Frontline On Financial Fraud

Tyler Durden's picture

In one of the most complete documentaries undertaken on the financial crisis, PBS Frontline's "Money, Power, & Wall Street" series stretches from the origins of the credit derivative business with a bikini-clad pool-side Blythe Masters and her JPMorgan colleagues to the scary (but absolutely true) fact that the financial crisis never ended. The four-part series (of which we present the first two below) continues tonight at 730ET and the entire set of 20 in-depth interviews with the various players (from Sheila Bair to Rodgin Cohen with a smattering of Jared Bernstein and Dick Fisher in between)  can be found here. A must-watch series from beginning to end to get a grasp of how we got here (despite what Chairman Greenspan told us all this morning), where exactly we are now (in spite of today's FTMFW ISM print), and what we can expect in the next few years.

The chapter-headings alone generate enough insight into the documentary's depth and we will post the remaining two episodes tomorrow as soon as they are released.

Episode 1

Chapter 1 - A Brave New World of Banking

A group of young bankers make history with the creation of the credit default swap market

Chapter 2: Funding The American Dream

The Wall Street and mortgage lobbies successfully defeat attempts to regulate derivatives

Chapter 3: Marching Towards The Cliff

JPMorgan reassesses, pulls back from the mortgage market but other banks can't get enough

Chapter 4: The Unraveling Begins

When the housing bubble burst, CDS bring the global economy to its knees

Episode 2


Chapter 1 - Systemic Risk

Bear Stearns collapses; regulators fear its effects on the financial system

Chapter 2 - The Summer Of Assurances

The financial crisis becomes increasingly obvious, but there's no decisive action

Chapter 3 - The Decision To Let Lehman Fail

Paulson bet the markets would take care of themselves but would soon learn he was wrong

Chapter 4 - AIG Gets A Bailout

A decision by Geithner means billions of US Government dollars flows to Wall Street

Chapter 5 - A Turning Point?

Paulson decides on a dramatic use of the TARP money: capital injections to the banks.

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bob_dabolina's picture

There is also an excellent interview segment with one of the pioneers of Credit Derivatives as part of this series. She's hot too.

Gene Parmesan's picture

This post is partially misleading.

bob_dabolina's picture

I think she's attractive.  It doesn't even look like she's wearing makeup.

Compare someone like this to someone like Abby Jospeh Cohen.

Come on man, you know you'd sniff her butt.

Bay of Pigs's picture

They should all have been arrested and prosecuted. What they have done is treasonous.

bobola's picture

They are capitalists.

Made truckloads of money selling toxicity to the sheeple.

No different than the tobacco or the fast food industries. 

You buy toxic waste, you pay the price...

Criminal is the Heart Attack grill in Las Vegas.

Now that is the worst of the worst........


AldousHuxley's picture

wall st. is subsidized from US dollar's reserve status.

they are the ultimate socialists while claiming capitalism on bonuses earned.


greed blinds. sheeple got sucked into the scam via their own greed.

PersonalResponsibility's picture

Can't believe I voted against the majority on this site... wow.

Yes that down-vote was me.  I just don't find a small (relative) company at fault for trying to work within a fake currency.  You make a bad bet, you lose.  You make sure you understand the game or don't play.  The criminal is the one that steals by force.  You play a shell game and lose, you had better wise up.  I don't think the one making the game is at fault.  If you lose and then pull a gun on someone to take their money to pay for your loss... then you should be arrested and tried.  I'll leave it at that.  The matrix is more than one layer deep.


Seer's picture

"You play a shell game and lose, you had better wise up.  I don't think the one making the game is at fault.  If you lose and then pull a gun on someone to take their money to pay for your loss... then you should be arrested and tried.'

And if the Shell Game is rated AAA?

Listen, I'm sure that at one point you thought things were legit; but now that you know that they weren't you're lambasting people for not understanding?  Hindsight...

Oh, and if THEY pull a gun on you?  Yeah, you missed the part where, essentially, everything was about putting guns to peoples' heads.  You think that the good guys would have survived had they too not cheated?  If you're unable to lie about big returns then the money would have vacated your business.  And this is the sad part, many companies (that we now view as fucked up) essentially had guns to their heads; and in order to not get shot they in return had to hold guns to the heads of customers (lie to them).

THE Shell Game is much bigger than perhaps you might think.  It's all based on perpetual growth on a finite planet: as soon as I understood this all-too-obvious mathematical fact I could see the actual Matrix.

PersonalResponsibility's picture

"Listen, I'm sure that at one point you thought things were legit"

Yes, I really did and lived my life by that belief.  And, I've seen people lie in real Bricks an Mortar businesses, and it only brings pain to employees and loss of money.

I think you're wrong though on our finite planet because we are not limited to our planet.  I'd agree with you if time were limited.  I don't think it is.  We don't actually understand time.  Do we even know what gravity really is?  Maybe we never will, maybe given enough time we will.  We can have perpetual growth, we just can't move too quickly.  

