My husband and I were listening to this yesterday and were just floored by how exhaustive and layperson-friendly it is. Kudos to all involved. (Glass' program has done some spectacular work in the past, too, BTW).
Yeah, I listened to it and wondered what Tanta would think. And I did wonder why at the end they think the troubles may be over; the Alt-A's are still out there. The problems may be over, but if that boulder starts rolling down the hill Ben Bernanke is gonna feel like Sisyphus.
I listened to this last night (thanks for the mp3, anon, and ziggurat for the pitch!) - it was great. They manage, as usual, to explain things very very simply without seeming to talk down to the listener. Even for someone who's been reading here at CR for months, there were a few things to learn! One problem was it sort of scared my kids - they've been maintaining that there's nothing wrong with the economy - no one they know or see has any money problems, so this must all be in Mom's head. Hearing this program, which they know of and have heard before, saying the same things - frightening.
We heard representative voice of every party up and down the chain of the housing boom, except the most important one -- the investors (institutions, CB's, pension funds, life insurance funds, etc,...) who are left holding the bags. Wonder what are their collective mind sets? I believe Brad Setser's estimate of about 500B of agency MBS are in the Chinese hands. Did we really screw them? Wonder what they think about us now?
T-Shane wrote (in an earlier thread): Unfortunately for CR and Tanta, now that This American Life gave them a hat tip, by Monday morning, this place will be swarming with hipster know-it-all's who like to talk about how interesting ordinary people are.
Oooh-wee, T-shane!
Vistor count 191. So much for the swarm of hipsters.
I can't listen to TAM because of the annoying pauses as well. It's like nails on a chalkboard to me. The stories are usually great, but Ira Glass irritates me.
mock turtle, there is a pull-down menu for archives (by month) on the right. Hopefully this will be sufficient - as opposed to that long list that use to be on the right.
Not listening to the program because of Ira Glass is stupid. In fact he speaks all of three or four sentences in the whole hour.
Your ignore function is not helping this time.
As for me, I heard the show Saturday and I was impressed they bothered to produce it at all, and the interviews with the guys in the tranches--;)--provided welcome insight.
I'd just spoken the night before with a mortgage broker at length about the state of his trade ("murderous" he called it) and it was fresh in my mind.
Kudos to NPR-News and This American Life for the co-production. Pity television with its vast audience-enslaving capacity can't come close.
pfffffft. c'mon! Get with the program. Think of al the UPSIDE from here. Dimon today SAID the credit crunch is 75% OVER - RIGHT NOW! Think GROWTH! Time to get in on the rally.
Re Liking NPR and PRI and waiting for the show to conclude:
They actually have a compilation CD entitled Driveway Moments for all those times you got home, but didn't get out of the car until the piece was over.
ROFL, Curlydan. Love the.... Ira Glass.... riff. There's a fine line between dramatic pauses and Shatnerfication.
I think Mrs. Exception and I tuned into this program on Saturday.
As I recall, it wasn't Glass, but Alex Blumberg who was doing the piece, talking with a guy at one of the lenders about all the NINJA loans getting dumped on Wall Street. Great reporting. Glad to see CR got credit.
pfffffft. c'mon! Get with the program. Think of al the UPSIDE from here. Dimon today SAID the credit crunch is 75% OVER - RIGHT NOW! Think GROWTH! Time to get in on the rally.
TRIPLE DIGIT GAINS TODAY ALONE!
Notice once again that the heavily shorted stuff like real estate and financials keeps going up and up and up. SRS and SKF just keep getting hammered.
I think if Shanghai had short sellers they'd have dropped maybe 5%, not 50%.
What's funny is they talk about this stuff like it's ancient history, but really thanks to rate cuts and Wall Street bailouts the same kind of insane judgment-free panic buying of assets is simply moving from mortgages to other classes (notably commodities and emerging market stocks and debt).
Nothing has fundamentally changed.
Global economic structure continues to rot in a sea of easy money.
I agree that the credit crisis is 75% over - if by "over" you mean the point when substantial parts of the U.S. financial system are officially under the control of US bankruptcy judges.
let's not forget about guys like Cioff, the 8 figure guys whose 10k sqft homes are fully bought for and paid...no note.
and hte hundreds of others on Ws just like him.
Loved the .......... Ira............. Glass.......... riff, too. They do a good job, and I like listening to them (PRI, NPR). But they do way, waaaay too much fluff.
