If You Have the Proper Tools...

A blog like this could be useful to companies but only if done well. The average blog reader does not read in depth articles but tend to skim over a large wall of text. If a blog was done by someone who knew what they were doing, a blog could be very useful to a company. A blog has the capability of reaching anyone who has internet access and can be found with a simple internet search. As long as a blog has a nice, user friendly layout and quality content, it can be very beneficial to a company.

Tools and widgets that would make the blog more useful:

• Comments/Feedback section
• Users can talk to you via IM with a communications widget such as Google Talk
• Capabilities to see most popular posts
• Share button to allow readers to share the blog with friends
• Tag/Label cloud on the side bar that allows readers to find relevant posts easier
• Capability to add a company’s twitter to the side bar

In conclusion, as long as a business uses a blog properly, and not as an online journal, it can be very valuable to a company.

Everything You Wanted to Know, and Some Things You Didn’t

Frontline on PBS “Money, Power, and Wall Street”

Episode 4

The fourth and last episode of this in depth documentary shares secrets that many did not know. This documentary explains exactly the issues and motivations behind the economic issues since 2008 and tells us three things:

• Nothing has changed on Wall Street despite this crisis.
• While banks had tried to help lower the debt payments of cities using swaps, the market crashed soon after
• While Americans show their outrage in ways such as Occupy Wall Street, there are still more fights going on in Washington, D.C. to decide how we progress

We find out that $7.7 trillion was given to banks. It informed that banks were at their weakest when people were being told they were on the mend. This shows that the small window that was available for reform has closed and until there is another catastrophe there will be no fixing the system. It reveals secrets and strives to inform people exactly what is occurring in meetings and places they cannot be. Mostly, this documentary explains to the people everything they wanted to know, and some things they didn’t, about the economic crisis.

Gaviria, Marcela, prod. "Episode 4." Prod. Martin Smith. Money, Power and Wall Street. Frontline on PBS: 01 May 2012. Television. 

The Mess Obama Inherited

Frontline on PBS “Money, Power, and Wall Street”

Episode 3

This episode focused on how President Obama and his staff dealt with the mess they inherited and how their actions were viewed by peers, the bankers that had started the issues, and by the American people.

Watch Money, Power and Wall Street: Part Three on PBS. See more from FRONTLINE.

This episode covers a few points:

• The response of the federal government to the economic meltdown during the last days of the Bush administration
• The same response during the first few months of the Obama administration
• The relationship between President Barack Obama and Timothy Geithner, Secretary of the Treasury
• President Obama’s response to the banking crisis
• The too big to fail regulations and changes that bankers were expecting
• How the big banks felt about President Obama after basically winning the “fight”

There were also some choice quotes:

• Obama campaigned on, “There’s a problem in our economy, my opponent doesn’t see it ,and I can fix it.” -Charles Duhigg, The New York Times
• “He was making sure that the ethics of Wall Street was pure and that we were doing the business we should be doing.” –Robert Wolf, Chairman, UBS Americas
• “They were still learning which keys go to which locks, and how to get around the offices, and they are being asked to provide the plan that will save the world.” –Charles Duhigg, The New York Times
• “Somehow they have survived this disaster of their own making and it is back to business as usual.” –Ron Suskind, author, Confidence Man

Kirk, Michael, dir. "Episode 3." Writ. Michael Kirk, and Mike Wiser. Money, Power and Wall Street. Frontline on PBS: 01 May 2012. Television. 

The Bailout That Didn't Help

Frontline on PBS “Money, Power, and Wall Street” 

Episode 2

After the housing bubble burst, banks began to feel the strain. Bear Stearns was the first to fall due to massive investments in subprime mortgages. As analysts looked into the fall of Bear Stearns, they discovered they were frighteningly connected to other banks up and down Wall Street and everyone became afraid of what a bank failure would lead to. The Chairman of the Financial Crisis Inquiry Commission, Phil Angelides, said, “What became clear as you look at the records is the extent to which the people who were charged with overseeing our financial system really didn’t have a sense of the risks that were in the system, they didn’t see the fundamental rotting that had manifest itself for years.” As the risk of failure increased, regulators continued to ignore evidence that Wall Street was flirting with disaster. “They had deliberately turned a blind eye to those problems,” was explained by Phil Angelides.

