The Financial And Political Systems Have Always Played

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 financial crisis from2007 to 2008 is considered the worst financial crisis since the Great Depression of the 1920s and destroyed the U.S. economy severely. It led the housing prices fell 31.8%, the unemployment rate rose a peak of 10% in the United States. Especially the subprime market, began defaulting on their mortgage. Housing industry had collapsed. This crisis was not an accident, it caused by varies of factors. The unregulated securitization system, the US government deregulation, poor monetary policies, the irresponsibility of 3 rating agencies, the massed shadow banking system and so on. From my view, the unregulated private label mortgages securitization is the main contribute factor which led the global financial crisis in 2008.

On October 3, 2008 President George W. Bush signed the Emergency Economic Stabilization Act of 2008, otherwise known as the “bailout.” The Purpose of this act was defined as to, “Provide authority for the Federal Government to purchase and insure certain types of trouble assets for the purpose of providing stability to and preventing disruption in the economy and financial system and protecting taxpayers, to amend the Internal Revenue Code of 1986 to provide incentives for energy production and conservation, to extend certain expiring provisions, to provide individual income tax relief, and for other purposes” (Emergency Economic Stabilization Act). In my paper I will explain and show the relationship between the Emergency Economic Stabilization Act of 2008 and subprime lending, the collapse of the housing market, bundled mortgage securities, liquidity, and the Government 's efforts to bailout the nation 's banks.

The great recession of the year 2007-2009 had a substantial adverse impact on the US Economy and the world. Charles Ferguson documentary narrates how politicians, bankers, and economist conspired to create a crisis that caused high unemployment, increased the United States global debt and contributed to the loss of investments and savings. He describes how banks resisted regulation in the early 1990's by CFTC and how successive regimes led to the crisis by enacting laws that supported the process.

Many people today would consider the 2008, United States financial crisis a simple “malfunction” or “mistake”, but it was nothing close to that. Contrary to what many believe, renowned economists and financial advisors regarded the financial crisis of 2007 and 2008 to be the most devastating crisis since the Great Depression of the 1930’s. To make matters worse, the decline in the economy expanded nationwide, resulting in the recession of 2007 to 2009 (Brue). David Einhorn, CEO of GreenHorn Capital, even goes as far as to say "What strikes me the most about the recent credit market crisis is how fast the world is trying to go back to business as usual. In my view, the crisis wasn't an accident. We didn't get unlucky. The crisis came

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.

The banking crisis of the late 2000s, often called the Great Recession, is labelled by many economists as the worst financial crisis since the Great Depression. Its effect on the markets around the world can still be felt. Many countries suffered a drop in GDP, small or even negative growth, bankrupting businesses and rise in unemployment. The welfare cost that society had to paid lead to an obvious question: ‘Who’s to blame?’ The fingers are pointed to the United States of America, as it is obvious that this is where the crisis began, but who exactly is responsible? Many people believe that the banks are the only ones that are guilty, but this is just not true. The crisis was really a systematic failure, in which many problems in the

The underlying problems that caused the financial crisis of 2008 began building before many economists and policymakers are willing to admit. Since the laissez-faire policies of the Reagan administration in the 1980s, inequality and unemployment heightened. “Between 1976 and 2006 (...) ation-adjusted per capita income increased by 64 percent, for the bottom 90 percent of households it increased only by 10 percent. For the top one percent of households it increased 232 percent,” (Wisman 2013, 932) causing an income gap. Another arsing issue was globalization after World War II. The economy’s structure changed and outdated previous economic policy. Manufacturing jobs were outsourced because labor was cheaper abroad; the US imported more goods than it exported, causing a trade deficit.

The documentary “Inside Job” offers its viewers with a thorough and thoughtful analysis of the 2008 financial crisis, which eventually led to the Great Recession that later cost the world ten trillion dollars and thirty million jobs. Almost all major economist as well as the International Monetary Fund (IMF) agree that the recession is the worst global recession that has ever happened since the Great Depression of the 1930s.

One day the balloons are built so gigantic that they just detonate and fall. The Global Economic Crisis of 2008 was a balloon that was built so far out with no stop that one day it just came down, with no helium left, and a burst of air. In the film Inside Job, Charles Ferguson presents his evidence towards the issues that he believed led to the 2008 crisis, while also depicting the ideas which he believed were the most important in concern to the issues. While many issues were conspired into the crisis, behind every madness there is someone who opens the door to it. In the Global Economic Crisis of 2008 the most important issues in determining the cause of the Great Recession of 2008-2013 are deregulation, conflict of interest, and blowback.

One day the bubbles are built so gigantic that they just detonate. The Global Economic Crisis of 2008 was a bubble that was built so far out with no stop that one day it just came down, with no gravity to pull it up, and a great burst of water. In the film Inside Job, Charles Ferguson presents his evidence towards the issues that he believed led to the 2008 crisis, while also depicting the ideas which he believed were the most important in concern to the affairs. Accordingly, while many matters were conspired into the crisis, behind every madness there is someone who opens the door to it. In the Global Economic Crisis of 2008 the most important issues in determining the cause of the Great Recession of 2008-2013 are untimely deregulation, a

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.

In 2008, the US experienced the traumatic chaos of a financial downturn, whose effects rippled throughout Europe and Asia. Many economists consider it the worst crisis since the Great Depression, and its alarming results are still seen today, a long six years later. Truly, the recession’s daunting size and formidable wake have left no one untouched and can only beg the question: could it have been prevented? The causes are manifold, but can be found substantially rooted in illogical investments and greedy schemes.

It is clear that the crisis had multiple causes such as the financiers themselves especially those who claimed to have found a way to expel risk where in fact they had only lost track of it. Regulators and bankers are also to bear blame because they tolerated this recklessness. The macroeconomic backdrop was very important as years of low inflation and stable growth nurtured risk-taking. Some research suggests that European banks should take blame as they borrowed greedily in American money markets pre-crisis and used the funds to buy dodgy securities. All these factors together played a major role in the unravelling of the recent financial crisis

According to the work examined in this study the global recession that occurred in 2008 and 2009 was partially a result of the financial industry's failure to be responsible for the decision it made in using financial instruments that were risk and very complex in nature. The culture of corporations were constructed on risk-based rewards instead of rewards that resulted in value for stakeholders. The financial risks that banks took on were not well comprehended by the public or regulators and the mass media also failed to understand the risks that the banks had entered into with certain financial agreements.