THE CANNABIS QUESTION
High Times - September 29, 2021; Addison Herron-Wheeler
The Cannabis Question Looks at Weed and the Body and Brain
The new PBS/NOVA film The Cannabis Question, delves in to the scientific questions behind weed that we are still finding the answers to.
The more cannabis becomes accepted in the U.S., the more frustrating it becomes that cannabis researchers are barred by Schedule I status and cannot freely research, as well as that communities of color remain more at-risk for incarceration. The new PBS and NOVA documentary The Cannabis Question tackles both problems in one, succinct film.
The film looks at what scientists have discovered so far about the body and brain, as well as the potential medical benefits and risks of using cannabis and how people of color have been harmed by its criminalization. Released on September 29 of this year, the film takes an unbiased and fair look at the way cannabis has been treated.
"A majority of Americans now live in states where cannabis is legal. As more people make their own choices about cannabis use, this film explores what scientists have learned so far about the potential benefits and risks,” said NOVA Co-Executive Producer Julia Cort in a press release.
"We hope The Cannabis Question will inspire people to join the national conversation about cannabis—informed by the science, and also by the story of how the plant has been weaponized against marginalized communities, causing irreparable harm.”
The film looks at scientists Yasmin Hurd at Mount Sinai Hospital and Daniele Piomelli at University of California, Irvine. Both researchers are heading up studies on the endocannabinoid system. By sharing the personal stories of patients and users, the documentary uses a mix of science and emotional appeal to shake the stigma against weed.
"Such research is critical on a number of levels,” Hurd told High Times. "First, the endocannabinoid system, through which cannabis mediates its actions, is a critical biological system in the brain. It has a broad role in numerous brain functions relevant to cognition, memory, emotion, hormonal regulation and motor behavior and thus is highly implicated in various neuropsychiatric disorders.
"Moreover, the endocannabinoid system is critical for hardwiring of the developing brain. As such it is important to understand the impact of cannabis exposure especially as THC concentrations have dramatically increased over the years thus leading to far greater perturbation of the endocannabinoid system over its normal physiological bandwidth. In addition, given the neuromodulatory role of endocannabinoids in the brain, it is important to study whether cannabis/cannabinoids can be leveraged to modulate neuropsychiatric disorders.
According to the Director of The Cannabis Question, Sarah Holt, the film is the first of its kind to closely examine the scientific research on how cannabis interacts with humans’ endocannabinoid systems.
I hope viewers will come away with an understanding of why [the endocannabinoid system] is one of the most important regulatory systems in our body—and anytime you use cannabis, you are interfering with it,” Holt stated in a press release. This isn’t Holt’s first dive into filmmaking to uncover and share scientific data about how drugs interact with the brain.
"In 2018, I produced a NOVA film called Addiction,” Holt told High Times. "The film investigated how opioid drugs alter the brain, and why addiction should be viewed as a brain disorder that can be successfully managed with evidence-based treatments. As more Americans favor legalizing cannabis, NOVA and I agreed it was time to investigate the latest science studying the vast array of chemicals in this plant.
"Scores of clinical trials were underway exploring the potential medical benefits or risks of cannabis. Instead of anecdotal stories, the hope was that our film could report on real data to help viewers make informed decisions about cannabis.”
The film focuses on how cannabis benefits patients with conditions like PTSD, anxiety and pain. It also traces the history of cannabis criminalization throughout the U.S., including the racist history of the word "marijuana” and the demonization of undocumented people throughout the War on Drugs. It specifically focuses on the stories of those who have done or are still doing hard time for cannabis possession.
"I hope the film helps people understand the larger context and impacts of our drug policies,” Holt said about the movie. "A public health crisis has been unfolding for decades—caused by the war on drugs. The film highlights the influence of racism in forming US policy and its implementation around cannabis over the last century. Cannabis arrests are fueling mass incarceration in this country, and disproportionately targeting communities of color. Incarceration dramatically affects people’s health, and conviction records make it difficult for people to get jobs.
