Movie Review - Inside Job PDF

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USF BUS 330-03: INVESTMENT ANALYSIS Name:

Date: March 22, 2020

Movie Review Worksheet Movie: Inside Job Director: Charles Ferguson

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Year: 2010

Major Take-Aways  Unethical practices of the banking industry produced the housing bub ble eventually collapsing on a global scale in 2008.

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Who the Main Characters Are

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Mortgage loan companies (Fannie Mae, Freddie Mac, etc.) Insurance companies (AIG) Credit rating agencies (S&P, Moody’s, Fitch) Securities and Exchange Commission Commodity Futures Trading Commission Federal Reserve, Chair and Board Investment banks (Goldman Sachs, Stanley Morgan, Merrill Lynch, etc.)

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What Roles did they Play / What Did They Do  CDO development started as mortgage loan companies that authorized and selling subprime loans to investment banks, which then bundled them into financial products for sale to institutional investors and individual. Investment banks paid (bribed) credit rating agencies to allocate products to scores ofinvestment grade to ju nk financial deliberately. Such investment firms used Default Credit Swap to bet against their wrongdoing so they are covered once all bust by insurance firms. Because the positions of the Federal Reserve andthe governme nt were occupied by former bankers and because of pressurefrom bank lobbyists, the government did not interfere with the criminalactivities.  What were their Motivations • Mortgage companies make money as more loans are accepted and they don't care about repayment. • Investment bankers market more financial products to increase their profits. •Investment banks pay credit rating agencies for giving false scores. •Money •Through several presidential administrations, FED chairmen and boards of directors are former bankers who took advantage of this ill practice

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What Were the Outcomes Associated with the Institutions and Persons Actions and Behavior Government stood by as the collapsing housing bubble and as a result of a loosely regulated banking industry unraveling financial crisis.

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Was the Behavior and Decisions Ethical and Moral; What were the Consequences  While banking industry and government agencies 'actions and decisions were not highly ethical at every level, most of these bankers that were faced little or no consequences. Sure, litigation against big banks forced them to pay, but for such unethical behavior, only a few main bankers were prosecuted and harassed. On the verge of bankruptcy, businesses that engage in these activities are bailed out or bought. The government has gave guarantee to apurchasing.  Who Benefited and Was Hurt Banks, loan companies, credit rating agencies have benefited greatly, while creditors and customers have suffered the financial institution's mistakes. 

What Were the Immediate Affects, Medium and Long-Term on the Industry, Customers, Economy and Citizens Overall  Most money is created from thin air, and everything goes into the bankers'pockets. The market, however, collapsed entirely and the economy fell into a recession ultimately. Citizens who, in prosperity's times, believed they could own a home then lost their jobs and homes. Not only the US, but economies around the globe influenced the collapse of the financial market and thehousi ng bubble.

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What can be Done to Prevent it in the Future / My recommendation of Policy at both the Government, Institutional and Corporate Level  In order in prevent a similar financial crisis, it is necessary to re-enact regulations that regulate the banking industry. Legal corruption, such aslobbying and the appointment of unethical bankers to government positions, must be stopped in order for government to intervene effectively if something goes wrong in the private sector.  What is Going to Happen in the Future  There is inevitably an imminent recession. There is not much difference in economic conditions from that prior to the financial crisis of 2008. As the economy as a whole rises, so does the price of housing worldwide. Under the current Republican government, tax cuts and financial sector reform are taking place at the same time. Due to the latest yield curve inversion, the above indicators point to another that devastates recession potentially.

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