Inside Job Documentary

Section Two: 1. The documentary, “Inside Job” provides an interpretation of the causes and consequences of the 2008 global financial crisis. Is this interpretation compelling? Be sure to include institutional, ideological and interest factors in your analysis. The movie, the

The opportunity for power and competition seems to also be one of the largest intersecting parts of this whole debacle. In the film, I heard and saw that these bankers placed bets on the crash of all the loans. These bankers knowingly put countless families and individuals in

“When the dust settle from the collapse, 5 trillion dollars in pension money, real estate value, 401k, saving, and bonds had disappeared. 8 million people lost their jobs; 6 million people lost their homes” （120min.）.The amount of money is equal, just from one person to anther person. Many people suffer a lot in the financial crisis, and also some people predict the financial crisis to make money. Financial crisis is a certain event and happens not only once. The financial crisis still exists in today’s market. As the movie mentioned last, “In 2015, several large banks began selling billions in something called a “bespoke tranche opportunity”, which is just another kind of CDO”

The primary issues in this case are: why did the Wall Street bankers blindly trust that the risky mortgages were good assets to invest into? And why did everyone involved allow the whole thing to go this far?

The financial collapse is a very complex issue rooted in multiple causes, making it hard to put into a single sentence. However at it’s core the reason for the collapse is that many investors and banks tried to get rich by taking on assumptions about the housing market and taking on huge risks that they didn’t realize the full extent of.

In 2008 America’s financial system was brought to a stand still as decades of negligence and financial decisions caused our economy to sink into the worst recession since the great depression. Cultivating a problem worse than America has seen in roughly a century points one finger not at a particular cause, but a string of events that finally gave way. Now, eight years later our economy is still recovering, and time has allowed us to look back at decades of mistakes to try and connect the dots of the perfect storm that collapsed our financial market in 2008. In 2009 Brookings Institution, one of Washington’s oldest think tanks, concluded there were three causes that resulted in the crisis. Economists Martin Baily and Douglas Elliot stated that the results of government intervention in the housing market, the influences Wall Street had on Washington, and global economic forces were the three main causes of the economic collapse. They believed that a housing bubble inflated when Fannie Mae and Freddie Mac, two government-sponsored enterprises, intervened in the housing market. The banking industry was called out to be blamed for years of manipulation of our political and financial systems. Lastly, Baily and Elliot cite the global economy and the existence of a credit boom throughout European and Asian nations. Low inflation and consistent growth throughout the world economy spiked investors’ interest in acquiring riskier investments, which encouraged

I believe the the Great Recession of 2008 was the fault of the Government. The Government did not not properly regulate and had relaxed rules. The made many assumptions also. For example, the just assumed that the British would help them. Because of the way the Government is made the were not able to make changes fast enough. Like it said in the video our class watched,”Congress can not flush a toilet in a day”. I do not believe that you can blame the investment banks or the people. The were just doing what the rules allowed them to do. It is basic human nature. It is the Government's fault for allowing lenient laws. Also, the Government's job is to make sure that everything in the U.S. is going alright. It clearly wasn’t and the Government

The Big Short is based on a real life story that is about the 2008 financial crisis which was a result of housing bubble. Sadly, unethical choices made by bankers, financial institutions and rating agencies led to a crisis that hurt the World economy badly. The main ethical business dilemma is that many people were aware of the potential risks; however, they preferred to avoid the truth, and play stupid. There are many dilemmas throughout the movie that support this finding.

In addition, one must note that those who caused the financial crisis avoided punishment. They were the ones who lead the economy into failure and, now, promising that they are the only ones who can fix it. In Inside Job, it demonstrated the consequences of the crisis and financial innovation, through the educational system. It means that those who consulted with financial firms and companies were professors or on the board of directors of ivy league schools, who teach their economic ideologies onto the future generation.7 Ergo, this is creating a vicious economic cycle that needs to change.

Enron – Enron is partially responsible for the crisis of confidence, because they committed the fraud via the special purpose entities. Because of the three percent rule, Enron was able to put lots of its liabilities onto those off-balance sheet entities. Also, Enron did not have adequate financial statement disclosures. Many of the top employees at Enron were able to “realize” an extraordinary profit within matters of a couple months because of the fraud. Additionally, Enron abused the mark-to-market accounting method for its long-term contracts. All of these fraudulent activities caused Enron’s profits to be overinflated.

The 2008 financial crisis was the worst economic disaster the world had seen since the Great Depression of 1929. In spite of efforts made by the Federal Reserve and Treasury department to prevent such a tragic event from occurring, a large portion of the US banking system was fraudulent. The banks ' failure took a toll on more than just the financial system - it hurt people. People experienced layoffs, lost pensions, lost retirement funds,

From the CEOs, the Government, prostitutes, and even Ivy League professors, the movie blamed anyone who had even the slightest role in the financial meltdown. In a more non-fiction type setting, the documentary aimed to exposed the corruption on Wall Street and how the government got involved. The documentary seemed to put blame on the greedy 1% of America. According to the film, people in power stay in power and simply rotate their position in power to other like individuals. So top Wall Street executives rotate to leading government positions and thus continue the cycle of greed and destruction. They generalized everyone on Wall Street to be greedy crooks who use drugs and spend corporate

What caused the financial crisis to happen? The origin of the crisis, the film argues, can be traced back to the 1980s, when the process of deregulation was eagerly implemented under the Reagan Era. Prior to the emergence of Reaganomics, the financial industry was tightly regulated following the Great Depression. Most of the banks were local and were prohibited from speculating customers’ deposits (brought by the Glass-Steagall Act), while the investment banks were modest and private. However, everything changed after 1980, when Ronald Reagan became president and the U.S economy entered a thirty-year phase of deregulation. Financial institutions, which included commercial and investment banks then embarked on the process of maximizing profit by making risky investments with the depositors’ money. By the end of the decade, saving and loans companies went bankrupt, causing tax payers to lose more than one hundred billion dollars. However, the government did not implement any reform and deregulation continued to take place under the Clinton

The Meltdown is a PBS special on the events of the financial crisis of 2008, in a timeline format, revealing the thinking behind decisions made during the fateful months before the stock market crash in August of that year. Some financial gurus on Wall Street devised a plan to bundle several mortgages together into a group, and then selling that bundle to another group of investors looking to invest in securities. The lender did not need to earn money from the loans he was giving out, he merely gained enough of a profit from the bundling operation that billions were being made on Wall Street from 2005-2008. The problem is that these bundles were risky, and as credit unworthy individuals defaulted on their mortgages, the entire system crumbled into what is now known as the Stock Market Crash of 2008, and have subsequently lived during the Great Recession.

There has been a debate for years on what caused the Financial Crisis in 2008 and if there was one main cause, or a series of unfortunate events that led to the crisis. The crisis began when the market was no longer funding many financial entities. The Federal Reserve then lowered the federal funds rate from 5.25% to almost zero percent in December 2008. The Federal Government realized that this was not enough and decided to bail out Bear Stearns, which inhibited JP Morgan Chase to buy Bear Stearns. Unfortunately Bear Stearns was not the only financial entity that needed saving, Lehman Brothers needed help as well. Lehman Brothers was twice the size of Bear Stearns and the government could not bail them out. Lehman Brothers declared bankruptcy on September 15, 2008. Lehman Brothers bankruptcy caused the market tensions to become disastrous. The Fed then had to bail out American International Group the day after Lehman Brothers failed (Poole, 2010). Some blame poor policy making and others blame the government. The main causes of the financial crisis are the deregulation of banks and bank corruption.