Essay Example on This American Life is a radio show









This American Life is a radio show hosted by Ira Glass in collaboration with Adam Davidson a business correspondent for National Public Radio NPR as well as Alex Blumberg a producer for the show The podcast episode number 390 which originally aired in the spring of 2008 was called Return to the Giant Pool of Money The show begins with Ira and Adam at a black tie dinner similar to the Oscars However the award being presented was not for actors This award dinner was for a small group of specialized financial experts with one award in particular being given for Collateralized Debt Obligation CDO of the year Jim Finkel also sitting at the table with Ira and Adam was a man who was described as a Legend and a Granddaddy of the financial industry Now he sat nervously no longer high with investor confidence Ch 9 p 294 because he was up for the CDO of the year award At this time it was an already well known fact that CDOs were considered to be a financial product that became a leader in the economies subprime mortgage meltdown and financial crisis Act 1 was particularly interesting as it began by recapping the original report where Alex and Adam hear from the bankers mortgage dealers investment managers and homeowners who all whether consciously or not played a role in creating the economic disaster created by the housing crisis 

The discussion starts with Clarence Nathan a homeowner who received a NINA no income no asset bank loan to purchase a home This type of loan is lent without first checking to see if the borrower has any income or assets to fall back on in case a default in payment occurs It became very clear the banks had become willing to take excessive risks as they began to dabble in subprime mortgages The banks tied more and more capital into these loans Securitization Ch 10 p 444 allowed these banks to free up assets by pooling them together and selling them off Moving on in the show we heard from Mike Francis a Wall Street financier who worked at Morgan Stanley Mike Garner a Nevadan working as a Mortgage Broker and Glen Pizzolorusso a Mortgage Salesman in NY Each was a link in the chain that connected homeowners such as Clarence inadvertently to the global pool of money through the purchase bundle and sales of residential mortgages and US housing Interestingly the episode led us back to Jim Finkel the guy up for the CDO of the year award who also ran an investment management firm CDO s were created as a result of the industry attitude which was lower interest rates create credit increase the money supply and spend spend spend 

This mentality led Jim and his company to seek new markets and create new financial vehicles to tap those markets create liquidity in the economy and allow banks to sell off debt to free up capital to invest or loan In fall 2009 the show revisited some of the market players to see where they were a year later The team describes the bursting of the housing bubble the key financial player s business and personal fortune as well as the shift that occurred in economic thinking Ch 1 p 15 What I found to be the most engaging is how the homeowners faired versus some of the key financial players Alex and Adam met with the homeowner Richard Campbell who nearly lost his house as a result and after much stress effort and assistance from the aid of a program called Neighborhood Assistance Corporation of America NACA were able to overcome the housing debacle and keep his house Clarence Nathan the original homeowner with the NINA loan neither had made a payment nor been contacted by any institution regarding a payment or foreclosure

He was lost in the sea with millions of others with delinquent mortgages but continued to live for free for nearly three years On the flip side there was Glen and Jim who lost millions as a result of the burst Glen lost his own home which he found himself upside down in Both were left with nothing other than memories to reflect on In closing the team checks in with the giant pool of money which was initially stated to be around 70 trillion dollars and growing Yet two years a financial collapse and anticipation of shrinkage the pool grew to 84 trillion The fact is two major influences played a role in the recovery and growth of the pool major investors pulling money from the stock market and reinvesting it into the pool and the government The Federal Reserve and the world s central banks created trillions in new currency which has made it back into the pool again

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