"At the same time that we have an estimated 40,000 Americans behind bars for cannabis charges, the cannabis wellness industry is thriving, creating a stark divide. I’m hoping that this film widens people’s perspective on cannabis and helps them see how science could inform policy in ways that are both more equitable and beneficial to public health.”
Datebook ~ San Francisco Chronicle (datebook.sfchronicle.com) - Wednesday, September 29, 2021; Amelia Williams
NOVA looks into science of cannabis
In 2021, more than 150 million Americans live in a state with legal access to recreational cannabis—and most live where some form has been legalized for medicinal use. Despite ever-increasing accessibility, innovations and legislation changes, many Americans still don’t understand how cannabis works, its interactions with our bodies’ systems and how its illegal status is weaponized against communities of color.
Premiering on PBS’ “NOVA” on Wednesday, Sept. 29, award-winning documentarian Sarah Holt’s latest film, The Cannabis Question, seeks to fill in some of these gaps, while recognizing how much more work there is to do to understand this plant and rectify the harm the war on drugs has caused.
The Chronicle recently sat down with Holt to discuss her film and how it came together against the backdrop of the coronavirus pandemic.
Q: As an investigative filmmaker, you have made films on topics such as extinction, Darwinism, COVID19 and addiction, to name a few. How did you decide to make a film about cannabis, and why now?
A: It was when I was working on a film called Addiction, where I was investigating the opioid crisis. We’re spending $47 billion a year on the war on drugs, and when I would talk to experts, everyone was in agreement that the war on drugs was failing and people should be getting evidence-based treatment, not being imprisoned. I was amazed to learn that one of the No. 1 reasons for being arrested in this country is drug possession, and cannabis arrests are an extremely high number of those.
As I began to realize how many people in America are turning to cannabis, it would be important to do a film and really try to explore the latest science on cannabis and try to give people really solid information because it’s a very polarizing topic. There are groups of people that think it’s the devil’s grass, and there are people that think it’s this panacea that can cure everything.
Q: This film, as others have, covers the debate around cannabis’ efficacy for treating symptoms of mental and physical conditions, but also the social and political dimensions that have really just begun to get the comprehensive coverage they deserve. How do you see all these issues as related?
A: It’s a complicated subject. I watched hundreds of films on cannabis and thought, ‘Oh, dear, this film has been made a thousand times.’ Then I began to realize, no one’s really looked at the science of cannabis. No one’s ever delved into the whole endocannabinoid system and how we make our own cannabis-like molecules. There actually is pretty exciting research going on, and if not for the pandemic, we would have had clinical trials that would have had conclusions.
Shawn’s story (about a veteran with post-traumatic stress disorder) was a story that could show the issues around cannabis and racism. He was an Iraq War decorated Purple Heart veteran who has a medical cannabis card. He’s arrested for a third of an ounce of medical cannabis and ends up being sentenced to five years in prison. We slowly contacted a group called Alabama Appleseed who was advocating on his behalf, and when Shawn was released from prison, they allowed us to come and film. I thought it was a really strong story to show how the war on drugs was not keeping people safer or healthier.
Q: What did this film teach you about cannabis and its role and place in our society?
A: It’s an incredibly complex plant; it’s got over 400 chemicals. People will say to me, ‘Is cannabis good or bad?’ How do you answer that question? It depends on how much you use, when you use it, what you’re using it for. It may be beneficial for some people and harmful for others.
This (endocannabinoid) system can be a source of new medicines, a source of helping us figure out how to treat new diseases. Cannabis may be a way to harness the system, but it’s always complicated. It seems to me that one of the messages that I kept hearing was understanding when you should use it in a medicinal way.
Cannabis is California’s biggest cash crop. It’s one of the nation’s fastest-growing industries. So cannabis, as Stacy Gruber said (in the film), “It’s like rock ’n’ roll; it’s here to stay.” You can only do so much in 52 minutes, so it’s this dance to try to help people understand.
Q: Despite its growing accessibility, cannabis is still personal, and attitudes vary person to person. Who is this film for?
A: I’m hoping we’ll reach people of different ages and different backgrounds. ... I hope if anyone comes away from this film, they’ll have an appreciation for the (endocannabinoid) system. I didn’t know it existed, I had no idea we made our own cannabislike molecules or that THC mimics those molecules.