There is a market for hard news, and it's not small. Trouble is, it takes a lot of time and money to do it right... radio budgets are tight.
So they only bring out the good stuff when they have a pledge drive, and want to 'convert that latte a day" into membership.
I also love this blog because I learn so many new words... last week it was 'Kunstlerhead', before that "hoocoodanode", and now 'Shatnerfication'. Love it.
Congrats for the mention guys! And well deserved. I can't wait for the free download to be activated so I can hear the show too.
And to Scnaps ("hipster know-it-all's who like to talk about how interesting ordinary people are") - great joke. I hope I'm not the only other TAL-listening, O.C-watching, Calculated-Risk-reading nerd who got it.
Great show and was starting to suspect that no one could put together as comprehensive a big picture view of the mortgage world without talking to the two of you. And then, there you were at the end... I was laughing!
Besides everyone knows hipster know-it-alls are just pulling themselves out of bed right around now. Seriously, I just thought the joke was amusing and appropriate for this situation.
It looks like Matilde was the only one who actually articulated the source of the joke. She wins the inflatable Bernanke doll(ar). It starts like a dollar bill, then magically inflates without warning. When it does, Washington's held morphs into Ben's, and you can use it as you see fit. If you're a recent buyer or knife-catcher, you can cuddle with it at night. If you're a saver or a long-term homeowner, it doubles as a punching bag.
YES, YES! listened to this as well - from my car running into the kitchen and then to the living room to turn on the deck speakers to enjoy while gardening. did not want it to end.
Loved the .......... Ira............. Glass.......... riff, too. They do a good job, and I like listening to them (PRI, NPR). But they do way, waaaay too much fluff.
Fluff? The show is called 'This American Life'... what did you expect?
I stayed up late to listen to the podcast and was thrilled to hear them mention this blog at the end. I learned something new: That the analysts assigning ratings to the CDOs were using data modeled on traditional mortgage products.
There was no historical data to know how the toxic waste loans would perform.
It was very classy for This American Life to give CR a shout out. How many MSM outlets would do the same?
As for the comment about there being too much "fluff" in the piece -- they got personal interviews with people at every point in the process, from the CDO Wall Street tycoons to the retail loan guys to the mortgage cold callers to the subprime borrower. I'd say that's pretty darn thorough for a one hour show.
"barely writes:
pfffffft. c'mon! Get with the program. Think of al the UPSIDE from here. Dimon today SAID the credit crunch is 75% OVER - RIGHT NOW! Think GROWTH! Time to get in on the rally. "
You are joking of course, as you must have noticed how swiftly last week 's XLF reversed 2 weeks of advance, in higher volume.
Today hum... may be you could feel it was going up between say 02.00 and 02.30, as long as you paid no attention to UP/DOWN volume
Funny how people keep isolating 3 words out of Dimon (or Soros) comments from the rest of what they are generally saying these days: ie in summary the consequences of the crisis for the general economy have hardly begun and are not expected to be mild.
Saturday's "The big pool of money" was just precious, even if you knew the facts, the voices and the expressions of the "actors" is always revealing. But then what do you expect combining the best on radio and in the blog world!
This crisis is all about psychology, so it is not surprising Ira Glass nailed it so well.
Glass' pauses are intentional. I heard an interview with him awhile back, and he said the pacing of all the speech on the show is extremely important. The pauses are meant to give the listener time to think about what is being said. It's actually a nice feeling to listen to something and have time to absorb the information. I come away from TAL remembering far, far more than I ever remember watching any news program, and I credit the pace as a substantial contributer to that.
As a long time listener, I agree completely. If you want Michael Bay Radio, listen to something else.
I tried listening to it, but when I got to the part where the guy mentioned that he was throwing around money and buying bottles of $1000 Cristal at the club, it started making me physically ill and had to stop it.
It's simply outrageous. Something is seriously out of line. This will not stand.
I tried listening to it, but when I got to the part where the guy mentioned that he was throwing around money and buying bottles of $1000 Cristal at the club, it started making me physically ill and had to stop it.
It's simply outrageous. Something is seriously out of line. This will not stand.
All you gotta do is start trading oil and you'll be right back to buying Cristal with other peoples' money.
You know personally I think this is a fantastic idea. And I think the best and brightest futures traders also need to display their talents on Walt Disney Co.'s ESPN during highly publicized events.
It's revealing that you see these kinds of articles on Bloomberg:
Organizers of the World Series of Poker, the game's top competition, have thrown players a curve ball that threatens the integrity of the multimillion-dollar tournament.
