Inside Job and The Euro

See the documentary Inside Job – a forensically researched, superbly delivered film about the 2008/2009 financial collapse – to see what the Euro leaders really have to deal with, the rating agencies delivering them an ultimatum.

Why haven’t we had a detailed analysis as we see in Inside Job presented to us by big media?

Some empirical facts to ponder: “The financial services industry’s share of profits increased from 10% in the 1980s to 40% in 2007, and the value of its shares (in the overall) went from 6% to 23%, while the industry only accounts for 5% of private sector employment.” Household debt in the U.S. grew from 3% of disposable income in 1998 to 130% in 2008. Prime mortgage delinquency as a percentage of loans increased from 2.5% in 1998 to 118% in 2008 – Manuel Castells.

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One response to “Inside Job and The Euro

  1. Why was there a market for these low quality private label securitizations? In a Peabody Award winning program, NPR correspondents argued that a “Giant Pool of Money” (represented by $70 trillion in worldwide fixed income investments) sought higher yields than those offered by U.S. Treasury bonds early in the decade. Further, this pool of money had roughly doubled in size from 2000 to 2007, yet the supply of relatively safe, income generating investments had not grown as fast. Investment banks on Wall Street answered this demand with financial innovation such as the mortgage-backed security (MBS) and collateralized debt obligation (CDO), which were assigned safe ratings by the credit rating agencies.

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