Inside Job - Timothy Little GSB 732 Inside Job The movie Inside Job tells the story of the events surrounding the 2008 financial crisis which negatively

Inside Job - Timothy Little GSB 732 Inside Job The movie...

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Timothy LittleGSB 732Inside JobThe movie “Inside Job” tells the story of the events surrounding the 2008 financial crisis, which negatively impacted millions of Americans. The movie cites the deregulation of the financial industry as playing a critical role in the crisis. Unquestionably, the deregulation of Wall Street has led to an increase in boom and busts in the financial sector, and the men who caused it continue to profit off middle-class Americans. This movie describes how they built a system that was designed to collapse in order to increase their money and power.The documentary begins by explaining the events leading up to the 2008 financial crisis. Specifically, the movie mentions and focuses on the deregulation of several financial institutions,including the banks, insurance companies, and credit rating agencies. As a result of this deregulation, financial institutions were able to maximize profits at the expense of their clients. For example, the movie explains how deregulation in Iceland’s three major banks formed a bubble that burst in late 2008. The movie also cites the Reagan Administration’s actions during the 1980s, which allowed the banking industry to make risky investments with people’s savings deposits. Indeed, by the end of the 1980s, several loan companies had gone bankrupt, costing taxpayers $124 billion (“Inside Job”). As financial lobbyists and economists captured the political system, financial institutions became consolidated into a few large firms. As a result, by the late 1990s, these few firms controlled the fate of the entire economic system. By the mid-2000s, financial institutions had a far greater concentration and centralization of power. The industry was dominated by five investment banks (Goldman Sachs, Morgan Stanley, Lehman Brothers, Merril Lynch, and Bear Stearns), two financial conglomerates (Citgroup and JP Morgan), and three securities insurance companies (AIG, MBIA, and AMBAC). These financial institutions created the securitization food chain. Basically, the lenders began making mortgage
loans to home buyers, regardless of credit risk, and sold those mortgage loans to investment banks. The investment banks, in turn, created a new product known as a CDO (collateralized

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