I am looking to go into finance in my third year at Sauder so anything finance related always peaks my interest. After hearing Murray Carleson and Dean Dan speak about the beginning of “The Great Recession,” I began to look into more of the causes and culprits of the whole thing. This is a documentary movie I found called “Inside Job” from director Charles Ferguson with lead narrator Matt Damon about the 2008 financial crisis.
I haven’t yet had the chance to see the movie as it is only playing in one theatre in BC, but look forward to the opportunity to see it. I am really quite floored by what these huge investment firms such as the Lehmen Brothers and Goldman Sachs were able to get away with throughout all the years leading up to the crisis. I understand the concept behind lowering the risk by diversification, but just because you have a bunch of different kind of crap, spread around different parts of the US doesn’t mean at the end, you’re not left with a big pile of crap! This is essentially what these investment banks were doing with the sub-prime mortgage backed securities. Setting up a whole bunch of absolutely horrendous mortgages (average of 99.3 percent of houses leveraged), grouping them together and somehow managing to rate them AAA (the same rating as government securities!) How they we’re able to get away with this is beyond me!
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