Any of you New Yorkers looking for something to see this weekend? Anybody already seen this documentary, at a festival? Opinions?
From Andrew O’Hehir’s Salon review/interview with filmmaker Charles Ferguson:
“Inside Job” offers a lucid and devastating history of how the crash happened, who caused it and how they got away with it. Furthermore, Ferguson argues, if we don’t stop those people — preferably by removing them from power, arresting them and sending them to prison — they will certainly do it again…
This may be forcing a parallel, but here’s what occurred to me: At the beginning of Marxism-Leninism, the leaders who believe in what they’re selling. We can assume that Lenin and Trotsky believed that they were changing the world for the better, history was on their side, and so forth. Maybe Stalin did too, at first. By the end of the Soviet state, you have a completely corrupt environment in which nobody, including the leadership, actually believes in the Communist future. I wonder if we’re seeing a speeded-up version of that same ideological decay in the world of free-market capitalism.
I think that’s an extremely accurate and perceptive analogy. And it’s also a very disturbing one. The idea that the United States is being taken over by this utterly cynical group of people who know that this is a rigged game and just kind of give it lip service. I think that there’s a lot of that. The United States has changed over the past 30 years. America has changed. And it really is time I think for the American people to unchange it…
In your film we see recent congressional testimony, from April 2010, in which Goldman Sachs executives discuss selling securities to major clients, such as pension funds, that they themselves were betting would fail. How does someone in that world justify that behavior to themselves?
In a number of conversations I’ve had with bankers, I’ve been struck that they find it surprising that somebody would raise ethical questions. They don’t find it surprising that legal questions could be raised. “Could I get in trouble?” That’s a discussion they’re very familiar with. But, “Is this right or wrong?” That’s not a discussion they have often.
That is because every single environmental factor in the banking industry reinforces an existing sense of amorality and disregard for ethics. It’s cultural sociopathy.
The only amoral thing in the church of capitalism is not getting paid for your work.
This is disturbingly similar to an exchange between Wolf Blitzer and Michael Moore when the movie Sicko came out. Michael Moore was saying that news channels do not cover this kind of crisis because they sell so much advertising to the pharmaceutical companies, and Blitzer kept saying, “But this is a business.”
You know, Blitzer not being the sharpest knife in the drawer, that this is what he is told all the time.
Danny Schecter covered this ground in his doc “Plunder”. He actually called all of it as early as 2008, before Lehman Brothers went south.
Even – maybe especially – when you do as little work as possible.
I’ve got an easy fix for this:
We need sharper disincentives.
@Martin: Oh bullshit. The only amoral thing in the Church of Capitalism is not getting paid for your shares.
Free labor is the holy grail of capitalism.
It’s like the textbook case for strong, transparent regulation. When the only thing an individual cares about is “Will I get in trouble”, you better make damn sure the guy gets in trouble when he fucks up or he’s just going to fuck up again.
Ughhh! I rarely watch morning news programs much unless a particular guest is on anyway. And if I had to, I’d rather watch Today than GMA…but if I needed more of a reason not to watch GMA other than Georgey S, then this is a good a reason as any…
Elisabeth Hasselbeck joining ‘Good Morning America’
Heck, I can’t really stand the View, so I guess the only shows I watch on ABC are Castle, Modern Family, and Cougar town!
And that’s assuming it’s a fuck-up, versus a conscious decision to fuck other people – which seems far more common in the current system.
Rahm was at my El stop this morning pressing the flesh. I was surprised how short he is. Although at 6’3″ I often have that observation.
I was happy he didn’t hand me a dead fish.
Yeah, narcissistic sociopaths don’t often ask that question. It never enters their mind.
Which makes me laugh at the conservatives who simultaneously claim to believe in the corruption of mankind, but know that if we only get rid of regulations, everyone will act in their own best long term interests which will mean sunshine, happiness, and puppies for all.
If you think humans are corrupt, you believe in limits, laws, and regulations on private and public operations to constrain human stupidity and evil.
This Week in Blackness:
‘I’m not Democrat so much as anti-evil’
If only the Dems could message this well.
