, though, he seems to have nailed it. Jarvis’ visualization of the credit crisis has received multiple comments on multiple sites, as well as a mention in NPR’s Planet Money. I examined the comments online about his visualization, and any reader differences with his portrayal of the crises appear to be minor nuances or politically motivated (which means those differences may or may not be accurate).

What do you think of Jarvis’ visualization of the credit crises? Do think he got to the core of the matter?

[Via Infosthetics.]

Please let me know what you think....