Comments on: WATCH FRONTLINE TONIGHT on PBS * open thread

By: Mark34

Mark34 — Thu, 22 Oct 2009 15:50:07 +0000

Britain was soon followed by the other countries of Europe. ,

By: diane b

diane b — Wed, 18 Feb 2009 17:48:16 +0000

That doesn’t share anything about credit default swaps. You are buying nothing there is no property behind the debt.

By: anon

anon — Wed, 18 Feb 2009 17:10:27 +0000

Go learn about Credit Default Swaps if you want to understand Lehman’s (and everyone else’s) interconnectedness. Once you learn that you’ll understand that the systemic risk remains.

By: Bazooka

Bazooka — Wed, 18 Feb 2009 16:12:54 +0000

I don’t think the program says at all that if Lehman was bailed-out the crisis would not have happened. What it does say is that Lehman was way more interconnected than people may have thought. The systemic risk related to Lehman was way greater than what people were anticipating.

Hard to know in hindsight if saving Lehman would have made a difference, but it certainly kept the dominos falling. The Lehman decision is very controversial and greatly debated. No clear answers.

By: Bazooka

Bazooka — Wed, 18 Feb 2009 16:09:13 +0000

Paulson let ideology get in the way. He did not necessarily make the best decisions.

By: anon

anon — Wed, 18 Feb 2009 14:17:20 +0000

I don’t think and didn’t say the piece overly emphasized Paulson’s supposed antipathy for Lehman’s CEO. It was suggested though. In doing so the piece misdirects the viewer’s understanding of the cause and implies that bailing out Lehman’s might have stemmed the meltdown. This is false.

Coupled with the mere mention of the role of CDS and only in connection with AIG steers the viewer away from the inescapable domino effect of the CDS market. Its a misdirection, purposeful or not, I wouldn’t know.

By: anon

anon — Wed, 18 Feb 2009 14:09:15 +0000

Thanks for the link, that’s a good piece from the personal experience perspective. If you really want to understand CDS and the domino effect go to wikipedia and search Credit Default Swap.

By: anon

anon — Wed, 18 Feb 2009 14:00:41 +0000

Cynic, the “interconnected web” they mentioned in the Frontline piece IS the CDS’. All the CDS taken together exceed all the money in the world quite a few times over. I’ve seen values quoted as high as $72 Trillion.

I don’t know, but I suspect, that the reason Ford has not needed and has not taken bailout money is because they did not invest in CDS, they are not in the chain of dominoes.

By: anon

anon — Wed, 18 Feb 2009 13:21:28 +0000

That would be an important piece of information, wouldn’t it. $500 billion in 2 hours cannot be a run by many, many investors. Had to be sovereign funds or hedge funds. Other than foreign nation treasuries, who might have that much money in cash, I wonder hmm?

By: Ellen D

Ellen D — Wed, 18 Feb 2009 09:34:02 +0000

Who was behind the $500 billion drawdown from U.S. money markets? That’s what I’d like to know.

By: diane b

diane b — Wed, 18 Feb 2009 08:42:35 +0000

they might have mentioned it in passing but they did not state that there was any property backing these derivatives. Nothing and then AIG gives them insurance. I ask, Insurance on what a piece of paper. This is what this deregulation scam allowed and these guys Paulson and Bernanke to do to allow these guys knew exactly what they were doing, they knew all the details to make this happen the way it ddi, they PLANNED this!!!

Remember where Paulson came from; Goldman Saks. CEO. Talk about the fox gaurding the chicken coop!! ’nuff said!

To get a the real explanation of this ‘crisis’ check the article “The End” by Michael Lewis:

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?tid=true

By: cynic

cynic — Wed, 18 Feb 2009 08:02:35 +0000

Didn’t they cover the credit default swap issue in connection with the AIG? I believe they attributed most of AIG’s problems to CDSs, but I may be misremembering.

By: diane b

diane b — Wed, 18 Feb 2009 07:01:47 +0000

This program aired by FrontLine did not explain what the credit default swaps were. They did not explain that they were not backed by real estate, these default swaps are backed by absolutely nothing. Yes, folks absolutely nothing.

They would take a piece of property create the first loan, and then a hundred exact copies of that loan, but now called a credit default swap but not backed by the original property. They used different names on these swaps it was gambling.

The big boys all new what was going on. They created trillions of these derivatives.

No, this show was a real farce.

By: Peggy Sue

Peggy Sue — Wed, 18 Feb 2009 06:02:18 +0000

I’ll try to check it out, cynic. Thanks for the suggestion. I keep going, I might begin to understand this mess [a little, at least].

By: cynic

cynic — Wed, 18 Feb 2009 05:51:13 +0000

MSNBC’s housing bubble program “House of Cards” is also worth seeing, if you get a chance. It’s astonishing what went on in plain view without too many questions being asked. I guess no one wanted to question what was at the bottom of a booming economy.