This American Life teamed up with All Things Considered to produce a fascinating and very clear picture of the global market demand that lead us to the mortgage crunch and current credit crisis.  The show certainly qualifies for ‘Driveway Moment’ status in my book.

With developing nations extracting resources and creating wealth at an unprecedented rate, the global pool of money took all of human history to grow to 35 trillion dollars (equivalent) by 1999.  Just 7 years later, the pool had doubled to over 70 trillion dollars.  Money needs to be spent or invested somewhere.  As enterprising folks do, some of them dreamed up asset backed securities like ‘mortgage backed securities’ and they sold like hot cakes.  And as demand for the product increased, so did companies willingness to do whatever-it-takes to create the mortgages behind the security. 

The shows producers speak with people on all sides of the issue including the people who wanted a new investment, the people who invented the new vehicle, the people who sold it and the people who are suffering from the effects of it.  It’s an incredible story that takes the listener all the way through the issue that continues to dominate our current global economic situation.  It is a must listen.  The hour long This American Life version can be heard here and is completely worth your time.  The shorter companion edition from All Things Considered is available here. 

If you were able to land a loan in the last few years based more or less on a fantasy perspective of your financal situation, listen to the story and you’ll understand why.  ChannelBV readers, chime in in the comments!  We would love to hear about your experiences during this shared experience.

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