Everyone wants to know the location of Ground Zero in our ongoing financial disaster – the place this recession all began. PBS’s “Frontline” provides an answer in its special, two-part, four-hour “Money, Power and Wall Street” (tomorrow, (4/24) and May 1). It was in the ‘90s, at a swanky Boca Raton conclave of twentysomething brainiacs from JP Morgan, when the idea of credit default swaps was conceived.
“They were well-intentioned. I would not say they were greedy,” observes revered broadcast journalist Martin Smith, speaking of that team of young turks. He points out that the idea stemmed from wanting to insure themselves against loan risks. The Frontline report tracks how trading risk as an insurance product began in a seemingly smart way, with corporate loans, then morphed into a market of its own that spread into mortgages, and ultimately the toxic loans that resulted in 2008’s financial crisis. Smith is quick to credit Gillian Tett and her book, Fool’s Gold for the Boca Raton story. (Tett appears on the docu.)
Smith has won numerous journalistic awards for his reporting on documentaries like “Gangs of Iraq,” “Beyond Baghdad” and “Return of the Taliban.” The labyrinthine world of high finance is most different from war reporting, he tells us, in that “you don’t have to explain to people what happens when a bullet hits,” but the practices and terminology of finance require careful boiling down for non-expert viewers. Smith makes the point that instead of merely chalking up financial matters as arcane and complex – which many media members do – “it’s important that we, the public, understand them. And we can understand,” he stresses. “As someone pointed out, every time we buy a box of cereal, we’re paying a price that involves derivatives.”
Judging by the galloping first hour of “Money, Power and Wall Street,” “Frontline” has achieved its goals. In fact, the fascinating saga has so much potential to be portrayed as a smart thriller, one wonders whether Hollywood will soon be looking to dramatize it.