Even on subjects as hot as the financial crisis, much of the "news" and comment we see on TV lacks real depth, revelation of key facts and critical thinking. 60 Minutes has revived investigative journalism. More please.
60 Minutes asked experts for the real key to the crisis. Answer: derivatives, especially credit swap derivatives. Unregulated, there is no capital requirement to back them up. So they are not unlike bets by a bad bookie. With many trillions of them issued, when the horse they bet on gets sick (the price of houses, represented by bundles with flawed mortgages in them), the bookie (AIG, for instance) and all the bettors get wiped out.
How could this be legal? It is unregulated gambling. Turns out we've had speculation and leverage before. In fact, there were "bucket shops," parlors where the public could place bets on the direction of the market each day. Then there was a panic (1907) where millions got wiped out. Then Congress passed a law making it illegal. Fast forward to 2000 at the end of a lame duck Congress. Wall Street lobbied to make it legal again. Not just legal, but with an exemption against state laws that classified it as a felony! 60 Minutes found and displayed a copy of the actual Act, making it legal, giving the exemption and allowing a banking system outside the banking system to be unregulated. Then along came Alan Greenspan, a true believer in free market self-correction and easy money. The rest, along with the recklessness and greed that followed, is history.
Did the senior executives and boards know the cancer that was growing in their firms? An apologist says they did not. Had there been regulation, there would have been forms to fill out. Absent that, they not only did not understand the securities, but did not know how much they had! Rubbish. Risk managers (who analyze and simulate the impact of investments) and those who gave warning were ignored or banished. It varies by firm, but those who should have known either knew or did not want to know.
But 60 Minutes did us all a service to think and do their research. Would that other news organizations were as diligent and proactive.
That's my view. What's yours?