The story of 2008 Crisis

2. The Journey….
 Directed by Charles H. Ferguson and was released on 8th October 2010.
 Won Oscar award for the best documentary (2011) and 5 other awards in
different award events.
 The whole movie is narrated by Matt Damon.
 Budget: $20 million
Opening week: $39000
Gross: $4.5 billion
 Perfectly named “Inside Job”.

4. The Story….
Movie is divided into 5 Parts
1. How we got here
2. The Bubble
3. Crisis
4. Accountability
5. Where we are now

5. 2008
HOW DID IT START ?

6. 20081980
ICELAND
 Banks
 Insurance Companies
 Credit Rating Agencies

7. BANKING- A THREAT

8. 1999
VIOLATED THE GLASS-STEAGAL ACT
2001
GRAMM-LEACH-BLILEY-ACT
Short-term Financial Crisis
Financial Institutions in Internet Companies
Securitization Food Chain
Events before the “Bubble”

9. Securitization Food Chain (2001)
CDO (Collateralized Debt Obligation)

12. Crisis
All the warnings were
“IGNORED”

13. Accountability
 Top Executives were paid bonuses instead of
being fired
 Bankers complained Regulators did not do their
job
 $5 Billion for lobbying & campaign contributions
 Academic Economists advocated for
deregulation
 Conflicts of interest as these economists were
consultant to companies

14. Where are we now?
 The American economy is weaker than before
 Unemployment and inflation are at a rise
 Obama came with a lot of promise but the government
did not prosecute any senior executives
 The government did not bring any financial reform and
this resulted in………

15. Wall Street
Government

16.  Beware of complex financial instruments.
 Do not believe in Rating agencies – “Just
Opinions”.
 Bonuses: A step towards Bankruptcy.
 Understand the implications that Conflicts
of Interest could have.
“Greed is the big plague of mankind’
A few lessons…

17. Presented By
PAYAL BHANDARI (32)
PAREESH BHATIA (31)
KRITIKA SINGH (30)
SYRIL THOMAS (29)
MEHER KOMAL (28)
LOVESH LOONKER (27)
LIKITHA PADIYALA (26)
KHUSHBOO GUPTA (25)
?
ANY QUESTIONS