When you begin to look at the system of receptors of enzymes and endocannabinoids, we have receptors that are named after cannabis on every organ in our body. It is this master regulatory system that regulates mood, sleep, emotion, cognition, appetite. Its whole purpose is homeostasis, and it’s one of the most important regulatory systems most people have never heard of. So what I hope is that what people realize is that when you use cannabis, you are activating this very powerful system, and this system changes over our life span.
ADDICTION
Paste - October 17, 2018 | 10:00am; Amy Glynn
NOVA: Addiction Explains the Horror of the Opioid Crisis in Terms We Can All Understand
There are reasons, plural, why some people get addicted to opiates and some do not, just as there are reasons why some people suffer from depression and some do not, and why some people tolerate alcohol just fine while others end up breaking people’s noses in brawls and then blacking out. The shocking news is: Brains, genes, metabolisms and environments are varied. I know, it’s a lot. And for my super-well-intended buddies on the socials who pontificate about how addiction is “a choice,” I’ve got a PBS program I recommend you take a gander at. Because I am super sick of this conversation, in all its shades of raging ignorance.
Please watch Addiction, the new documentary from NOVA. Please? It has the unmistakable tang of non-fake news and it will relieve you of the burden of believing the opioid crisis is occurring because record numbers of especially dumb or weak-willed people have awakened on a random Wednesday morning and decided to buy black tar from the twitchy dude under the freeway overpass just to see what’ll happen. Legions of people are probably both dumb and weak-willed, but it isn’t the determining factor in addiction. Even if you really, really want it to be, for whatever reason. It can happen to anyone, and for most people it starts in a doctor’s office or an ER.
A while back, I was treated to a Showtime trainwreck about the opioid crisis. It was classist, arguably racist, and outrageously misleading, other than one truth it put forward loud and clear: People who are addicted to painkillers are abandoned by the system and criminalized. That part was spot-on.
NOVA’s new program is not sensationalist and it isn’t about gangs in Mexico. It’s a calm, educated look at how opiate addiction happens, why it’s surging in certain areas, and what needs to change if we want that trend to reverse. It tracks doctors at Stanford, public health officials in West Virginia, controversial safe injection sites (in particular, one in Vancouver; they’re not currently legal in the U.S.), a teen with an improperly diagnosed disorder who got taken on a seriously nasty roller coaster ride courtesy of conventional medicine and its attitudes toward “addicts,” and a scion of upper-tier privilege who was also misdiagnosed and whose resources, education and attentive parents could not save him from his own dopamine receptors. There is some agonizing footage of what happens when babies are born in opioid withdrawal that’s still making my skin crawl as I write this. There’s a lot of detailed, clear-headed research into how addiction works, how humans have evolved to respond to dopamine (the neurotransmitter that mediates pleasure and “reward” responses) and how chemicals that bind to dopamine receptors can, over time, reduce their function and even their numbers, creating a vicious and verifiably not-choice-based circuit of escalating need for those chemicals. Since we know this, it’s curious to note that people who become addicted to opioids are not considered medical patients with a medical problem. They become pariahs, criminals, outcasts. That’s generally when Mr. Thousand Yard Stare under the highway starts to seem like an option, because there aren’t any legitimate ones left. And if that guy’s selling something tainted with the elephant tranquilizer Fentanyl—or, hey, cut with rat poison-well, the odds of respiratory arrest are kind of high.
Dr. Rahul Gupta, a public health official dealing with this crisis in West Virginia, notes that overdose deaths are happening at the rate of “a Boeing 747 crashing every day.” And addiction is really very equal-opportunity, even though treatment outcomes are not. Places that are hit especially hard by opioid overdose deaths correlate with socio-economic depression in a lot of cases (if the only gig in town is in a coal mine, guess what, you’re at really high risk of things like crush injuries and crippling chronic joint pain), but addiction doesn’t recognize class, race, gender or education level, much less “willpower.” It’s a biological process. Where demographic differences come into play is in what resources are available to you if, after your surgery, your injury, your illness, you are having trouble with things like nerve and bone pain, incessant vomiting and blinding rage (for example). But even if you are wealthy and well-educated, or, you know, a rock star, the odds are good that the medical system will mishandle you and predispose you to long-term and potentially terminal misery.