Culture of Truth
“I learned it by watching you, ok, I learned it by watching you!!!”
That is quite possible.
Grim thought. My crystal ball just clouded over, with dark and dreary storm clouds.
Now I haz a sad that Mike Capuano didn’t win to run against that preening prick Cosmo McTrucknutz. His turn with the mic that day was a thing of pure heartfelt populist beauty, but alas just a tiny ripple in the scum pool.
Calvin Jones and the 13th Apostle
@Eric S.: Did you ask him how he enjoyed showering with Massa? ;-)
@Culture of Truth:
Seriously, wasn’t that like the worse PSA evah! I still laugh when I remember that commercial.
Unfortunately, nothing could compare to the mother of all drug PSA….
“This is your brain…”
“This is your brain on drugs…”
Even if I thought this PSA was a joke as a teenager, I still to this day remember it, so meh, maybe it did work after all!!!
Calvin Jones and the 13th Apostle
@Cat Lady: hopefully either he, or Elizabeth Warren, runs in ’12.
Daily show had a great piece on how the Mortgage Bankers Association did a strategic default on their own loan on their corporate headquarters. The hypocrisy is stunning.
Wow, the country really is going full-wingnut, isn’t it? Well, our empire lasted a solid 65 years. I guess we shouldn’t complain too much.
so sorry, no it hasn’t. the labor, women’s and civil rights movements just pulled back the curtain on the shenanigans of the privileged class. It was just easier to form monopolies during the robber baron ages and ‘those’ people expected to work for nothing and die in poverty. it’s only taken 30 years to ‘win’ back the losses from the New Deal and redistribute them back to their rightful owners, the über rich.
The Big Picture has some photos of the sludge disaster in Hungary. #4 is particularly shocking, considering all that red mud is highly caustic.
has there been a time in US history when people did not think the End Of Everything (!!) was just around the corner ?
@Culture of Truth:
one funny thing about that line, is that I’m 33 years old (soon to be 34 on Nov 5th…Scorpios Rule bitches!) and I occasionally through this line out at my little sister, and she just stares at me with the blank gaze like “What…”. So, alas, it’s totally lost on her!
@lamh32: Hey, I was completely bombarded with “anti-drug” messages all through middle and high school. And I generally avoided drugs till my junior year of college. So it must have worked.
Also, I’ve got this nifty rock that keeps away tigers. :-p
Seriously, though, I think there’s a certain merit in instilling “recreational drug use = bad!” at a young age. At least people were trying. In the modern age of education hatin’, I imagine the only acceptable response to school drug use would be a national program of random high school SWAT team raids.
@cleek: I think some point in the last 90s, when the biggest national news was how the President got his dick wet, forced everyone to admit we had it pretty damn good.
I’m planning on seeing this Saturday. Charles Ferguson made an amazing film about the invasion of Iraq, No End in Sight. It’s still watchable today. It’s on Netflix.
He took a very complex subject and organized it, into a structure that really flows. He basically came up with the most important questions to answer and then structured the movie around that. The movie came out in 2007 and I had read most of the Iraq books and was very familiar with the issues and the controversies, but I still discovered new things watching it.
As for Danny Schecter’s Plunder. It’s pretty unwatchable.
@lamh32: I remember hanging out with some friends in London watching BUffy the Vampire Slayer on TV, and I had to interpret bits here and there. “Oh, that was a line from a child abuse PSA.” “Oh, that was a line from an ABC after school special.”
It was amazing how popular that show was over there when the audience didn’t even get some percentage of it.
Apparently, Donald Trump announced on Sky News that he will be a 2012 POTUS candidate.
@Dexter: No, he said he was considering it, at least according to the sky news web site.
Anyone else have wingnut rellies who are flipping out because Obama left out “endowed by their Creator” from the unalienable rights sentence in the Declaration of Ind.? Apparently Drudge had it and Limpballs was all over it. I’ve got 3 male rellies on FB right now going apeshit because this proves, proves I tells ya, that O is a marxist atheist not to mention mooslim!
Fucking assholes. Don’t they have anything else to do with themselves? Even wanking would be more productive.
