High-Frequency Trading & Rigging the Stock Market (CBC The Current 09 April 2014)
Why Michael Lewis thinks the stock market is rigged by high-frequency trading - April 9, 2014
The Current from CBC Radio (Highlights) (The Current from CBC Radio (Highlights))
0:00/28:51
1.
2.
*
3.
*
4.
5.
6.
Unit 4 Financial Markets
FM GLOSSARY
Anthropologist Joris Luyendijk describes how terrified insiders were during the financial crisis of 2008. Joris Luyendijk describes the consequences of saving the financial system from its near-collapse in 2008 in an interview for a program titled The Illusion of Money.
"We think we know what money is. We use it every day and our lives are unimaginable without it. But look more closely and you find that coins and dollar bills aren't "real". They're promises, symbols, ideas. And exactly what money is has evolved enormously over the ages." Joris Luyendijk
"Money is something we no longer understand. Because it describes a claim on future goods and services, but it's also a store of value, it's used as a productive resource. It's all sorts of different things. And I think it's terrifying because if our economy is the body, then money is the blood and the financial sector is the heart. And if we no longer understand the blood that's keeping our body alive, we're in deep trouble." Joris Luyendijk
SOURCE 1 → Meltdown: The Secret History of the Global Financial Collapse
SOURCE 1 → Meltdown: The Secret History of the Global Financial Collapse
VIEW → Episode 1 of Meltdown: The Secret History of the Global Financial Collapse
Meltdown travels the world - from Wall Street to Dubai to Iceland - to investigate the secret history of the global financial collapse. Meltdown is the story of the bankers who crashed the world, the leaders who struggled to save it and the ordinary families who got crushed.
In Episode 1, we hear about four men who brought down the global economy: a billionaire mortgage-seller who fooled millions; a high-rolling banker with a fatal weakness; a ferocious Wall Street predator; and the power behind the US President.
The crash of September 2008 brought the largest bankruptcies in world history, pushing tens of millions of people into unemployment and bringing many countries to the edge of insolvency. But how did it all go so wrong?
Lack of government regulation; easy lending in the US housing market meant anyone could qualify for a home loan with no government regulations in place.
Also, London was competing with New York as the banking capital of the world. Gordon Brown, the British finance minister at the time, introduced 'light touch regulation' - giving bankers a free hand in the marketplace.
All this, and with key players making the wrong financial decisions, saw the world's biggest financial collapse.
In Episode 1, we hear about four men who brought down the global economy: a billionaire mortgage-seller who fooled millions; a high-rolling banker with a fatal weakness; a ferocious Wall Street predator; and the power behind the US President.
The crash of September 2008 brought the largest bankruptcies in world history, pushing tens of millions of people into unemployment and bringing many countries to the edge of insolvency. But how did it all go so wrong?
Lack of government regulation; easy lending in the US housing market meant anyone could qualify for a home loan with no government regulations in place.
Also, London was competing with New York as the banking capital of the world. Gordon Brown, the British finance minister at the time, introduced 'light touch regulation' - giving bankers a free hand in the marketplace.
All this, and with key players making the wrong financial decisions, saw the world's biggest financial collapse.
Episode Chapters / Locations in Chronological Order
SOURCE 2 → Money, Power and Wall Street PART 1
SOURCE 2 → Money, Power and Wall Street PART 1
Money, Power and Wall Street, FRONTLINE tells the inside story of the struggles to rescue and repair a shattered economy, exploring key decisions, missed opportunities, and the unprecedented and uneasy partnership between government leaders and titans of finance that affects the fortunes of millions of people around the world.
In 1994, a team of young, 20-something JPMorgan bankers on a retreat in Boca Raton, Fla. dreamed up the “credit default swap” — a complicated derivative they hoped would help manage risk and stabilize the financial system. Fourteen years later, they watched in horror as that global system — weighed down by the risk of credit default swaps tied to morgtage loans — collapsed.
The ensuing saga between that first credit default swap involving JP Morgan, Exxon, and the European Bank for Reconstruction and Development and the start of the 2008 global financial crisis are “defined by daunting complexity,” writes Greg Evans in Bloomberg Businessweek. Part 1 of Money, Power and Wall Street, he adds, does an “exemplary job of walking viewers through [it].”
“Money, Power and Wall Street is demanding — this isn’t Finance for Dummies,” Evans writes in the review. “But it’s a compact and thorough lesson.”
In Part 1, FRONTLINE takes you inside the rapid rise of credit default swaps, including the voices of those who created them. With the real estate market booming, bankers successfully tweaked the credit default swap to bundle up and sell home mortgage loans to eager investors. But despite the money flowing into banks’ coffers, credit default swaps also loaded the financial system with lethal risk. And when the housing bubble burst, the credit default swaps — originally designed to stabilize the system — brought the global economy to its knees. Regulators, who had often stood on the sideline and allowed Wall Street to police itself, saw the ugly consequences rapidly unfold before them.
In 1994, a team of young, 20-something JPMorgan bankers on a retreat in Boca Raton, Fla. dreamed up the “credit default swap” — a complicated derivative they hoped would help manage risk and stabilize the financial system. Fourteen years later, they watched in horror as that global system — weighed down by the risk of credit default swaps tied to morgtage loans — collapsed.
The ensuing saga between that first credit default swap involving JP Morgan, Exxon, and the European Bank for Reconstruction and Development and the start of the 2008 global financial crisis are “defined by daunting complexity,” writes Greg Evans in Bloomberg Businessweek. Part 1 of Money, Power and Wall Street, he adds, does an “exemplary job of walking viewers through [it].”
“Money, Power and Wall Street is demanding — this isn’t Finance for Dummies,” Evans writes in the review. “But it’s a compact and thorough lesson.”
In Part 1, FRONTLINE takes you inside the rapid rise of credit default swaps, including the voices of those who created them. With the real estate market booming, bankers successfully tweaked the credit default swap to bundle up and sell home mortgage loans to eager investors. But despite the money flowing into banks’ coffers, credit default swaps also loaded the financial system with lethal risk. And when the housing bubble burst, the credit default swaps — originally designed to stabilize the system — brought the global economy to its knees. Regulators, who had often stood on the sideline and allowed Wall Street to police itself, saw the ugly consequences rapidly unfold before them.
SOURCE 3 → The Role of Credit Derivatives in the Crisis
VIEW → SHORT FILM The Crisis of Credit of Visualized
SOURCE 4 → ARTICLE "What Went Wrong at AIG?"