60 Minutes, 03.14.10
March 14, 2010 5:00 PM
Steve Kroft interviews Michael Lewis on the Wall Street meltdown; Also, Lesley Stahl profiles musical savant Derek Paravicini; Plus, Andy Rooney on the Postal Service.
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See all 15 Commentsthe number above, which i cite as my own & can also be obtained through fairly straightforward and simple (well... for me, anyway) calculations, has been more or less confirmed
by the i.M.F., which put its own estimate at US$4.2trillion in collective losses for all the investment banks, insurance cos., & financial firms worldwide. i suppose the discrepancy arises from the fact that Lewis is looking only at American financial institutions
(which makes sense - $1.75trillion -, but overlooks the fact that European banks (most were banks, anyway) sustained greater losses than their across-the-pond brethren in the order of (no less than) a mind-boggling US$2.5 trillion; that's 2,500,000 x US$1million for those still paying attention...
i notice people have lost a sense of the order of magnitude of the amounts that we're talking about. so, in order to illutrate the scale of things, i'll just ask everyone to visualise the following: $100,000,000,000 (i.e. $100 billion) is a 180,000meter high stack of $1000-denominated bills; therefore, $4.2 trillion is a [42 x 112.5mi. =] 4,725 miles-high pile of thousand-dollars bills... now maybe you get a better appreciation of an estimate of the wealth that has vanished as a result of this collective (global) folly. for instance, in the thre (3) weeks that followed Lehman Brothers bankruptcy, $30,000 billion (or: $30 trillion) in collective wealth vanished from investors' portfolios & international exchanges globally.
p.s.: Lewis cites numbers such as $20 or 30 billion as the value in
CDSs (Credit Default Swaps) emitted by AiG, but remember that the Fed had to pump US$180 billion into AiG alone in order for it not to fail; and the global market for this single variety of derivatives called "swaps" stood at US$64 trillion in 2007, which is 1/10 (one tenth) of the size of the global financial economy as a whole in 2007 (i.e. S$650,000,000,000,000). now, if these numbers don't scare you
into a stupor & do not cause you to forget entirely any notion or scenario in which those banks that made the risky bets had been let to fail (with the resulting utter "financial meltdown", where every single asset class known to man gets knocked off its valuation foundations, translating into a [ballpark] 27-38% jobless-rate), i don't know what other argument could possibly move anyone to renounce once and for all this completely idiotic (albeit uninformed) notion of <<letting 'em just all go to he#$ and fail>>...
i thought visitors to the "60 minutes" site might want to know that to inform their judgement
alan s. renaud
Montreal, CANADA
Absolutely amazing.
As to Wall Street. It's a looting operation. To readers, try not to be looted too much.
No one was complaining then -- now many are victims and blame everyone else. It's our own fault if we hung on and weren't aware and prudent.
(CMOs (Collateralized Mortgage Obligations) have been around since 1980s and Credit Swaps also have been used PRUDENTLY during 1980s and 1990s.)
You can't sustain that kind of housing boom and stock market rise; you need to pay attention.
feel like a walk on the windy day. The coming storm will happen because of a volatile mixture of dangerous elements. The sub-prime crisis is but one chemical in this recipe. Health-care is another, as is the increase of social secutity collectors as the baby-boomers retire, but the biggest and most dangerous one is the fact that this government is spending money it does not have, at rates it cannot recover. The only way it will be able to keep the country from spinning off into hyper-inflation sooner rather than later will be to enact substantial tax increases, which will hurt businesses that are already stretched too thin and thus increase unemployment, which leads to fewer people buying anything except the basics and lowers the amount in taxes coming into the government, which it needs in order to keep spending, bailing out places like Goldman Sachs and AIG, so they can keep giving their executives multi-million dollar bonuses for starting this mess with their greed. And so 'round and 'round we go! The hurricane is coming, and we do not have the skills our grandparents had when they weathered through the Great Depression. Do you know how to can food? Sew your own clothing? Milk a cow? Me neither! Lord help us! It's going to be a very bumpy ride. I still do have hope that something will be done-many things,actually, by many people- to avert this gloomy scenario, but.....is it even POSSIBLE to teach adults to be self-sarificial for the good of their country? To put aside selfishness and greed? I kind of doubt it. Peace.
We live in a world where those with the dough believe they've earned it, even if it's tens of thousands of times more than the rest of us. But who's to say they're right or wrong but their cronies. It's a self-perpetutating malady.
It's not the money some people have a lot more of, it's the influence it can buy. The more money one has the more direction you give to other peoples' lives, not necessarily for the better. Rich people should be humbled by the fact that they owe it to the rest of us to have put them on a pedestal and they have an obligation to pay back to society in a good way.
These failing institutions are companies Americans have been waiting their whole lives to watch topple into dust. Finally David had the opportunity to slay Goliath but Uncle Sam intervened and didn't allow it to happen. Oh well, I will continue to take my business elsewhere. I will not support these criminal organizations.
What has happened here is treason as it has hurt all of America, and rippled around the world.
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