When taken in context, the full emails might have provided evidence that actually indicated that the analysts were analyzing the shape of the market and new research. Other stunning contributory factors expressed in the documentary film were greed in addition to the deregulation and an unsupervised financial industry by the Federal government. Just as there are the Big Three credit reporting agencies, there are the Big Three companies that independently evaluate and rate securitized investments Inside Job tells us the names. Despondently, when borrowers defaulted on their home mortgages, investors suffered dearly as losses were realized, consequently, financial institutions collapsed and unemployment rose above its usual average rate. It is said that follow the money to solve the crime. In September, the federal government took over and , which had been on the brink of collapse. However, following the , Rajan's views came to be seen as prescient and he was extensively interviewed for this movie.
When my memory gets hazy I refer back the notes I made. Many on Wall Street were surprised that the top tranches were affected, and they became aware of a crisis brewing in the mortgage market. Think of securitization as you would processed foods. One couple in the theater we were watching in got up and left. With such extreme leverage, even if the homeowners kept up their payments, if the value of the home decreased by say, 25% in a caving real estate market you would still be on the hook for the full amount borrowed, and the losses could add up to more then the entire net worth of your bank.
The effect is multiplied in either direction. This Documentary is about the economic recession of 2008. The Academy Award® Winner for Best Documentary, Inside Job, directed by Charles Ferguson shows that the 2008 global financial Armageddon was no accident. Lack of regulation gives the nod to the financial services community to behave as they wish. Further, this condensed is becoming so popular that at the present If you would like to see the film with all surprises intact, then here is my quick summary for you - Inside Job is a documentary that uses charts, interviews, recording to explain the global financial crisis of 2008 by following a chain of cause and effect beginning in the 1970s.
For example, a buyer can purchase an option agreement to buy a good or service in the future at an agreed price within a specified time frame. If the income from securitizing the extra million dollars is greater than the interest rate on the loan, you're ahead. Ethics is an important issue, be it a company or an organisation or an official body, like a government. Made possible by the repeal of a law that had kept the financial markets intact for decades since the Great Depression. First, the rating agencies hold a huge responsibility in this crisis.
By the way, Cioffi and Tannin were soon bankrupted, with defrauding investors and later, acquitted of fraud. It waved the down payment, relaxed income requirements, and failed to verify the income entered on loan applications. But that's a simplified explanation. Merrill Lynch, on the edge of collapse, was acquired by. But that was not enough. Top Executives The new players pulled from the documentary film are economists, credit agencies and top banking executives. But keeping securitized investments safe requires rules regulations.
Derivatives are financial contracts between two parties of which the value can derived with not affiliation to the good or service. Are any of them true? In the late 1990s, the financial sector had consolidated into a few giant firms. And this is where the trouble begins. One side effect of the boom in easy home loans was a boom in demand for those loans, which produced the greatest ramp up in real estate prices in memory. United States: Sony Picture Classics Froese, R. Bloomberg Businessweek, 4177 , 56-59.
If property values were to drop, the equity of the loan could become less than the amount owed. It screened at the in May and won the 2010. It begins by examining how Iceland was highly deregulated in 2000 and the of its banks. This film not only makes me angry but also furious. Inside Job is about heads of high finance and government selling the world into the global financial crisis. On the other hand: There is no proof that it was an accident and no proof that it wasn't.
The most breathtaking fact is that the arrogance, greed and corruption that these people exhibit and the fact that none of them have been indicted for fraud and violation. The movie makes a lot of claims, like suggesting that Wall Street caused 30 million job losses worldwide, that Wall Street creates nothing of value, and that it profits more off creating investments that will lose money than investments that will make money. While on the other hand, Greenspan was promoted appointed as president of the Federal Reserve by Ronald Ragan and was reappointed by Clinton and Bush administration to police the big bucks. Inside Job clearly illustrates exactly how capitalism can go and still is off the rails when not properly regulated. Now there really was no limit on what interest rate the banks could charge for their sub prime products. Fuld lied to Congress when stating the amount of his salary and other compensation from 2000-2007.
Some of the consulting firms involved were the , , , and the Law and Economics Consulting Group. Bear in mind that the only thing that kept this scheme going was ever rising home prices. This compelling, serious, easy-to-follow film will make you want to raise your voice and declare. If you are even remotely interested in understanding how the crisis happened and why it is probably going to happen again , you should really watch this documentary. Efforts to regulate derivatives were thwarted by the , backed by several key officials.
Banks provided mortgages to people who were unable to afford them in order to earn greater fees. Economists were apparently paid handsomely to produce favorable reports of which most did not disclose their connected conflict of interest. Then Fannie Mae and Freddie Mac, two of the biggest housing loan agencies, were acquired by the federal government which rang bells throughout the economy that the ground was paving way right beneath their feet. The use of leverage multiplies the losses if the economy stumbles or interest rates rise. This jaw dropping documentary in its fearless interviews and prying identified greed and deregulation by the Federal government as principle causes of the financial crisis. Now on to the actual summary. By then end of the 1980s, many workers i n the financial sector were going to jail f or fraud and many people were losing their li fe savings.