Financial Markets


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A song and a cartoon explain the basics of the bank as an intermediary--you can use it to save and earn interest, or you can borrow from the bank if you need funds now, but in that case you pay interest. How would we borrow and save if there were no banks or financial intermediaries?

The Role of the U.S. Government

A catchy tune from School House Rock that looks at the ever-growing debt of the United States. However, does this clip get the story right? Do our tax dollars feed the debt or do they feed government spending, which in turn feeds the debt?

Merle Hazard sings about the Greek debt crisis of 2010. It is both entertaining and informative.

Instruments and Rates

This clip has a clever song about financial instruments and hedge funds. Can you identify these terms that are mentioned in the song: put, swap, mortgage-backed CDO, margin call, hedge fund, hedge, Goldman Sachs, leveraged 10 to 1, Moody's, S&P? (One quibble--some of the financial institutions that collapsed during 2008 were leveraged 30 to 1. Ten to one would have been conservative for them.)

This simple video that introduces you to the basics of financial markets is actually a commercial for a firm that wants you to use their services to trade in these markets.

Speculators and Markets

Tim Harford, author of The Logic of Life and The Undercover Economist, explains efficient markets in this clip. How are the checkout lines in the supermarket like financial markets? Why should we not trust the expert? Why then do people trust experts in financial markets? (Is the reason that people are not willing to pay for Harford's advice because they do not think he is an expert, or could it be that the value of his expertise in this case, avoiding a few minutes of waiting, is not worth very much?)

These links were checked on July 20, 2020.
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Copyright Robert Schenk