MovieChat Forums > Too Big to Fail (2011) Discussion > America really Screwed us all...

America really Screwed us all...

posted 13 years ago by maritze
11 replies | jump to latest

This is a pretty good movie is you watch it as fiction. Sadly however it misses the mark on so many factual levels it’s tragic.

The root causes of the entire worldwide financial crises are CLEARLY traceable to America and it’s lack of regulation, a rather obvious fact the makers of this film understate to such a level it becomes almost laughable. Check out the scene where Paulson and co explain what happened to Cynthia Nixon’s character how to explain the entire balls-up to the media. They get very close to the truth and then they suddenly decide to bail on reality and call it a worldwide problem, as if the rest of the world bailed on America before things got really pear shaped. The origins can clearly be traced to US states and even neighbourhoods where sub-prime home loans were the norm, THAT is where the problem began. So, in fact it was the other way around. America de-regulated their banks, Wall street became a casino and the rest of the world’s credit –itself strained quite significantly- got sucked into the gaping hole of American greed.

And then after all the bailout's relative success in stabilising the markets the US government and the Republican Congress decide to play chicken with raising the America’s deficit ...and here we go again, Resession all round!

Seriously as a non American I am sick and tired of a country way across the ocean with a government I can’t vote for –or against- that has such an profound impact on my life here in Australia. Even though I can do absolutely ZILTCH about it. Sucks.

[–] lizanosalsa 12 years ago

The root causes of the entire worldwide financial crises are CLEARLY traceable to America and it’s lack of regulation, a rather obvious fact the makers of this film understate to such a level it becomes almost laughable.

I recommend a re-watch if you think the film-makers somehow dodged the idea that the US financial system wasn't the central player in the worldwide financial crisis. What's laughable is your grasp of the film and especially the scene you reference. The final message of that scene is that a lack of regulation is to blame for the circumstances that led to the crash. How you can think that this is understated makes me think you were stoned on some Australian bud or that you only saw what you wanted to believe.

Check out the scene where Paulson and co explain what happened to Cynthia Nixon’s character how to explain the entire balls-up to the media. They get very close to the truth and then they suddenly decide to bail on reality and call it a worldwide problem

Again I have to question your grasp of this scene. They call it a "worldwide problem" because banks all over the world bought credit default swaps from AIG and suffered the consequences when AIG ran out cash. This scene only further places the onus on American financial institutions (AIG). You can't use it as evidence that the film-makers are letting U.S. financial institutions off the hook. Well you could. But you'd be wrong.

I think you let your personal frustrations regarding the global economy cloud your judgement of the film.

[–] maritze 12 years ago

I see no reason to revise my opinion. I rewatched those scenes and came to the same conclusion. The filmmakers get very close to the truth and then perceptibly change the tone of the discussion and change direction to a more general and more palatable view of what occurred. Watch ‘Inside Job’ and read Niall Fergusons new edition of ‘The Rise of Money’ for a good primer on what happened. I put it to you that you missed the cop-outs this movie is seriously guilty of. Also, keep the ad-hominem barbs down, they don’t help your frail argument at all.

[–] tricksoftrade01 12 years ago

You can point the finger at the US government for not putting stricter controls on regulating banks. But there is a major logical reason for lightly regulating banks in the US.

The world has become increasingly interconnected and competitive at the same time, this competitiveness includes banks. The fear of the US government was that if they over-regulated US banks, the American banking system would lose ground to banks of foreign countries that had lighter regulation and are able to place risker bets (and reap bigger rewards).

America has already lost its manufacturing base to emerging countries, the thought of losing its banking/financial centers also was the spur for Washingtom not to over regulate them.

Governments have to walk the tighrope of regulating their banking system and still letting the banks be competitive on the world stage.