The response to this imminent failure was to bring in analysts. These analysts believed that, just as in the Great Depression, a lack of confidence in the banks could bring down the economy. Richard Fisher, President of the Dallas Federal Reserve, explained, “The market was telling you something was wrong.” The government’s response was a 30 billion dollar bailout.

After the bailout of Bear Stearns, the Lehman Brothers began to have difficulties. Because of the precedent set with the Bear Stearns situation, the Lehman Brothers were convinced that the government would come to their rescue because the country couldn’t survive without them at the center of the banking industry. Instead of helping, the government allowed the Lehman Brothers to fail. They followed the sentiment that if you don’t let some people go belly up, the discipline of the market will be lost. Other Wall Street banks decided they weren’t going to help either and it was over for the Lehman Brothers.

Secretary of Treasury, Hank Paulson, thought the stock markets would take care of themselves after the loss of the Lehman brothers. He was wrong. Charles Duhigg, The New York Times, elaborated, “Everything freezes, and that’s what causes the crisis. And it really started because Lehman Brothers went into bankruptcy.” Shockwaves from the collapse of Lehman Brothers is felt everywhere as no bank wants to lend to another bank for fear of inability to be repaid. The decision not to bailout the Lehman Brothers is now at the heart of the market failure.

AIG, the world’s largest insurance company, begins to fall apart shortly thereafter. Analysts decided that if the government didn’t do everything possible to save AIG, the outcome would be devastating. The government decided they couldn’t let AIG fail, so, in order to save the economy, AIG was bailed out. And so began the biggest government bailout in U.S. history. 

Kirk, Michael, dir. "Episode 2." Writ. Michael Kirk, and Mike Wiser. Money, Power and Wall Street. Frontline on PBS: 24 Apr 2012. Television. 

The Industry That Led The World Into Crisis

Frontline on PBS “Money, Power, and Wall Street” 

Episode 1

Source: Frontline on PBS

In 1994, a team of young JP Morgan bankers went on a retreat to Boca Raton, FL where they created a derivative that would change the world. Credit Default Swaps, or CDS’s, are a kind of derivative that ensures a loan against default. Instead of a company taking the risk of the loan on them, they swapped and compensated another company to take it. Because of this, “credit, which is the vital part of the lifeblood of an economy, became a more readily available asset” according to Blythe Masters, Head of global commodities at JP Morgan.

As other corporations discovered what this could do for business, they began swapping more than corporate loans. They began bundling mortgages. However, these new corporations didn’t understand CDS’s as well as those who had created it and thus, while it fueled a worldwide credit boom, they began to build a bubble that would eventually pop. Frank Partnoy, author of Infectious Greed, said, “I think finance may have gotten too complicated for anyone to understand.” More and more companies began to offer mortgages and swap the bundled risks, using dishonest tactics such as high rate subprime debt, until the bubble finally burst.  Daniel K. Tarullo, Federal Reserve Board Governor, explained, “It was quite clear to me that a number of really quite large financial institutions had not has the kind of management information systems which allowed them even to know what all their risks were.”

The outfall of this has been devastating. People have lost their houses, children who have graduated are having to move back in with parents, and unemployment rose. David Wessel, The Wall Street Journal, aptly summed up the view of most Americans with, “most Americans think, and with good reason, that Wall Street got bailed out and Main Street didn’t.” This is shown by the banks receiving help while others lose their homes and jobs.

The episode sums up with these thought provoking words from Dick Kovacevich, Chairman of Wells Fargo: “It should never have happened.”

Smith, Martin, prod. "Episode 1." Prod. Marcela Gaviria. Money, Power and Wall Street. Frontline on PBS: 24 Apr 2012. Television.