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Clarence Nathan was a man with three part-time jobs who earned about $45,000 a year, and yet a bank loaned him $540,000. The bank never checked his income.

"I wouldn't have loaned me the money, and nobody that I know would have loaned me the money," Nathan said. "I mean, I know guys who are criminals who wouldn't lend me that money, and they'd break your kneecap."

But this kind of lending happened, over and over again since 2003, leading to the mortgage crisis that has disrupted the global economy.

How did this mess happen? Through the news media you can pick up bits and pieces. But how many people really understand the housing crisis, why Bear Stearns went under, or sub-prime mortgages, or why the rest of the world was pulled under too?

These questions have bugged This American Life producer Alex Blumberg since early 2006 when someone told him about a NINA mortgage loan -- no income, no assets needed.

"Because I'm not much of a financial person, all my friends grew bored of talking about it with me," he said. The exception was Adam Davidson, NPR's international business and economics correspondent. Friends since working at WBEZ in Chicago in the 1990s, they've been talking about the housing crisis since before it became front-page news.

In an unprecedented public radio partnership between NPR and This American Life (distributed by Public Radio International), Blumberg and Davidson set out to learn what happened and why. What they found is mind-boggling. But more significantly, they tell their story in a fascinating, compelling way that anyone can understand.

On May 9, the pair debuted a 13-minute piece, "The Giant Pool of Money," on All Things Considered (ATC) with a joint introduction from ATC host Michele Norris and This American Life host Ira Glass. An hour-long version also appeared on This American Life.

"Thank you very much for the program that aired today on 'The Giant Pool of Money'," listener Nina Robbins wrote me. "It was, by far, the clearest explanation of the U.S. housing crisis -- the subsequent international financial crisis --that I have ever heard. It enabled me to finally integrate into a comprehensible whole all the previously incomprehensible pieces of information I had heard over the past months."

I agree.

The unusual partnership came about when NPR's Vice President for News, Ellen Weiss, ran into Ira Glass at a party at NPR's New York bureau. Glass has "always been the most generous and wonderful colleague and we talked about our mutual desire to do something together, and then we just looked for the right project," said Weiss. "Adam worked for TAL and so it was wonderful, organic and as I said, easy collaboration -- we just said yes and left the rest to the talented reporters and editors and got out of their way."

After the piece ran on ATC, the show was inundated with emails of praise. "The key: They asked the right questions," said Les Cook, NPR's business editor who handled the pieces. "How did bankers get to the point that they were loaning money to people who had no chance of repaying it? The explanations were quite sophisticated. And clear enough that people who don't know much about how Wall Street works could understand them."

Davidson and Blumberg take you, the listener, along on their reporting journey where you meet (and in some cases may even like) the people who did the borrowing, the bundling, the loaning, the deceiving, and the profiting -- until it becomes clear that everyone involved is culpable.

"What makes this story interesting is that it's not a simple case of some bad actors, some criminals victimizing people," said Davidson, who began working with Blumberg on the story in February. "Sure, there were criminals at every step of the chain. But the core of this story is that almost everyone--from borrowers, to brokers, to bankers and wall street investors--effectively worked together: deceiving themselves and each other into believing that they could create massive wealth with little risk. Almost everyone involved was a victim and a victimizer at the same time."

The benefit of having two smart narrators is that they interrupt one another if something sounds puzzling, then explain it to listeners in a conversational style as if they were sitting together in a coffee shop.

They also masterfully translate economic gobbledy gook.

To explain why a $70 trillion (yes, trillion) global pool of money shunned investing in the safe U.S. government and went instead into risky mortgages, Davidson and Blumberg played a clip from former Federal Reserve Board chairman Alan Greenspan that would go over the heads of most of us. They even apologize for quoting the inscrutable Greenspan.

Then Davidson translates. What Greenspan is really saying is, Davidson tell us, is: "Hey global pool of money, screw you. You are not going to make any money on U.S. Treasury bonds for a very long time. Go somewhere else!"

The pair admit that they "stole" their buddy-system narrative format, where they play off of one another, from WNYC's Radio Lab. "We were trying to mimic that," said Blumberg. " I actually sent them an email thanking them for letting us rip them off."

Davidson said he's gotten no negative comments, which itself is an amazing outcome for a complex piece of journalism on a controversial subject.

"What I find the most satisfying is that the positive comments have come equally from people who know nothing about economics and people who are intimately familiar with the housing industry or other aspects of finance that we covered," said Davidson who joined NPR in 2004. "I can say, that by a very long margin, this is the most positive response I've ever seen to any story I've worked on."

