This American Life had a very good episode back in May, The Giant Pool of Money. "A special program about the housing crisis produced in a special collaboration with NPR News. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money."
Last week they did Another Frightening Show About the Economy. "Alex Blumberg and NPR's Adam Davidson—the two guys who reported our Giant Pool of Money episode—are back, in collaboration with the Planet Money podcast. They'll explain what happened this week, including what regulators could've done to prevent this financial crisis from happening in the first place. You can learn more about the daily ins and outs and join the discussion on the Planet Money blog." They do very well describing the difficult to understand credit default swap market, leverage and netting.
2 comments:
This is the third reference I've heard in the past few days to the May TAL broadcast.
I just listened to both the May and October shows. They are amazingly well done and frightening at the same time. It's impressive to hear the fear in the voices of both the reporters and the people they are interviewing. For anyone interested in finance at any level, this is a good investment of time.
Beyond the ~40% hit my professionally managed, well diversified investments have taken recently, I'm honestly evaluating how much I trust the FDIC for my cash position if there's a wide-scale run on banks.
I never imagined that I would look at my portfolio and think "I was underweighted in 'mattress'".
These days investments linked to the the mattress index may be your best bet. The mattress index, it never goes up, but it never goes down.
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