It is an eye-opener and will leave you enthralled, fascinated and infuriated. Enter the Big Three rating agencies. Large investment banks began merging and developing monopolies. Sub-prime loans have a higher rate of interest and thus the lender's profits were higher. These agencies put their reputation on the line every time they rate a security. Sorry, but copying text is forbidden on this website! Many employees must now wait around 3-5 years before cashing in their stock. But even without including those additional interviews, this documentary is still excellent.
What followed was a domino effect, with a succession of top investment banks and other financing houses either adopting bankruptcy or being bailed out by the government. For example, organic barley is grown in Oxnard, California and processed into a product called 'Barley Green'. First, in 1999 a very important law controlling the behavior of the financial services sector was repealed. Recall that derivatives are tradable securities derived from real things home mortgages, other types of secured loans, crops, etc. During the early 2000s the United States economy began to slow down and in an effort to rejuvenate this downward condition the Federal Reserve introduced a stimulation project to cut interest rates to induce customer spending.
Bernanke was reappointed Fed Chair. Instead, investors were deceived into investing in insolvent companies as a result of the ratings provided thereof. In 2011, a Metacritic editor ranked the film first on the subject of the 2008 financial crisis. The director has done a masterful job of explaining things in a simplified manner. A garden produces pure and simple food. However, following the , Rajan's views came to be seen as prescient and he was extensively interviewed for this movie.
It waved the down payment, relaxed income requirements, and failed to verify the income entered on loan applications. It was unthinkable that reputable economists failed miserably to disclose any conflict of interest regarding their economic research report concerning economic trend. The banks could then bundle their sub prime loans and sell them to Wall Street and receive margins on the loans, for example if the prime rate on Wall Street was 4. Other new theories that developed from the documentary film were economists, credit rating agencies and top executives have all contributed to the financial crisis. The Academy Award® Winner for Best Documentary, Inside Job, directed by Charles Ferguson shows that the 2008 global financial Armageddon was no accident. United States: Sony Picture Classics Froese, R.
Through exhaustive research and extensive interviews with key financial insiders, politicians, journalists, and academics, the film traces the rise of a rogue industry which has corrupted politics, regulation, and academia. If the income from securitizing the extra million dollars is greater than the interest rate on the loan, you're ahead. Source: On the other hand: That's an overstatement. Banks could now begin to loosen their lending guidelines, this trend lead to what was know as sub prime lending. Inside Job was acclaimed by film critics, who praised its pacing, research and exposition of complex material. Inside Job provides anecdotal evidence of Wall Street analysts promoting companies while On the other hand: Analysts were accused of lying to clients based on edited emails that don't tell the whole story. This is corruption, plain and simple.
The remaining 50 people in the theater stayed, laughed, and shook their heads countless times. If you seem credit worthy the bank lends you the bulk of the money to buy the house. The documentary film zeros in on the contributory factors of the financial crisis such as falling interest rates, securitization of home mortgages and credit default swaps derivatives. Epilog So add it up. The biggest example of this would be the financial crisis that struck and shook the strongest and most ideal economy in this world, in 2008. The slippery slope of greed did not stop there. There are two specific kind of rules lack of rules, actually that directly relate to the financial crisis in 2008.
Deregulation continued under the Clinton administration congress overturned the Glass-Steagall Act by passing the Gramm-Leach Bliley Act which facilitated the Citigroup merger. If property values were to drop, the equity of the loan could become less than the amount owed. . But that was not enough. It screened at the in May and won the 2010.
An organic vegetable garden in your backyard is analogous to the previously described traditional home loan. This well done documentary really shows just how the lobbyists and the people with real money have all the real power in the country and most of them abuse it. Banks provided mortgages to people who were unable to afford them in order to earn greater fees. 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. 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. We also know that the derivatives being created in this process are unregulated, and we know that banks can use customer deposits to purchase these derivatives and resell them to their customers, but we don't yet know what deregulation shenanigans are about to occur. 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.
What happened and continues to this day is not capitalism. What come out of the documentary film was that executives were rewarded for selling subprime mortgage investments as if it was top priority. Academic economists had for decades advocated for deregulation and helped shape U. Such loans would be held until the full loan obligation has been satisfied in the long term. And very little is being done to fix this faulty system and the ones who should be held liable are not and still filthy, filthy rich and very powerful.