Extra Credit 9: Football High

            Tonight I watched the documentary Football High on Frontline. I grew up watching football and my older brother played football his whole life. I was interested to see what the documentary had to say about high school football in todays’ society. High school football is taken very seriously all over the country. One million kids across the country play football, that’s more then any other high school sport. There are about sixty thousand concussions per year from football games and practices. Studies show that more then half of football players who never reported signs of concussion had serious brain damage. Football injuries often lead to CTE in the brain, which can then lead to suicide and memory loss. Helmets are not made to prevent concussions; they’re made to prevent the skull from fracture. In August of 2010 in Arkansas there were two cases of high school football players who were rushed to the hospital after heat stroke. Both of the athletes passed out from heat stroke during practice in 112-degree weather. One of the boys actually ended up passing away. 2/3 of sports related death in high school is football related. The medical facts that this documentary brought up were frightening.

            I can relate to this because my older brother had numerous injuries throughout his high school football career. In his senior season alone he was rushed to the hospital four different times. The injuries throughout the season were two concussions, a fractured wrist and a fractured ankle. He would never admit it to coaches or my parents, but he said that he had at least three other concussions on his three years on varsity football that the coaches and trainers did not pick up on. He said they were not as serious and could definitely feel the effects but it would not stop him from playing. I was very surprised that the athletic trainers and doctors let him come back in the season after experiencing two concussions. Coaches and doctors need to pay more attention to their athletes and their injuries. The athletes need full time to recover, especially in cases relating to the brain. High school football in todays’ society has much more attention and pressure. Some high school football games are nationally covered. As high school football becomes more serious, the injuries do as well. This means that medical attention must become more serious too. 

Extra Credit 8: Money, Power and Wall Street Episode 4

             I have now completed all four episodes of Money, Power and Wall Street on PBS. The first part of the episode was basically an interview with four workers who worked for various banks doing various parts of banking. When they were asked how much money they made, they all became nervous and said it would be inappropriate to answer. One male did say that starting salary could be between five and ten million dollars a year. All of the people interviewed admitted that the businesses make money for themselves. Traders are advised to sell to clients no matter if the client understands what is going on or not. Banks try to do most of their work that will require less regulation.

            People in our country as well as other countries had very little understanding of what they were buying from investment banks. In Jefferson County, Alabama JP Morgan took advantage of the fact that they were in desperate need. JP Morgan offered the county interest rate swap. They did this several times and were basically betting against the market. JP Morgan then bribed the financial advisors in Jefferson. In November 2011, Jefferson County filed for the highest municipal bankruptcy in all of American history. The head financial advisor of Jefferson went to jail for bribery and fraud and JP Morgan had to pay back fees to Jefferson County. Interest rate swaps cost American taxpayers about twenty billion dollars.

            Derivatives are the most risky and closed form of banking all over the world. Derivatives led to many of the economic problems in Europe. For example Italy and JP Morgan had a currency swap with a built in loan. This transaction was not required to be put on the financial statement. All of the European countries economies were connected with one another so when Greece’s debt doubled between 2001 and 2008, the institutions that fueled the European spending spree, then proceeded to back out and pull out of the plan. Banks are greedy and will do anything they can to get money. 

            I think the reason the directors of this documentary ended episode four talking about Greece and other countries economies was to show that even though our economy has been doing very poorly for many years now, all over the world economies are not thriving. The shady business performed on Wall Street affects economies all over the world. The people protesting to Occupy Wall Street may not know how the system works and everything about banking and trading, but they know that it is not helping them. Many of the protestors have degrees and cannot find a job. The government really needs to take action and regulate banking on Wall Street. Lobbyists made it so that only banks trading more then eight billion dollars require oversight; which leaves eighty-five percent of the derivative businesses out of that. I really hope that the government has a plan of action to help our economy. 

Extra Credit 7: Money, Power and Wall Street Episode 3

As I continue to watch Money, Power and Wall Street I was eager to see what happened in episode three. Episode three focused on the time from when President Obama was taking office. When President Obama took office the stock market was down six thousand points and unemployment rates were up to seven percent. Henry Paulson used $125 billion dollars to bail out banks and during the transition between presidents he gave another twenty billion dollars to Citi group.

            President Obama pushed for Wall Street to change its ways; he wanted “pure” business. He gave a speech at Cooper Union in front of many of the power brokers. He spoke of regulation before the Wall Street workers even thought about it. When it came time for Obama to choose his economic team, he wasn’t sure whether to go in the direction of reform or rebuilding Wall Street. He chose Tim Geithner as Secretary of Treasury. Tim Geithner was president of the New York Federal Reserve and he also saw the economy as Wall Street did so he was able to reflect that to the White House. Another person President Obama was Paul Volcker to his economic board and Volcker was a reformer and tough on Wall Street. On February 9^th President Obama gave a speech that said that the following day Geithner would give a speech about the economic plan. President Obama’s speech had left the country with very high expectations. The day of Tim Geithners speech, he was very inexperienced in front of TV and most importantly his plan was not ready yet. The day that Geithner gave that speech about stress tests the market dropped almost four hundred points. Following that day, Obama was under major pressure to replace Tim Geithner however he chose to stay with him.

