Ec102 Inside Job
Ec102 Inside Job
Lim
EC102 G
1. What did you learn from this video that you can apply to our class? You as a consumer and
your personal financial future?
Through this video, I learned to become wary of where I invest my money. Honestly, this
video made me cautious and hesitant of even thinking of putting my money in investments or
stocks. My father warned me and my siblings, ever since we were younger, to be careful of
insurances and investments because sometimes these can just be scams, and this has been
stuck in my head while growing up.
The video only reinforced the idea and notion that investments are not safe. I will admit,
and I admit this only to appease anyone who thinks wrongly of my opinions, but I know that
even though there are bad investments, good and honest ones do still exist. However, it is
personally much easier to just not invest instead of taking the risk that my money will fall into a
persons greedy hands: persons like Henry Paulson, Wall Streets highest paid CEO in the 90s,
or Alan Greenspan and Ben Bernanke, two of those greedy men that refused to be interviewed
for the movie a refusal, which, Id like to mention, gives us viewers the right to assume that
they are guilty of cheating people and being avaricious.
After learning how the investment banks crashed in 2001, and how the banks were not
able to do anything about it, my view on banks changed. I used to think that the bank was
honest and everything you left with them was safe (in terms of leaving your savings with them,
and entrusting your jewelry and valuables to their vault), and although a part of me still does, I
am more cautious now and I will be careful to research on the background of the bank before I
leave my savings with them. I also learned that it would be better to not have anything to do with
loans. That is just my opinion, but I do know that these loans may be necessary at times. This is
why in the future, if I do end up needing a loan or deciding to invest, I will make sure that the
bank I invest or loan from is honest: that they have honest bankers and CEOs (though it is hard
to find honest people nowadays), and that they have a clean and safe system.
5. Do you think this movie is produced more from a left-wing (liberal), right-wing (conservative),
bipartisan or anti-government perspective? Why?
I believe that this movie was produced more from a liberal perspective than a
conservative perspective because it highlights how the banks betrayed the people they were
supposed to serve. It also opened up viewers eyes and taught them to distrust bankers, and be
wary of them. Also, this movie gave emphasis on how banks engaged in criminal activity (how
JP Morgan bribed officials, how Credit Suisse funded money for nuclear programs, how Fannie
Mae falsified accounts, and how corporate money was spent on prostitutes), something which
isnt usually revealed in society. Also, the decline for interviews of several bankers and agencies
such as Alan Greenspan, Goldman Sachs CEO and employees, Rating Agencies, and Ben
Bernanke, was revealed in the film and this rejection for interview requests, I believe, should
be deemed confidential. These things prove how the film sought to be liberal and emphasize the
freedom of speech of people.
7. What are the riskiest loans called? Why did investment bankers prefer them?
The riskiest loans are called CDOs and subprime. CDOs are sold to investment banks.
These were popularly used for retirement funds. According to the film this was a ticking time
bomb because people just borrowed and borrowed and the bank did not care if they could pay
their loans in the future. The economy ended up with so much accumulated mortgage loans,
and because anyone could just borrow (without being screened if it was in their power to pay for
these in the future), investment banks kept borrowing money (which also led to their downfall:
the bankruptcy of the Lehman brothers caused the entire system to freeze and the flow of
money in the economy stopped). Also, if the CDOs were proved to be inefficient, the banks
would not be liable for it.
Meanwhile, a subprime was what was combined to make CDOs. These received triple A
ratings by rating agencies even if subprimes were not beneficial for the economy because they
are paid higher for rating loans highly. Also, because the subprime carried higher interest rates,
the bank made more money and because the bank made more money, CEOs and bank
agents became greedy for more and they needlessly placed borrowers in expensive loans. In
other words, they cheated people.