buying airline routes and putting money under the mattress

I have to point out this morning’s NPR Planet Money podcast. It was just too good. There’s three segments and the last two are awesome.

The second piece has some guy trying to explain why we can’t just take all the crappy mortgages out of these big CDOs and call it a day. Well, it turns out that a lot of these CDOs have a collection of utterly disconnected things such as “income from a specific Friday night flight on Korean Airlines between Tokyo and Seoul” and “royalties from David Bowie’s songs” but more importantly things like “the mortgage for your office building” and “the mortgage for the cell phone tower your phone used this morning”. That’s one of the reasons why this toxic subprime debt is effecting things completely unrelated, like friday night flights out of Tokyo.

The last piece is talking with some bond and paper traders. The guy mentions how he has a client who had to buy treasury notes that day and ended up only getting 1 basis point for his trouble. That’s 1/100th of 1%. That’s a 1 cent return for $100. He also mentioned that some notes cleared this week for 0, the equivalent of hiding it under your mattress.

planet money

So I started listening to NPR’s Planet Money podcast this morning on my walk to work and I have to say it’s simply phenomenal. One of the guys who hosts the show did the recent This American Life episode’s about the economy. What’s so great about the show is that it takes listener questions about the economy and explains what’s going on in terms that most people could understand. It always takes the time to explain trader jargon and random acronyms.

For example, the latest episode explains why credit markets are incredibly important to every day people and how it’s measured. The interviewee talks about Treasury Bond rates and TED spreads and how they measure “fear” but they take the time to explain where you see those rates on yahoo and bloomberg.

Anyways, if you’re confused about the credit crunch, the bailout, the economy (and who isn’t?) I’d highly recommend checking out this podcast.

This American Life - Another Frightening Show About the Economy. follow-up episode to the phenomenal “Giant Pool of Money” episode.

This American Life on the Housing Crisis. haven’t listened to it yet. via ram.

NPR : Cuaron Faced New Challenges in ‘Children of Men’. director talks about how hard it was to make the 6 minute long action sequence at the end of the film (which really cool).