The same is true for This American Life. Since the show started in 1996, it usually gets five to 10 comments, according to Blumberg, who's worked there since 1997. After this piece aired, the show received nearly 100 emails.

Please listen to "Giant Pool of Money" on either All Things Considered or This American Life. Let's hope this isn't the last time NPR works with the ultra-talented Ira Glass' show. Kudos to Davidson and Blumberg for an extraordinary piece of journalism.


categories: Investigative Reporting

8:58 - May 28, 2008



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I have just purchased a home within the past four years. The lending company crawled all over my past finances... and that was for a loan less than half the amount mentioned in this article. I find it difficult to believe that any lending institution would have done such a thing. If it is true, then why don't you name names or give the lender a chance to respond?

Sent by Bill Avallone | 5:53 PM ET | 05-28-2008

Moreso, why don't you review the documentation that this man submitted to the financial lender? I suppose it is easier to blame industry for all of our individual problems... no doubt, it is never the fault of the individual.

From my last response, I see that any and all comments are not necessarily posted as is... rather, they are subject to whether you feel they are "proper". All this time I thought that NPR was about free speech and open forums. I guess I was wrong.

Sent by Bill Avallone | 6:05 PM ET | 05-28-2008

Asserting that our current economic woes are a result of a housing bubble is simplistic. The bubble was likely just a symptom of our economic house of cards. Questing economic assumptions is way off the NPR radar. Why do we keep hearing the same tired economic reporting on your flagship shows? Some economists forecast the current economic crises, but they are not on NPR. Why not?

I like This American Life, but your current column seems to contradict your column IS "THE INFINITE MIND" AN NPR SHOW?

Sent by andrew hennessy | 9:14 AM ET | 05-29-2008

This was one of the best shows of any kind that I have ever seen or heard or read anywhere that I can recall. Kudos for a superb job on telling the story of such a complex, bizarre, mind-blowing story. I am a writer and I have been struggling to come to grips with the details myself, so this show was a godsend. I love NPR madly. Thank you!!

Sent by Jesse Sublett | 12:33 PM ET | 05-30-2008

Seems simple to me--Davidson and Blumberg wanted to do a story together for "TAL," but Davidson's primary reponsibility is to who pays his paycheck. "ATC" was interested enough in the story to do the shorter part and Davidson got permission to complete the story on "TAL." Nothing more than when Bill Moyers has pieces produced by "Expose" on his show. What's the big deal?

Sent by Mark Jeffries | 12:51 PM ET | 05-30-2008

This was an incredible American Life show...Actually it was the first time I ever listened to it, and I came away duly impressed. It really humanized the problem...

Sent by Peter Dujardin | 12:55 PM ET | 05-30-2008

I listened to the This American Life episode via iPod soon after it came out. It was the best piece of explanatory journalism I've experienced in any form in years, and I've worked for TV, print and Web.

Sent by Anthony Moor | 9:34 PM ET | 06-03-2008

My question is: have there been any stories on the Community Reinvestment Act? I seem to remember the mortgage industry being under fire for not being flexible enough with mortgage applicants. If my memory serves, lawsuits were filed and damages paid. Is that correct? I am interested in hearing if the CR Act is related to the current crisis.

Sent by Marc Damato | 3:29 PM ET | 06-05-2008

Not sure why you are asking this question as an "impartial" observer. Ira Glass made all of this VERY clear. How is it that his brand of journalism trumped EVERY other piece on NPR or PBS? Might it be that he asked and pointed out the obvious problems and didn't try to sound like a "business" reporter? Why isn't he in charge? I think there is a serious problem in the producer dept.

Sent by kent strock | 1:58 AM ET | 06-07-2008

A Giant Pool of Whizzo.

Read more about it here:

We (the people of the US of A) no longer have control of any 'real' money.

It is now a shell game.

Printing more money, shuffling it around creating disasters to create jobs through more confusion.

(nevermind while we shuffle the pieces on the chessboard!)

We are 'money/tax' slaves to the corporate hucksters.

Wake Up Folks!

Sent by JCS | 9:17 AM ET | 06-18-2008

My friend with a very bad credit(banckrupcy), unemployed and with no history of work, put down 30K down and granted 250K. Why am I not suprised that she cannot make her mortgage payments.

Sent by Sandra Cohen | 4:36 PM ET | 07-11-2008


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Alicia Shepard

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