The Giant Pool of Money

"The Giant Pool of Money" is an episode of the radio show This American Life which originally aired on May 9, 2008. The episode described to a general audience the causes and factors which led to the subprime mortgage crisis. Specifically, the show aimed to show the chain of people who were "participants up and down the subprime food chain".

The show featured Adam Davidson, a business correspondent for National Public Radio and Alex Blumberg, a producer for the show, interviewing and reporting on the financial crisis. Blumberg described it as trying to answer the question “why are they lending money to people who can’t afford to pay it back?”

The episode's name "The Giant Pool of Money" is derived from the description used in the show of fixed-income securities; it was identified in passing with the global saving glut. Davidson described it as follows:

The show begins at a black tie gala, where an award is being presented for CDO of the year. The show does not lay blame on the financiers directly, going so far as to say "Let me just say, they’re aware that there’s a certain irony, giving awards to the instrument that almost destroyed the world’s economy. They did consider canceling this year but it’s been a really tough year, it’s been really gloomy for them." They then proceed to the opposite end of the spectrum, with a borrower whose mortgage is in default.

After some background on what caused a shift in capital to mortgages, which they hypothesize to be Alan Greenspan's keeping fed funds rates low during the early 2000s (decade), the show moves to Mike Francis, a Wall Street financier who worked at Morgan Stanley. From there, the show describes "another Mike", Mike Garner, who worked down the chain, at Silver State Mortgage. He described the pressures and motivations faced by mortgage salesmen. After describing that area of the chain, they moved on to a CDO investment management firm run by Jim Finkel of Dynamic Credit, LLC. Davidson through an interview with Finkel describes the nature and creation of CDOs.

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