Understanding the Credit Crisis

The credit crisis or credit crunch has affected most of us in one way or another. Most of us probably know roughly why it happened. But, could you explain it to someone?  More importantly, will you know how to watch for the signs of credit crunch in the future so you can avoid being trapped by it again?

Here is a very good animation explaining the credit crisis in an approachable way.

http://www.youtube.com/watch?v=Q0zEXdDO5JU