Inside Job is a 2010 documentary film, directed by Charles H.

Ferguson, about the late-2000s

financial crisis. Ferguson says the film is about "the systemic corruption of the United States by
the financial services industry and the consequences of that systemic corruption." In five parts,
the film explores how changes in the policy environment and banking practices helped create the
financial crisis.
Inside Job was well received by film critics who praised its pacing, research, and exposition of
complex material. The film was screened at the 2010 Cannes Film Festival in May and won the
2010 Academy Award for Best Documentary Feature.
Ferguson began doing research for the film in 2008.
Synopsis
Inside Job, a sleek, briskly paced film, whose title suggests a heist movie, is the story of a
crime without punishment, of an outrage that has so far largely escaped legal sanction and
societal stigma. This film is as gripping as any thriller. Aided by some fascinating interviews,
Ferguson lays out an awful story. The betrayal of public trust and collective values that Mr.
Ferguson chronicles was far more brazen and damaging than the adultery in Nathaniel
Hawthornes novel, which treated Hester more as scapegoat than villain.
The documentary is split into five parts. It begins by examining how Iceland was highly
deregulated in 2000 and the privatization of its banks. When Lehman Brothers went bankrupt
and AIG collapsed, Iceland and the rest of the world went into a global recession.
Part I: How We Got Here
The American financial industry was regulated from 1940 to 1980, followed by a long period of
deregulation. At the end of the 1980s, a savings and loan crisis cost taxpayers about $124 billion.
In the late 1990s, the financial sector had consolidated into a few giant firms. In March 2000, the
Internet Stock Bubble burst because investment banks promoted Internet companies that they
knew would fail, resulting in $5 trillion in investor losses. In the 1990s, derivatives became
popular in the industry and added instability. Efforts to regulate derivatives were thwarted by the
Commodity Futures Modernization Act of 2000, backed by several key officials. In the 2000s,
the industry was dominated by five investment banks (Goldman Sachs, Morgan Stanley, Lehman
Brothers, Merrill Lynch, and Bear Stearns), two financial conglomerates (Citigroup, JPMorgan
Chase), three securitized insurance companies (AIG, MBIA, AMBAC) and the three rating
agencies (Moodys, Standard & Poor's, Fitch). Investment banks bundled mortgages with other
loans and debts into collateralized debt obligations (CDOs), which they sold to investors. Rating
agencies gave many CDOs AAA ratings. Subprime loans led to predatory lending. Many home
owners were given loans they could never repay.
Part II: The Bubble (20012007)

During the housing boom, the ratio of money borrowed by an investment bank versus the bank's
own assets reached unprecedented levels. The credit default swap (CDS), was akin to an
insurance policy. Speculators could buy CDSs to bet against CDOs they did not own. Numerous
CDOs were backed by subprime mortgages. Goldman-Sachs sold more than $3 billion worth of
CDOs in the first half of 2006. Goldman also bet against the low-value CDOs, telling investors
they were high-quality. The three biggest ratings agencies contributed to the problem. AAA-rated
instruments rocketed from a mere handful in 2000 to over 4,000 in 2006.
Part III: The Crisis
The market for CDOs collapsed and investment banks were left with hundreds of billions of
dollars in loans, CDOs and real estate they could not unload. The Great Recession began in
November 2007, and in March 2008, Bear Stearns ran out of cash. In September, the federal
government took over Fannie Mae and Freddie Mac, which had been on the brink of collapse.
Two days later, Lehman Brothers collapsed. These entities all had AA or AAA ratings within
days of being bailed out. Merrill Lynch, on the edge of collapse, was acquired by Bank of
America. Henry Paulson and Timothy Geithner decided that Lehman must go into bankruptcy,
which resulted in a collapse of the commercial paper market. On September 17, the insolvent
AIG was taken over by the government. The next day, Paulson and Fed chairman Ben Bernanke
asked Congress for $700 billion to bail out the banks. The global financial system became
paralyzed. On October 3, 2008, President Bush signed the Troubled Asset Relief Program, but
global stock markets continued to fall. Layoffs and foreclosures continued with unemployment
rising to 10% in the U.S.A. and the European Union. By December 2008, GM and Chrysler also
faced bankruptcy. Foreclosures in the U.S. reached unprecedented levels.
Part IV: Accountability
Top executives of the insolvent companies walked away with their personal fortunes intact. The
executives had hand-picked their boards of directors, which handed out billions in bonuses after
the government bailout. The major banks grew in power and doubled anti-reform efforts.
Academic economists had for decades advocated for deregulation and helped shape U.S. policy.
They still opposed reform after the 2008 crisis. Some of the consulting firms involved were the
Analysis Group, Charles River Associates, Compass Lexecon, and the Law and Economics
Consulting Group (LECG). Many of these economists had conflicts of interest, collecting sums
as consultants to companies and other groups involved in the financial crisis.
Part V: Where We Are Now
Due to this catastrophic meltdown American economy is now highly depending on overseas
market. Their own company like General Motor, Chrysler and U.S. Steel, once leading
companies of the world, are now poorly managing and are falling behind their foreign
competitors. Tens of thousands of U.S. factory workers were laid off. American companies has
been sending job to overseas to save money. Now U.S. is leading in IT sectors, but this sector

