Inside Job Assignment

Inside Job Assignment

1. How, exactly, was it "mad"?

The rise of subprime mortgages, financed with CDO and mortgage-backed securities, heavily contrubutited to the financial and economic crisis occurred in the year of 2008. Starting in 2006 homebuyers could excessively borrow almost 99.3% of the price of their houses via subprime lending without any credit worthiness factors or any other lending standards being in place. Since sub-prime lending was financed with CDOs, its ratings were based not on actual cash-flows of securities but its credit ratings by the biggest investing agencies who at that time were paid to rate a mortgage pool, and underestimating subprime mortgage defaults.

2. What are your own views and beliefs about the facts presented in Inside Job? Do you have an ideology in this area?

Money, Power, Greed and Politics will always be in the same pot;

Money will always talk;

Any government regulation proposed towards financial markets will not survive unless there is an ongoing plan of convicting certain parties involved, related and contributed to the economic recession. (Also See part 4 b-e).

3. Why did these banks pay such large bonuses in 2008? What grade would you give the decision to award these bonuses?

Banks were able to pay such large bonuses as betting on subprime lending was its major investment. Grade of F, for failure, should be given to all involved in that financial "innovation".

4. a. Ben Bernanke. Chair of the Federal Reserve, was chair of the Federal Reserve under President George W. Bush.

William C. Dudley. President of New York Federal Reserve, was Chief Economist of Goldman Sachs

Rahm Emanuel. Chief of Staff, was on the Board of Directors of Freddie Mac

Timothy Geithner. Treasury Secretary, was President of New York Federal Reserve

Gary Gensler. Head of the Commodity Futures Trading Commission, was a Goldman Sachs Executive

Mary Schapiro. Head of the Securities and Exchange Commission, was the CEO of FINRA, the...