This year Las Vegas-based Harrah's Entertainment Inc. has changed the event so that instead of playing over two weeks in July, those who make the final table of nine players will be asked to come back and finish during two days in November.
This, the organisers say, will allow the final table to be shown on Walt Disney Co.'s ESPN and give the broadcaster time to generate publicity that will maximise the audience. The 12 days in which the estimated 7,000 players are whittled down to nine will be broadcast in the weeks before the final, allowing viewers to get a feel for how the players have progressed to the summit of the poker world.
CR, what were the 70s like ? When you talk about job growth, is it right to assume that every sector is affected differently ? What sectors will be hit the most and least this time ?
CR, what were the 70s like ? When you talk about job growth, is it right to assume that every sector is affected differently ? What sectors will be hit the most and least this time ?
Obviously, we've been losing an average of about half a million manufacturing jobs a years for the past 7-8 years and that will continue. There's nothing that would stop it, and there's whole manufacturing industries like newspapers that are going out of biz.
But what I see if enormous overcapacity in a lot of white-collar industries, especially financial services. I'll bet the U.S. economy loses 20-30% of its financial services jobs over the next few years, permanently.
Did any country ever need 500,000 stockbrokers, 250,000 mortgage brokers, a million insurance agents, two million Realtors, etc?
As retail and restaurants contract drastically, there will be many fewer of those jobs, which have been like sponges, soaking up unemployment with crummy, part-time or shift work.
All employment data is rigged. The job losses are already big, if you count real full-time necessary and meaningful jobs.
The government doesn't know it. The MSM doesn't know it. But ordinary workers know it.
What wasn't explained in the program was what the Iraq vet, whose mortgage broker kindly put down a monthly income of $16800 to get the HELOC, did with his $540,000 that he pulled out at 11%.
Ira also didn't really find any senior wall street types to talk: ones who definitely didn't blow their ill-gotten bonus on b-list celebs - but instead salted them away, out of reach of everyone.
Nor did he get a mortgage broker to defend fraud on the application forms or the inverted redlining of neighborhoods (I lived in east new york in 2001-2005, but in a shi-shi neighborhood, and nobody was banging on our doors offering NINA loans, you got 30 year fixed and put in your W2s and bank statements).
great show. most of the stuff covered i read here over the last few months (thanks for the education), but clarifying surely.
Notice the b-list guys attitude when asked how long since he last made a payment? how many times has he given that same "oh, i dunno, January?" mock sheepishness, slight bravado- waiting for the incredulous look on the questioners face... probably gets high fives from some guys.
Tanta, what was the Cretaceous like? Was there cheesecake? Did they milk Triceratops to make the cheese? Did they make you bring your in W-2's on slate or cuneiform clay tablets?
"What wasn't explained in the program was what the Iraq vet, whose mortgage broker kindly put down a monthly income of $16800 to get the HELOC, did with his $540,000 that he pulled out at 11%."
Two different guys. The Iraq vet came home from the war and bought a house in Flatbush with either a NINA or a SIVA, it was a bit unclear which. (Even though he would have qualified for a special vetran's loan). The other, somewhat shady guy, needed the %540,000 for an unspecified "situation" and took out a HELOC. The Iraq vet was trying to hold onto his home, that's why he sold all his furniture and was meeting with debt counselors. The other guy was just waiting for the bank to take the house.
I'm glad other people liked it because i was really impressed.
I like the irony of the banquet where they were giving awards for 'CDO of the Year.'
Another great line -- "the broker had 18,500 reasons to falsify the application.
It was also a good example of the general bubble mentality. Everyone in the chain had strong personal financial incentives to make economically unsound decisions. Also the 'rush to the bottom' where once a big buyer started accepting worse loans, within a week, all the others were doing the same thing. There was also the universal 'we weren't the worst' mantra.
Overall a worthwhile listen. I agree that the connection between easy lending and price inflation, though mentioned, was not stressed enough.
It's not only that more unqualified buyers in the market means more dollars chasing houses and the predictable pushing up of prices. Its that those unqualified borrowers were given unprecidented amounts of money to spend. An uncreditworthy buyer used to be denied a loan. The 'revolution' wasn't merely that they now had access to loans at all, its that they had access to those loans in amounts that were orders of magnitude larger than traditional lending principles would have dictated.
