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We Look Back At Toxie

During and after the 2008 financial crisis, everyone was talking about “toxic assets.” They were a star character in the economic turmoil wreaking havoc around the world. But they were also mysterious financial instruments that were hard to grasp and, let’s be honest, kinda boring. And so, fifteen years ago, Planet Money, then in its toddler years, decided to do something to cut through their mind-numbing complexities while also having a little fun: we actually bought a toxic asset ourselves — and we nicknamed it “Toxie.”

Toxie the Toxic Asset/NPR

Before these toxic assets sank the global economy, they were known less pejoratively as “mortgage-backed securities.” In the run up to the 2008 financial crisis, these mortgage-backed securities were all the rage on Wall Street. Financial engineers would take people’s home mortgages, slice and dice them, and package them together to create and sell complex financial products. Banks and investors, goaded by rating agencies, came to believe these products were relatively safe investments, and they gobbled up over $3 trillion worth of them.

When the housing market started crashing, and many homeowners stopped paying their mortgages, these assets started becoming — well, toxic. Financial institutions suddenly realized these supposedly safe investments were really ticking time bombs, and the institutions that bought large numbers of toxic assets found themselves in dire straits. These toxic assets were the big reason why a downturn in the housing market metastasized into a full-blown financial crisis. The federal government sought to rescue the financial system by buying up these toxic assets, under a program known as the Toxic Asset Relief Program, or TARP.

So, yeah, toxic assets were central to the story of the financial crisis and the news coverage of it, but, at the same time, most people didn’t really know what they really were. And Planet Money wanted to change that by actually buying one and concretely describing what it was, where it came from, and the people connected to it.

By the time Planet Money decided to buy one of these toxic assets, they had plummeted in value. We pooled together a little over $1,000 to buy one — which was tens of thousands of dollars cheaper than it had been before the crash.

Through the purchase of this toxic asset, Planet Money, over the course of a number of episodes and radio segments, basically told the story of the financial crisis and its aftermath. It became a hallmark for many Planet Money stories to come: going out into the world and doing something real and documenting it as a way to do explanatory journalism about the economy.

Well, in a new Planet Money+ episode, the reporters behind the Toxie series, David Kestenbaum and Chana Joffe-Walt, talk with Planet Money executive producer Alex Goldmark. They reminisce about their journey creating the Toxie series and what they learned along the way. It’s a fun conversation.

If you’re already a Planet Money+ supporter, thank you! You can hear the full conversation in your supporter-exclusive podcast feed. You can also hear the entire toxic asset series in one playlist! It’s one of three playlists we’ve just created for Planet Money+. So along with “We Bought a Toxic Asset,” we’ve made it easy to hear some of our other “classic” series, including “We Invested In Gold” and “We Made a Shell Company.” (More playlists will be rolling out later this year!)

If you haven’t signed up for Planet Money+, think about joining! It's the best way to help us stay strong, independent, and ambitious. By signing up, you get a host of benefits, including these new exclusive playlists, sponsor-free listening, and the warm fuzzy feeling of knowing you’re supporting our journalism. You can sign up here or via Apple Podcasts.

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15 Years Since We Bought Our Toxic Asset

We Look Back At Toxie

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