Anyone had a chance to watch this? Conservative or liberal, I think most would agree it's a crock of shit what happened.
Recorded it and watched the beginning. It looks interesting yet depressing. Frontline has another special on the financial crisis airing tonight: http://www.pbs.org/wgbh/pages/frontline/meltdown/
I watched the Frontline piece tonight. Here's where I was screaming BULLSHIT at the TV. A schmuck like me knew in summer 2007 that there was going to be a severe correction in the housing market. What I did NOT know about was the series of highly leveraged bets that had been made on mortgage securities. If I had known about that, I would have known the whole system was in dire straits. Yet all the supergeniuses had no idea. I didn't get that.
I hear you. I know the other guy's job always seems easier than your own, but I've always believed in the 3 X salary rule-of-thumb when buying a house, and by that measure, by 2007 I could not even afford my own house. That I bought 18 years before. I saw 3 BR single family homes outside the beltway going for 550+K, I saw townhouses in Charlestown, WV going for 450K. New, huge single family homes near Leesburg going for 700+K. I was thinking, who's making all this money? Now I know. Why the folks in the mortgage business didn't see it, I don't know.
They knew, they just didn't care. In the House of Cards piece they interview some of the lenders and bankers; the players knew they were making a quick buck, and I'm sure that some were getting their palms greased to help the boom along.
Which is the kind of crap that makes Marx almost look plausible sometimes... Like the proverbial last two capitalists arguing over who gets the profit on the sale of the rope...
Absolutely. Just like the middle-men in the Maddoff scheme. They knew there was no way what Maddoff was doing was legal, but they were making their 1 % on the invested money, their clients were happy, and if it all fell apart they could go all Hogan's Heroes - "I know nothing...nothing"
House of Cards came up in my macro class last night. Sadly, I missed both it and the the Frontline special. For what it's worth, one of the students in my class works with CDOs, and she claims that the market is now irrational in exactly the opposite direction as it was in 2006 and 2007. She noted that some of them are trading at 5 cents on the dollar and that something like 95% of the mortgages covered in such CDOs would have to default for the investor to lose money when the CDO is selling at that kind of discount. If they're really trading at such low levels, then I think she's right.
So, do you bet on the strength of the American economy, or do you bet on that this recession will drag out for another year or so?
Have you listened this this episode of This American Life? http://www.thislife.org/radio_episode.aspx?episode=355
I DVR'd the Frontline special...I'm reluctant to watch it because almost every Frontline I watch nearly gives me a concussion from repeated:
From today's WaPo Chat with the producer of the Frontline piece I guess what he's saying is that the supergeniuses thought that only firms who had bet heavily on these exotic investments would fail, that nobody understood how AIG and the other big financial firms would suffer.
I know, I was just kidding The problem is that there has been so much speculation and hiding of the true value of assets is that there just aren't any buyers. If Joe Izuzu said to just trust the value, but we can't even tell you if we still own these mortgages or houses, making the sale is going to be difficult.
There's an article on the front page of my paper today about people being foreclosed on asking the bank to "produce the note" and stopping the foreclosure cold. See, the whole industry is so ********ing complicated it takes a company months to prove they hold the mortgage.
I watched the first half over lunch and listened to the second half afterward. Engrossing stuff--thanks for passing it on!
Yeah, the debate and later second guessing over the decision to let Lehman go under is especially fascinating.
I thought so, too, as was the segment about Paulson's hardball plan to avoid moral hazard with Bear Stearns.