As the world totters on the brink on economic uncertainty, we wonder if the financial crisis of 2008 which nearly brought the world on the brink of collapse, will come back to haunt us again.Although the situation looks better than then, it still leaves a lot of room for doubt. With the increasing delinking of the Indian economy, the threat to us is even less. But nevertheless, the economic might the west exercises, and the world economies getting inextricably interlinked, when the west sneezes the rest of the world quickly catches the cold.
What really caused a crises of such magnanimous proportions ? What measures have been taken to prevent a recurrence ? Three years down the line the layman is pretty hazy about what really precipitated this huge crisis. We have all heard about sub prime and derivatives and the greed of the wall street and the eventual collapse of Meryil Lynch and AIG, but the terms seem too technical and its difficult to make much out of the jargon.
"Inside Job" tries the demystify the world of Wall street to the common man. Its more a documentary than a movie. The reel stars are the big bosses of the real Financial world themselves. Based on detailed interviews with bankers, heads of regulatory authorities and academicians, it tries to put the story in a way you and me can understand. So what was it that brought down the whole world in late 2008 - GREED, callousness, bad judgement, bad luck or a deadly concoction of all?
The world over, the Financial sector comprising banks, institutions, mortgage (housing and other loan) companies, stock and bond markets is a subject of strict regulation. It is also one most susceptible to fraud. Who hasnt heard of ponzi schemes which promise to double your money in no time? Unlike manufacturing the sector has little tangible assets like building, Machinery, which the investor can see. The value creation process is very slow and is based on integrity and sound judgement, rather than innovation and enterprise. So what happens when the companies forget these time tested principles of honesty and integrity?
The sub prime mortgage crisis which lies at the crux of the financial debacle did not happen overnight. So why were powerful regulators and politicans watching when banks went about "manufacturing" derivatives out of this air? Why did the rating agencies handing out AAA rating to bonds which were backed by sub prime loans? How were Freddie Mac and Fannie May (the biggest housing lenders in US) able to retain their AAA ratings upto the day of their collapse? And most importantly, a full three years after the crisis, why are the key perpetuators not just not prosecuted, but appointed to key positions in the Obama team?
So who benefited from these crises? The executives of Goldman Sachs who reaped millions in bonuses? Or the banks who profited by speculating AGAINST their own derivates? The politicians who depend on Wall street for their election campaigns? The crux lies in the increasing control exrcised by Wall Street on US politics. The fundamental culture of greed of Wall Street that has many willing supporters in powerful positions.. So what does the US need for a redemption ? An "imported" Anna Hazare ???
Overall a must watch ..
Available at -
http://www.indiaplaza.com/inside-job-movies-mov1005201101cyg02-10.htm
