"As an economist, I am supposed to have something intelligent to say about the current financial crisis."

"To be honest, however, I haven’t got the foggiest idea what this all means."

Whew. And I was feeling bad about not having anything worthwhile to say.

That quote is from Steven D. Levitt. But Levitt gets Douglas W. Diamond and Anil K. Kashyap to explain many things, which they do very clearly, answering a series of questions:

1) What has happened that is so remarkable?

2) Why did these things happen?

3) Why did the Treasury and Fed let Lehman fail but rescue Bear Stearns, Fannie Mae, Freddie Mac, and A.I.G.?

4) I do not work at Lehman or A.I.G. and do not own much stock; why should I care?

5) What does it mean for the Fed and Treasury going ahead?

6) What does this mean for the markets going ahead?

7) When will the turmoil end?