Inside Job movie: comments?

[JJM 777]

A friend of mine feels quite shocked and concerned, after watching the movie Inside Job (2010, Directed by Charles Ferguson).

He asked me to watch it and tell my opinion, whether the claims made in the movie are true or not. Watching it and hearing the claims would not directly empower me to know the truthfulness of the claims, so I try something else: ask the JREF forummers.

Can you explain, or give a link to explanations, of the main claims in the movie, and their truthfulness?

Sorry if a thread about this exists already: before starting this I sincerely looked around to find a forum search tool, but I didn´t find it.

[Schrodinger's Cat]

I think it would be best if the people watching the documentary just laid back and enjoyed it and didn't care about whether or not the documentaries were true. Sometimes regarding truth as being important is more harmful to yourself than believing something which is not true.

It's all a state of mind, man.

[Skeptic Ginger]

I found the film to be very credible. Of course I would have considerable confirmation bias since the film fits closely with my view of the corporate world. So I went to the right wing response to the film. There hasn't been as much rebuttal like there is with any Michael Moore film, but then this movie also has not reached as broad an audience as Moore's films do.

Here's one rebuttal from a right wing source: The American Spectator review of "Inside Job". I see very little substance and a whole lot of ad homs in the review.

[theprestige]

Originally Posted by JJM 777

Watching it and hearing the claims would not directly empower me to know the truthfulness of the claims,

I disagree. Ironically, Skeptic Ginger gives a good example of direct empowerment through watching it yourself:

Originally Posted by Skeptic Ginger

I see very little substance and a whole lot of ad homs in the review.

By hearing the claims for yourself, you are directly empowered to judge their truthfulness. If they don't provide sources for their claims, you can judge this immediately just by watching the movie. If you check their sources, and they don't support the claims, you can judge this too. If they commit logical fallacies like appeal to emotion, or appeal to authority, etc., you can judge this too. All this you can do by directly empowering yourself--that is, by watching and hearing the claims.

[Segnosaur]

Originally Posted by Schrodinger's Cat

I think it would be best if the people watching the documentary just laid back and enjoyed it and didn't care about whether or not the documentaries were true.

Some of us like to watch documentaries for the informational content. Seeing things in an audio/visual media can sometimes make it easier to understand than seeing the same information in an alternate form, such as in print.

Even if someone did watch documentaries strictly for their entertainment value, it would still be valuable to know what information contained in a documentary can be trusted, if and when we want to use that information in order to establish an opinion on some subject.

Otherwise, a documentary just becomes "wasted time". If you're going to assume you can't trust the information in a documentary, then why bother watching them? You can get entertained watching fictional movies/TV shows.

[MarkyX]

Quote:

Can you explain, or give a link to explanations, of the main claims in the movie, and their truthfulness?

The best way to do is look at the articles or footage they have used. I'm studying financial services myself, and this film was speaking a language I can easily understand.

Yes, it is true that these banks bet against investments they sold to the public (look up 'pump and dump'). Yes, it is true that the loaner is no longer taking a risk of a mortgage loan once they sell it to an investment bank (this also makes the balance sheet look good since they remove it from the 'liabilities'). And yes, due to lack of financial regulation, a bank can easily create an insurance policy without any backing.

I would say that the good portion of the documentary, if not all of it, is pretty accurate. Even some of my professors, all of them who worked in both the United States and American banks, expressed that the lack of regulation is what caused the financial system to melt down in 2008. I know I say this far too often in my posts, but just compare the United States to Canada. United States has all the tools to become an economic powerhouse: Large population, education, and opportunity. Canada? We just have some natural resources and hockey. Population wise, Canada only has 35 million, while America has 350 million. Yet in the end, Canada is the winner in terms of economic safety because of our strong regulation (which Harper wanted to get rid of!).

As for the recession being "rigged" by the banks, it certainty wouldn't surprise me considering these are the same group of banks who gave themselves bonuses when they got bailout money and constantly fight against any sort of regulation.

Quote:

Here's one rebuttal from a right wing source: The American Spectator review of "Inside Job". I see very little substance and a whole lot of ad homs in the review.

Agreed. Like most right-wingers, he brings up Fannie Mae as if that alone caused the crisis. While it would caused problems for the housing market and would require the government to bailout, it certainty wouldn't have bankrupted the Lehman brothers or cause a recession worldwide. He even suggests that loaners CARE about the loans they give, failing to realize that these mortgage loaners sell their stuff to investment banks so they don't care if they give a bad loan or not.

[lomiller]

Originally Posted by MarkyX

He even suggests that loaners CARE about the loans they give, failing to realize that these mortgage loaners sell their stuff to investment banks so they don't care if they give a bad loan or not.

