I’ve seen several charts that attempt to digest the nature of this financial conundrum. So you know, watch out for charts that represent a value in terms of the diameter of a circle (i.e. the width of a circle), because our natural tendency is to interpret that circle in terms of its area, not its diameter. Here is an example of a terrible, scare-mongering graphic that makes this misleading error:

bank_equity_rtfa

On the other hand, the Guardian has put together a really decent infographic that breaks the problem down, and they do not torture their charts to make the point. It is scary enough, as is.

RTFA: http://www.guardian.co.uk/business/dan-roberts-on-…

Global recession – where did all the money go?

guardian_global_recession_rtfa

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