Our friends at ProPublica have come up with the latest in a series of investigative stories shedding light on the obscure world of Wall Street derivatives that were at the heart of the housing bubble and collapse.
The story, by investigative reporters Jake Bernstein and Jesse Eisinger, focuses on how Merrill Lynch and other financial outfits “created fake demand” to prop up the market for so-called collateralized debt obligations, or CDOs.
Trying to understand the “daisy chain” transactions that lined pockets on Wall Street -- and made it easy to get a mortgage – can be some pretty heavy slogging. But just as they did with their previous investigation into a hedge fund called Magnetar, ProPublica and their partners at NPR’s Planet Money leaven the mix with comedy.
In the Magnetar case, the producers behind the story commissioned a pretty hilarious Broadway-style song, “Bet Against the American Dream.”
This time around, there is a great comic strip explaining how CDOs work, along with this very funny video from Auto-Tune the News, titled “Bankers’ Song – We Didn’t See It Comin.’” Suddenly, it all makes sense.