The only limit on what a unsophisticated buyer is willing to spend is their mortgage approval amount. It used to be if you wanted to bump your bid up by a measly $5k, you had to come up with at least $1k out of pocket - if that $5k was above your approved mortgage amount, you'd have to come up with ALL of that $5k. With no money down blank checks, there is no longer any restraint, and prices unsurprisingly take off.
The one thing everybody in the chain had in common, from the borrower to the originator to the consolodator to the the I-baker -- ex-the investor -- was that it was OPM (Other People's Money); easiest kind in the world to spend. The WMC and Silver Star brokers, while titilating stories -- partying with Tara Reid and other B-listers at Marquee, buying $1,000 bottles of Cristal (swill overpriced at 1/10 that, IMHO), are almost inconsequential in the larger picture. Just another pair of fools and their money. With the $1.5M CT vacation home and the Manhattan Penthouse, he never saved a dime. One month's check came up short and it all came crashing down. The poor fool was "just one paycheck away from being homeless". Blech...
Yeah, there's a bit in the CDO Banquet tape where the guy trying to say what they did wasn't really so bad says something like
(paraphrase from memory)
The one thing everybody in the chain had in common, from the borrower to the originator to the consolodator to the the I-baker -- ex-the investor -- was that it was OPM (Other People's Money); easiest kind in the world to spend.<
Exactly. In addition, there were generally another couple of layers of money managers who were using OPM. Before you get to the OP. The money managers obviously didn't want to lose, but if they didn't match performance indices, they were gone. And they didn't have to give money back.
This terrific report on Ira Glass's show -- by a couple of correspondents, This American Life's Alex Blumberg and NPR's Adam Davidson -- continues a tradition described years ago by Lawrence Weschler writing in The New Yorker about Robert Krulwich's economics reporting, also at NPR: "The Giant Pool of Money" will be "prized for its crystalline clarity."
My recent impressions are that this
blog's comments are devolving toward
something like those at housingpanic,
which I quit surfing as being a waste
my time.
My husband and I were listening to this yesterday and were just floored by how exhaustive and layperson-friendly it is. Kudos to all involved. (Glass' program has done some spectacular work in the past, too, BTW).
Yeah, I listened to it and wondered what Tanta would think. And I did wonder why at the end they think the troubles may be over; the Alt-A's are still out there. The problems may be over, but if that boulder starts rolling down the hill Ben Bernanke is gonna feel like Sisyphus.
I listened to this last night (thanks for the mp3, anon, and ziggurat for the pitch!) - it was great. They manage, as usual, to explain things very very simply without seeming to talk down to the listener. Even for someone who's been reading here at CR for months, there were a few things to learn! One problem was it sort of scared my kids - they've been maintaining that there's nothing wrong with the economy - no one they know or see has any money problems, so this must all be in Mom's head. Hearing this program, which they know of and have heard before, saying the same things - frightening.
CR- Ooooh, and you have a spiffy redsign for the new guys. Did they contact you or Tanta?
OT
CR
will archives ever return or are they a thing of the past (
(humor intended)
but really, will they?
We heard representative voice of every party up and down the chain of the housing boom, except the most important one -- the investors (institutions, CB's, pension funds, life insurance funds, etc,...) who are left holding the bags. Wonder what are their collective mind sets? I believe Brad Setser's estimate of about 500B of agency MBS are in the Chinese hands. Did we really screw them? Wonder what they think about us now?
"This American Life" is one of the best things on radio.
It became disruptive to my life, however. If I was in a car during the show, I couldn't leave the car until the show ended.
Now I listen on the iPod. If you subcribe to the feed, each show is available for download for one week after broadcast.
You can listen to archived shows of any age at any time over your computer by going to thislife.org
T-Shane wrote (in an earlier thread): Unfortunately for CR and Tanta, now that This American Life gave them a hat tip, by Monday morning, this place will be swarming with hipster know-it-all's who like to talk about how interesting ordinary people are.
Oooh-wee, T-shane!
Vistor count 191. So much for the swarm of hipsters.
No, really - I'm here because of the TAL mention. Subscribing to RSS feed, too.
This week....
On This American Life...
Sub-prime...
How it affects you...
What it all means...
Why do I pause so much?
I don't know...
I'm Ira Glass
I can't listen to TAM because of the annoying pauses as well. It's like nails on a chalkboard to me. The stories are usually great, but Ira Glass irritates me.
Didn't Scrooge McDuck have a giant pool of money?
"Didn't Scrooge McDuck have a giant pool of money?"
