Earlier this month, This American Life, the popular radio program from Chicago Public Radio, produced an hour-long story called “The Giant Pool of Money”. The program tells the story of how the sub-prime mortgage crisis began, with input from the actual Wall Street players who contributed to it. Producer Alex Blumberg and NPR’s Alex Davis trace a chain of people beginning at Wall Street and ending in the neighborhoods of America—with the individuals now facing foreclosure and bankruptcy.
At the center of their story is “the giant pool of money”, the nearly $70 trillion collection of all of the world’s savings. It is this pool of money, and the investors itching to make it grow, that led to a sudden overwhelming interest in residential mortgages. From there, loan guidelines began to loosen and banks became more and more irresponsible in their lending practices.
We encourage you to listen to this fascinating story of the current financial crisis and how it happened, told in a way you may not have heard before. You can listen to the entire program online HERE.