President Obama with Tim Geithner

            On March 15^th President Obama called a meeting at the White House with thirteen CEO’s of the major banks. The CEO’s were very nervous however at the end it turned out that Obama should have made demands to the banks but he didn’t. He also chose to stay with Geithner’s ideas of giving the banks stress tests and went against Larry Summers who wanted aggressive reform. When the results of the bank stress tests came back, nineteen of the largest banks were considered “healthy.” On Sept 14^th 2009 the president gave a speech right near Wall Street. Many of the banks CEO’s did not show up. This was at a time when things were stable so the banks became disengaged since they knew they got off the hook easily. At this time the banks began to use some of the money the government gave them to pay off government officials so that Congress would lay off the pressures on Wall Street.

            I was surprised and glad to see that President Obama made the right decision to keep Tim Geithner in office because I agree that at the time the economy and banks were too fragile for aggressive reform. I was however very disappointed with how President Obama handled the situation with the CEO’s of the banks. They are very much at the root of this economy’s problem and they feel no repercussions. I’m very interested to see how the last episode of Money, Power and Wall Street ends. On a side note I found it to be very interesting and ironic that during the documentary, every advertisement that came on was for Goldman Sachs. 

Extra Credit 6: Money, Power and Wall Street Episode 2

            After watching episode one of Money, Power and Wall Street I immediately watched the second episode because I was very curious as to where the economy and the problems on Wall Street were going. I knew that the problems in our economy were getting worse as time went on these past couple of years but I never knew why.

Henry Paulson

            In the beginning of this episode Bear Stearns went bankrupt. This company was very big in mortgages because it often bundled and sold mortgages to other businesses throughout Wall Street. This caused a huge problem because if Bear Stearns went down, many other businesses would be greatly affected by it. Henry Paulson was Secretary of Treasury at the time and he had to decide what to do about this. In the end he decided that the government would use $30 billion to bail out Bear Stearns and sell it to JP Morgan. After the bailout of Bear Stearns, the government declared that it would not help out another company because of “moral hazard.”

            Shortly after this Lehman’s Brothers, the fourth largest investment bank in the world was breaking.  Once again Henry Paulson was at a crossroads with whether or not to bail out the company. This time however, he had close personal relationships with the CEO of Lehman’s Brother Dick Fuld. CEO Dick Fuld strongly believed that the government would help out if needed but to his surprise, the government did not bail them out. Henry Paulson believed that Americans would support their decision and be confident with the resilience of the American economy. On September 15^th 2008, Lehman Brothers filed for bankruptcy. After that, no banks wanted to lend to other banks and the decision that was made to not bail out Lehman Brothers added to the panic. However when AIG was collapsing the head leaders of our economy feared that there would be a full-scale worldwide depression. Paulson went back on his word and created a relief program that Congress passed. The relief program gave $700 billion to help the economy. At the end of the documentary it discussed that Paulson gave billions of dollars to the nations richest banks, even though some of them did not want the money because they had a lot of doubts.

            I found myself left with a lot of questions after watching this video. At one point, Senator McCain suspended his campaign and requested a meeting at the White House. When the meeting took place, McCain had no plan or strategy and Obama had a great plan considering he had inside information from Robert Wolf and Henry Paulson. I wonder if that had any effect on McCain’s campaign. I also wonder what happens in the next episode because it sounds like Obama has good ideas to help the economy however today our economy is still struggling. Why would Henry Paulson force billions of dollars into companies that did not want it? I feel like that is just going to come back and bite Paulson in the ass. Obama's economic policy ideas must have been very specific since he knew what exactly was causing the major problems. 

Extra Credit 5: Money, Power and Wall Street Episode 1

            I finished episode one of the documentary Money, Power and Wall Street. This was a documentary I wanted to watch because I know that Wall Street and the economy are a major problem in society today but I never really understood why the economy was so bad and how Wall Street works. This documentary went into the history of what had happened and what led to the recent fall of our economy. Many of the problems leading up to the problems with the economy started before I was even born. It was interesting to see how through out my childhood the changes that were taking place in the economy. The economy and the things that take place on Wall Street are important for me to understand as I’m older now and will be graduated and looking for a job in three years.

            The main part of the documentary was spent discussing Credit Default Swaps and the idea of eliminating risk. In 1994 a group of JP Morgan workers went on a weekend getaway to the Boca Resort in Florida. The objective of this trip was for the collection of workers to make it safer to trade loans and eliminate risk. The workers were young, many of them in the twenties. By the end of the weekend the idea of credit default swaps was invented. Credit Default Swaps allowed banks to share the responsibility of credit. Credit became more readily available which fueled a worldwide credit boom. It was an immensely profitable market and was unregulated, it was basically just betting. The fact that it was unregulated caused so many problems. Greedy banks and companies were taking advantage of the fact that it was unregulated. For example Goldman Sachs would actually bet against its own company so that its clients would lose money and it would gain money.

            The events that took place over the last couple of years are hard to imagine. Our economy is in serious risk of a depression. Eight and a half million jobs were lost in the recession and about eleven trillion dollars were lost. The banks have recovered but the economy hasn’t and citizens are outraged by it. Some serious action must take place in order to save this economy. The past eighteen years have led to the recession of the American economy and sounds like we might be headed to a second depression. I’m interested to see what happens in the other episodes of Money, Power and Wall Street.