Inside Job [Film]

Inside Job [Film]

Inside Job presents how a chain of actions and decisions underpinned by increasing self-interest in the U.S. financial sector over the past 50 years has brought the U.S. to its current worsening socio-economic state. Maximized Self-Interest – The Financial Crisis Time-Bomb Ticker The key point that Inside Job presents is how the “securitization food chain” developed – borrowers, lenders, investment banks, investors, ratings agencies – governed by the commonly held value of maximized self-interest at every rung of the chain. It shows how precisely this chain was the ticking financial crisis time-bomb that exploded in September 2008, the effects of which are felt worldwide until today. Here’s how maximized self-interest worked at every level of this chain: Borrowers wanted loans for buying homes or other high-cost assets (and since it was in the financial interest of people in the higher parts of the chain for as many people as possible to get loans, then loans were highly promoted during the first years of the 2000s) Lenders wanted the extra money they could make from any loans they provided, no matter how risky, since they sold all the loans to investments banks Investment banks wanted the extra money they could derive by collating all the loans they bought into complex derivatives called CDOs (Collateralized Debt Obligations), and selling those CDOs to investors Investors wanted the extra money they would get from the borrowers paying back the loans (the CDOs) Ratings agencies, which were hired by investment banks to evaluate the CDOs, wanted the extra money they would get from giving high ratings to the CDOs (since people in the ratings agencies would get paid more for giving CDOs...