Yes, and I believe he went swimming in it from time to time. Unfortunately, virtual money gives a much less satisfying experience in that respect.
ottnott,
Are you the masked friend of enol regnar?
sdtfs, yes, we had a nice conversation!
mock turtle, there is a pull-down menu for archives (by month) on the right. Hopefully this will be sufficient - as opposed to that long list that use to be on the right.
You can also use the search at the top.
Best Wishes.
Oooh-wee, T-shane!
Vistor count 191. So much for the swarm of hipsters.
Yeah, ain't nothing but us interesting ordinary people round these parts.
Oops, Ottnott, I meant to ask if you are the friend of the masked man, enol regnar?
Yes, and I believe he went swimming in it from time to time. Unfortunately, virtual money gives a much less satisfying experience in that respect.
Your pixels must not vibrate like mine do.
thanks CR
sorry for not being observant
I think it is PRI not NPR. Different org's
Not listening to the program because of Ira Glass is stupid. In fact he speaks all of three or four sentences in the whole hour.
Your ignore function is not helping this time.
As for me, I heard the show Saturday and I was impressed they bothered to produce it at all, and the interviews with the guys in the tranches--;)--provided welcome insight.
I'd just spoken the night before with a mortgage broker at length about the state of his trade ("murderous" he called it) and it was fresh in my mind.
Kudos to NPR-News and This American Life for the co-production. Pity television with its vast audience-enslaving capacity can't come close.
sdtfs, yes, we had a nice conversation!
what! did you guys reveal your secret identities to them?
pfffffft. c'mon! Get with the program. Think of al the UPSIDE from here. Dimon today SAID the credit crunch is 75% OVER - RIGHT NOW! Think GROWTH! Time to get in on the rally.
TRIPLE DIGIT GAINS TODAY ALONE!
Re Liking NPR and PRI and waiting for the show to conclude:
They actually have a compilation CD entitled Driveway Moments for all those times you got home, but didn't get out of the car until the piece was over.
barely,
Mktwatch says mbia corrects revenue so market pulls higher..Amazing-I used to think it was just an Aerosmith song..
cd,
Love in an Elevator?
ROFL, Curlydan. Love the.... Ira Glass.... riff. There's a fine line between dramatic pauses and Shatnerfication.
I think Mrs. Exception and I tuned into this program on Saturday.
As I recall, it wasn't Glass, but Alex Blumberg who was doing the piece, talking with a guy at one of the lenders about all the NINJA loans getting dumped on Wall Street. Great reporting. Glad to see CR got credit.
When they spoke of staring at a computer screen with long lists of numbers of various loan vintages I imagined BaconDreamz and Shnaps at work.
pfffffft. c'mon! Get with the program. Think of al the UPSIDE from here. Dimon today SAID the credit crunch is 75% OVER - RIGHT NOW! Think GROWTH! Time to get in on the rally.
TRIPLE DIGIT GAINS TODAY ALONE!
Notice once again that the heavily shorted stuff like real estate and financials keeps going up and up and up. SRS and SKF just keep getting hammered.
I think if Shanghai had short sellers they'd have dropped maybe 5%, not 50%.
All, oops, not NPR. I changed the title.
bacon dreamz, Tanta's identity is a state secret - mine, well not so much!
Best to all.
what! did you guys reveal your secret identities to them?
When CR says "we," he means himself and his cat. I am not allowed to talk to the media. (Really. It's better that way.)
ok, do we at least get to know the real identity of CR's cat?
I love how that WMC broker making $75K per month a few years ago is now considering "walking away" from his mortgage.
What's funny is they talk about this stuff like it's ancient history, but really thanks to rate cuts and Wall Street bailouts the same kind of insane judgment-free panic buying of assets is simply moving from mortgages to other classes (notably commodities and emerging market stocks and debt).
Nothing has fundamentally changed.
Global economic structure continues to rot in a sea of easy money.
The future continues to darken.
I agree that the credit crisis is 75% over - if by "over" you mean the point when substantial parts of the U.S. financial system are officially under the control of US bankruptcy judges.
let's not forget about guys like Cioff, the 8 figure guys whose 10k sqft homes are fully bought for and paid...no note.
and hte hundreds of others on Ws just like him.
Loved the .......... Ira............. Glass.......... riff, too. They do a good job, and I like listening to them (PRI, NPR). But they do way, waaaay too much fluff.
There is a market for hard news, and it's not small. Trouble is, it takes a lot of time and money to do it right... radio budgets are tight.
