The Inside Job - Term Paper Example

The Inside Job The Inside Job is an American documentary directed by Charles Ferguson and produced by Charles Ferguson and Audrey Marrs. The documentary runs for 108 minutes and was released in 2010. Sony Pictures Classics was the company responsible for its distribution. The documentary is about the financial crisis experienced in 2007 and 2008 among other vital economical issues in the United States and on the globe in general. The 2007 global financial crisis was a result of poor loaning scheme to the real estate sector that led to the worst state of bankrupt ever recorded. The United States legislators, out of their own greed, ordered the banking institutions to provide unsecured loans, only for the real estate owners to become loan defaulters. The scheme affected the global economy causing the prices of basic necessities to rise by certain percentages. Ferguson uses the documentary to highlight some of the corrupt deals and changes in the banking industry that brought the global financial crisis among other economical limitations. This study analyzes the documentary, putting emphasis on the motive behind the entire casting. The documentary contains five parts which are in a sequential order as far as the cause and effects of the global financial crisis are concerned. All the five episodes make a summery of the causes and effects of the global financial crisis. This paragraph contains the main financial summery with regard to the late-2000 US financial crisis. It begins by highlighting the poor performance, then the collapse of some of the greatest banking institutions (Iceland) in the United States. Iceland collapsed the moment its main shareholders, Lehman Brothers and AIG, went bankrupt. The producer engages narration as one of the main styles to pass relevant information in the documentary. The documentary is ideal for general viewing, but it would make more sense to those with economical knowledge since some economical and financial jargon words are used to describe the causes and effects of the global financial crisis. The first episode begins as a history documentary where the audience is taken through the US and the global economical status from 1940 to 1980, during which the financial sector was regulated. The documentary creates a comparison platform, where the audience is made to recognize the difference between the current financial status and that of 20 years ago. It requires good financial analytical skills to note the difference, but the producer broke the entire idea into simpler details. He also tries to use the ordinary language and not financial technical jargon to describe his findings. One learns that the documentary is some sort of financial research findings, but in a simpler language. However, more emphasis is put on the blunders committed by the financial sectors. After 1980, there is no record of regulating the financial sector, and this helped various individuals to establish giant firms on the taxpayers’ money. The documentary records that an estimate of $ 124 billion of taxpayers’ money was channeled from the national treasury to start the giant companies. Various banks later ventured in internet banking scheme, where huge amounts were invested despite those firms being infeasible. The financial sector lost about $ 5 trillion on the failure of the internet companies. The sector introduced some derivatives that caused even more instability. Several financial studies were conducted, and derivatives regulation was considered one of the remedies to reverse the financial status. However, a good number of legislators supported the bill of Commodity Futures Modernization, which later became a bill and compromised derivative regulations. From the year 2000, the financial sector was dominated by five major companies, comprising Goldman Sachs, Morgan Stanley, Lehman Brothers, Merrill Lynch and Bear Stearns. The other team was made of two financial partners, Citigroup and JPMorgan Chase. AIG, MBIA, and AMBAC, which are insurance companies, form the third team. The fourth team was made of national rating agencies, namely, Moody’s, Standard & Poor’s, Fitch Ratings. The investment banks transferred good amounts of mortgage, loans and debts into untraceable collateral debt obligations, and this was backed by several rating agencies despite the illegality. Several home owners were made to acquire loans they could not pay back (house boom), and this led to instability in the national and global financial status. The next episode compromises some of the financial implications of the house boom. The amount borrowed by the investment bank was far much below the company’s asset, and this was not a good sign. Various organizations or institutions could purchase credit default swaps with collateralized debt obligations they virtually owned. More mistakes were committed by Goldman, when the company made a good amount of bet against CDOs of low values but made the investors believe they were of high value. The ratings companies also gave misleading verdicts with regard to the low valued CDOs; there were more AAA ratings than expected. The documentary suits our course in several ways; for instance, the producer engaged productive arguments that make the audience understand the effects of corruption in any governmental sector. Ferguson quotes exact figures to support his points, and this is convincing. The mention of exact companies is a clear indication that he had conducted a comprehensive financial study before making such verdicts; otherwise, this would make him sued and charged in the industrial court, according to the United States constitution. He describes his points in details, leaving attentive audience satisfied. There are several philosophical ideologies behind the documentary. The producer, Ferguson is a true patriot, as he uses his financial skills to enlighten the public on the causes of the late-2000s global financial crisis and limit chances of reoccurrence. Nationalism is indicated by the solidarity formed by various organizations, including the human rights activists to limit such financial crisis. The analysis is more of macro analysis as the producer focuses on several subjects with regard to the late 2000 financial crisis. Some ideas came stronger than others; for instance, it is difficult to understand the mistakes of the rating firms. The producer should have incorporated the rating procedure or framework so that the audience could actually depict the exact mistakes and remember that even the auditors and rating professionals may use the documentary to enhance their skills. The documentary is a nail hit on the head but I feel the producer left out some important facts to support his findings. The government of the United States, under the leadership of George Bush, introduced some financial strategies to reverse the crisis. The documentary should have included this to enlighten other nations which are likely to experience the same financial crisis. The producer did not include some financial or economical documents like the loan forms, rating sheets and audits documents among others to support his points. The documentary dwells on sensitive financial issues that would remain fruitless if not well supported. The producer should have also included the legal implications with the causes of the financial crisis. For instance, he should have quoted some of the violated laws or acts violated by the responsible parties, with regard to the causes of the financial crisis. Some of the moves or miscalculations leading to the crisis would have some benefits if well executed. The producer says nothing with regard to such. For instance, the exact ratings would encourage more investors in the financial sectors, should the sector have remained stable. To conclude, the documentary is well rated, having focused on sensitive financial issues and having tricky legal implications. The producer points at well-established companies that would have been sued and charged. He talks of the mistakes that led in the 2007 to the financial crisis in five basic steps. He engages various styles, such as interviews, to support his arguments. The documentary is effective thanks to using simple language, but the producer used pure financial jargon in the second part without further explanations. The documentary is useful or rather relevant to general viewing, but it would be more appropriate to people with financial knowledge, including the financial auditors, financial and property raters, bankers, property managers, loaning professionals, legislators, and accountants among others. Work Cited The Inside Job. Dir. Furguson Charles. Perf. Matt Damon, William Ackman, Daniel Alpert. Sony Pictures Classics, 2010. Web. 3 July 2013. Read More