Inside Job Movie Review

1111 WordsMay 21, 20135 Pages
Movie Review of “INSIDE JOB” “Earth provides enough to satisfy every man 's needs, but not every man 's greed,” said Mahatma Gandhi and this is somewhat the crux of this movie. Inside Job is directed by Charles Ferguson, and it highlights the reasons and the consequences of the global financial crisis of 2008. This movie is basically related to recession that was caused by the inefficiency of the industry and the unfavourable banking practices. The director has conducted several interviews and has exposed some hidden realities. The movie clearly shows that this crisis was not accidental, and that there were many people, including regulators, politicians, businessmen, who were actively involved in this destruction. These people and large…show more content…
Every person asking for loan was treated equally and was given the loan. So basically these were the riskiest loans and investments made. Along with this the rating agencies were paid heavy amounts by investment banks in order to get the CDOs highly rated and this was the main problem actually. Everyone was satisfied that it is highly rated so it is safe. Other banks kept on purchasing these CDOs due to this reason. All this lead to huge mortgages all around and therefore housing prices increased dramatically creating a bubble. According to experts this was not real money it was just being created by the system. Leverage ratios were increasing. It is the ratio of bank’s borrowed money and its own money. As borrowings were far more than their own money that is why leverage ratios were high and asset base was decreasing dramatically. AIG, an insurance company was selling huge amounts of derivatives for CDO owners. It was an insurance policy that if CDO goes wrong AIG will pay the loss to the investors. AIG did this because it was so sure that nothing can go wrong as almost all CDOs are rated AAA and along with this it will get premium from the investors. But AIG’s anticipation was wrong, when all CDOs went bad it faced losses. AIG also involved speculators which resulted in even large losses. People were unable to pay back their loans and therefore the whole system collapsed
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