In fact since higher interest rate loans netted them higher profits but they kept none of the risks lenders had an incentive to give out bad loans even when the person qualified for a better loan. This is why you had lenders not only issuing lots and lots of sub-prime loans but actually going out and deceiving people into taking high interest rate sub-prime loans. The whole incentive of risk vs reward system for lenders basically got turned upside down and this was the root cause of the crisis.

[Segnosaur]

Originally Posted by MarkyX

Agreed. Like most right-wingers, he brings up Fannie Mae as if that alone caused the crisis. While it would caused problems for the housing market and would require the government to bailout, it certainty wouldn't have bankrupted the Lehman brothers or cause a recession worldwide. He even suggests that loaners CARE about the loans they give, failing to realize that these mortgage loaners sell their stuff to investment banks so they don't care if they give a bad loan or not.

Of course, if the system had been working right, then the bond rating agencies would actually have been giving proper ratings to the various CDOs. In that situation, bad loans would be harder to sell/pawn off. This would make the front-line banks a bit more careful extending credit, so they would care about having too many bad loans on the books.

It was basically the bond rating agencies who were saying "Yup, no risk here" that allowed the bad loans to destroy the economy.

[BobTheCoward]

Originally Posted by Schrodinger's Cat

I think it would be best if the people watching the documentary just laid back and enjoyed it and didn't care about whether or not the documentaries were true. Sometimes regarding truth as being important is more harmful to yourself than believing something which is not true.

It's all a state of mind, man.

I don't know if I can enjoy it. It was my least favorite nominee for the oscar. Restrepo and Exit Through The Gift Shop were so much better. What I saw of Gasland, I thought it was better.

Here is inside job: Narrate over a panning shot of a city or street, interview, narrate, chart, interview.

[Skeptic Ginger]

BTW, my son and I went to Iceland and my son had studied economics in college so the discussion of their bank collapse came up a few times on our trip. The movie got that right from what I understand about the events. Their money collapsed and it was tough going for a couple years for almost everyone in the country. They rely a lot on imports so it makes a huge difference when your currency is devalued like that.

[MarkyX]

Originally Posted by BobTheCoward

Here is inside job: Narrate over a panning shot of a city or street, interview, narrate, chart, interview.

Welcome to any video where the central theme is financial services.

[Corsair 115]

Originally Posted by MarkyX

I know I say this far too often in my posts, but just compare the United States to Canada.

This is a point I've stressed several times in various threads in the "USA Politics" forum. It appears to garner very little traction. I theorize that, given what they've been through the last few years, Americans by and large cannot appreciate in a real way that some countries did not suffer the kind of housing and financial crises the U.S. suffered. It's outside their experience so it's hard for some of them to relate.

[JJM 777]

This is what I answered to my friend:

I googled and surfed around a bit, and it looks like commentators regard the Inside Job documentary as quite accurate, for the most part at least. Not even the more critical reviews claim that the documentary is not true for the most part. Here are links to some of the best analyses that I found about the subject:

http://skepticblog.org/2010/11/30/an...an-inside-job/
http://www.telegraph.co.uk/culture/f...ob-review.html
http://www.businessinsider.com/is-in...curate-2011-2#
http://en.wikipedia.org/wiki/Late-20...nancial_crisis

[Skeptic Ginger]

So that begs the question the film producer asks, why haven't any of the culprits gone to jail? And I'll add, why hasn't the news media been addressing these issues?

[JJM 777]

Originally Posted by Skeptic Ginger

why haven't any of the culprits gone to jail?

1. Because they broke no law that would give a jail sentence? 2. Because loopholes in law would save them?

3. Because all funding of politicians comes from the Wall Street after all, so politicians cannot saw off their own branch of the tree?

4. Or because politicians realize that the national economy sits on the branch of these people, and sawing them off would be more harmful than achieving some perceived justice?

Originally Posted by Skeptic Ginger

And I'll add, why hasn't the news media been addressing these issues?

5. Because the news media is owned by Wall Street? Or because also the media cares about possible reason 4.?

[MarkyX]

Originally Posted by Skeptic Ginger

So that begs the question the film producer asks, why haven't any of the culprits gone to jail? And I'll add, why hasn't the news media been addressing these issues?

Easy. Banks gives advertising dollars and the media requires advertising dollars to survive.

[DC]

wow, i am watching it now.
why are those people still walking around freely?

reminds me of the old saying: You don't get rich by honest work.

[lionking]

Inside Job did what Michael Moore tried to do, but failed miserably.