This is the kind of attitude our business leaders should have.
The terror is the important part. Have I mentioned lately how they’re a bunch of fucking lazy gutless retards?
@Svensker: I told all my wingnut relatives to fuck off and die. I’ve got kids to get through life, and wingnuts are an existential threat to their welfare – particularly those with a trusted relationship in the family.
No, that’s not snark. They do hear it a bit more clearly when it comes from family, particularly when it’s not overly emotional and unvarnished. They can play with their patriot porn in the privacy of their own home, but if it gets anywhere near my family I kick their ass our of my house and disown them so fast, they don’t know what hit them.
Oh, and on the front of the goddamn wingnuts, we shed 159,000 government jobs last month and added 64,000 private sector jobs. Democrats really are shrinking the size of government, so they can just shut the fuck up about that. But at the same time they’ll bitch about the high unemployment rate, with no recognition at all that the fault lies entirely in the private sector for refusing to take their own bold moves to boost the economy.
Nope. We’ve always been the land of apocalyptic cults. 24/7 news has only accelerated the cycle.
@Menzies: They just live in an insulated bubble, where they are the center of the universe, they do no wrong – if only those sub-prime mortgages with 3-in-1 ARMS had been able to refinance in 2006 and 2007, the good times would keep rolling – and if you tell them they are wrong, they need to find a way to replace you with someone, who “understands” how business works.
I really don’t think it’s a deliberate lack of ethics, it’s just a colossal arrogant egotistical breed of people who work at that level in finance and they just don’t get why other people don’t like what they like or do what they do.
This is a variation on my theory – that the American conservative movement- and its corporate counterparts- are behaving with much the same mentality as late stage sockulists.
That is, they have become infatuated with doctrine and ideology, and clinging to power at all costs.
In the 60’s/ 70’s was the leftists who were the doctrinaire ideologues, who couldn’t seem to focus on practical, moderate solutions to governance, but insisted on turning every argument into a debate about the Marxist dialectic, and quoting abstract philosophy even when the topic might be how to organize a local fire department.
Today it is the Right that does these things, nodding gravely when a man’s house burns down for want of paying a fee, and talking about Hayek and Mises.
It is exactly their devotion to ideology that causes them to blithely abandon it when it becomes inconvenient- thus Free Market Galtians line up for taxpayer assistance when their bets go bad, simply because maintaining the pretense of ideological purity is paramount.
I swore I heard him say “well endowed by the Creator”- was it just me?
Bankers have zero interest in moral dilemmas. They are interested in how much profit they can make on a deal, preferably while screwing the investors who have entrusted their money to them. Bunch of crooks who have not paid the price for their arrogance, with the full cooperation of the politicians. I don’t have a solution, I’m just complaining about it, cause THAT’S the “American Way.” I’ll tell you what, electing Republicans in November is NOT a solution.
Since this is an open thread, and about bankers, I thought this was an interesting tidbit: Bank of America halts foreclosure sales in all 50 states.
Not much more to the story than that right now, but … hmmm.
(Edited to clarify — they’re halting foreclosure sales, not foreclosures, as far as I can tell.)
For the open thread, a brief video at Benen’s place: “Guess Who’s Voting”
Agreed, I don’t think it’s a conscious reinforcement of the sociopathy inherent in screwing people repeatedly and completely out of their money, I think it’s just the environmental factor of working around people who are just as huge sharks as you are and who will not hesitate to cut your feet out from under you if it comes to that.
Having spent enough time around econ and business majors, I feel pretty confident that the majority of the ones that become bankers, or hedge fund managers, or what have you, were honestly already heading that way before they so much as set foot in a brokerage firm.
To add, I think the people that stick with that sort of work are just born arrogant and don’t get that they are. The work environment just rewards the most arrogant “alpha-male silverback” types, which sort of reinforces their negative personality trait.
I remember the hedge fund manager, who was a classmate of President Obama’s at Harvard, and that group of people just don’t get why people are mad at them; they do genuinely feel like they are being singled out for unfair treatment because all they did was make money by playing by whatever rules were in place. For those guys, they just don’t get that the rules might be wrong and whatever they are doing within those rules is thus flawed.
