Read The Economist Where Credit Risk is going from August, 2003. It’s subscription, of course. But now the global economy is going to hell, you may – bizarrely – feel more inclined to pay for a decent analysis of how it all went pear-shaped.

Here is Luigi Zingales, an economist with a plan: Suppose that you bought a house in California in 2006. You paid $400,000 with only 5% down. Unfortunately, during the last two years the value of your house dropped by 30%; thus, you now find yourself with a mortgage worth $380,000 and a house worth $280,000.…