The truth is, there’s a lot we don’t really understand about pain, and the tools we have for managing it are relatively crude and relatively limited. A cynical person would also be prompted to note that it is... lucrative when large numbers of people are addicted to things and that it’s theoretically possible that, say, the pharmaceutical industry isn’t in a raging hurry to stop dispensing those meds. Addiction presents a very compelling case for a major revision of opinion on what addiction is and how to heal it—and it starts with actually accepting that “heal” is the right word. Not “sack up.” The documentary is oriented toward non-scientists (though I especially think physicians should be watching it), it’s logically presented, clearly directed, well-paced (it covers a lot of ground smartly and thoroughly in an hour), and it will in all likelihood challenge some of your preconceptions about who becomes an opioid addict and why—even if you already know a good deal about it.
I’m also psyched and grateful that there was some attention devoted to the question that started troubling me about halfway through, which was whether the observable damage to the prefrontal cortex of the brain was permanent, whether even a recovered addict would have permanently diminished capacity to... feel OK. Happily, this is being researched, and the answer appears to be, “No, it can be reversed.” But in order to make that happen, the medical system needs to acknowledge addiction as an actual illness, not a “bad choice” or a moral failing.
MASS EXTINCTION: LIFE AT THE BRINK
VARIETY - NOVEMBER 28, 2014; Brian Lowry; TV Columnist
“Mass Extinction: Life at the Brink” is an alarming title, but given the cottage industry and political interests built around denying climate science, desperate times call for extraordinary appellations. Actually, beyond its name, this is an extremely solid documentary, detailing two of the five mass-extinction events that have occurred in the planet’s history, and making a fairly compelling case regarding present trends. Narrated by Jeffrey Wright, this isn’t the week’s most uplifting hour, but it might be one the members of the Environment and Public Works Committee — or at least likely new Republican chair James Inhofe — should be required to watch.
Cramming a lot of science into an hour, the project makes good use of computer animation and other graphics to illustrate the K/T Extinction, the asteroid strike that killed off the dinosaurs 66 million years ago; and the Great Dying, which claimed even more species 250 million years ago.
Scientist Sean B. Carroll serves as a guide through the research, enlisting various colleagues in what essentially plays like a jigsaw puzzle, involving theory pieced together from the fossil and geologic record.
Perhaps the most compelling evidence, however, comes near the end, when paleontologist Anthony Barnosky suggests a sixth event is already in motion, exploring changes in the atmosphere and a loss of habitat that are hastening the disappearance of species.
Climate change has admittedly become a favorite issue in Hollywood circles — see Showtime’s “Years of Living Dangerously” — and one that conservatives are fond of deriding. Their favorite rejoinder, “I’m not a scientist,” clearly reflects little interest in scientific consensus and what the vast majority of climatologists have to say on the matter.
In its title and tone, “Mass Extinction” is obviously intended to be provocative, but like hunting for fossils, scraping away the surface reveals a serious discussion of a topic that many wish would just go away. Of course, on the chance these eggheads know what they’re talking about, who or what might be disappearing, and when, is really the whole point.
Produced by Tangled Bank Studios and Holt Productions; Executive Producers: Sean Carroll, Michael Rosenfeld; Producer/Director, Sarah Holt; Writers, Thomas Friedman, Holt; Editors: Holt, Daniel Sheire, Sam Green; Narrator: Jeffrey Wright
NEW YORK DAILY NEWS - Saturday, November 29, 2014, 2:00 AM; TV review by David Hinckley
Smithsonian documentary on past extinctions, and maybe a future one, is fascinating and scary
If you'd rather watch a football game than a documentary on why life on the planet could someday go extinct, well, that’s your choice this Sunday night.
If you think the Chiefs and Broncos will be more uplifting than a show cheerfully titled “Mass Extinction,” you wouldn’t be wrong.
