Planet Money

We dive into the SEC's lawsuit against Goldman Sachs, and Goldman's emphatic arguments in its defense. We consider the similarities between this case and that Magnetar story that aired recently on This American Life. And our long quest to unite financial reporting with Broadway theater continues. (Spoiler: It's a dramatic reading of a Goldman executive's convoluted answer to a key question about the case.) For more, listen to a recording of the conference call Goldman hosted this morning, and read our posts explaining the SEC's case and hashing out one piece of Goldman's defense. You can also read the SEC's complaint and Goldman's response.

A toxic asset — very much like our own Toxie — goes bad. And a New Jersey carpenters' union fund that bought a piece of the asset tries to figure out if there's someone to blame. On today's Planet Money, we hear from a carpenter, a lawyer and a guy who owns a pub in London. Oddly enough, the pub owner could be the one bailing the carpenters out.

The lead singer of the band OK Go, famous for the video where they dance on treadmills, talks about the economics of Rock and his band's decision to leave their label and start their own record company.

We landed a rare broadcast interview with William Dudley, the president of the New York Fed. The classic Fed stance has been that there's not much that regulators can do about the economic bubbles that grow and pop. Dudley disagrees — at least, he says, fighting bubbles is worth a shot.

The Federal Reserve owns the biggest mall in Oklahoma, and it's looking to sell. The mall is one of the many, many assets the Fed bought to bail out Bear Stearns a few years back. The assets were bundled into a special company called Maiden Lane I. Also on the bank's shopping list: A bundle of home mortgages that's closely related to Toxie, Planet Money's toxic asset. (Does that make us, like, in-laws with the Fed?) For the most part, the Fed owns financial stuff like loans and swaps. The assets it bought as part of the Bear bailout included a mortgage on the Crossroads Mall in Oklahoma City. When the owners of the mall defaulted on the mortgage, the Fed foreclosed. So if you're looking to buy yourself a mall in Oklahoma, you might check out Crossroads. As the listing notes, "this lender owned distressed asset ... can be purchased at far below replacement cost." It includes an AMC theater as well as a "former JC Penney (vacant)," and a "former Steve & Barry's (vacant)."

So there was a big shipping bubble that inflated about the same time the housing bubble did. It grew for some similar reasons — a go-go economy, easy credit, a belief that prices never decline, etc. And, like housing, it's now turned ugly. Ships that cost more than $100 million a few years back now go for $40 million — and the rates for freight have fallen accordingly. Ship owners have gone bust, and their ships have been taken by the bank and sold at auction.

That's Lynn Tilton up there. She runs a $7 billion private equity firm called Patriarch Partners that specializes in scooping up companies teetering on the brink of bankruptcy. On today's podcast, we visit with Tilton. And we go inside Spiegel, the catalog company Patriarch bought last year.

The FDIC swoops in and closes a failing bank. Then what? Last year, Chana Joffe-Walt told the story of a bank failure. In today's podcast, she follow up with the main players. The FDIC guy who closed the bank down gets choked up when he thinks back on it. And Todd Zalk — who was so connected to his job that he wore his bank name tag months after the bank closed — describes how it felt when a former colleague pleaded guilty to hiding bad loans.

President Obama signed the health-care bill today. You know this. So what does it mean? Millions of uninsured people will get health insurance. Millions of people with high incomes will pay higher taxes. Medicare spending will grow a little less. But the broader issue of rising health costs will remain a problem. Today's podcast explains all that, with the help of uninsured manfriend and some very bad jokes.

s China manipulating its currency? What does it even mean to manipulate a currency, anyway, and how does a country do it? On today's Planet Money, Alex Blumberg and David Kestenbaum explain with help from economics professor Paul Wachtel and entrepreneur Imran Karim.

Adam Davidson and Chana Joffe-Walt, who've been reporting in Haiti, talk to Prime Minister Jean Max Bellerive. He runs the government's day-to-day affairs; President Rene Preval is the head of state. They interview Bellerive at his official residence, and while they're talking, a U.S. Army helicopter flies by. It's a reminder of the massive foreign presence in Haiti. And it's not just the military; all sorts of people from around the world looking at everything from Haiti's ports to its health-care system. But as plans for what Bellerive calls Haiti's "refoundation" get hashed out, there's some tension between the Haitian government and the international community.

In today's podcast, Alex and David talk with Reps. John Campbell and Brad Miller about what went into the House finance bill. They also talk about derivatives and resolution authority with Mike Konczal, the finance guy behind the blog Rortybomb.

We wanted to really understand how this whole housing bust/economic catastrophe is playing out. So we sent David Kestenbaum and Chana Joffe-Walt to Kansas City, where a former Wall Street guy named Wit Solberg runs a shop that buys and sells toxic assets. Wit sold them a $1,000 sliver of a toxic asset he'd bought for $36,000. The asset — a bond made up of residential mortgages — was marked down from the pre-crash price of $2.7 million. Of course, it's marked down for a reason. About 15 percent of the homes in the bond are in foreclosure, and nearly half are behind on their payments. The foreclosures will continue to mount, and at a certain point our asset will be wiped out. But until then, we'll get monthly payments. If we make it to Thanksgiving, we could double our money. (We'll be giving any profits to charity, by the way.)

Could the Greek crisis spell the end of the Euro? No way, says Berkeley economist Barry Eichengreen. Eichengreen, says that if the Greek parliament were to even discuss the possibility of going back to Greece's old currency, the Drachma, it would send people running from Greek bonds. Eichengreen's got plenty more to say about the Euro. He argued recently that European countries should put in place a system for Euro-zone bailouts, complete with "temporary control of the national budget by a committee of 'special masters' appointed by the European Union." (Somehow, this idea seems unlikely to gain much traction with European governments.)

The economies of Jamaica and Barbados — two countries with very similar histories — have grown far apart in the last several decades. That difference in GDP shows up in all sorts of ways, Planet Money's Alex Blumberg found on a recent trip to both countries. Today, we get the first installment: What schools look like in each country. A principal in Jamaica keeps her school running with help from neighborhood volunteers, a donation from a Jamaican pop star and some funding from a U.S. aid program. A principal at a similar school in Barbados says government funding does a pretty good job of meeting the school's needs