"And if the Shell Game is rated AAA?"

If I put a up $1 billion for an investment, let alone $16B, I'd better know what the hell I'm investing in.

As you stated, someone was pointing a gun to someone that was pointing the gun to someone and so on.  We need to go after who is holding the first gun.  I guess, sadly enough, we'll always be going after the fall guy.

I don't think the shell game is bigger than I think.  I just hope technology buys us enough time in my lifetime to bring down the one with the first gun.  For that matter, I hope it will happen at least sometime in the future.

Addition: Abolishing the ability to create money out of thin air (close to the first gun maybe) would be a first barrier to fraud.  Let's start with that. 

theTribster's picture

treasonous is the right word! Treason of the highest order and greatest magnitude, we all know what that means - get the blindfollds ready.

Max Fischer's picture


Come on man, you know you'd sniff her butt...

From their proclivity to bury their most prized possessions in the backyard (shiny metal, food, bones, etc.), to their mating and courtship habits, libertarians are remarkably similar to the canis lupus familiaris.



Calmyourself's picture

Snark is not high art Max..

Bizaro World's picture

Present a better alternative MF....socialism? Yeah, worked great for Europe.  Communism? Yeah worked great unless you were one of +100M dead comrades, chinese, cambodians, etc. Though I disagree with some liberatarians' choices as it does not fit my belief system, at least they don't want to F---ing kill you.


Ranger4564's picture

How many died because of the self indulgent imperialist capitalist state you cherish?


All i can say is everyone always seems to be solving the wrong problem.  So you can start working on the correct problem, the problem is, how do we produce enough to satisfy the needs and wants of everyone.  Capitalism does a fairly good job, but it fails miserably in other ways... for example, it provides exceedingly well for those chosen recipients, but it abuses the life out of those chosen to be the providers.  It literally transfers wealth from the poor to the rich.  There is a reason everyone is not rich even if the majority of the world is now capitalist. There is no way a capitalist system can make everyone prosperous.  In capitalism, it really is the haves and the have mores.  Only, the have mores always set the price, so the haves never actually have enough.


Instead of defending a system that in inherently a failure because it never even aims to satisfy all of humanity, why not work out a solution that would?  Why justify this crappy system just because you were not born on the other side of the planet on the losing end of the transaction?  Imagine you were an African or Asian or Middle Easterner, participating in this socio-economic mechanism.  I mean, living there, being of that ethnicity.  What resources does an African child have to prepare to compete against a kid from the Western countries?  What about the kids in Indonesia, Thailand, South America, etc.


What happened in the communist / socialist nations in the last century was also misguided because they were not well designed to serve the people, they were well designed to control the people.  These kinds of things are also present in capitalist society... do you see prosperity in England, or do you see an oppressive control mechanism?  How about present day US?  If there is so much fucking amazingness in capitalism, why is there 15-25% unemployment?  Why are we in a recession?  Why wasn't capitalism able to stop the fraud?  Why is it still so fucking difficult to acknowledge the nightmare and the criminality?  Why are the bankers in these videos still oblivious?  How is this system even tolerable let alone desirable or defensible?

phungus_mungus's picture

The redhead with the big tits in the Snortees ad is quite distractingly hot... 

smlbizman's picture


poor fella's picture

Oh, thought only I got that one, and was special somehow... damn Internets!

Temporalist's picture

Also podcast:

Lessons Not Learned at MF Global

Corzine...nobody's heard from him have they?

CPL's picture

She's hot too.


No.  Horsey looking acresses with faces that you dig a hole with must stop now.  I understood that we are only using women that look like zooey deschanel now.  This horse faced freak show must stop.


Nurse...Take a letter...

WonderDawg's picture

She's Office Hot, for sure. Drives me crazy the way she keeps her head tilted the whole freaking time. Straighten your neck, chica, you're giving me vertigo.

Buck Johnson's picture

I can't wait to watch this all the way through, it goes to show you what people where saying.  And that is this problem was never cured, it was just bandaged over.

Seasmoke's picture

Very Very Weak !!!

Winston Smith 2009's picture

If you mean their criticisms were weak, I agree.  Two big problems in the first two parts of the documentary - they totally glossed over the significance of the repeal of Glass-Steagall and didn't critically analyze the "experts" claims that it would have been the end of the world if Paulson hadn't given up on his moral hazard avoidance and they hadn't bailed out AIG.

Fluffybunny's picture

For comparison, the U.S. is the only nation that had something like Glass-Steagall that restricted Commercial and Investment banks from joining under one umbrella.

How in the world could Glass Steagal's partial repeal have had any significance, especially negative ones, in the 07-08 events or those leading up to it?

