Money, Power, and Wall St.

819 Words2 Pages

The PBS Frontline documentary, Money, Power, and Wall Street gives the audience a little history about the causes of the Great Recession. Frontline some of the major people from Giorogs Papakonstaniou, the Former Greek Financial Minister; Sheila Biar, chair member of the FDIC during the crisis, and Robert Wolf the chairmen of UBS Americans to name a few. The crisis of 2008 not only made about 8 and half million Americans unemployed, but also a loss of about $11 trillion in net worth. On top of that, the nation was divided with radical movements from the left and right like Occupy Wall St. and the Tea Party forming as a result of the crisis in 2008. Some may say that this was just a result of capitalism and not enough government regulation on Wall St. Many of the “Elite” financial figures could not give a definite answer about why this crisis occurred as well as stated by many of the people interviewed, “We don’t know how it happened.” Many young brokers working for JP Morgan back in the middle of the 90’s believed they could come up with a way to cut risk, credit derivatives. Credit Derivatives are just a way of using other methods to separate and transfer risk to someone else other than the vender and free up capital. They tested their experiment with Exxon Mobile who were facing millions of dollars in damage for the Valdez Oil Spill back in 1989 by extending their line of credit. This also gave birth to credit default swaps (CDS) which a company wants to borrow money from someone who will buy their bond and pay the buyer back with interest over time. Once the JP Morgan and Exxon Mobile credit default swap happened, others followed in their path and the CDS began booming throughout the 90’s. The issue was that many banks in... ... middle of paper ... ...here they were not as big but still receive major media attention. The protestors also wondering why many lost their jobs and wanted the government to reform the Banks. Also the police received attention because of how they were treating the protestors where many were pepper sprayed and brutally assaulted. A major term, confidence was very importance during this time. Because as soon as Lehman Brothers fell, many banks and brokers began to lose confidence as well because they were worried who would fall and how much money they would be losing because of their investments with Lehman. Then when it came to fixing Wall St, Obama chose Geithner because he was already popular with Wall St and if he would have chosen someone else that confidence would have been lowered down. This confidence also helps consumers go out and spend their money to keep the economy going.

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