So they only bring out the good stuff when they have a pledge drive, and want to 'convert that latte a day" into membership.
I also love this blog because I learn so many new words... last week it was 'Kunstlerhead', before that "hoocoodanode", and now 'Shatnerfication'. Love it.
Congrats CR, Tanta. I LOVE TAL and caught half of the episode on Saturday.
Congrats for the mention guys! And well deserved. I can't wait for the free download to be activated so I can hear the show too.
And to Scnaps ("hipster know-it-all's who like to talk about how interesting ordinary people are") - great joke. I hope I'm not the only other TAL-listening, O.C-watching, Calculated-Risk-reading nerd who got it.
Great show and was starting to suspect that no one could put together as comprehensive a big picture view of the mortgage world without talking to the two of you. And then, there you were at the end... I was laughing!
Shnaps and Sonic Seuss:
I know you only mock because you love...
Besides everyone knows hipster know-it-alls are just pulling themselves out of bed right around now. Seriously, I just thought the joke was amusing and appropriate for this situation.
It looks like Matilde was the only one who actually articulated the source of the joke. She wins the inflatable Bernanke doll(ar). It starts like a dollar bill, then magically inflates without warning. When it does, Washington's held morphs into Ben's, and you can use it as you see fit. If you're a recent buyer or knife-catcher, you can cuddle with it at night. If you're a saver or a long-term homeowner, it doubles as a punching bag.
i heard it too! I felt cool because I've been reading CR for darn near a year now.
// get of my lawn!
YES, YES! listened to this as well - from my car running into the kitchen and then to the living room to turn on the deck speakers to enjoy while gardening. did not want it to end.
hipster know-it-alls are just pulling themselves out of bed right around now.
well, ipodius made his first comment at 10:22 today - just sayin'.
FWIW - I liked it & wasn't mocking it at all. I thought it beared repeating in this thread.
Loved the .......... Ira............. Glass.......... riff, too. They do a good job, and I like listening to them (PRI, NPR). But they do way, waaaay too much fluff.
Fluff? The show is called 'This American Life'... what did you expect?
I stayed up late to listen to the podcast and was thrilled to hear them mention this blog at the end. I learned something new: That the analysts assigning ratings to the CDOs were using data modeled on traditional mortgage products.
There was no historical data to know how the toxic waste loans would perform.
Well, now we have some data.
"Washington's head" not "held."
Jeez. I should be spending more time putting typos on my take-home exam instead of here.
Thanks, Shnaps for the repeat mention.
It was very classy for This American Life to give CR a shout out. How many MSM outlets would do the same?
As for the comment about there being too much "fluff" in the piece -- they got personal interviews with people at every point in the process, from the CDO Wall Street tycoons to the retail loan guys to the mortgage cold callers to the subprime borrower. I'd say that's pretty darn thorough for a one hour show.
"I am not allowed to talk to the media. (Really. It's better that way.)"
Tanta,
You mean, it's better for the media? They could actually get the unvarnished truth? That'd be dangerous: their heads could explode.
"barely writes:
pfffffft. c'mon! Get with the program. Think of al the UPSIDE from here. Dimon today SAID the credit crunch is 75% OVER - RIGHT NOW! Think GROWTH! Time to get in on the rally. "
You are joking of course, as you must have noticed how swiftly last week 's XLF reversed 2 weeks of advance, in higher volume.
Today hum... may be you could feel it was going up between say 02.00 and 02.30, as long as you paid no attention to UP/DOWN volume
Funny how people keep isolating 3 words out of Dimon (or Soros) comments from the rest of what they are generally saying these days: ie in summary the consequences of the crisis for the general economy have hardly begun and are not expected to be mild.
Saturday's "The big pool of money" was just precious, even if you knew the facts, the voices and the expressions of the "actors" is always revealing. But then what do you expect combining the best on radio and in the blog world!
This crisis is all about psychology, so it is not surprising Ira Glass nailed it so well.
Glass' pauses are intentional. I heard an interview with him awhile back, and he said the pacing of all the speech on the show is extremely important. The pauses are meant to give the listener time to think about what is being said. It's actually a nice feeling to listen to something and have time to absorb the information. I come away from TAL remembering far, far more than I ever remember watching any news program, and I credit the pace as a substantial contributer to that.
As a long time listener, I agree completely. If you want Michael Bay Radio, listen to something else.