[DC]

Originally Posted by lionking

Inside Job did what Michael Moore tried to do, but failed miserably.

who failed, the movie or Michael Moore?

[lionking]

Originally Posted by DC

who failed, the movie or Michael Moore?

Michael Moore. He's a belligerent, partisan idiot. The maker of this film isn't.

[DC]

Originally Posted by lionking

Michael Moore. He's a belligerent, partisan idiot. The maker of this film isn't.

ah sorry, a language issue then, i understood it the other way around

[lionking]

Originally Posted by DC

ah sorry, a language issue then, i understood it the other way around

Sorry, my fault. I've been traveling and am tired. I shouldn't be posting at all really.

[MarkyX]

Originally Posted by DC

wow, i am watching it now.
why are those people still walking around freely?

reminds me of the old saying: You don't get rich by honest work.

Because of politics.

You need to remember that politicians need to get votes to get win. Sounds good, right? Problem is, politicians need money to get those votes, so special interest groups (such as banks) come in and say "We'll give you all the money you need, just do what we say."

And of course, to make sure that they get their required funding for re-election, politics have to play the lapdog to special interests.

[DC]

Originally Posted by lionking

Sorry, my fault. I've been traveling and am tired. I shouldn't be posting at all really.

maybe it was a down under problem

[DC]

Originally Posted by MarkyX

Because of politics.

You need to remember that politicians need to get votes to get win. Sounds good, right? Problem is, politicians need money to get those votes, so special interest groups (such as banks) come in and say "We'll give you all the money you need, just do what we say."

And of course, to make sure that they get their required funding for re-election, politics have to play the lapdog to special interests.

sounds like politics needs more regulation also.

[BobTheCoward]

Originally Posted by lionking

Michael Moore. He's a belligerent, partisan idiot. The maker of this film isn't.

And Michael Moore is a superior film maker to the Inside Job guy.

[DC]

Originally Posted by BobTheCoward

And Michael Moore is a superior film maker to the Inside Job guy.

but this was a documentary.

[Segnosaur]

Originally Posted by DC

why are those people still walking around freely?

Well, as JJM 777 suggested earlier, maybe because there were no laws that they broke.

Can you point to any specific laws that they might have violated? (Well, OK, the movie did point out Wall Street's use of drugs and prostitutes, but I meant laws regarding finances.)

After all, I don't think there was anything strictly illegal about selling derivatives, of people quitting executive jobs to work for the government, etc. Even the people I personally blame most for the melt down (the bond rating companies) were claiming "1st amendment protection".

Now you could argue that companies were selling holdings that they knew were faulty, but that might fall more into civil law than criminal.

The system was flawed, people took advantage, immorally but legally.

[DC]

Originally Posted by Segnosaur

Well, as JJM 777 suggested earlier, maybe because there were no laws that they broke.

Can you point to any specific laws that they might have violated? (Well, OK, the movie did point out Wall Street's use of drugs and prostitutes, but I meant laws regarding finances.)

After all, I don't think there was anything strictly illegal about selling derivatives, of people quitting executive jobs to work for the government, etc. Even the people I personally blame most for the melt down (the bond rating companies) were claiming "1st amendment protection".

Now you could argue that companies were selling holdings that they knew were faulty, but that might fall more into civil law than criminal.

The system was flawed, people took advantage, immorally but legally.

How about treason?

[Segnosaur]

Originally Posted by BobTheCoward

And Michael Moore is a superior film maker to the Inside Job guy.

Depends on how you define 'superior' (at least when it comes to documentaries).

If you mean in terms of entertainment, editing, photography, etc. you might be right. However, some of us think (at least when dealing with documentaries) that there should be at least some emphasis on truth and facts. Not that we can expect documentaries to be "perfect" in that regard, but even some people who might agree with Michael Moore's politics think that his documentaries are too biased and that he isn't really honest in them.

The fact that Inside Job is widely seen as accurate can (at least for some of us) make up for lower production values or less entertainment.

[Segnosaur]

Originally Posted by DC

Quote:

Can you point to any specific laws that they might have violated?

How about treason?

Well, the U.S. has a very specific definition of treason...
"Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort."
(From: http://en.wikipedia.org/wiki/Treason#United_States)

The actions of the Wall street people were greedy and idiotic, but since there wasn't an actual 'war' or 'enemies' involved, I'm not sure 'treason' would stick. (Of course, I will defer to anyone more familiar with American law...)

