This weekend, I watched PBS Frontline's - "
Inside The Financial Meltdown." (Link takes you to the full video).
Here's an excerpt from the introduction:
On Thursday, Sept. 18, 2008, the astonished leadership of the U.S. Congress was told in a private session by the chairman of the Federal Reserve that the American economy was in grave danger of a complete meltdown within a matter of days. "There was literally a pause in that room where the oxygen left," says Sen. Christopher Dodd
"I think that the secretary of the Treasury could not fully comprehend what that linkage was and the extent to which this would materialize into problems," says former Lehman board member Henry Kaufman. [...]
Paulson was thunderstruck. "This is the utter nightmare of an economic policy-maker," Nobel Prize-winning economist Paul Krugman tells FRONTLINE. "You may have just made the decision that destroyed the world. Absolutely terrifying moment."
In response, Paulson and Bernanke would propose -- and Congress would eventually pass -- a $700 billion bailout plan. FRONTLINE goes inside the deliberations surrounding the passage of the legislation and examines its unsuccessful implementation.
"Many Americans still don't understand what has happened to the economy," FRONTLINE producer/director Michael Kirk says. "How did it all go so bad so quickly? Who is responsible? How effective has the response from Washington and Wall Street been? Those are the questions at the heart of Inside the Meltdown."
I really enjoyed watching this documentary because they presented this complex problem in a very easy to understand manner. The documentary provides some incredible insight into former treasury secretary Paulson. Secretary Paulson is this wall street guy who used to work at Goldman Sachs. There's this incredible moment where he seems to put his personal agenda for vengeance ahead of the public good. He seemed intent on letting one of his former competitors in Wall Street fail, and he makes an example out of his competitor. It seems to be partially based on personal animosity towards this former adversary. This act sends shockwaves across the stock market.
I think the other remarkable thing is just how quickly these financial titan corporations fell in a matter of days. Billions of dollars of market capitalization literally evaporated over night.
The Dow Jones Industrial hovering over 13,000 seems like such a distant dream these days. We're barely holding onto Dow 7,000 right now.