Bad Banks on This American Life This Weekend

For public radio fans, Simon is on this weekend’s episode of This American Life, “Bad Bank,” with Adam Davidson and Alex Blumberg of Planet Money, explaining what happened to our banking system. Regular readers of this blog will already know most of what they cover, and some of it comes from episodes of Planet Money you may already have heard (including the “ransom noteconversation). But if your friends and relatives are not quite as up to speed as you are, feel free to recommend this episode. (It’s the third TAL episode to focus entirely on the economic crisis; the others are listed on our Beginners page.)

TAL plays at different times on public radio affiliates this weekend. Starting Sunday night or Monday, the free online stream will be available from the TAL page. And if you subscribe to their podcast, you’ll get the episode Sunday night or Monday.

In my opinion, TAL is the best show available in any medium anywhere, so I recommend listening to them even when they’re not talking about the economy.

9 responses to “Bad Banks on This American Life This Weekend

  1. I thought Simon was a dry economist. He’s a hoot! Quite funny!
    I was disappointed he didn’t somehow insert his phrase “break the back of the elites” as a necessary part of fixing financial crises.
    And TAL is not only very good but serving a very useful function.

  2. I’m still reeling from the program.
    It was excellent. I’ve been an NPR/CPR listener for ages and I podcast PlanetMoney everyweek. I will podcast TAL on Monday when it becomes available and listen to it again. Having said that, I have never been more terrified. One possible outcome of this crisis is unthinkable and almost unspeakable.

    And there is nothing I can do to control this situation. the worst feeling in the world. . .

  3. I should add. . .TAL is probably the best radio listening out there. Intelligent. Interesting. Curious. Off the beaten path American lives.

    Last weeks “Plan B” program was hilarious.

  4. Hi donailin

    I haven’t caught up with this broadcast yet. But there is one thing you can do to control this situation and that is talk about it. Just what you are doing. If one outcome seems almost unspeakable, talk about it anyway – a burden shared is a burden halved.

    Wired, for example, has a piece on “radical transparency” (see http://www.wired.com/techbiz/it/magazine/17-03/wp_reboot?currentPage=all) that argues that …

    “That’s why it’s not enough to simply give the SEC—or any of its sister regulators—more authority; we need to rethink our entire philosophy of regulation. Instead of assigning oversight responsibility to a finite group of bureaucrats, we should enable every investor to act as a citizen-regulator. We should tap into the massive parallel processing power of people around the world by giving everyone the tools to track, analyze, and publicize financial machinations. The result would be a wave of decentralized innovation that can keep pace with Wall Street and allow the market to regulate itself—naturally punishing companies and investments that don’t measure up—more efficiently than the regulators ever could.”

    It’s suggestions like these, developed through the frank exchange of dissimilar ideas, that are our best hope.

  5. I love “This American Life”. However, the “Big Bank” episode did not meet my expectations.

    They came very close to saying the f-word – fraud – which has to be acknowledged before the real fix can be found. One economist was saying that banks’ and government’s statements are close to deception, but, again, nothing accusatory.

    There was some dancing around Deutsche Bank’s LaVorgna’s opinion letter, calling these people mafia, but it is not the same as calling for criminal prosecution of bankers and mortgage brokers – one of which was featured in the second installment (repeat of Planet Money episode), who according to the presenter “avoided committing most of the abuses”.

    Until some heads roll, there will be no solution to this crisis as fraud will continue.

  6. Maryellen J Lewis

    Reply to Donailin & Boris:
    For some encouragement, you might want to check out the work of the National Community Reinvestment Coalition, an alliance of over 600 advocacy groups across the country with headquarters in DC, who have been fighting against this catastrophe since long before it became a crisis. Now with national attention, changes are beginning to happen that have been sought for years. NCRC and its allies have used evidence-based arguments to criticize and form recommendations about reining in the greed, which are finally being taken seriously at the highest levels. Check out NCRC’s formal complaints filed against the 3 biggest Ratings agencies for their critical role in this meltdown – by calling all those toxic loans top quality, thus ensnaring investors. [See

    http://www.ncrc.org/index.php?option=com_content&task=view&id=371&Itemid=118

    and

    http://www.ncrc.org/index.php?option=com_content&task=view&id=409&Itemid=118

    It is all so complicated! NCRC also created the national Appraisal Institute which has had some success already in raising standards for the home appraisals which underlie all those toxic mortgages – fraud, as Boris writes.
    Don’t get discouraged, get mad! and join with the efforts that are making some headway against the greed and malfeasance that led to this cascading tragedy.
    [signed: one of the many volunteers in NCRC’s economic justice network]

  7. Maryellen J Lewis

    P.S. NCRC is having a terrific conference later this month called:
    “Roadmap to the Financially Inclusive Society”
    NCRC 2009 National Conference
    March 11- 14, 2009

    I have access to some scholarship funds (e.g., for students, small nonprofits, etc.) – if interested, please contact me at lewisma9@msu.edu.
    CHECK IT OUT: http://www.ncrc.org/index.php?option=com_content&task=view&id=376&Itemid=91

  8. Maryellen,

    Today on 60 minutes, Harry Markopolos mentioned that fraud is wide-spread on Wall Street.

    I used to work for one the major banks mentioned on NPR. Two years I blew a whistle on my employer, and I am still involved with this case. There was no action from the government during this time, the bank’s share prices went down 90% and they are still dragging on my case.

    To say that fraud was limited to mortgage appraisal is a major understatement. Actually, the organization you pointing to filed suit against rating agencies – the ones that rated securitized pool of mortgages as AAA investment. That fraudulent rating process tool place long after fraudulent house appraisal.

  9. Hey fellas. I just randomly (luckily)tuned into this show at the beginning of it a couple of hours ago while I was at work. I thought it would be your typical mumbo jumbo, but I gave it a shot cuz of the bold claim the host made about how they could explain it in layman terms. Glad I did! My first TAL show and look forward to more already!

    Unfortunately, I was working and people were talking and all sorts of stuff tried to distract me from it, but I attached a little portable radio to my belt (was moving around a lot) and tried my best to follow it while working and communicating with my work mates. Luckily I caught the website to TAL and will be able to hear what I missed. I actually found a torrent I might go for that is available right now.

    Here is my main concern. It seems like they didn’t mention or get in to “Fractional Reserve Banking”! Perhaps I missed it. It’s very possible I missed it. But I wonder how it fits into this equation, cuz I’m sure it plays a key role.

    If you are ignorant to the “Fractional Reserve Banking”, then check out this: http://www.youtube.com/view_play_list?p=9DAF8813F0358C04
    It does a similar great layman’s terms explanation of the Fractional Reserve Banking system as this one here does an the current Banking Crisis.

    So does this theory allow for Fractional Reserve Banking?