[DC]

Originally Posted by Segnosaur

Well, the U.S. has a very specific definition of treason...
"Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort."
(From: http://en.wikipedia.org/wiki/Treason#United_States)

The actions of the Wall street people were greedy and idiotic, but since there wasn't an actual 'war' or 'enemies' involved, I'm not sure 'treason' would stick. (Of course, I will defer to anyone more familiar with American law...)

well i guess it was the perfect crime, a legal robbery. those people are clever, and the dummys hired them to fix the problem

why don't we hire the Mafia to solve the organized crime problem?

[Skeptic Ginger]

Originally Posted by JJM 777

1. Because they broke no law that would give a jail sentence? 2. Because loopholes in law would save them?

I don't buy that one.

Originally Posted by JJM 777

3. Because all funding of politicians comes from the Wall Street after all, so politicians cannot saw off their own branch of the tree?

Most likely, at least tangentially if not directly.

Originally Posted by JJM 777

4. Or because politicians realize that the national economy sits on the branch of these people, and sawing them off would be more harmful than achieving some perceived justice?

You'd have to believe Obama was duped by Geithner since Obama is in charge of the Justice Department and must be calling the shots re investigating. Maybe, but it's a stretch.

Originally Posted by JJM 777

5. Because the news media is owned by Wall Street? Or because also the media cares about possible reason 4.?

This would explain Fox News but I'm so not much of a CTer that I think the bankers control all the media that directly. It's possible the media parent companies could be in with the financial entities but it really doesn't seem that likely.



I hate to say it but somewhere along the way, Obama is calling the shots. So then one has to wonder how/why he isn't pursuing prosecutions. The media is not completely oblivious, only the major TV news stations:

From another thread, RandFan posted an Olbermann interview with Matt Taibbi from the Rolling Stone. Here is Taibbi's article: Frank Rich Blasts Obama For Letting Wall Street Off the Hook.

Taibbi links to the New Yorker piece by Frank Rich: Obama’s Original Sin

Quote:

The president’s failure to demand a reckoning from the moneyed interests who brought the economy down has cursed his first term, and could prevent a second....

What haunts the Obama administration is what still haunts the country: the stunning lack of accountability for the greed and misdeeds that brought America to its gravest financial crisis since the Great Depression. There has been no legal, moral, or financial reckoning for the most powerful wrongdoers. Nor have there been meaningful reforms that might prevent a repeat catastrophe. ....

Even now, on the heels of Bank of America’s reluctant $8.5 billion settlement with investors who held its mortgage-backed securities, the Obama administration may be handing it and its peers new get-out-of-jail-free cards. With the Department of Justice’s blessing, the Iowa attorney general, Tom Miller, is pushing the 49 other states to sign on to a national financial settlement ending their investigations of the biggest mortgage lenders. What some call a settlement others may find a cover-up ...

The weak Dodd-Frank financial-reform law that rose from the ruins remains largely inoperative, since the actual rule-writing was delegated to understaffed agencies now under siege by banking lobbyists and their well-greased congressional overlords. The administration’s much-hyped Consumer Financial Protection Bureau is being sabotaged by Washington Republicans intent on blocking any White House nominee, ...

Rich puts it this way:

Quote:

While he has never lusted after money ... the dirty secret of Obama’s background is that the values of Harvard, not of Kenya or Indonesia or Bill Ayers, have most colored his governing style. He falls hard for the best and the brightest white guys.

He stocked his administration with brilliant personnel linked to the bubble: liberals, and especially Ivy League liberals. Nearly three years on, they have taken a toll both on the White House’s image and its policies. Obama arrives at his reelection campaign not merely with a weak performance on Wall Street crime enforcement and reform but also with a scattershot record (at best) of focusing on the main concern of Main Street: joblessness. One is a consequence of the other. His failure to push back against the financial sector, sparing it any responsibility for the economy it tanked, empowered it to roll over his agenda with its own. He has come across as favoring the financial elite over the stranded middle class even if, in his heart of hearts, he does not.

Very disheartening. That suggests duped.

[Skeptic Ginger]

There's also this story related to the Taibbi/Olbermann interview: Sen. Grassley: SEC may have covered up bank wrongdoings

Quote:

Senior Republican Senator Chuck Grassley said that "an agency whistle-blower" sent him a letter that described the SEC's allegedly unlawful destruction of records related to more than 9,000 informal investigations.

The documents included cases arising from the 2008-2009 financial crisis, including Goldman Sachs, AIG, and the Bernard Madoff pyramid fund, according to the whistle-blower, Grassley said.

The whistle-blower, 13-year SEC lawyer Darcy Flynn, said the destroyed records related to "matters under inquiry" or MUIs -- probes that precede the launch of formal investigations.

[Skeptic Ginger]

Originally Posted by BobTheCoward

And Michael Moore is a superior film maker to the Inside Job guy.

