Tuesday, Feb 19, 2008
Watch this program again on 4oD
Channel4: Dispatches: How The Banks Bet Your Money
Very good documentary on Channel 4 going into detail on the credit crunch, sub prime, cdo etc etc.
Installing 4oD is slow and clumsy because it needs microsoft programs. But it does work well.
Posted by happyrenterz @ 01:03 PM (1666 views) Add Comment
29 Comments
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1. dbnazz1 said...
An excellent documentary. It was nice to be reminded that true jouralism (ie reoprting facts and not making it up) still exists. It pulled no punches and was straight to the point.
I have made reference to this programme on my comments on another blog. It was almost as if it had been scripted from this site. there are probably quite a few site members here who would have been loking at tghat programme and felt that somebody had read their mind.
2. sold 2 rent 1 said...
dbnazz1,
It even said at the end that there are products called 'credit default swaps' that you will not have heard of but will eventually become a household name like 'sub-prime mortgages'. This was timed perfectly after the Washing Post article that was posted yesterday about CDS's
3. inbreda said...
Absolutely - much better than teh repossessionx3 programme. I was really impressed with this documentary - and the domm-mongering at the end was exciting!!!
I was amazed that anyone was allowed to make a programme that so accurately and intelligently highlighted the root cause of the problem (Gordon "the fat useless man" Brown) and the greed of the banks. I also truly beleived him when he described the ignorance of the BoE to the coming problems. It makes me think that much worse is to come, and they aren't really in control of anything at all.
4. inbreda said...
In fact I wish he had concentrated a bit more on what to do to survive - I would value his opinion.
5. techieman said...
For a change the documentary was substance over form (he did come across as a bit of a know it all, and his presentation skills left something to be desired).
6. Landedgentry said...
Slavic village in Cleveland Ohio looked like it had been nuked .
7. voiceofreason said...
The bit about how the FSA is now investigating itself for failure to regulate CDOs was a real eye-opener.
It underlines the extreme ineptitude of Gordon Brown's restructuring of FSA/Treasury/BoE.
And that's on top of killing off final salary pensions for everyone but the public sector, and of course the many £100bns of PFI that is off govt debt books.
Cheers Gordy :)
8. crash bandicoot said...
I liked the bit about the public having a greater understanding of Northern Rock's situation than the FSA, the treasury and the BOE all put together.
9. Landedgentry said...
Banks = Privatise profits, socialise losses.
10. techieman said...
He kept on calling CDOs CLOs and not to nitpick but is it surprising that the people on the board of banks dont know what the traders are doing? Does the CEO of Sony know how CDs are made? ;-).
11. waitingfor hpc said...
yeah but i bet that the top man at sony has not bought a load of cd's for £1 which are now worth £0.10 each as they were recorded wrong!!!
12. Letthemfall said...
I think CLOs refer to collaterised commericial loans don't they? CDOs are asset backed (mortgages on houses the interesting ones).
The point the presenter made (a private equity chap) is that all the credit default swaps means the CLOs are potentially as explosive as the CDOs, so hang on to your hats (but not your house).
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14. stillthinking said...
I wondered about the CDO CLO link, but doesn't that just represent his perspective, i.e. you sell a loan, from your view, but somebody buys a debt, and the various intermediaries were selling CLOs which became CDOs on purchase.
15. techieman said...
Fair comment - stillthinking and waiting for hpc!
16. 51ck-6-51x said...
To clear up some terminology...
A CLO is a type of CDO (as is a CBO)
A CDO, 'Collateralised Debt Obligation', is a type of ABS, 'Asset Backed Security', and is a security with underlying secured or unsecured senior or junior bonds issued by corporate & sovereigns, secured or unsecured loans made to corporate commercial & industrial loan customers of lending banks.
A CBO is a CDO containing bonds only; a CLO is a CDO containing loans only.
CDOs are usually written on somewhere between 20 and 500 borrowers, whereas traditional ABSs would be on 500 to 100,000. CDOs *should* have a more accurate rating than these traditional ABSs as the agencies may directly assess the underlying securities, rather than using statistical analysis (as they would with ABSs).
17. japanese uncle said...
Yes, we have identified the problem. But then what can we do to stop those banking thugs from doing the same again? We have no voice in the Parliament any longer, as Lab/Tories are actually serving the interests of those thugs. recently joined by the LidDem after their coup, nuetralizing Charlie K and his more progressive colleagues. This is a particularly serious issue.
