Inside Job Essay

The collapse started back in the 1980s with the deregulating of Savings and loans, this meant that the government no longer was overseeing the manner in which problem was conducted. This in its self did not create the collapse, but as era when along more(prenominal) deregulation in the banking sector took place. Banks could now get under ones skin to loosen their lending guidelines, this trend lead to what was know as stand in original lending. Many banks such as Chase, Citi, Bank of America, Countrywide and numerous more started these companies to lend to the less hence slandered banking customers. This way the banks could still keep money, but not jeopardize their portfolio customers. forthwith banks could lend money to customers that had reliance scores less then 700 and with resent bankruptcy and even foreclosures and their credit. The biggest conclude for the shooter prime was money. Now there really was no particularize on what interest rate the banks could charge for their sub prime products. The banks could then bundle their sub prime loans and sell them to palisade passage and touch margins on the loans, for example if the prime rate on Wall pass was 4.5% and your interest rate on your loans might be 9.5% Wall Street might pay the bank 3% on all their loans.Now this then is where the collapse is starting, Banks now ar offering more and more products to lesser credit worthy customers at high rate and owe brokers and bankers are 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.The nigh chapter of the collapse is on Wall Street as shown in the movie AIG comes up with this great insurance idea 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 pass on tell on and who helped AIG come up with this idea, The ir next door neighbor and biggest buyer of sub prime loans Lehman Brothers.As we see in the movie everything comes to a precede in 2008, Lehman Brothers closes, AIG is bailed out by the government and all sub prime lenders close.Yet no one is prosecuted and most all the upper focal point from the companies that contributed to the collapse are either still teaching business in upper scale colleges or hold positions on government cabinets.In conclusion this movie shows how money and the promise of unlimited amounts, can deed 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 doctor their accounting, and even pay to receive AAA rates even days before they went bankrupt so investors wouldnt know.Has Wall Street learned its lesson or do they even care?