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David Goggins
Former Navy Seal
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Bryan Cranston
Actor
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Liv Boeree
International Poker Champion
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Amaryllis Fox
Former CIA Clandestine Operative
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Chris Hadfield
Retired Canadian Astronaut & Author
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Paul Krugman Explains the Global Banking System

Question: How has the Global Financial System Changed?

Paul Krugman: I think the biggest thing is that we have this new banking system that is not your father’s banking system. I mean, we have an idea of what a bank is. A bank is a big marble building, with a sign on the window that says, FDIC Insured, right? And you go in and get cash or you deposit cash, and those things still exists. More like shopping malls, storefronts than big marble buildings, but they still are ordinary banks, but, at this point, most of what, at least on the eve of the crisis, most of the banking activity was going on in this economy was things that didn’t look like that. They were things that actually had no storefronts or no big marble building. They were things like asset-backed commercial paper funds or money market funds, or auction rate securities. All of these institutions that prefer, you know, they were giving people what they thought was a way to park their cash with ready access to it, but they were paying higher interest rates than banks paid, and in return they were then lending that money out, and it will look like banks to people, except that it turned out they weren’t the safest banks. They weren’t regulated, they weren’t, they didn’t have a safety net. They certainly didn’t have insurance, and this thing, which people called the shadow banking system or the parallel banking system was, on the eve of the crisis, it was bigger than the conventional banking system and it’s now imploded. It’s just basically shriveled up, and that was what we didn’t understand. I mean, there were hints of it, but no one, I think, until the crisis hit realized just how big this was and how fragile it was.

Question: What company would be recognized as a shadow bank?

Paul Krugman: It’s not that easy because these things are not that visible. So, you know, there are a lot of money market funds. People probably have some money market funds in mind, and many people have money in money market funds. I guess I have some, and, you know, what is an A.G. Edwards money market fund, which is now, thankfully, insured because the Fed moved in to rescue it, but, you know, I think any money market fund was part of this. Asset-backed, or actually auction rate securities, which is a classic, because that was a $350 billion, you know, bank, in effect, that wasn’t called the bank… those were mostly set up by banks you’ve heard of. They were set up by Citibank or, in some cases, by the investment banks, but typically they were set up by Citi Group or JP Morgan, but they were not guaranteed by them. It wasn’t part of the regular thing, and so people had this thing, money in these institutions, these arrangements, and didn’t realize what they were actually getting into. It’s a lack of obvious brand names, and that’s part of the problem.

 

Paul Krugman on the financial instruments of the future.

Why do people believe in conspiracy theories?

Are we genetically inclined for superstition or just fearful of the truth?

Videos
  • From secret societies to faked moon landings, one thing that humanity seems to have an endless supply of is conspiracy theories. In this compilation, physicist Michio Kaku, science communicator Bill Nye, psychologist Sarah Rose Cavanagh, skeptic Michael Shermer, and actor and playwright John Cameron Mitchell consider the nature of truth and why some groups believe the things they do.
  • "I think there's a gene for superstition, a gene for hearsay, a gene for magic, a gene for magical thinking," argues Kaku. The theoretical physicist says that science goes against "natural thinking," and that the superstition gene persists because, one out of ten times, it actually worked and saved us.
  • Other theories shared include the idea of cognitive dissonance, the dangerous power of fear to inhibit critical thinking, and Hollywood's romanticization of conspiracies. Because conspiracy theories are so diverse and multifaceted, combating them has not been an easy task for science.

COVID-19 brain study to explore long-term effects of the virus

A growing body of research suggests COVID-19 can cause serious neurological problems.

Coronavirus
  • The new study seeks to track the health of 50,000 people who have tested positive for COVID-19.
  • The study aims to explore whether the disease causes cognitive impairment and other conditions.
  • Recent research suggests that COVID-19 can, directly or indirectly, cause brain dysfunction, strokes, nerve damage and other neurological problems.
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Neom, Saudi Arabia's $500 billion megacity, reaches its next phase

Construction of the $500 billion dollar tech city-state of the future is moving ahead.

Credit: Neom
Technology & Innovation
  • The futuristic megacity Neom is being built in Saudi Arabia.
  • The city will be fully automated, leading in health, education and quality of life.
  • It will feature an artificial moon, cloud seeding, robotic gladiators and flying taxis.
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Better reskilling can future-proof jobs in the age of automation. Enter SkillUp's new coalition.

Coronavirus layoffs are a glimpse into our automated future. We need to build better education opportunities now so Americans can find work in the economy of tomorrow.

Image: metamorworks / Shutterstock
Sponsored by Charles Koch Foundation
  • Outplacement is an underperforming $5 billion dollar industry. A new non-profit coalition by SkillUp intends to disrupt it.
  • More and more Americans will be laid off in years to come due to automation. Those people need to reorient their career paths and reskill in a way that protects their long-term livelihood.
  • SkillUp brings together technology and service providers, education and training providers, hiring employers, worker outreach, and philanthropies to help people land in-demand jobs in high-growth industries.
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