And actually, I believe the pauses are edited in. I've heard him on live performances, and it's not like that.
I tried listening to it, but when I got to the part where the guy mentioned that he was throwing around money and buying bottles of $1000 Cristal at the club, it started making me physically ill and had to stop it.
It's simply outrageous. Something is seriously out of line. This will not stand.
I tried listening to it, but when I got to the part where the guy mentioned that he was throwing around money and buying bottles of $1000 Cristal at the club, it started making me physically ill and had to stop it.
It's simply outrageous. Something is seriously out of line. This will not stand.
All you gotta do is start trading oil and you'll be right back to buying Cristal with other peoples' money.
Me? no, you need to be president to do that!
You know personally I think this is a fantastic idea. And I think the best and brightest futures traders also need to display their talents on Walt Disney Co.'s ESPN during highly publicized events.
It's revealing that you see these kinds of articles on Bloomberg:
Organizers of the World Series of Poker, the game's top competition, have thrown players a curve ball that threatens the integrity of the multimillion-dollar tournament.
This year Las Vegas-based Harrah's Entertainment Inc. has changed the event so that instead of playing over two weeks in July, those who make the final table of nine players will be asked to come back and finish during two days in November.
This, the organisers say, will allow the final table to be shown on Walt Disney Co.'s ESPN and give the broadcaster time to generate publicity that will maximise the audience. The 12 days in which the estimated 7,000 players are whittled down to nine will be broadcast in the weeks before the final, allowing viewers to get a feel for how the players have progressed to the summit of the poker world.
Poker Tournament Schedule Ruins Integrity
OT - tipjar
CR - did you ditch the tipjar?
or am I just not seeing it?
CR, what were the 70s like ? When you talk about job growth, is it right to assume that every sector is affected differently ? What sectors will be hit the most and least this time ?
Regards.
Listening to TAL reminds me of listening and viewing Charles Kuralt's CBS Sunday show. Very pleasant.
CR, what were the 70s like ? When you talk about job growth, is it right to assume that every sector is affected differently ? What sectors will be hit the most and least this time ?
Obviously, we've been losing an average of about half a million manufacturing jobs a years for the past 7-8 years and that will continue. There's nothing that would stop it, and there's whole manufacturing industries like newspapers that are going out of biz.
But what I see if enormous overcapacity in a lot of white-collar industries, especially financial services. I'll bet the U.S. economy loses 20-30% of its financial services jobs over the next few years, permanently.
Did any country ever need 500,000 stockbrokers, 250,000 mortgage brokers, a million insurance agents, two million Realtors, etc?
As retail and restaurants contract drastically, there will be many fewer of those jobs, which have been like sponges, soaking up unemployment with crummy, part-time or shift work.
All employment data is rigged. The job losses are already big, if you count real full-time necessary and meaningful jobs.
The government doesn't know it. The MSM doesn't know it. But ordinary workers know it.
That gigantic pool of capital is now being pumped into farmland and corn, wheat, oil, etc. Hold on.
What wasn't explained in the program was what the Iraq vet, whose mortgage broker kindly put down a monthly income of $16800 to get the HELOC, did with his $540,000 that he pulled out at 11%.
Ira also didn't really find any senior wall street types to talk: ones who definitely didn't blow their ill-gotten bonus on b-list celebs - but instead salted them away, out of reach of everyone.
Nor did he get a mortgage broker to defend fraud on the application forms or the inverted redlining of neighborhoods (I lived in east new york in 2001-2005, but in a shi-shi neighborhood, and nobody was banging on our doors offering NINA loans, you got 30 year fixed and put in your W2s and bank statements).
great show. most of the stuff covered i read here over the last few months (thanks for the education), but clarifying surely.
Notice the b-list guys attitude when asked how long since he last made a payment? how many times has he given that same "oh, i dunno, January?" mock sheepishness, slight bravado- waiting for the incredulous look on the questioners face... probably gets high fives from some guys.
farmer writes:
That gigantic pool of capital is now being pumped into farmland and corn, wheat, oil, etc. Hold on.
farmer | 05.12.08 - 7:49 pm | #
Those of us who were around for the 80s know how that will end.
Great program!
I kinda wish they had mentioned the 2 pieces of legislation that allowed no scrutiny or regulation of these financial products.
Maybe no legislators would talk to them. . .
The Archive link is pretty hard to spot, CR, even after you said where it was.
Would more people spot it if it were nearer the top?
CR, what were the 70s like ?