James E. Powell
I hate to be annoying, but what does “C.R.E.A.M.” mean?
I have two film degrees, one graduate and one undergraduate. And, sadly, I too spend my days talking to copiers in the office.
True dat. I’ve been saying this for years. 1991 proved that communism as embodied in the Soviet Union was a failed system. Now 19 years later, we can look back and realize that 2008 proved capitalism as embodied in the U.S. of A. is a failed system.
@Malovich: My favorite line from that episode of TWiB:
That about sums it up.
Yeah, I think that about hits the nail on the head. I used to room with a business major who genuinely didn’t see why companies should be regulated; he saw my being in favor of financial regulation as an attack on individual freedom, and it always seemed like he thought that because he was so focused not just on money but on competitiveness.
I think the environment at a hedge fund or bank or other similar establishment is basically nothing that Alec Baldwin’s Glengarry Glen Ross speech didn’t already establish. It’s hardcore competition for everything, verbal abuse for those who fail.
He’s totally right. Honestly, the source of a lot of the learned helplessness I’m seeing is that we’re so used to the Republicans being in control and ignoring everything we say that people just assume that the Obama administration will act the same way.
Of course, when we do actually get up and make ourselves heard in volume, we get pocket vetos and personal apologies to Shirley Sherrod within a couple of days, but for some reason people never seem to remember that and go right back into “everything’s hopeless, no one listens to us” mode.
...now I try to be amused
You’d think people would have noticed by now that the Obama administration does everything as low-key as possible.
I disagree that it is, by definition, morally wrong for firm A, which has a short position in security S (is “betting [it] would fail”) , to sell that security to firm B.
There are, certainly, some conditions under which this would be morally wrong (or even legally wrong), such as if A misrepresented the security to B, or failed to give B material information, or presented the information so as to hide the risks, or bribed one of B’s officials, etc.
But it’s not, per se, morally wrong to sell something you believe will decline in value.
well, it’s a different movie than I’m about to talk about, but it is an open thread, after all.
@asiangrrlMN: Living in England now, I’m watching a movie on BBC2 that I venture to guess you would enjoy.
What’s even better than a movie starring Alan Rickman? A movie starring Alan Rickman, with massive voice-overs by Alan Rickman. Good Lord, but that man’s voice is sensual!
I hope you get a chance to see it sometime; I recommend it highly.
I would argue that it’s morally wrong to sell something you believe will decline in value by representing it to the buyer as something that will increase in value. That seems like pretty straightforward fraud to me since you’re selling something under false pretenses.
If a seller represents an increase in value as a sure thing (“will increase”), that’s morally wrong — and also probably legally wrong.
The harder case is when the seller expects the security to decline in value, but plays up its appreciation potential to the buyer.
But I’d argue that selling it without pumping it is not morally wrong. If a presumably-knowledgeable buyer, given full information, and having real ability to walk away from the deal, nonetheless buys the security, I don’t see how we can condemn the seller.
@Tonal Crow: To elaborate, the buyer in my last paragraph thinks she’s buying a security that will become more valuable, and the seller thinks she’s selling one that will become less valuable. If both buyer and seller have access to the same information about the security (e.g., composition, default rates, etc.), and have similar abilities to walk away from the deal, I don’t see how the arrangement is asymmetric such that the seller owes the buyer some special insight into her internal deliberations. If one posits such asymmetry, one needs also to say that the buyer owes the seller the same degree of internal insight.
@James E. Powell: Cash Rules Everything Around Me.
(Check out the Lexicon links in the right-hand column… )
If you’re selling the security based on your supposed expertise that the buyer doesn’t have, that’s asymmetric information. We’re not talking about a buyer who purchases (for example) stock directly from a company. They’re buying it through an intermediary because buying it that way (supposedly) brings more security than buying the stock directly. If the intermediary didn’t add value to the transaction for the buyer by directing the buyer to what the intermediary feels are worthwhile investments, there would be no point in using an intermediary and everyone would just buy direct from the companies.
