BBC2 now - Inside Job.

[Mr XXXX]

Derek Smith said:

I must admit that I was expecting a whitewash thread here, suggesting that it was all smoke and mirrors and that we should be thanking the bankers and those acting in unison for their industry.

Nice to have a prejudice proved wrong.

I always assumed I was a bit cycnical and people and things weren't as bad as I thought. I've been proved wrong again.

The programme was astounding.

I missed the beginning. The programme doesn't appear to be on iPlayer yet Eastenders is.

http://www.bbc.co.uk/iplayer/episode/b0183l0t/Storyville_20112012_Inside_Job/

[johnfm]

I think the biggest shock is that all the big players are now at the controls under Obama. That is a bit surprising.

I expect, like Al gore's film, there are some holes here (the whole cost of college education graph from $600 to $10000 was a bit poor - as it was corrected for inflation and the whole cost of education is a separate issue to the melt down.

[Northern Munkee]

Derek Smith said:

I must admit that I was expecting a whitewash thread here, suggesting that it was all smoke and mirrors and that we should be thanking the bankers and those acting in unison for their industry.

Nice to have a prejudice proved wrong.

I always assumed I was a bit cycnical and people and things weren't as bad as I thought. I've been proved wrong again.

The programme was astounding.

I missed the beginning. The programme doesn't appear to be on iPlayer yet Eastenders is.

It was there last night. Think the BBC (for its all fault) have really done a superb job with their recent bbc2 programming about the economic situation, balanced and understandable. The only problem is it should be shown on bbc1, preferably after Strictly.

[Digga]

johnfm said:

I think the biggest shock is that all the big players are now at the controls under Obama. That is a bit surprising.

Yes and no.

One might have hoped his regime would want to put clear distance between themselves and the Bush administration, but in reality, as Inside Job demonstrated, it would be impossible to break ties with the big, powerful institutions that (behind the scenes) actually ran things.

There seems to have been a cross-fertilization of leftist, loose-money ideals throughout the west over the last 30 years. The way that Winky's mate David Blanchflower, ex-of MPC is now at Dartmouth College, New Hampshire is typical.

[deltaevo16]

Digga said:

I agreee.

F**k! I am actually a bit shocked after that and what is most shocking is that I don't know why because a lot of it I already knew.

The mendacity of people like Fuld is well documented, I've read Renhardt & Roghoff's ideas in depth, I knew Iceland was an accident waiting to happen viz GDP/banking ratios etc. etc., but it was the background and detail this piece provided that somehow managed to fill me with a sense of discomfort. As others here said, that the academics were so blatantly for hire is damning in the extreme, both individually and for their respective schools, and the breadth and depth of infiltration into government and politics of ex-bank people is clearly a hazard.

Whilst this will do nothing to sway the opinions of the mindless bank-bashers, it will at least broaden their horizons as to the wider responsibilities for the crisis. The corruption and the wealth gap created is a scandal and I have no doubt there could and should have been more prosecutions were the system itself not so bent.

Criticism of the show? Well Clinton got away scot free though - a bit of a pisser considering his fundamental part in the instigation of sub-prime mortgages - and the broader detail of the way money suddenly over-flowed from the US to the UK and Eu was glossed too quickly perhaps for those who are unfamiliar.

Thats the way it left me feeling. That the system is so corrupted that the government also allows this corruption. Promotes the corruptees to positions of power, and rewards them for the greed and foolishness. While homes and pensions are lost. It reminded me of Nero watching Rome burn. Can we really say that the protestors on wall street and in other cities are wrong.
Believe you me, nothing will change. The Banks and Institutions run the world. The comment by the Christine Lagarde about a financial tsunami that was coming and everyone seemed to be more interested in which bathing suit to wear, was priceless.

[Derek Smith]

Mr XXXX said:

http://www.bbc.co.uk/iplayer/episode/b0183l0t/Stor...

Thanks for that. That's my morning's work put on hold. Well worth a second viewing.

Ta.

[scenario8]

Derek Smith said:

Thanks for that. That's my morning's work put on hold. Well worth a second viewing.

Ta.

O/T How's the house sale going, Derek?

[alfaman]

Derek Smith said:

Mr XXXX said:

http://www.bbc.co.uk/iplayer/episode/b0183l0t/Stor...

Thanks for that. That's my morning's work put on hold. Well worth a second viewing.

Ta.

grrr - not accessible here in SG

[Derek Smith]

scenario8 said:

O/T How's the house sale going, Derek?

Thanks for asking.

We've got two couples interested. One is in Germany at the moment and not back until the New Year. They were very positive on first viewing, going over the place a number of times. They had to leave for Germany later that day. They have been searcing for the right place for nearly a year.

The other is playing us against another place they say they are interested in. We 'caught' them parked up in their car on Sat showing our house to their kids.

We've been advised to wait until the New Year 'rush' before making a decision on any offer. So two viewings, both very positive. And this at a time that is historically 'slow'. So pleased so far.

[Mr XXXX]

alfaman said:

grrr - not accessible here in SG

Try:

http://www.youtube.com/watch?v=XiGJ3uS4lww

[fido]

Sorry, i don't buy the 'blame it all the banks and politicians'. Just go back to some of the posts on here asking "shall i put my money in Iceland? - it's paying 7%!". You can wrap it all up in some 'clever' documentary by Robert Peston {or insert Award-Winning filmmaker} and smugly point fingers at the bogeyman - but the smug people are those who weren't too greedy, didn't borrow recklessly or didn't lend recklessly - and were happy to earn a measly 4% to 5% on their deposits. And remember who voted in those same politicians who f*d up. (It wasn't me - never once did i vote for Blair/Brown especially after they raided the private pension)

[Northern Munkee]

You haven't watched the programme have you.

