Critically acclaimed investigative journalist and CNBC TV personality, Charles Gasparino, joins Dennis McCuistion for an intense discussion and look at the last 30 years that led to today’s financial meltdown.
Charles Gasparino talks about Wall Street’s “love affair” with risk. From the 1980’s and the advent of mortgage-backed securities, to the packaging of mortgages to bonds, to the selling of those to Wall Street. He speaks on the bond market situation in 1986 and Alan Greenspan, the former Chairman of the Federal Reserve Bank, who in 1987 lowered interest rates and bailed out Wall Street.
Charles Gasparino explains the trail of culpability, including the Government’s encouragement of home ownership which prompted mortgage brokers to give loans to people who did not have the means to pay back the money loaned and the underwriters who invested in risky debt. He states the outcome was an abdication of collective responsibilities on the part of government, homeowners and financial institutions and for Wall Street – greed and risk taking.
Overall, Charles Gasparino says it was about avarice, arrogance, stupidity and greed… and the “selling off of the American Dream.”
Niki Nicastro McCuistion
Executive Producer/ Producer
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1812 – 01.24.10
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Guest, Charles Gasparino, is a critically acclaimed investigative journalist and CNBC TV personality and joins Dennis McCuistion for another look at Wall Street.
In part two of this program Charles Gasparino illuminates the crisis of today and what responsibilities Ben Bernanke, Hank Paulson and others played that led to the global meltdown in our economy. He cautions that the present day situation had its roots in irresponsible actions taken 30 years ago. He urges that if we want answers we need to look back at the players then and the key figures today… all built on yesterday’s greed and risk taking.
Wall Street’s romance with risk developed an ever increasing appetite for risk taking; which led to investments that were bizarre, esoteric and complicated. So complicated that former Treasury Secretary under President Clinton, Bob Reuben, a trader deluxe at Citigroup, didn’t even understand collateralized debt obligations. Yet, here was a man who earned a $15 million salary at Citigroup. According to Gasparino, “There was no responsibility. He should have stepped up to the plate, but instead advocated Citigroup to take on even more risk!!!”
A mild rupture to the system, that of decreasing housing prices, among others, created massive implosion. The model, did not have a possibility that home prices could go down so they were kept on balance sheets. The correction led to defaults, people could not afford the mortgage they were paying, they had variable rate loans, had bought homes with nothing down and nothing invested, homeowners in increasing numbers walked away from obligations they could not fulfill… and the list goes on.
You’ll walk away from watching this program angry at the irresponsibility of government and Wall Street and the risks they have taken that have put all of us at risk.
Join us as we talk about things that matter with people who care…
Niki Nicastro McCuistion
Executive Producer/ Producer
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1813 – 01.31.10
Podcast: Play in new window | Download
