g5000
Diamond Member
- Nov 26, 2011
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Mac, they go all the way back to BISTRO, although they don't mention it specifically by name. Even further back than that. They even extensively interview two of the 20-somethings at JP Morgan who invented it and then watched their creation get turned into a monster by other firms who had no idea what they were doing.
It really is well done.
My concern is that they try to point all the blame in one simplistic direction (as "Too Big to Fail" did) instead of painting the big picture. So they illustrate that there were many pieces, many villians (including the consumer) in this? If so, then yeah, I'll try to check it out.
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I have watched only the first hour, but it is pretty clear they are constructing all of the pieces. In the first hour, they went into the creation story of CDS and CDOs. There also touched on how the instruments were gamed and given AAA by the ratings agencies.
And they went into the naivete of the investors who were buying the toxic tranches.
While they don't accent it enough, they do explain how loose credit became as the result of the mistaken belief that risk was being eliminated through derivatives. And so the underwriting laws of the Universe were being chucked out the window.
One of the JP Morgan women explains how they created CDOs for business loans because they had a long credit history of such loans, and she bemoans how there was no such history for retail home loans and that is why they hesitated to get in on that market while the rest were running wild.
Frontline also gets major Cool points from me because they feature [ame=http://www.amazon.com/Traders-Guns-Money-derivatives-Financial/dp/0273731963/ref=la_B0045AX9M2_1_2?ie=UTF8&qid=1336066829&sr=1-2]Satyajit Das[/ame] in the first hour quite a bit.
It is a very impressive effort, and I look forward to watching the remaining three hours.
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