I challenge you to watch it, then come back, tell us what you think then.

[Eric Mc]

Watch the programme.

Read Gillian Tett's book "Fool's Gold".

Then come back and tell us that the financial industry was not responsible for what happened.

[mattviatura]

Credit,as with many other products, was artificially cheap for too long.

Consumers lapped it up.

House prices were not going to go up for ever, no market ever has. Ever.

Re-mortgaging to fund a Mercedes-Benz is a very foolish thing to do.

Although far from blameless it wasn't just the financial services industry.

[Digga]

fido said:

Sorry, i don't buy the 'blame it all the banks and politicians'.

Neither do I entirely.

However, looking more closely at some of the evidence presented by the documentary, it is staggering how badly the odds are stacked in favour of the house and not th punter.

Add to the must read list is "This Time it's Different" by Reinhardt & Roghoff (the latter providing an interesting interview for this film) and you will be better able to sort the chicken from the egg with regard to imprudence.

[Northern Munkee]

It all makes sense when it was described as "Who's holding the bag?" this was redistribution of wealth on a grand scale, given that you cannot create money unless you are goverment, nothing of value was created, it was the transfer of wealth from those that had it, to bankers and their friends, who already had plenty, first from gullible investors, then from pension funds, under auspices of light and often no regulation, and when the music stopped,some of those same bankers, were put into government to oversee the bag being passed to the tax payer.

[Eric Mc]

mattviatura said:

Credit,as with many other products, was artificially cheap for too long.

Consumers lapped it up.

House prices were not going to go up for ever, no market ever has. Ever.

Re-mortgaging to fund a Mercedes-Benz is a very foolish thing to do.

Although far from blameless it wasn't just the financial services industry.

You can't borrow what the lender won't lend.

Allowing people to borrow when they shouldn't have been able to was ENTIRELY the decsion of the lenders. They had the power. They didn't use it.
Why didn't they use it?
Because they foolishly thougfht that they had eliminated the risk associated with such lending and because they were rewarding themselves handsomely for making such dumb decisions.

They had the power and the knowledge. They failed to use it properly.

[Digga]

Eric Mc said:

Allowing people to borrow when they shouldn't have been able to was ENTIRELY the decsion of the lenders. They had the power. They didn't use it.
Why didn't they use it?
Because they foolishly thougfht that they had eliminated the risk...

If I could correct you, they had absolved themselves of risk.

They bunged all the loans - mortgages, car HP etc. etc. - into CDOs, got the bent ratings agencies (equally culpable) to slap AAA stickers onto them and sold them on, so the risk was off their books.

Then, to put the icing on the cake, they bet aginst these CDOs by taking out CDS effectively insuring them (mostly through AIG) even though they didn't own them.

This little wheeze because so attractive, lucretive and easy, that banks like (but not only) Goldman actually started to create st investments (yes they actually called them this and went ahead and sold them anyway) to bundle into CDOs that they could then take out CDSs on.

At what point does banks knowingly hoovering up bad risk, labelling it as AAA and then betting against it because they were sure the risk was bad not constitute fraud?

[mattviatura]

Eric Mc said:

You can't borrow what the lender won't lend.

Allowing people to borrow when they shouldn't have been able to was ENTIRELY the decsion of the lenders. They had the power. They didn't use it.
Why didn't they use it?
Because they foolishly thougfht that they had eliminated the risk associated with such lending and because they were rewarding themselves handsomely for making such dumb decisions.

They had the power and the knowledge. They failed to use it properly.

I stand by my post. It's too simplistic an argument to suggest a load of 'stupid poor people' were exploited and allowed to over-extend themselves.

I know plenty of otherwise sophisticated people (that sounds a bit PH 'powerfully built' but you know what I mean) who became caught up in the whirl of house price mania and made foolish borrowing decisions. On paper they made a reasonable proposition and let's not forget the practice of hoodwinking underwriters wasn't completely unheard of.

All I'm trying to say is the financial service industry is a convenient scapegoat. If we're honest about it lots of us played a part.

Edited by mattviatura on Thursday 8th December 11:10

[anonymous-user]

Eric Mc said:

You can't borrow what the lender won't lend.

Allowing people to borrow when they shouldn't have been able to was ENTIRELY the decsion of the lenders. They had the power. They didn't use it.
Why didn't they use it?
Because they foolishly thougfht that they had eliminated the risk associated with such lending and because they were rewarding themselves handsomely for making such dumb decisions.

They had the power and the knowledge. They failed to use it properly.

The lenders were making money by lending, they made more by sub prime lending as interest rates were higher. The debt was then simply sold on up the chain and packaged into complex derivatives and derivatives of derivatives. Each institution just sold on the bad debt taking a slice as it was passed on. It didn't matter if the borrower couldn't pay, they had sold on the debt to someone else.

Easy when you can get the government to keep relaxing regulation as you devise even more complex and risky schemes. It also helps when the rating agency gets paid and is encouraged to give AAA ratings to these complex packages.

As a CEO you just take bonuses when it works and sell your stock before it goes bad. You might even get a job working for the treasury and not have to pay tax on selling your stock.

Shocking really.