Truth is, it’s pretty much inevitable that life on Earth will end at some point. It has already ended, to a large extent, on five occasions, and this documentary focuses on two of them.
The dinosaurs, of course, suffered the most attention-getting fate. An asteroid 6 miles wide crashed into Earth, triggering atmospheric disruption that made dinosaur life impossible. Before that, however, there was the “Great Dying,” which was triggered by volcanic eruptions that poisoned the air and the water and killed 90% of all life.
“Mass Extinction” goes into great detail on exactly how these events led to those devastating reactions. It’s grim science, compelling science and best of all, understandable science. It connects the dots for us civilians. Its larger point, which is emphatic while trying not to scold, keeps coming back to the way we’re treating our air, soil and water.
We’re killing off animal and plant species simply because it’s convenient and makes our lives easier and cheaper. In the process, we’re gradually using up the planet’s resources. The more we use up, and the less attention we pay to replacing them, the sooner we will lose the environmental links that ensure our own survival.
And if there’s no more planet, there’s no more football.
WORLD IN THE BALANCE
THE NEW YORK TIMES - April 20, 2004; John Donnelly, Globe Staff
JOHANNESBURG -- Documentaries tied to Earth Day often are so gloomy that they put you into a deep depression. NOVA's two-hour special tonight at 8, World in the Balance, refreshingly avoids the guilt trips and offers insights into some of the most important issues of our time: population trends and environmental impacts of a huge rising middle class. The first hour includes stories from India, Japan, and Kenya and focuses on reproductive health; the second hour examines China's need to create jobs, and the ensuing pressures on the environment.
Of the two parts - both are produced out of Boston - the first hour addresses the more important question. It examines three broad trends in global demographics: the rapidly declining population in many rich countries, evidenced by Japan's shrinking citizenry; the rapid growth in countries such as India; and the impact of AIDS in sub-Saharan Africa, which is creating an "hourglass" demographic, with large populations, young and old, and a dwindling number of middle-aged adults.
Demographers and economists state on the show that if adults in the coming generation begin to simply replace themselves - each woman of child-bearing age has roughly two children - the world's population will jump from 6 billion today to 9 billion in 50 years and then stabilize. But if the birth rate is 2.5 children per woman, the number jumps alarmingly to 11 billion.
Interestingly, countries such as Japan, and to a lesser extent the United States, strongly reacted to books published in the '70s that forecast disaster if population trends continued at high rates. Japan, in fact, may have overreacted in terms of supporting its elderly as too few young are left to fund its pension system. Most developing countries also sharply reduced reproduction rates (now at 3 children per woman in India, and 4 in Kenya), but still must record further drops to slow growth.
The United States, the third most populous nation with nearly 300 million people, has for 35 years had fewer than two children per woman of child-bearing age, but its population has grown because of the influx of immigrants, roughly 1 million annually. Because of immigrants, the US population is expected to rise to 400 million in the next 50 years.
The benefits for reduced populations are obvious. Economist David Bloom says that the so-called East Asia economic miracle wasn't about economics, but demographics: If countries reduce fertility rates and invest in their young, he says, economic booms will follow. Such birth rate reductions, say several experts, didn't happen on their own. They argue that programs educating societies about reproductive health led to the downturn. They also said the Bush administration policy not to fund clinics offering abortion services, even if US money isn't used for abortions, would backfire and lead to more births, and greater harm to the planet.
The show is not without problems. It accepts too easily population forecasts for Africa, which historically has had poor census surveys and now is entering a wildly unpredictable phase with the onset of AIDS. In Africa, it's impossible to say with any accuracy the population of Nigeria, for instance, much less the numbers continent-wide of those infected with HIV. But that doesn't hurt the documentary's greater point about the fundamental importance of birth rates. It is the show's great honor that a viewer is left wondering why so little attention -- and so comparatively few dollars -- is paid to simple interventions that would give great benefit to families, nations, and the earth itself.
© Copyright 2004, The New York Times Company
SHACKLETON’S VOYAGE OF ENDURANCE
WALL STREET JOURNAL REVIEW; March 25, 2002; Claudia Risett
The ad was marvelous. Placed in the personal columns of the London Times, almost 90 years ago, it ran:
Men wanted for hazardous journey.