[–] maritze 12 years ago

Light regulation is one thing, leaving the bankers to whatever they please and actually encouraging them to do so is quite another issue all together. The sub-prime loans that caused the foundation of the credit system to crack was actively endorsed and pushed by Bush –and Clinton before him. The warning signs were there long before everything went pear shaped. People like Steve Keen warned that the US was heading toward disaster, American bankers and regulators did nothing to avert the mess. And now the same guys are running the show from government positions.

[–] tricksoftrade01 12 years ago

'Bankers to do whatever they please'...Lets look at that a bit closer.

If you have one bank who is making money by packaging up the subprime loans and reselling them with new complex instruments 'credit default swaps' develolped by egghead M.I.T. financial gurus, other banks will follow for fear of losing market share.

Highly respected banks really believed at the time that they could develop a mathmatical eqauation that could totally minimize risk, by spreading it out a mile wide and only 4 inches deep. They were making money and convinced Washington not to intervene.

It is easy with 20/20 hindsight to say that something should have been done. But at the time large corporations were making money, they believed in these equations, some saw the signs,but most believed in these new financial instruments to minimize risk.

A small disbelieving minority will not be heard when money is being made.

[–] maritze 12 years ago

My point exactly. Only the 'small minority' was not all that small. Read a bit wider and outside the American media/press and you will find plenty of voices speaking up way before the meltdown.

As for 'bankers do what they please'. Yes, exactly that. They cook up they deals, reap the profits and use their money to lobby away regulation (Now go on and tell me that is not so.) Then they open the field wider for riskier deals. As for math to bargain away risk. Well have seen time and time again that that NEVER works. From the Orchid bubble all the way to the Sub Prime House Price Bubble. If there is one thing we know it is that every bubble bursts, it's just a question of when. The whole 'math equation' was simply a confirmation bias that was way out of control... and unregulated.

[–] kucingiskool 12 years ago

these words "Lobby away regulations"...
makes me wonder..
how much do these wallstreet goons offer to lobby things to their liking..
imagine there are 10's or 20 goons, each with 10 million dollars, the guys they lobby.. blimey.. must be rich by now!!

[–] Strazdamonas 12 years ago

they are.

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Applied Science? All science is applied. Eventually.

[–] hels-dunleavy 12 years ago

By that logic one could argue that its actually all the British's fault, since Thatcher created such an attractive case study of how to hammer a culture into profitable de-regulation and not have a massive backlash way before subprime was a dirty word. Everything's more complicated than that.

[–] IMDbeans 12 years ago

You're missing the point. Blaming Americans for their investments is hypocrisy. Australia is only affected because of its trade and investments in the US. The globe has voluntarily become interconnected. The only reason that the US affects the world more than others is due to the size (success) of its economy.

[–] bogwart-1 12 years ago

If you think a success consists of owing so much money that it can never be repaid I'd hate to see your idea of a failure.

Once globalisation started bigtime nobody of any consequence could afford to be left behind. Even London, the financial centre of the world.

The best thing about this film was that it showed very clearly where the blame lay, and unlike the bs the american administration has been trying for the past couple of years it showed clearly that it was a lack of regulation (put in place by FDR in 1933 and signed away by Clinton in repealing Glass-Steagall) and not Europe which blew over the house of cards.

Regulation was supposed to keep the banks' retail activities separate from their investment arms, while still maintaining a responsible leverage percentage. But due to Greenspan (who jumped ship in 2006 when he could see the writing on the wall) and then disgustingly amoral and duplicitous pigs like Lloyd Blankfein any semblance of self-control went out of the window.

The SEC is beyond corrupt http://tinyurl.com/sec-lies so there's no help there.

And it's going to get a lot worse. Anyone who believes that the worst is over needs to see an optician. The USD is rapidly running out of credibility as the world's reserve currency, with China and Japan trading with each other via yen/yuan swaps, Russia keen to join up, a pan-African system only narrowly avoided last year by the murder of Qaddafi and South America emerging as a viable credit system.

And when the USD falls it will be like Humpty Dumpty - there will be no putting it back together again.