House of Cards
March 7th, 2009
I know a lot of people have offered a lot of explanations for the current financial crisis, but I would go so far as to say that House of Cards, a CNBC documentary available for free on Hulu, is the absolute definitive history and explanation of what got us where we are.
Phenomenally well-made, it starts just after 9/11, and explains, step-by-step, the snowball that delivered us here.
We go from Alan Greenspan in a helicopter over Ground Zero thinking he needed to drop interest rates to keep the economy going, and we end up with an investor in Dallas realizing that things were about to fly apart, so he starts buying credit default swaps. What happens in between is compelling.
In particular, the last 30 seconds of the show have some comments from Alan Greenspan which I can’t shake. Paraphrasing, the host states that greed was root cause of all of this. Greenspan responds:
“Yes, and you’re going to pass some legislation that’s going to prevent this? Try it.
Human nature is such that this will happen again. It won’t happen for some time, but we will be having this same conversation again, sometime in the future.”
It’s 90 minutes long, but you won’t regret it. This should be required viewing for any finance class. It answered or clarified every lingering question I had.