In Moore's case the films get a much wider audience. But there is a lot of confirmation bias like Lionking's which writes off anything Moore has to say, and writes off the marketing strategy to make Moore's claim look like Commie Pinko hyperbole. The threatened financial interests have done a good job dishonestly attacking Moore's credibility.

OTOH, Inside Job is creating a slower but so far still rolling/increasing outrage. It would have been nice if Inside Job had had the widespread distribution that Moore's movies have. But then it is possible the financial interests would have invested more in marketing Inside Job as not credible. And, it is harder to attack a documentary that is more rationally presented rather than sensationally presented.

[Skeptic Ginger]

Originally Posted by Segnosaur

Well, as JJM 777 suggested earlier, maybe because there were no laws that they broke.

This is a marketed lie that really needs to be looked at skeptically.

Originally Posted by Segnosaur

Can you point to any specific laws that they might have violated? (Well, OK, the movie did point out Wall Street's use of drugs and prostitutes, but I meant laws regarding finances.)

After all, I don't think there was anything strictly illegal about selling derivatives, of people quitting executive jobs to work for the government, etc. Even the people I personally blame most for the melt down (the bond rating companies) were claiming "1st amendment protection".

Now you could argue that companies were selling holdings that they knew were faulty, but that might fall more into civil law than criminal.

The system was flawed, people took advantage, immorally but legally.

I'm not a lawyer but here's a start:

I'm skeptical that corruption is legal. Lying about one's company's assets with full knowledge of the lie and collusion by the ratings companies to support that lie is not legal in a publicly traded company.

The claim has been made that the ratings companies are allowed by free speech law or something like that to give false ratings. But this all begins to unravel when one sees there are internal memos acknowledging awareness of the fraudulent ratings.

There were large pension funds defrauded. And there's been an effort to cover up the fraud according the the whistleblower who testified before Congress (see my link above in post #34).

[daenku32]

Originally Posted by JJM 777

A friend of mine feels quite shocked and concerned, after watching the movie Inside Job (2010, Directed by Charles Ferguson).

He asked me to watch it and tell my opinion, whether the claims made in the movie are true or not. Watching it and hearing the claims would not directly empower me to know the truthfulness of the claims, so I try something else: ask the JREF forummers.

Can you explain, or give a link to explanations, of the main claims in the movie, and their truthfulness?

Sorry if a thread about this exists already: before starting this I sincerely looked around to find a forum search tool, but I didn´t find it.

I haven't seen the movie yet, but I grew up where you are at; Finland.

Any comparisons to what they did with the banks in Finland during the 90s recession? I know the situation is a bit different but I think I left the country before they had a chance to truly evaluate the banking situation in hindsight.

[Segnosaur]

Originally Posted by Skeptic Ginger

Quote:

Well, as JJM 777 suggested earlier, maybe because there were no laws that they broke.

This is a marketed lie that really needs to be looked at skeptically.

I find it ironic that you call my statement a "marketed lie", then jump in with a call for "skepticism".

There are (and were) major problems with the way the financial industry was handled. The question is whether the problem is enforcement of existing laws, or a need for new laws (or a return of previously repealed laws).

Quote:

Quote:

Can you point to any specific laws that they might have violated? (Well, OK, the movie did point out Wall Street's use of drugs and prostitutes, but I meant laws regarding finances.)

I'm not a lawyer but here's a start:

I'm skeptical that corruption is legal. Lying about one's company's assets with full knowledge of the lie...

But then, did the company lie about its assets?

I'm not a financial expert so I'm not sure exactly how much disclosure is needed, but if the companies selling the derivatives made a full list of the holding available then it would be hard to accuse them of lying.

Its kind of like a used car salesman selling a rust bucket... He may praise the car, but as long as he mentioned "Oh yeah the doors are falling off" at some point, he can claim "The customer was told of the problems. Its his fault if he decided to purchase it anyways."

Quote:

The claim has been made that the ratings companies are allowed by free speech law or something like that to give false ratings. But this all begins to unravel when one sees there are internal memos acknowledging awareness of the fraudulent ratings.

The right to "free speech" is a pretty strong argument, and last time I checked there's no requirement for that free speech to be accurate.

Like I said before, I want to stress that I'm not defending the banks, the executives, or the bond rating companies. I just feel the main problem was a lack of laws, rather than a breach of existing laws.

[DC]

Rating companies are not like those yellling FIRE when there is no fire. they are like those yelling NO FIRE when the whole crap is on fire. how this is protected by free speech is laughable.

[Almo]

Very informative, though it made a few unsupported assertions that were tangential to the core info.

Was great watching the academic economists squirm when the docu-guy asked if they had a conflict of interest.