The podcast gives a lot of insight into the series of events in the lead up to Wall Street’s biggest crisis since 1929: the2 009 financial meltdown. Ironically, in spring 2008, awards were given to a small group of specialize Wall Street financial experts who actually invented and developed all the financial securities, including the recent subprime meltdown resulting in the 2009 global financial crisis (This American Life 1). It is incredible that people could get rewarded for their role in creating one of the most undoubtedly unsuccessful financial instruments in human history. It becomes clear that Jim Finkel, a renowned Wall Street finance expert who collected and managed sophisticated mortgage-based financial securities, prematurely declared that the problems in the equities markets were behind us and the dust had settled. On the contrary, the crisis was only getting started as evidenced by – just five months after the awards dinner of the Wall Street financial experts – the collapse of Lehman Brothers. The collapse of the economy would force the federal government to intervene with bail out for the entire US financial system (This American Life 1).
Another significant take away from the podcast is that the 2008-09 global financial crisis was a culmination of the non-deliberate actions of bankers, mortgage dealers, investment managers and homeowners. When the housing crisis was still merely a housing bubble, banks gave out NINA loans which was a-no-income-verification-loan (This American Life 1). The result was that huge loans were given to individuals or organizations with bad credit, resulting in serious defaults that would crush the US financial system and the global economy at large. Finally, it was interesting to learn from the podcast that there exist a global pool of money or world savings running in trillion of dollars, which is far greater than the world’s annual grand spending that investors are keen on growing even further.
Work cited:
This American Life. 390: Return To The Giant Pool of Money. [Online]<Available> http://www.thisamericanlife.org/radio-archives/episode/390/return-to-the-giant-pool-of-money. <Accessed>February 17, 2014.
