'Inside Job Essay\r'

'The catch on started backside in the 1980’s with the deregulation of Savings and loans, this meant that the governing body no longer was over fall uponing the manner in which stage business was conducted. This in its self did not create the collapse, hardly as time when along more deregulation in the banking sector took place. Banks could now begin to un blade their tote uping guidelines, this trend lead to what was know as cuneus prime leading. Many banks such(prenominal) as Chase, Citi, Bank of America, Countrywide and many more started these companies to lend to the less thus slandered banking customers. This way the banks could still make bills, but not jeopardize their portfolio customers.\r\nNow banks could lend money to customers that had faith scores less then 700 and with resent bankruptcy and even foreclosures and their credit. The biggest reason for the electric ray prime was money. Now there re each(prenominal)y was no limit on what interest rate the banks could ill for their bomber prime products. The banks could then bundle their pigboat prime loans and sell them to environ Street and buzz off margins on the loans, for example if the prime rate on Wall Street was 4.5% and your interest rate on your loans susceptibility be 9.5% Wall Street might pay the bank 3% on all their loans.\r\nNow this then is where the collapse is starting, Banks now atomic number 18 go more and more products to lesser credit worthy customers at high rank and owe brokers and bankers be pushing these products because the banks are now offering incentives for these products and why because the banks are making money on them not because they are the best for the consumer.\r\nThe next chapter of the collapse is on Wall Street as shown in the movie AIG comes up with this great insurance radical of derivatives for the sub prime market. What these derivatives would do is protect the servicers and buyers of sub prime loans in case the loans will ex pire and who helped AIG come up with this idea, Their next door dwell and biggest buyer of sub prime loans Lehman Brothers.\r\nAs we see in the movie everything comes to a head in 2008, Lehman Brothers closes, AIG is bailed out by the government and all sub prime lenders close. Yet no one is prosecuted and just about all the upper management from the companies that contributed to the collapse are either still teaching business in upper scale colleges or hold positions on government cabinets.\r\nIn conclusion this movie shows how money and the promise of unlimited amounts, can turn Wall Street and the banking sector to do whatever it takes ethically or unethically to achieve it. We see that companies such as AIG and Fannie Mae and Freddie Mac will lie and fix their accounting, and even pay to receive AAA rates even days before they went bankrupt so investors wouldn’t know.\r\nHas Wall Street learned its lesson or do they even care?\r\n'