By Elizabeth Hemmerdinger

I don’t know about you, but I feel the need to follow this dreadful financial crisis almost perpetually.  Until a couple of weeks ago, I was an innocent, only occasionally scanning the headlines  and topic sentences of media coverage about business.  After all, I’m an Arts-Person, so I was drawn to the financial world pretty much only when it involved a juicy story of deceit and the subsequent fall from grace.

But what I now know is that the lives of so many people, probably everyone, will be profoundly affected by the mess that involved deregulation, lack of oversight, an overheated housing market and unregulated mortgage lending.   And THIS ALL blew up on Wall Street.

So: I promised myself  I would read and listen to pundits, search for the narrative threads AND for the answers to “What happened?” I came to an unremarkable conclusion:  financial writing is Greek to me.  There.  That’s the problem.

“All right,” I tell myself, “I can learn this.” In fact, doctors tell us that learning new skills fends off aging.  There’s the ticket.  I will learn, decelerate the FALLING APART of my body, and master finance/Greek-speak.  Yes, right, mastery.  That’s the ticket.

But I must say, for all my good intentions, learning all this stuff was like making sure my checkbook IS balanced.  Scary.  And yet, lots of women work on Wall Street, run companies, know this stuff cold.   I even know a few of them. So I had lunch with my friend Viv, who works in the financial world.  I started throwing terms at her.  Viv defined them for me, and by the  time my cappuccino cooled, I had moved a bit from vague fear to the beginning of comprehension – which I found pretty astonishing.

As with any new language, vocabulary words really matter. If you have them nailed down, you can understand the concepts.  With every article I now read, every news report I listen to carefully, I move further from fear to fluency.  Reassuring comprehension of any subject is a reward in itself and reminds us of our innate capabilities, no matter what the “out side” world dishes up.

I already feel better about the markets’ machinations – and, an accidental consequence! – about myself.  You can too. With Viv’s help, we’ll be able to join the global conversation that looks as if it will go on for quite a while.  Here you’ll find some of Viv’s vocabulary. Any other  concepts you think we need to know about? Put them in a comment below;  Viv has joined our team, so we can keep this course going till we all graduate.

• Yield Curve, The yield curve is a graph that illustrates the relationship between yield and maturity among similar fixed income securities (the most commonly referenced yield curve is the Treasury curve).  The vertical axis represents increasing yields and the horizontal axis marks years to maturity.

• Normal Yield Curve. In a normal yield curve, the line slopes upward and short-term interest rates are lower than long-term interest rates. Yields rise as maturity lengthens. This positive slope reflects investor expectations that the economy will grow and inflation will rise in the future (leading to tightening monetary policy and increased short-term interest rates).  Investors price these expectations into the bonds by demanding higher long-term interest rates.

• Inverted Yield Curve. If short-term yields are higher than=2 0long-term yields, the curve is inverted (the line slopes downward).  This is the most rare yield curve and may indicate a worsening economic situation.

• Flat Yield Curve. A flat yield curve occurs when there is no difference between short and long-term yields and often indicates market uncertainty.

• Dow Jones Industrial Average. The Dow Jones Industrial Average consists of 30 of the largest and most widely traded stocks in the United States. It is a weighted average  of stock prices. The movement of the Dow index, is a good indicator of the broad movement of the market.

• S&P 500. The Standard & Poor’s 500 is a basket of 500 stocks that are widely held. The S&P 500 index is weighted by market value and is thought to be representative of the market as a whole.

• Hedge fund. “Hedge fund” is a general, nonlegal term that describes a private, investment pool that invests on a collective basis. Hedge funds are typically organized as limited partnerships and have high minimum investment requirements and restrictions on types of investors. Such funds have traditionally enjoyed limited regulation and invest using a wider variety of strategies than institutional investors traditionally prefer..

• Short selling. Short selling is the sale of a stock that the seller doesn’t own but promises to deliver.  When an investor shorts a stock, she typically expects the share price to decline.

Now we’re equipped to peek at those financial stories.  (Now you know why, when both the Dow and the S&P 500 are on an inverted curve, the CNBC voices grow more hushed.) When my mastery of this improves so that I’m not circling new concepts all the time, I’m thinking of taking up table tennis.  I hear it’s great for the brain and the gluts!