18. Toto said...
Great documentary. Factual, concise and to the point. Now where's that 'No more boom and bust' video by Gordon Brown? There couldn't be a more appropriate time to air it again don't you agree?
19. alan said...
Brilliant!
." .......Yes, it was Gordo...
The programme said, "there is one simple reason why...an here he is
Top quote: - "When the savers formed a queue to withdraw from the Rock, they showed more common sense than the Chancellor, the FSA and the Bank of England".
This is the first TV documentary I've seen, actually pinning the blame. It is put together in a straightforward, plainspeaking fashion. I guess it's been "on hold" till the fate of NR was sorted.
20. drewster said...
On the CLO / CDO comment...
CLO = Collateralised Loan Obligations
CDO = Collateralised Debt Obligations
They're basically the same.
Here are a few more:
ABS = Asset-Backed Securities
CBO = Collateralised Bond Obligations
CMO = Collateralised Mortgage Obligations
MBS = Mortgage-Backed Securities
CMBS = Commercial Mortgage-Backed Securities
RMBS = Residential Mortgage-Backed Securities
All similar, though not quite identical. Basically the banks take debt (residential mortgage, commercial mortgage, credit card, car, personal loan) and bundle it up into a single tradeable security.
21. sold 2 rent 1 said...
JU,
Identifying how to stop it happening again is NOT the issue because the problem is the fundamental flaw in the debt-based monetary system.
It was always going to end up this way.
When this debt bubble started in the 1950s most debt was taken on by businesses which invested the money to expand.
A USD borrowed would generate many USDs in return.
As the debt-based monetary system requires an ever expanding level of debt to maintain the status quo, if was obvious that the quality of the borrower had to decrease along with any real long-term returns for the economy as a whole.
As we reach the extremes of this debt bubble almost every USD borrowed is spent on houses or consumption of imported goods which have very little long term benefits for the economy.
This bubble was always going to end up lending money to people who were least able to pay it back and spend it on the items that only had short-term benefits.
The depression would have started in 2002 without this sub-prime madness taking off.
22. monty032 said...
It was an excellent programme, particularly in comparison to the ubiquitous predigested trash you get these days. Even factual programmes that used to be serious such as Panorama and Horizon are now optimised for people with the attention span of a gnat. The script of the programme must have side-stepped the dumbing-down filters somehow, maybe because of his connections with people who matter. Jon Moulton is a well-known figure in the private equity world, so if he came across as a bit of a know-all it is with good reason. If his presentation skills were lacking in places it is because he isn't a professional reporter. At least he clearly knows what he is talking about.
23. Blank Czech said...
I think the show was up there with Panorama's expose on mortgage fraud a few years back and is destined to become an HPC classic.
Eric you must be a very happy man today. I know I am.
24. Alan said...
For anyone who wants to see it without downloading the channel 4 thing:
It's repeated on More 4 tomorrow night (Wednesday) at 9pm. Damn shame I'm out. I'd love to watch it. (I'll try the 4oD thing).
25. japanese uncle said...
sold2rent
You are right. Capitalism based on the current banking system is basically flawed thus needs to be scrapped.
26. sid public said...
Great programme.
I watched it with my girlfriend and said: "This is why I've been visiting the HPC site for the last 12 months!... trying to educate myself on this stuff"
I have no economic background but there clearly was a sh** storm brewing when I was house-hunting 12 months ago (the market in London was mental, sealed bids etc) and this site helped me educate myself beyond the 'house prices only ever go up' mantra we're absorbing by osmosis practically from birth!
So I didn't buy and I'm renting a great flat that I'll happily watch this all unfold in front of us over the next few years.
cheers!
27. shipbuilder said...
Hear, hear, S2R1 and JU.
28. geed said...
Just watched it. This program should be repeated at primetime instead of the 6 o'clock news for the next months to get some blo0dy sanity back into our country and the idiots who think all is well.
Not a Real Estate agent, corporate banker or self professed property guru in sight, and what do we get pure facts. halla freakin luja!
Lets hope this comes tumbling down fast so we can all get on with our debt free lives and be served burgers by ex-bankers.
29. Jon Moulton said...
CLO - I know its not right - thats why I kept saying "and things like them" - its the nearest to a generic for this soup!
Jon Moulton