When you’re relying on the expertise of the intermediary to direct your buying but the intermediary is simultaneously undercutting what you’re buying, that’s wrong. It may be common and legal, and pretty much the entire financial market may be based on that, but, frankly, that’s one of the reasons our financial markets are in the mess that they are. You can only have so many people gaming the system before the system breaks down and stops working for everyone.
So a seller is obligated to give a buyer full information on not only the security’s terms, and not only what she knows about its performance to date, but also her analysis of how she thinks it will perform? If so, isn’t the buyer obligated to give the seller the same? If not, why not?
And why not? In this case, the seller has loads of information that the buyer doesn’t have, far beyond “supposed expertise”. Such information includes the specifics of trade secrets, unfiled patents, etc., the entire contents of the company’s R&D programs, its sales strategies, identities of suppliers and contractees, and plenty of other stuff that companies actually need to keep from competitors, and thus can’t willy-nilly disclose to anyone who wants to buy their stock.
Usually no. There are many different kinds of intermediaries. The exchanges are a kind of intermediary. People don’t use exchanges for their advice (they provide none), but because, among other things, they provide better prices, more liquidity, better trade guarantees, and faster trading than can be got in private transactions.
Now an individual buying from a broker is a different can of worms, because of differences in sophistication and available information, differences in market power, etc.
That’s completely different from Goldman Sachs-to-Bank of America type transactions whose morality I intended to discuss.
Did GS’s trading partner “rely” on GS’s “expertise”? Or did it just buy what GS was selling, not bother looking at much of the information that GS provided, then screech when its investment didn’t turn out like it wanted?
I heartily concur, and think fraud by financial companies (actual fraud) is badly underinvestigated and underprosecuted. For example, the foreclosure fraud that’s been in the news recently.
But I do not agree that GS-to-Bank of America style transactions should be subject to anything like the disclosure rules you seem to be advocating.
Ah, see, that’s a different matter. I’m talking about Goldman Sachs-to-CALPERS type transactions, because that was the actual topic: financial companies selling stuff to pension funds as a good investment that they were simultaneously betting would lose value.
If GS and BofA want to spend all day trying to cheat one another, I don’t really care. It’s when they drag pension funds and other non-bankers into their games that I get pissed off.
@Mnemosyne: There is a difference between GS selling stuff to BofA and selling stuff to CALPERS. But there shouldn’t be much of a difference. Those are the big leagues. CALPERS has over $200 billion in assets (I just checked its site) — about 25% of GS’s. If CALPERS’s managers are going to buy anything, they have an obligation to pensioners and future pensioners to know what they’re buying. They absolutely should do their own detailed analyses, and not depend upon the seller to do it for them.
Did GS withhold basic information about the security (such as composition, default rates, credit scores, property locations, etc.) that would have allowed CALPERS to come to the same conclusion that GS did? Or did GS provide all the basic information (but not their internal views on the security)?
If the former, GS did wrong — morally and quite possibly legally. If the latter, CALPERS made a bad investment, and that’s pretty much the end of it. I do *feel* unhappy about pensioners (and future pensioners) being the losers on this, but not really because GS “won the bet” (they could easily have lost it, and certainly have on many other occasions). I feel unhappy mainly because CALPERS management — which could have done better — didn’t. They failed their constituents, and we shouldn’t let them off easy here.
I think we have a really fundamental disconnect here between what’s fair and what isn’t, so I don’t know that there’s any point in continuing to talk about this. CALPERS is not GS. They don’t have the same function in society. It’s not okay for GS to bet against their clients because, hey, that’s the game and you shouldn’t play if you can’t hack it.
GS and BofA think this is all just electrons flying around, but it’s not. It’s actual people’s lives being affected. It’s not a goddamned game.
ETA: I think there should be a difference between investing money with GS and putting that money on red 7 at the roulette wheel in Vegas. You don’t seem to agree.
jesus christ it’s not e-trade, they’re supposedly providing financial planning to these places and If I found out that some EF Hutton fuck was purposely steering me towards a shit sandwich I’m headed down to his office with at minimum a sharp kitchen fork and a lighter.