Tanta, what was the Cretaceous like? Was there cheesecake? Did they milk Triceratops to make the cheese? Did they make you bring your in W-2's on slate or cuneiform clay tablets?
What they fail to do in this show is to connect the fact that rising home prices were do to easy lending.
"What wasn't explained in the program was what the Iraq vet, whose mortgage broker kindly put down a monthly income of $16800 to get the HELOC, did with his $540,000 that he pulled out at 11%."
Two different guys. The Iraq vet came home from the war and bought a house in Flatbush with either a NINA or a SIVA, it was a bit unclear which. (Even though he would have qualified for a special vetran's loan). The other, somewhat shady guy, needed the %540,000 for an unspecified "situation" and took out a HELOC. The Iraq vet was trying to hold onto his home, that's why he sold all his furniture and was meeting with debt counselors. The other guy was just waiting for the bank to take the house.
What they fail to do in this show is to connect the fact that rising home prices were do to easy lending.
Not true. They clearly stated that the easy lending created increased demand and increased prices. Maybe you just missed that part, but they didn't.
We provide services of swimming pools, Fiberglass Swimming Pools, Swimming Pools Supply, Inground Swimming Pools, Swimming Pool Contractors Dubai, Above Ground Pools, pool builders, concrete pools, Guide to inground pools, pool cleaning service
Tacky Mats - Floor Entrance Mats outdoor mats, Door Mats, Wipes, cleanroom sticky rollers, clean Room wipes, Floor Mats, Adhesive Mat, Cheap Exercise Mat, Cleanroom Supply, Rags
I'm glad other people liked it because i was really impressed.
I like the irony of the banquet where they were giving awards for 'CDO of the Year.'
Another great line -- "the broker had 18,500 reasons to falsify the application.
It was also a good example of the general bubble mentality. Everyone in the chain had strong personal financial incentives to make economically unsound decisions. Also the 'rush to the bottom' where once a big buyer started accepting worse loans, within a week, all the others were doing the same thing. There was also the universal 'we weren't the worst' mantra.
Overall a worthwhile listen. I agree that the connection between easy lending and price inflation, though mentioned, was not stressed enough.
It's not only that more unqualified buyers in the market means more dollars chasing houses and the predictable pushing up of prices. Its that those unqualified borrowers were given unprecidented amounts of money to spend. An uncreditworthy buyer used to be denied a loan. The 'revolution' wasn't merely that they now had access to loans at all, its that they had access to those loans in amounts that were orders of magnitude larger than traditional lending principles would have dictated.
The only limit on what a unsophisticated buyer is willing to spend is their mortgage approval amount. It used to be if you wanted to bump your bid up by a measly $5k, you had to come up with at least $1k out of pocket - if that $5k was above your approved mortgage amount, you'd have to come up with ALL of that $5k. With no money down blank checks, there is no longer any restraint, and prices unsurprisingly take off.
The one thing everybody in the chain had in common, from the borrower to the originator to the consolodator to the the I-baker -- ex-the investor -- was that it was OPM (Other People's Money); easiest kind in the world to spend. The WMC and Silver Star brokers, while titilating stories -- partying with Tara Reid and other B-listers at Marquee, buying $1,000 bottles of Cristal (swill overpriced at 1/10 that, IMHO), are almost inconsequential in the larger picture. Just another pair of fools and their money. With the $1.5M CT vacation home and the Manhattan Penthouse, he never saved a dime. One month's check came up short and it all came crashing down. The poor fool was "just one paycheck away from being homeless". Blech...
Yeah, there's a bit in the CDO Banquet tape where the guy trying to say what they did wasn't really so bad says something like
(paraphrase from memory)
... there were no ... not many suicides...
Exactly. In addition, there were generally another couple of layers of money managers who were using OPM. Before you get to the OP. The money managers obviously didn't want to lose, but if they didn't match performance indices, they were gone. And they didn't have to give money back.
This terrific report on Ira Glass's show -- by a couple of correspondents, This American Life's Alex Blumberg and NPR's Adam Davidson -- continues a tradition described years ago by Lawrence Weschler writing in The New Yorker about Robert Krulwich's economics reporting, also at NPR: "The Giant Pool of Money" will be "prized for its crystalline clarity."
I... loved... this...
a...
lot...
My recent impressions are that this
blog's comments are devolving toward
something like those at housingpanic,
which I quit surfing as being a waste
my time.
And now spam here remains undeleted.
Sorry; just my thoughts.