“Giant Pool”… is that the one where the guy used to be a bartender and then became a loan agent because some bar patron offered him a job? The guy knew squat about lending practices, had no degree or training to speak of, but was making something sick like $200K a week? And the guy never lost a penny of it since he didn’t do anything illegal. Yeah, that show made me ill and confirmed my worst fears about the housing market.

Posted by grs on 9 October 2008 @ 11pm

Ditto, Waldo. I cannot express in mere words how enlightening those two shows were. I’ve been encouraging all my friends to listen to them.

Because of those shows, I’m now hooked on Planet Money. It’s the same guy(s) from those episodes of This American Life. http://www.npr.org/blogs/money/

Those guys are light years ahead of the rest of the MSM in terms of reporting on the economy.

Posted by finnegan on 10 October 2008 @ 9am

I listened to that podcast with Victoria while coming back from Boston in August. She was spellbound by it, while I was just interested. I still don’t understand how a pool of, what was it, 30 trillion dollars turns into a pool of 60 trillion dollars (don’t remember the exact figures) that is available for investment. And is it shrunken now? Economics is tough for me to get my mind around…Did central banks double the amount of printed currency in the time period mentioned? I get the whole slices of risk/bundled packages of mortgages to purchase part, but the fundamental pool of money…I left as baffled as before I started the podcast. And $1,000 bottles of wine? Man, the amount of high quality mind-altering substances that could do a better job than wine for that money is endless, not to mention the fact that spending that money on charity would be such a boost for one’s karma!

Also, I am sure that you have heard that the $850+ billion “bail-out” package could be split to $450,000 or so per taxpayer. War-game that scenario in your mind and think about what that would do to the economy. Would we all blow it recklessly and have inflation go to 1000% like Nigeria and other dictatorships? Or would we all get out of debt and solve personal, US and world problems while increasing the health of investment firms and banks. I dunno, the variables are too many to allow me to forecast. Where will this leave us in one year? Five? Twenty?

Posted by Chris Gorski on 10 October 2008 @ 3pm

It’s not $450,000 per taxpayer. For the math on that to work out there would have to be fewer than 2 million taxpayers in the US.

The number I’ve seen is $4500, which works out to a bit shy of 200 million taxpayers. That’s reasonable considering a US population of ~300 million.

Also, printed currency is only a very small component of the overall money supply.

Posted by Jeff Uphoff on 11 October 2008 @ 10am

Just to expand upon what Jeff was saying, money creation in the US has basically nothing to do with printing bills. It has to do with banking. And yes, it’s incredibly counter intuitive.

Here’s as good an explanation of it as I’ve found: http://ingrimayne.com/econ/Banking/Commodity2.html

Posted by Ben C. on 12 October 2008 @ 12pm

I listened to “Another Frightening Show about the Economy,” and they point to the recent Stock Market crashes as being a result of the “commerical paper market” and those insurance bets that any given company might fail and not be able to repay those commercial paper loans.

So why is every news media outlet still talking about this as being the fault of subprime borrowers (as in “the average joe”) rather than the result of major fatcat corporations, hedge funds, etc- participating in an entirely unregulated aspect of investing? (Which would be more accurate).

Without participation in the unregulated insurance betting- the crash/instability might not have been as bad.

Thus this bailout is really bailing out fatcat investors, but incorrectly laying blame on the average guy who shouldn’t have been given a mortgage in the first place.

A mosquito might have given you malaria but you shouldn’t have been swimming naked in the jungle to begin with and without your vaccinations.

Posted by TrvlnMn on 13 October 2008 @ 2pm