October 19, 2010



Tuesday, 19 October 2010

Inside Job: How Wall Street Robbed the World

Jeffrey Lane, Vice Chairman Lehman Brothers from 2003-2007, in Inside Job
  • Pritwo recent, searing scandals — sexual abuse by Catholic priests and the scheming of Wall Street financiers that triggered the world economic collapse — have some instructive, appalling similarities. Both involved egregious betrayals by people of stature of the trust placed in them by their powerless victims: in one case, the boys and girls scarred by the sins of their fathers; in the other, the middle- and working-class Amiercans who lost their homes, jobs and security. Both ruined thousands of lives. And both sets of atrocities were covered up by the agencies that should have protected the weak. The Church hierarchy stonewalled police investigations and shuttled offending priests to other parishes; Congress and the whole system of financial regulation let the high rollers keep playing, ever more recklessly, until the trillion-dollar tab had to be paid — by the taxpayer.

The only difference in this pair of capital crimes: the pederast priests didn't make money from their malfeasance. The finagling financiers did, in the cumulative billions. After their crimes were exposed, and the U.S. government bailed out their companies, they became even wealthier. If a class designation were to be appended to these brigands, it would be "the filthy rich."(See the top 10 financial-crisis buzzwords.)
This year's Cannes Film Festival has showcased a handful of movies about the money meltdown, including Oliver Stone's fizzy, sardonic Wall Street: Money Never Sleeps and Jean-Stephane Bron's Cleveland vs. Wall Street, which imagines a lawsuit brought by the city against the banks that foreclosed on so many local home mortgages. Now comes Inside Job, a cogent synopsis of the decisions that led to the Wall Street bubble and collapse, from documentary filmmaker Charles Ferguson, whose Oscar-nominated No End in Sight laid out the Bush Administration's slipshod planning of the Iraq invasion and occupation. In each case, Ferguson has addressed complex issues, involving dozens of key players, and made it all lucid. In Inside Job, narrated by Matt Damon, the filmmaker's tone is calm and professorial; yet you detect his growing anger as he digs beneath the headlines; and the fury is infectious. If you're not enraged by the end of the movie, you weren't paying attention.
The movie opens in Iceland, ends in the Halls of Ivy. Iceland, for years among the sturdiest European economies, in 2005 privatized its three largest banks — which jumped into speculative investments and, as one local economist says tartly, "wrecked the place." By 2008, the Parliament had to take drastic action to avert national bankruptcy. But the masters of the Wall Street universe saw Iceland's crisis as a fluke, not a harbinger, and kept their own party in high gear.(Watch TIME's video "In Iceland, Frozen Accounts, Boiling Assets.")
The central part of Inside Job details the history of deregulation, from Reagan to Clinton to George W. Bush, and the rise of financial instruments like derivatives and credit default swaps. Much of this material is familiar, both from news reports and books on the crisis and from earlier docu-blasts, particularly Leslie and Andrew Cockburn's American Casino and Michael Moore's Capitalism: A Love Story. In a way, Ferguson is the un-Moore: he's off-camera, asking questions, not front and center; his tone is serious and precise, not comedic-bombastic. Nor is Ferguson, who earned his Ph.D. in political science from M.I.T., a knee-jerk anticapitalist. In the '90s he and a partner created a software company, Vermeer Technologies, which they sold to Microsoft for $133 million. Unlike Moore, he's more at ease talking to the powerful than to the tearfully dispossessed. Inside Job contains just one brief interview with a woman who lost her home; the other conversations are with the articulate elite of bankers and professors.

