Friday, September 11, 2009

Breaking the bank...

Breaking the Bank is an excellent documentary on PBS (produced by Frontline) that documents the hour by hour collapse of Lehman and the back room deals done as more banks imploded. A lot of focus is paid on the buyout of Merrill by B of A, which started out as a great deal until the true state of the mess that was Merrill's balance sheet became apparent.

You can watch it online, and I strongly recommend it to all my students. My only disagreement with the documentary was in the closing minutes where it is stated that basically the whole mess was Wall Street's fault, and now the Feds are running the show. I fundamentally disagree with this take. I, like many (or most) other economists put a large amount of the blame for the mess not on the lack of government regulation, but on the very poor and misguided regulation that encouraged subprime lending and allowed firms to abdicate their responsibility for risk management.

Anyhow, check out the show, its compelling viewing.