60 Minutes on the Financial Storm
On Friday Congress finally passed - and President Bush signed into law - a financial rescue package in which the taxpayers will buy up Wall Street's bad investments.
The numbers are staggering, but they don't begin to explain the greed and incompetence that created this mess.
It began with a terrible bet that was magnified by reckless borrowing, complex securities, and a vast, unregulated shadow market worth nearly $60 trillion that hid the risks until it was too late to do anything about them.
And as correspondent Steve Kroft reports, it's far from being over.
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Source:
A Look At Wall Street's Shadow Market: How Some Arcane Wall Street Financial Instruments Magnified Economic Crisis
CBS 60 Minutes, Oct. 5, 2008
http://www.cbsnews.com/stories/2008/10/05/60minutes/main4502454.shtml
Tuesday, October 07, 2008 | 12:30 AM | Permalink
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Comments
Kroft did a surprisingly good job of boiling down these derivatives that are going to sink us.
Posted by: Jim Greco | Oct 7, 2008 12:33:34 AM
Barry
Wilbur Ross gave an INSuRANCE alternative to the Paulson plan. he was on cnbc 10-2-08. It made great sense: decreasing housing inventory and losening up the CDO and swap market.
Please see if this doesn't make sense for round #2 when we surely will need more injections.
Posted by: drdave | Oct 7, 2008 12:40:41 AM
When do you sleep barry?
Posted by: chris hoey | Oct 7, 2008 12:45:19 AM
LOS ANGELES -- An unemployed man despondent over extreme financial problems shot and killed his wife, three children, mother-in-law and then himself in an upscale home in a gated community, police said Monday.
I don't know if this man was a victim or not but his family certainly was. If this crisis is affecting you, don't kill yourself over it and don't kill your loved ones. If you are hurting then you still have feelings. Celebrate that because the bastards that brought this to us have no feelings. They are dead or soon will be when we catch up to them. So hang in there. Life is NOT money.
Posted by: AGG | Oct 7, 2008 12:46:52 AM
If we see this country coming out of this recession and the real estate market stablizing i would love to know who the USA will compete with and where will new income streams come from? We have alot of savings to catch up with and no future income prospects.
Posted by: chris hoey | Oct 7, 2008 12:52:10 AM
Frank Partnoy is very good... Check out his older interviews on Financial Sense Online
Posted by: SINGER | Oct 7, 2008 12:53:11 AM
Finally somebody told the truth that Jimmy Carter was to blame for all of this. Now we can move on.
Posted by: Douglas Watts | Oct 7, 2008 12:54:55 AM
====================
Mortgage Problems Explained (in plain language)
====================
Posted by: Jojo | Oct 7, 2008 1:04:18 AM
There was a curious audio loss when the culprit companies were being named just before the end of the interview. Censorship??
Posted by: rudyman | Oct 7, 2008 1:08:39 AM
Barry,
There is some justice in the world. Like this:
Knock Out: CNBC Confirms Lehman CEO Punched at Gym
Network verifies reports Richard Fuld was attacked for financial institution's bankruptcy.
By Jeff Poor
Business & Media Institute
10/6/2008 3:59:29 PM
It seems anxiety from the financial crisis is reaching new highs, but the tipping point for one individual came at the Lehman Brothers gym in the midst of the company’s collapse.
Posted by: AGG | Oct 7, 2008 3:04:19 AM
Great segment! That really puts a great deal of the less accessible specifics in a nut shell....I mean the criminal specifics not necessarily the big picture..historic low interest rates, international vendor finance, irresponsible lending.
James grant where he calls the participants criminally incompetent was great! we need a lynching that what we need...
Posted by: Simon | Oct 7, 2008 3:40:03 AM
Very good MSM segment but they forgot to whip open the curtain at the end to see a miniature Greenspan sitting there shocked at being caught....
Posted by: Brian | Oct 7, 2008 5:48:59 AM
> Wilbur Ross ... CNBC... decreasing housing inventory
I didn't see the clip, but this reminds me of the 'raze 1,000,000 houses' idea that would 'help' prices by reducing supply.
I don't understand how some people think. Destroy tangible physical assets to improve the 'value' of paper and electronic assets? Wouldn't it be more useful to, say, give a homeless person a roof over their head? Or populate a neighborhood with people looking for a place to live? Surely there must be a better application of our cleverness than burning houses instead of paper. And if we're going to raze something, why don't we tear down 1000 insolvent banks and their worthless paper and start fresh?