WonderDawg's picture

Glass-Steagall kept banks from creating credit to speculate with. It would have kept the commercial banking system separate from the insane risks that the trading desks took, thus the concept of TBTF. The investment firms could have been allowed to fail without creating systemic risk of the magnitude we saw in 2007-2008, which is now even worse. I'm sure there are more reasons, but those are serious enough to answer your question, I think.

Seer's picture

"Glass-Steagall kept banks from creating credit to speculate with."

And, figure it as a pop-off-valve.  It kept things from getting in to a race condition.  After the repeal it took a while for the data to trigger it, but finally that race condition tripped and, well, the rest is history.

Jones79's picture

i watched both parts and it seemed that PBS tried to walk a tight rope and never really got into the politics of what was going, or how the banks benefited from the abrupt fear-based hankerings of Hank Paulson plan or the kid gloves of Tim Geithner, which really it should have, since they are both from the same school of thought, and the reason for that thought should have been explored.  nor was Bernanke or the ideology of the Fed in response to the crisis touched on much at all. 

chunga's picture

Agree 100 percent.

The PBS puff-piece was made for the Kardashian crowd (whatever the fuck a Kardashian is)

poor fella's picture

A kardashian is a layer of dried compost you throw over an otherwise fertile area to keep growth at bay for decades.

NidStyles's picture

Kardashian - A family of transvestite whores.


Nid Styles Dictionary circa ~2007.

Tsunami Wave's picture

Meanwhile, the most comprehensive & complete coverage of the credit/real-estate/derivatives/all other aspects of the continual financial crisis have been all captured and tracked by this pretty neat website:

blindfaith's picture



THE ONLY website to tell the truth and nothing but the truth.

I have no TV, LUCKY ME! But hopefully PBS is better than the pathetic NPR.  Eric Holder was on All things Considered" and that worthless Segal wanted to know if the 'folks at the Apple Store' still liked Mr. Holder.  With all this pathetic media clown could have asked Holder, he wastes the PAYING listner's time with this crap.  NO MORE MONEY FROM ME...ask Eric for it NPR.  Diane Rhem is not much better, time to hit the pasture.

ReallySparky's picture

And today would be a good day for everyone to click on the DONATE button above and give a little donation for the excellent coverage found here!

If you can not donate, due to central planning and Wall Street ect....then you are hearby obligated to click on adds at least a hundred times so that the site will recieve revenue.

poor fella's picture

I for one would like to know how the ad-clicking works. Rest assured, when I see Citibank, AT&T, FX, and Cramer(!) ads, I click the LIVING_5H!+ outta them!! Does it do anything?   

They pile up and are easy to close.. but that's the sand dollar I throw back into the sea each day!

Thank you ZH (although it's quite addicting and needs a disclaimer).

Bag Of Meat's picture

Rumor has it you can only donate gold

narnia's picture

Gotta love those "libertarian" ideas like an easing central bank, FDIC insurance, GSEs, massive deficit spending on the federal and state level, government infrastructure, public schools, etc.  

It was just a libertarian paradise because of the Gramm-Leach-Bliley Act. PBS = shallow. 

Sudden Debt's picture

I'm selling these buckets with special sand in which you can put your head in and that help you forget and ignore stuff!

At your own risk off course. And I wouldn't do it for more than 2 minutes... But that's up to you!

ONLY 599,99$!!!
AND IF YOU BUY 2 IT'S ONLY 2699,99$ !!!!

smlbizman's picture

do i get lids....and is there more...

Atomizer's picture

Just contact the local Cleveland FBI CHS operative. You can purchase C4 and non-working IED's at a fraction of that cost. Turning sand into glass can become your MSM cultivated motive.

/sarc. We can only laugh at the desperation churned out on TV everyday.

SilverDoctors's picture

Watched the interview of Blythe last week.  Very telling that she is suddenly making numerous public interviews.
Think it is coincidental that JPM just converted their entire customer silver book to the in eligible for delivery requests?
Smells like The Morgue is on the ropes!

poor fella's picture

Her and Myron Scholes! Heard two radio clips within a week, a story about LTCM, and then he was on Bloomberg this morning!  wtf - as well as trotting out greenspam's corpse.

"We MEANT WELL!! Really, we did! It had NOTHING to do with money, praise, and power!"

BM's nothing but a ho-cake.

Gringo Viejo's picture

411 silver contracts (2,055,000) posted for delivery on Wednesday, May 2, 2012. The noose tightens.

q99x2's picture

I think I need a new computer either that or it is suffering from too much derivatives exposure.

eatthebanksters's picture

Yves Smith presented a critical review of the series in her 'Naked Capitalism' Blog.  She appropriately called out Frontline for their lack of depth on the subject of derivatives.  She went on to explain that because of their simplified storytelling the real truth of the crisis does not come out n the documentary. I think it was last Wednesday's edition of Naked Capitalsm. 

dick cheneys ghost's picture

Agrred..........these bankers should have been interviewed from the grey-bar motel....