If you are a fan of This American Life, you may be familiar with the episodes I’ll mention today. If not, you might be pleasantly surprised at how the writers of these shows managed to take a pretty difficult concept to grasp and made it understandable. If you really enjoy it, why not buy the set of four on CD or make a donation to your PRI station?
The guide to the meltdown is present over four broadcasts that spanned just over a year’s time. The first episode titled The Giant Pool of Money offered an amazing overview of the housing collapse and specifically how the liquidity of the global financial markets helped to create loans that by all accounts never should have been written.
The next installment Another Frightening Show About the Economy discussed credit default swaps, with a focus on how and why these derivatives managed to go unregulated. This episode aired 10/3/08 just after the government’s $700 billion bailout was announced.
Bad Bank takes a step back, first explaining what a bank is and what it does. They actually make assets, liabilities, and balance sheets understandable.
Last, The Watchmen reviews the job the regulators were supposed to do to prevent all of this from happening. How did they get it so wrong? More important, who exactly were the regulators who were supposed to audit these failed institutions?
Each show can be listened to online, or if you prefer, you can download a transcript and read it at your convenience. I promise, after listening to these shows you will understand the crisis we are still recovering from better than most people. Let me know if you enjoyed them.