Small wages, bitter cold, long months of complete darkness,
constant danger, safe return doubtful.
Honour and recognition in case of success.
Some 5,000 men applied, and in 1914, under the command of explorer Ernest Shackleton, 27 of them, including a photographer, set sail for Antarctica. They planned to be the first expedition to travel completely across that perilous continent, by way of the South Pole. They failed. Before they ever made landfall, Shackleton’s ship, the Endurance, became frozen into the ice pack, and the mission was transformed suddenly into a quest, against deadly odds, simply to return home alive. In that, after almost 2 years of hell, Shackleton succeeded. He brought back every last man.
The story of how he did it makes for one of the great survival sagas of all time but was overshadowed in its day by the mighty upheavals of World War I. Salvaged from obscurity in our own era by such works as Caroline Alexander’s 1998 bestseller, The Endurance: Shackleton’s Legendary Antarctic Expedition, the tale has become a modern favorite on many fronts, resurrected in books, photo exhibitions, an IMAX movie and even as a case study in effective management techniques under - to say the least - adverse conditions. Recently, it has assumed special relevance, as terrorist wars (plus Hollywood’s Black Hawk Down) have underlined the imperative of “leave no man behind” - a creed that Shackleton definitely lived to the limit.
Now, determined to not be left behind either, television producers have been leaping aboard the Shackleton story. Heaving onto the horizon, due to début in just under two weeks, is a two-part, four-hour A&E miniseries about the Endurance expedition: Shackleton, starring Kenneth Branagh in the title role. The first segment airs Sunday, April 7 (8 to 10 p.m. EST); the second segment, on April 8 (9 to 11 p.m. EST). This is a lavish production, packed with ice, lush with slush, decently acted and agreeably faithful to the story. The second segment will be preceded by Ernest Shackleton: Looking South (A&E, April 8), a one-hour biography of the explorer, whose restless inability to cope with the comforts of home and family was punctuated by three other expeditions to the Antarctic, where he finally died of a heart attack at the age of 47. Overall, this package provides a compelling show, well above most TV fare.
For an even closer brush with the real thing, cutting straight to many of the original sources, it’s worth tuning in tomorrow night to the excellent two-hour Nova documentary “Shackleton’s Voyage of Endurance” (PBS, 8 to 10 p.m. EST). Deftly crafted and drenched in so much authenticity that by the end it is both exhilarating and exhausting, this is the kind of show in which TV for once comes neatly into its own -- providing not only excerpts from the written accounts of the adventurers themselves, but loads of original black-and-white photographs and even film footage shot at various stages of the ordeal by the expedition’s cameraman, Frank Hurley. There are close-ups of the crew members, jaunty at the start, increasingly haggard as they are worn down by cold, hunger and constant danger. There are pictures of the wooden ship, its masts set in elegant dark profile against the ice, like a vision conjured from Coleridge’s The Rime of the Ancient Mariner. Some of the most dramatic original footage shows the crew working furiously at the ice with saws and picks, trying to free the Endurance during a brief spell of hope, when the ice pack broke up enough to leave open water just ahead -- only to freeze over again.
Woven into this drama are voice-overs from the diaries of various members of the crew, ranging from eloquent notes of hope and despair to such blunt stuff as one man calling another a “perfect pig.” There are interviews with a number of their descendants, including granddaughters of both Shackleton and Hurley. And we get a taste of Shackleton’s home life via a comment bequeathed by his wife, Emily, who did not enjoy competing with his love of adventure: “I think fairy tales are to blame for half the misery in the world. I never let my children read: ‘And they were married and lived happily ever after.’ “
This show includes part of a radio interview, made 40 years later, in which a crew member recalls that when the ice finally crushed the hull of the ship, the noise of the timbers cracking was like the “blasting of guns.” There are pictures taken by Hurley after the ship sank, and the crew set up camp in tents on the ice. There are more pictures taken after the ice began to melt and they set forth with just three small lifeboats, looking for land. At first they dragged the boats across the ice floes; finally they rowed through the ice-choked sea, their hands freezing fast to the oars.
