Marketplace

Search

Marketplace Whiteboard

(Marketplace)

Collateral calls

Millions of Americans are wondering why AIG has paid so much taxpayer money to other banks. One reason is because AIG has had to honor "collateral calls" -- demands made by banks on the insurance contracts it's written. Senior Editor Paddy Hirsch explains,

Whiteboard PIIGS

PIIGS

Five little PIIGS. Senior Editor Paddy Hirsch explains why problems with certain European countries' sovereign debt could blow the house down.

Whiteboard bank profits

How the big banks make the big bucks

We keep hearing the banks aren't lending. The truth is they are lending, and making a lot of money doing it, thanks in large part to one very special borrower. Senior Editor Paddy Hirsch reports.

Whiteboard ratings conflict

Ratings conflict

Ratings agencies are paid by the sellers of the securities they rate. Critics say there's a conflict of interest there.Senior Editor Paddy Hirsch explains.

Whiteboard commercial real estate

Look out below!

Commercial real estate is giving Ben Bernanke a big headache. Senior Editor Paddy Hirsch explains why it's such a threat to the economy.

Whiteboard interest rates

Interest rates

Confused about the theory of how interest rates can affect economic growth? Senior Editor Paddy Hirsch is here with a handy analogy.

Hostile Takeovers

Hostile takeovers

We all know what a takeover is. That's when one company agrees to be bought by another. But what happens when companies don't agree and the takeover goes hostile? Senior Editor Paddy Hirsch explains.

Whiteboard Derivatives

Derivatives

Credit default swaps? They're complicated -- and scary! The receipt you get when you pre-order your Thanksgiving turkey? Not so much. But they have a lot in common: They're both derivatives. Senior Editor Paddy Hirsch explains.

Bonds, notes and bills

Bonds, notes and bills

So much government debt! But what's the difference between the Treasury's bills, notes and bonds? Senior Editor Paddy Hirsch explains.

Whiteboard Inflation

Inflation

Most economists agree that inflation of about 2% or 3% annually is a natural function of a growing economy. But people are worried government stimulus measures could spark much higher inflation. Senior Editor Paddy Hirsch explains

High-frequency trading

High-frequency trading

High-frequency trading is creating a ruckus on Wall Street. Marketplace Senior Editor Paddy Hirsch explains what high-frequency trading is and why some people are up in arms about it.

More Whiteboard videos »

Comments

  • Comment | Refresh

  • By Richard Hoidal

    From Seattle, WA, 07/13/2009

    Where does all this leave the little guy?

    By Mike Stallard

    From Wisbech, 04/25/2009

    You spelled "it's" wrong.

    By Frank Sanchez

    From Los Angeles, CA, 04/20/2009

    How does Government spending stimulate the economy, and what's the risk to the tax-payer? Thank you.

    By Jason P

    From Waterloo, ON, 03/30/2009

    Just wanted to say thanks again for these whiteboards, Paddy. Good explanation to help understand more about these financial instruments. Keep it up!

    By Tim Paddy Hirsch fan

    From Seattle, WA, 03/30/2009

    To use your example of Sam and AIG, It seems to me that an increase in risk of the insured asset (say the bonds in your example) would result in not just higher collaterals for AIG, but an increased cost to SAM to insure the assets (bonds) since they are now a riskier investment from AIG's point of view. Is this true in fact?

    By Anonymous Coward

    03/29/2009

    Great segment! But why does anyone trust the ratings agencies anymore?

    By paddy hirsch

    03/29/2009

    Hi Shel Sam would pay as much as the insurer demanded. He'd pay very little for a AAA company in a boom. But for General Motors in a recession? Well, maybe not as much as 20% per year, but you can bet the insurer would want a fairly fat fee for that coverage. paddy

    By Shel Anderson

    From Durham, NC, 03/27/2009

    Interesting explanation. But why would Sam pay so much for these bonds? The initial $5 million, plus $500,000 a year. Does this really pencil out?

  • Post a Comment: Please be civil, brief and relevant.

    Email addresses are never displayed, but they are required to confirm your comments. All comments are moderated. Marketplace reserves the right to edit any comments on this site and to read them on the air if they are extra-interesting. Please read the Comment Guidelines before posting.

    * indicates required field

    *
    *
    *
     




     

    You must be 13 or over to submit information to American Public Media. The information entered into this form will not be used to send unsolicited email and will not be sold to a third party. For more information see Terms and Conditions and Privacy Policy.

The Specials

GAME: Budget Hero

Budget Hero

Think you could balance the federal budget? Play the game.

Conversations from the Corner OfficeTM

Conversations From the Corner Office

Marketplace goes one-on-one with CEOs, company founders, head honchos...

Sit in.

BLOG: The Greenwash Brigade

Environmental professionals scrutinize eco-friendly claims by businesses, governments and groups. Check out their reports.

Marketplace on iTunes U

iTunes U

Marketplace is on Apple's online education platform, iTunesU. Get free downloads in subjects like history, science, business and more. Study up

American Public Media © |   Terms and Conditions   |   Privacy Policy