financial crisis

CBS Sunday Morning: Are We due Another Banking Crisis?

In 2008, the banking system was near total collapse, the stock market was in free fall, and government officials (it seemed to many) were as clueless as the rest of us. I joined CBS Sunday Morning for a look back at the housing and banking crisis that almost dragged the world down into another Great Depression, talking with historian Adam Tooze and Wall Street Journal reporter Gretchen Morgenson about how many of the new rules put into place to protect the system from suffering another meltdown are being diluted.

Have a money question? Email me here.

Retirement Planning, ARMs and An Inside Account of the Financial Crisis

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We opened the show with Ben from Houston who wanted to run his retirement plan by us. He’s got a variety of accounts, an adjustable rate mortgage and some college funds for the kids. As you’ll hear, this guy is a risk taker. Is he taking too much risk? What about that mortgage…should he pay it off? Or should he consider refinancing and locking in a long-term rate?

The rest of the hour was spent on emails. The good news is that we’re actually making some serious progress. We’re finally into the month of October. That’s the good news. The bad news is that next week is already November. A good problem to have!

In hour two we get the inside account of the financial crisis from Neil Barofsky, the former Inspector General of TARP (Troubled Asset Relief Program) and author of Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.

As you’ll hear, the discussion is basically a play-by-play of how the Treasury Department bungled the financial bailouts.

At the height of the financial crisis in 2008, Barofsky gave up his job as a prosecutor in the esteemed U.S. Attorney’s Office in New York City, where he had convicted drug kingpins, Wall Street executives, and perpetrators of mortgage fraud, to become the inspector general in charge of overseeing administration of the bailout money.

It’s fascinating to hear him talk about how from the onset, his efforts to protect against fraud and to hold big banks accountable for how they spent taxpayer money were met with outright hostility from Treasury officials in charge of the bailouts.

Barofsky offers an insider’s perspective on the mishandling of the $700 billion TARP bailout fund. There’s no holding back as he reveals the extreme lengths to which our government officials were willing to go in order to serve the interests of Wall Street firms at the expense of the broader public, and at the expense of effective financial reform.

Just like the book, this interview delivered an incredible account of Barofsky’s plunge into the political hot-seat of Washington, as well as a vital revelation of just how captured by Wall Street our political system is and why the too-big-to-fail banks have become even bigger and more dangerous in the wake of the crisis.

Have a money question? Email me here.

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"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.

Real Estate + The Financial Crisis Ten Years Later

Saving for retirement while also trying to save for a house downpayment. That’s the dilemma facing Erin from Salt Lake City as we kicked off the latest radio show. Is there a happy medium? Or should she focus all her efforts on getting that downpayment in place?

Next up was Joe from Chicago with another real estate question. This one involves finding a way to keep an piece of existing property in the family.

Where has the time gone? It was ten years ago this month that the U.S. financial system was brought to its knees.

To help us retrace the events of that period, we’re joined today by Gretchen Morgenson, investigative reporter at the Wall Street Journal.

As the financial crisis was unfolding, Morgenson was working for the New York Times, and subsequently co-authored Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon.

There’s no one more qualified to walk us down memory lane and remind us of just how bad things actually were. In case you’ve forgotten, consider this timeline:

  • 9/15/2008: Lehman Brothers files for Chapter 11 bankruptcy protection. On the same day, Bank of America announced its intent to purchase Merrill Lynch for $50 billion.

  • 9/16/2008: The Federal Reserve Board authorized the Federal Reserve Bank of New York to lend up to $85 billion to AIG under Section 13(3) of the Federal Reserve Act.

  • 9/16/2008: The net asset value of shares in the Reserve Primary Money Fund fell below $1 per share, primarily due to losses on Lehman Brothers commercial paper and medium-term notes. When the Reserve fund “broke the buck,” it caused panic among investors who considered money market accounts nearly the equivalent of bank savings accounts.

  • 9/19/2008: To guard against a run on money market funds, the Treasury Department announced that it would insure up to $50 billion in money-market fund investments at companies that paid a fee to participate in the program. The year long initiative guaranteed that the funds' values would not fall below the $1 a share.

  • 9/20/2008: The Treasury Department submitted draft legislation to Congress for authority to purchase troubled assets (the first version of TARP).

  • 9/21/2008: The Federal Reserve Board approved applications of investment banking companies Goldman Sachs and Morgan Stanley to become bank holding companies.

All this in just one week!! An incredible moment in the history of this country, and it was only ten years ago.

Have a money question? Email me here.

Connect with me at these places for all my content:

https://twitter.com/jillonmoney

https://www.facebook.com/JillonMoney

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https://www.linkedin.com/in/jillonmoney/ 

http://www.stitcher.com/podcast/jill-... 

https://apple.co/2pmVi50

"Jill on Money" theme music is by Joel Goodman, www.joelgoodman.com.

An Inside Account of the Financial Crisis

This is our third and final installment of shows looking back on the financial crisis of ten years ago. It was such a big moment we felt we needed to devote most of September to remembering how the U.S. financial system was brought to its knees.

Today we get the inside account from Neil Barofsky, the former Inspector General of TARP (Troubled Asset Relief Program) and author of Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.

As you’ll hear, the discussion is basically a play-by-play of how the Treasury Department bungled the financial bailouts.