With great suffering, they made it to an utterly desolate place at the tip of the Antarctic peninsula: Elephant Island. They had no way to signal their plight; no one knew where they were, or even if they were still alive. Taking one of the lifeboats, Shackleton set forth with a few hand-picked companions, making for the nearest whaling station, which was the only hope of finding help. Cold, weary and famished, they had to cross 800 miles of open ocean, at times battling 30-foot waves, navigating toward a distant speck in the vast South Atlantic. This documentary includes re-enactments of that near-hopeless voyage. There are also original pictures and sketches of the wretched, cramped shelter rigged out of the two remaining lifeboats by the men who were left to wait for Shackleton’s return. There is even a rendition of a song they wrote in their efforts to stay sane, an ode to their refuge, complete with the lively refrain: “It’s the most palatial dwelling place you’ll find on Elephant Isle.”
In the odd cosmos of modern television, where exploration too often seems devoted mainly to the endless forms that victimhood can take, this program offers a splash of serious relief. It is a well-knit, richly documented true story of men shipwrecked at the far end of the earth but determined, in the face of ice, ocean, physical misery and mortal fear, to save themselves.
© Copyright 2004, Dow Jones & Company, Inc. All Rights Reserved
TRILLION DOLLAR BET
THE ARTS/CULTURAL DESK TELEVISION REVIEW - February 8, 2000; WALTER GOODMAN
When a Money Machine Needs a Helping Hand
Until reports of hundreds of millions of dollars in losses made the headlines, few Americans had ever heard of hedge funds, the invention of Nobel Prize mathematicians that promised to take the risk out of investing in the stock market. To get in on a company formed in 1992 called Long-Term Capital Management, created to bring about that miracle, you had to invest at least $10 million for 3 years.
For a time, Long-Term Capital, in Greenwich, Conn., was a Wall Street Wunderkind, paying as much as 43 percent in its best year. The rich got richer. But in 1997 the company ran into deep trouble; its investments lost prodigiously until the company was $100 billion in debt and the government and Wall Street, fearing the effects that its collapse would have on economies around the world, joined to save it from its own misjudgments.
How this happened is tidily unraveled by Trillion Dollar Bet, tonight's cautionary tale about the fallibility of experts and the unpredictability of the market.
Turning finance into a science is the holy grail long sought by investors big and small. In the 1970's mathematicians thought they were moving toward that goal with a way to keep one's investment portfolio in perfect balance with a technique they called ''dynamic hedging.''
For an explanation of how their system worked or was supposed to work, see tonight's NOVA, which spells out somewhat abstruse matters in an admirably lucid way. The upshot of the theoreticians' labors, which brought a Nobel Prize to Myron S. Scholes and Robert C. Merton in 1997, was a way to cancel out all risks by evaluating the price of options, a kind of insurance that permits investors to buy or sell stock at a specific price by a specific date. Mr. Scholes and Mr. Merton had already joined a bond trader named John W. Meriwether in a new firm, Long-Term Capital Management, that would operate by the rules of their theory. Their reputations quickly brought in $3 billion of investment money to be bet on continuing assessments of the relationship of markets all around the world.
But then, in 1998, came the Asian economic panic, an event that had never been dreamed of in the economists' mathematical models. As one trader says tonight, ''The market will test you and do what you don't expect it to do.'' Stock prices slid and kept sliding; on one day after Russia's economic default in August 1998, Long-Term Capital dropped $500 million and the Federal Reserve organized a $3.6 billion bailout by Wall Street's biggest power brokers.
The simple lesson that the narrator is left with after all the brilliant theorizing of the economists is, ''While models can help us manage risk, they can never tell us when to buy or sell.'' Another lesson is that unless you are a billionaire, nobody is going to bail you out.
Malcolm Clark, director; produced by Mr. Clark and Sarah Holt; David Ogden Stiers, narrator. For BBC/Horizon: John Lynch, executive editor; Bettina Lerner, series editor. Paula S. Apsell, executive producer for NOVA. A BBC/WGBH Boston co-production.