Posted by: pmorrisonfl | Oct 7, 2008 6:56:29 AM
Wall Street and associates linear programming in full
1 Minimise the interest rates (Mr Greenspan’s conundrum)
November 6 2006: 7:12 PM EST (Mr Bernanke becomes the new Fed governor)
Feds probe $4 trillion bond market
Government regulators meet with big banks to prevent abuse in bond repurchases.
Broadcasting a USA recession in 2006 for 2007
2 Maximise the rating i.e. the security
Remembering the rating agencies fallacious assessment of subprime and CDO’s
3 Maximise the capital gain as a source of repayment as opposed to real income
See the stock markets 2006/2007
Posted by: Philippe | Oct 7, 2008 7:13:06 AM
the credit default swaps and related instruments are not the problem per se
the problem is the power those phoney papers (instruments)(#s in an account) were given to buy real things; employ real people; and lastly cut checks to CEOs and CFOs
Posted by: Greg0658 | Oct 7, 2008 8:09:00 AM
All concerned citizens should call on the IRS to garnish the wages of these criminals. Sue them all for Racketeering under the RICO statute. WHO will do it! We need a DA with some gumption. The shareholders should all get involved with Carl Ichan... see his new org United Shareholders of America.
Posted by: Fred S. | Oct 7, 2008 8:09:00 AM
Think of the power still given today to those phony papers called "dollars" to buy real things, employ real people, etc... Once that illusion is revealed, it's Katie bar the door... dmc.
Posted by: dmc | Oct 7, 2008 8:53:05 AM
barry
you should read this:
http://article.nationalreview.com/?q=ZjRjYzE0YmQxNzU4MDJjYWE5MjIzMTMxMmNhZWQ1MTA=
Posted by: steve cook | Oct 7, 2008 8:54:33 AM
Well, as Saint Dicky Fuld said under oath (for all that's worth):
"There was nothing that could have been done. I lie awake at night, turning over in my head, what could have been done differently."
Oh boy.
Posted by: Alan Wilensky | Oct 7, 2008 9:07:52 AM
addendum:
most all job titles are a positive for society
in the case before us:
the balance between Mining coal; Building homes; Assembling cars (+-*/) Trading is in imbalance
Steely Dan "Reelin in the Years" ... "reeling in the yeast, stowing away for time"
Autograph "Turn up the Radio" ... "for every minute of work, I need a minute of play"
School : Work : Retire ... and Survive the forces of nature
Posted by: Greg0658 | Oct 7, 2008 9:31:24 AM
Another astounding footnote to this debacle: The NYT just got a leaked copy of the new SEC Inspector General's report on the firing of investigator Gary Aguirre in 2006. Yes, there was business pressure to fire him. But let's just recall the trajectory of this story: The head of the SEC's enforcement division allows the CEO under investigation to speak to her behind the investigator's back, and Aguirre gets the sack. Congress gets irritated, and the SEC IG issues a report in which he clears everyone and finds no evidence of corrupt contacts. But then it emerges that the IG never spoke to Aguirre in preparing his report. Soon after, he goes into early retirement, without disciplinary action against him. It takes two more years for the new IG to get the new report out the door, when the focus has moved on to the rot at the core.
Well isn't THIS the rot at the core? Sounds like every other IG report issued during the Bush administration. These offices have had statutory independence, but it didn't stop the Republican appointees' internal stonewalling, government wide.
Posted by: greenlight | Oct 7, 2008 9:44:07 AM
Croft was extremely remiss in not mentioning the role of central banks in initiating the loose money, the sine qua non of the credit bubble.
Posted by: algernon | Oct 7, 2008 11:25:49 AM
Excellent job by the Establishment propagandists at CBS of casting the blame on the "unregulated" market rather than on the interventionism of the government.
A simple plan for Congress:
1. Stop printing (or causing to be printed) "money". Re-legalize real money. Let the market sort out handling/transfer/ownership mechanisms.
2. Stop trying to "help" accomplish social goals through tax and regulatory schemes. Let us decide what we want for our own lives.
3. In general, vote NO unless the bill is constitutional, affordable, and necessary -- and you've read all of it.
Do that and save America.
Posted by: Jamie Jackson | Oct 7, 2008 4:56:44 PM
in my opinion after watching 60 minutes, and the fallout of these 'financial terrorist criminals' the only way to find out the scope and identities of the perpetrators is to have homeland security
arrest those known persons and transfer the terrorists to Guantanimo.
Using their own 'waterboarding' techniques to get all individuals that benefitted from this financially, and seize their assets to correct the problem. It should be done before the new president elect takes office, if possible. I feel that deregulation was the key
factor that allowed them access to this fraud scheme.
Posted by: Frank | Oct 12, 2008 5:39:57 AM