At the height of the financial crisis in 2008, Barofsky gave up his job as a prosecutor in the esteemed U.S. Attorney’s Office in New York City, where he had convicted drug kingpins, Wall Street executives, and perpetrators of mortgage fraud, to become the inspector general in charge of overseeing administration of the bailout money.

It’s fascinating to hear him talk about how from the onset, his efforts to protect against fraud and to hold big banks accountable for how they spent taxpayer money were met with outright hostility from Treasury officials in charge of the bailouts.

Barofsky offers an insider’s perspective on the mishandling of the $700 billion TARP bailout fund. There’s no holding back as he reveals the extreme lengths to which our government officials were willing to go in order to serve the interests of Wall Street firms at the expense of the broader public, and at the expense of effective financial reform.

Just like the book, this interview delivered an incredible account of Barofsky’s plunge into the political hot-seat of Washington, as well as a vital revelation of just how captured by Wall Street our political system is and why the too-big-to-fail banks have become even bigger and more dangerous in the wake of the crisis.

“Better Off” is sponsored by Betterment.

Have a money question? Email us here or call 855-411-JILL.

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The Global Impact of the Financial Crisis

When we think back to ten years ago and the events of the financial crisis, such as the fall of Lehman Brothers and the bailout of AIG, it’s easy to only recall what happened in the U.S.

But in reality, the crisis was an enormous global mess, and one that actually started in Europe.

That’s why today we’re joined by Adam Tooze, professor of history at Columbia University and author of Crashed: How a Decade of Financial Crises Changed the World.

Tooze delivers an in-depth reinterpretation of the 2008 economic crisis as a global event that directly led to the shockwaves being felt around the world today.

In September 2008 President George Bush could still describe the financial crisis as an incident local to Wall Street.

In fact it was a period of dramatic global significance that spiraled around the world, from the financial markets of the UK and Europe to the factories and dockyards of Asia, the Middle East, and Latin America, forcing a rearrangement of global governance.

In the United States and Europe, it caused a fundamental reconsideration of capitalist democracy, eventually leading to the war in the Ukraine, the chaos of Greece, Brexit, and the eventual election of Donald Trump.

It was the greatest crisis to have struck Western societies since the end of the Cold War, but was it inevitable? And is it over?

Crashed is a narrative resting on three original themes:

  • The haphazard nature of economic development and the erratic path of debt around the world

  • The unseen way individual countries and regions are linked together in deeply unequal relationships through financial interdependence, investment, politics, and force

  • The ways the financial crisis interacted with the rise of social media, the crisis of middle-class America, the rise of China, and global struggles over fossil fuels

Given this history, what are the prospects for a stable and coherent world order?

“Better Off” is sponsored by Betterment.

Have a money question? Email us here or call 855-411-JILL.

We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!

Connect with me at these places for all my content:

https://twitter.com/jillonmoney

https://www.facebook.com/JillonMoney

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The Financial Crisis Ten Years Later

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Where has the time gone? It was ten years ago this week that the U.S. financial system was brought to its knees.

To help us retrace the events of that period, we’re joined today by Gretchen Morgenson, investigative reporter at the Wall Street Journal.

As the financial crisis was unfolding, Morgenson was working for the New York Times, and subsequently co-authored Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon.

There’s no one more qualified to walk us down memory lane and remind us of just how bad things actually were. In case you’ve forgotten, consider this timeline:

  • 9/15/2008: Lehman Brothers files for Chapter 11 bankruptcy protection. On the same day, Bank of America announced its intent to purchase Merrill Lynch for $50 billion.
  • 9/16/2008: The Federal Reserve Board authorized the Federal Reserve Bank of New York to lend up to $85 billion to AIG under Section 13(3) of the Federal Reserve Act.
  • 9/16/2008: The net asset value of shares in the Reserve Primary Money Fund fell below $1 per share, primarily due to losses on Lehman Brothers commercial paper and medium-term notes. When the Reserve fund “broke the buck,” it caused panic among investors who considered money market accounts nearly the equivalent of bank savings accounts.
  • 9/19/2008: To guard against a run on money market funds, the Treasury Department announced that it would insure up to $50 billion in money-market fund investments at companies that paid a fee to participate in the program. The year long initiative guaranteed that the funds' values would not fall below the $1 a share.
  • 9/20/2008: The Treasury Department submitted draft legislation to Congress for authority to purchase troubled assets (the first version of TARP).
  • 9/21/2008: The Federal Reserve Board approved applications of investment banking companies Goldman Sachs and Morgan Stanley to become bank holding companies.

All this in just one week!! An incredible moment in the history of this country, and it was only ten years ago.

“Better Off” is sponsored by Betterment.

Have a money question? Email us here or call 855-411-JILL.

We love feedback so please subscribe and leave us a rating or review in Apple Podcasts!

Connect with me at these places for all my content:

https://twitter.com/jillonmoney

https://www.facebook.com/JillonMoney

https://www.instagram.com/jillonmoney/

https://www.linkedin.com/in/jillonmoney/ 

http://www.stitcher.com/podcast/jill-... 

https://apple.co/2pmVi50

Financial Crisis Anniversary 10 Lessons

Financial Crisis Anniversary 10 Lessons

The traditional anniversary gift for a tenth anniversary is tin or aluminum, so to honor the milestone of ten years since the financial crisis, let’s make a pinky swear and vow not to turn a tin ear to what happened and learn some important lessons.