Read more: http://www.time.com/time/specials/packages/article/0,28804,1988868_1988866_1990114,00.html#ixzz12psARBMd


‘Inside Job’ Makes Oliver Stone’s Movie Look Like A Comic Strip

Oct. 5 2010 -
Larry Summers. Tim Geithner, Bob Rubin, Hank Paulson, Alan Greenspan, Ben Bernanke refused to make voluntary appearances in the documentary film on Wall Street’s collapse, which gets my vote for the Oscar documentary. Sadly, documentary film makers don’t have subpoena power. These Masters of the Universe were skewered anyway by a film that is a gripping, must-see narrative of the financial meltdown. Good on Sony Classic for giving the filmmakers total control over their product. The purity of the film’s narrative is impressive.
‘Inside Job’ is a comprehensive , exhausting series of ethical and sometimes illegal actions that casts Wall Street in a very dim light. It is the real thing– not a fictional concoction from Hollywood like “Wall Street-Money Never Sleeps” –which is more Barnum & Bailey fantasy than a non-fiction-though clearly biased — documentary. I left Lincoln Center last night inspired by the muckraking and furious that no-one has gone to jail. The audience definitely wanted blood and gave the director Charles Ferguson a standing ovation– more than Oliver Stone will ever get for his cinematic mess.
The muckraking was from Paul Volcker, George Soros, Christiane Lagarde (French Finance Minister), Rep. Barney Frank,, and a bevy of economists from Harvard, Columbia, MIT, NYU, mostly critics of Wall Street greed like Nouriel Roubini.
Sample revelation; the French Finance Minister was never warned by US Treasury Secretary Paulson in September, 2008 that Lehman Bros. was about to file bankruptcy, an event that threw global markets into chaos and threatened financial disaster.
New York Federal Reserve Bank president Timoth...
Another shameful disclosure; Treasury Secretary Tim Geithner testifying that he had no experience in financial regulation. This admission reveals a total misunderstanding of the mandated role of President, New York Federal Reserve Bank. In that post, Geithner had the responsibility of monitoring and and regulating money center banks like Citigroup, which became technically insolvent from the massive leveraging of its balance sheet.
The most shocking new allegations –heretofore mentioned by no one– suggests that some parts of academia – namely Columbia University Business School and Harvard University were not being fore square in disclosing conflicts some of their members have about well-paid private sector consulting gigs. R. Glenn Hubbard, former chairman of George Bush’s Council of Economic Advisers,(now Dean Columbia School of Business) appears hesitant about revealing his outside sources of income and their dollar level. And he gets irritated and angry at his inquisitor, charging the filmaker with beng his prosecutor.
In an email to me today,(full text below) Hubbard writes; “All of my outside activities are fully disclosed (indeed, Mr. Ferguson obtained them from my own materials!), and they are reviewed and approved by the University on an annual basis.”
Frederick Mishkin, a member of the Federal Reserve Board, appears to be a weak uninformed twerp caught in his dishonor. And he knows it. Mishkin had the audience guffawing when he claimed that the reason he left the Federal Reserve Board in September, 2008– at the height of the crisis, was in order to return to Columbia to write a textbook. No matter that his was he third vacant seat at the central bank during the worst crisis in its history. He hummed and hawed inconsequentially about not revealing his fee from the Iceland Chamber of Commerce for a very wrong puff promotion of the Icelandic economy– which totally collapsed. His innate weakness of character is written into his chiseled face.
Likewise, Prof. John Campbell, the British twit, who chairs Harvard’s economics department, looked like a frightened deer, also unable address any question put to him., particularly about his department’s ability to earn outside income. He seemed to suggest Harvard had no policy about this sensitive issue. My friend Martin Feldstein, was a tad too smug in refusing to identify his financial clients. Harvard will have to contend with this moral vacuum soon, I would guess. The film also shows former Harvard President Summers making $20 million as a consultant to a hedge fund– while earning a $135,000 fee for one talk at Goldman Sachs.
For comic relief were two clowns in blue suits who were clearly unprepared for tough questioning— a smarmy lobbyist for a Washington financial institutions organization and a block-headed former member of the Bush Treasury. Those guys got hired despite not exactly being Phi Beta Kappa. Dullards.