requires higher education and college education is getting out of reach for the the most of the
American citizens due to shrinking of government fund and rising tuition. The new Obama
administrations financial reforms have been weak, and there was no significant proposed
regulation of the practices of ratings agencies, lobbyists, and executive compensation. Geithner
became Treasury Secretary. Martin Feldstein, Laura Tyson and Lawrence Summers were all top
economic advisers to Obama. Bernanke was reappointed Fed Chair. Finally it has become an
Wall Street Government! Though European nations have imposed strict regulations on bank
compensation, but the U.S. has resisted them.
Reception
The film was met with critical acclaim, earning a 98% rating on the Rotten Tomatoes website.
Roger Ebert described the film as "an angry, well-argued documentary about how the American
financial industry set out deliberately to defraud the ordinary American investor". A. O. Scott of
the New York Times wrote that "Mr. Ferguson has summoned the scourging moral force of a
pulpit-shaking sermon. That he delivers it with rigor, restraint and good humor makes his case all
the more devastating". Logan Hill of New York magazine's Vulture characterized the film as a
"rip-snorting, indignant documentary", noting the "effective presence" of narrator Matt Damon.
Peter Bradshaw of The Guardian said the film was "as gripping as any thriller". He went on to
say that it was obviously influenced by Michael Moore, describing it as "a Moore film with the
gags and stunts removed".
Both American political parties are indicted; Inside Job is not simply another belated settling
of accounts with Mr. Bush and his advisers, though they are hardly ignored. The scaling back of
government oversight and the weakening of checks on speculative activity by banks began under
Reagan and continued during the Clinton administration. And with each administration the
market in derivatives expanded, and alarms about the dangers of this type of investment were
ignored. Raghuram Rajan, chief economist at the International Monetary Fund, presented a paper
in 2005 warning of a catastrophic meltdown and was mocked as a Luddite by Mr. Summers.
Theres a lot to dislike about Wall Street- the pay, the culture, in many cases, the people. But that
doesnt explain what happened in 2007 and 2008. A lot of observers understood we had a
housing bubble Dean Baker, for instance, had been sounding the alarm for years but few of
the housing skeptics saw everything going on behind the bubble: That the subprime mortgages
had been packaged into bonds, that the bonds had been sliced into tranches, that the formulas
being used to price and rate the tranches got the variable expressing correlation wrong, that an
extraordinary number of banks had purchased an extraordinary amount of insurance against
getting that correlation wrong from AIG, that AIG had also priced the correlation wrong and
would be unable to pay its debts in the event of a meltdown, that a meltdown would freeze the
mostly unregulated shadow market that major financial institutions and players used to fund
themselves, that the modern financial system was so fragile that an uptick in delinquent subprime
mortgages could effectively crash the global economy.

Whats remarkable about the financial crisis isnt just how many people got it wrong, but how
many people who got it wrong had an incentive to get it right. Journalists, Hedge funds,
Independent investors, Academics, Regulators, Even traders, many of whom had most of their
money tied up in their soon-to-be-worthless firms. Inside Job is perhaps strongest in detailing
the conflicts of interest that various people had when it came to the financial sector, but the
reason those ties were conflicts was that they also had substantial reasons fame, fortune,
acclaim, job security, etc. to get it right.