If you like your economic meltdown exposés with Canadian accents and ominous music, then Meltdown: The Secret History of the Global Financial Collapse is the documentary for you.
I’m still watching the first episode, but Meltdown looks like a good, easy-to-grasp summary of the economic meltdown, starting with Countrywide‘s reckless lending practices. It’s done by the CBC, but for the life of me, I can’t figure out how to watch it on the CBC website. All I get are back-to-back ads. Fortunately, Al Jazeera English makes it easier. Here are all the episodes: 1, 2, 3, and 4.
Why politicians and economists can’t decide on the best fix for the economy. What’s the Best Fix? | Newsweek
Even though the interest rates banks pay are dropping, credit card interest rates are holding steady. Joseph Ridout of Consumer Action thinks the banks are trying to make up for their losses on subprime mortgages.
At the same time, banks are cracking down on existing customers by raising rates, dropping limits, and taking other draconian measures.
But if banks keep squeezing consumers with high credit card interest rates, they will see default rates skyrocket as people stop making payments they cannot afford, sending the credit card market down the drain right behind the subprime market.
Interest rate cuts? Not on credit cards | USA Today
Banks pull the squeeze play | Star Tribune
This American Life has done two excellent shows to help ordinary folks like you and me understand the morass that is the U.S. economy.
A few months ago, in The Giant Pool of Money, Ira Glass and his crew explained the link between the housing crisis, the turmoil on Wall Street, subprime lending, and more. Follow the link for the full show.
Today, TAL returned to the economy, trying to unpack the meltdown and figure out whether the country needs to bail out Wall Street, or not. Some key conclusions:
- The Wall Street meltdown happened because of the subprime meltdown, obviously, but that manifested in the financial sector in the form of the collapse of the commercial paper and credit default swap markets;
- The meltdown is both parties’ fault, not just Democrats’ or Republicans’;
- It is fair for taxpayers to be furious about the bailout, and to direct that fury at federal regulators who were sleeping on the job;
- The bailout is probably good, but may not work; and
- The Treasury should probably use its discretion and pursue a stock injection strategy rather than the Paulson plan (which is obviously unlikely).
If all that sounds like gibberish, listen to This American Life’s Another Frightening Show About the Economy. It was all gibberish to me before I listened to that show, too.