Week 13, Nov. 23, 27: The Global financial Crisis of 2008

 Week 13, Nov. 23, 27, First readings of Global financial crisis of 2008

1. Three years after the crash, in 2011, there was still a worldwide financial crisis. This 11-minute video explains how it happened, The Credit Crisis. 

 1. 

2. The Giant Pool of Money, a one-hour radio report, with transcript available. This walks you through the step-by-step process of how lots of people fooled themselves, and others, in a greedy money grab that led to a global financial crisis. It shows how radio can cover a complex financial topic in an easily understandable way.

3. In preparation for Monday's class, I am sharing the slides for the class here


4. And here are four short clips of 30 seconds each that tell some of the story of how the crisis occurred.

Glen Pizzolorusso, the mortgage broker, making $60,000 a month 
Glen lived the high life, champagne at $1,000 a bottle
The chain or irresponsibility: everyone passed the problem to the next guy
The experts fooled themselves; they were using the wrong data
 
For Friday's class

The Crisis goes Hollywood in the movie "The Big Short" with Ryan Gosling, Christian Bale, Brad Pitt, Steve Carell, and a cameo of Margot Robbie. Here is an explanation of some of the technical aspects of the film clips from the movie. 

How four men saw the financial crisis coming
Christian Bale´s character outsmarts the Wall Street Banks, who think he is a fool
Ryan Gosling, The Jenga clip, he talks about credit default swaps
The Big Short ratings agencies, a conflict of interest

Even more clips from The Big Short:
Michael Burry (Christian Bale) discovers the housing market is propped up by bad loans, Margot Robbie helps  
Michael Burry closes out his investment fund with 489% return, 2.7 billion dollars 
As always, the big bankers and politicians say the crisis was the fault of poor people and immigrants

If you want to dive deeper,  two Wikipedia articles explain more background on how the crisis occurred.
How government policies contributed to the crisis.
Explanations for innacurate credit ratings agencies and the subprime crisis.