Analysis Of The Inside Job

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Recommended: The 2007 financial crisis

The Inside Job is a documentary movie directed by Charles Ferguson. This film describes the Global economic crisis of 2008 and claims the United States financial services as one of the major contributors of Great Economic Recession; it overviews some of the historical factors, and changes of policies that have possibly caused the financial sector to fall into a corrupt state. This documentary is split into 5 parts; each part examines some of the major economic and political events, discusses the regulations, and relationships between financial services and the United States government.

The Inside Job

In an introduction, Charles Ferguson uses Iceland as an example of how government’s broad policy of deregulation has led to disastrous …show more content…

It describes the events that led from government regulated financial industry to deregulation which allowed the financial institutions to make risky investments, the merging of banks into giant firms and their domination of the market, the origin of derivatives, collateralized debt obligations (CDO) and Internet Stock bubble burst. Deregulation continues to affect the economy and causes a housing boom. Predatory lending becomes popular due to high rates of subprime loans and investment companies start to borrow money to buy loans and turn them into CDOs. Credit default swap allows people bet against CDOs that they did not own; many companies and brokers start to speculate on the market by providing faulty ratings to their investors. The ratio of borrowed money against the assets grows rapidly until big investment firms run out of money and declare bankruptcy. Although the US government bailed out some of the banks, the stock market continues to fall and unemployment is on the …show more content…

Although the United States financial sector was one of the causes of Great recession, so was the culture. We grew up in a society that relies on a credit. People get loans to pay for college education, buy cars and houses. Most of the people are accustomed to depend on a credit and spend money that they have not yet earned.
The housing boom has caused the house prices to rise continuously up to the point of Great Recession. Deregulation allowed people to buy houses with a very small down payment, meanwhile the value increased so quickly, that a person could gain money on a turnaround in a matter of months. Many people took advantage of this opportunity and the housing market collapsed. Although weak regulations are one of the major contributors, it is important to mention the lack of financial education among

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