insidejob英文字幕

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o used to be President Clinton39。 s budget director received over $52 million in bonuses. When UBS was caught helping wealthy Americans evade taxes with the government. Would you be willing to supply the names? lf there39。 s a treaty framework. You39。 ve agreed you participated in a fraud. But while the panies face unprecedented fines have to admit any wrongdoing. When dealing with this many products, this many customers, mistakes happen. The financial services industry seems to have a level of criminality You know, when was the last time that Cisco or lntel or Google or Apple or IBM, you know? I agree about hightech versus financial services Hightech is a creative business where the value generation actually creating something new. Beginning in the 1 990s and advances in technology financial products called derivatives. Economists and bankers claimed they made markets safer. But instead, they made them unstable. Since the end of the Cold War a lot of former physicists, mathematicians decided to apply their skills not on, you know, Cold War technology And together with investment bankers You know, as Warren Buffett said, weapons of mass destruction. Regulators, politicians, business people the threat of innovation of the financial system. Using derivatives on virtually anything. They could bet on the rise or fall of oil prices the bankruptcy of a pany, even the weather. By the late 1 990s derivatives were a 50trilliondollar unregulated market. ln 1 998, someone tried to regulate them. Brooksley Born graduated first in her class at Stanford Law School to edit a major law review. After running the derivatives practice at Arnold amp。 Porter Born was appointed by Clinton Trading Commission the derivatives market. Brooksley Born asked me if l would e work with her. We decided that this was a serious,potentially destabilizing market. In May of 1 998, the CFTC issued a proposal to regulate derivatives. Clinton39。 s Treasury Department had an immediate response. I happened to go into Brooksley39。 s office the receiver on her telephone from her face. And she looked at me and said, That was Larry Summers. He had 1 3 bankers in his office. He conveyed it in a very bullying fashion Banks were now reliant for earnings on these activities. And that led to a titanic battle to prevent this from being regulated. Shortly after the phone call from Summers Greenspan, Rubin, and SEC chairman Arthur Levitt condemning Born to keep derivatives unregulated. Regulation of derivatives transactions by professionals is unnecessary. She was overruled, unfortunately. First by the Clinton administration In 2020, Senator Phil Gramm took a major role in getting a bill passed derivatives from regulation. They are unifying markets, reducing regulatory burden. I believe we need to do it. It is our very great hope to move this year on legislation that,in a suitable way for OTC derivatives. I wish to associate myself of Secretary Summers. ln December of 2020, Congress passed Modernization Act. Written with the help of financialindustry lobbyists of derivatives. After that, it was off to the races. Use of derivatives and financial innovation exploded dramatically after 2020. By the time Gee W. Bush took office in 2020 was vastly more profitable than ever before. Dominating this industry were five investment banks two financial conglomerates panies And linking them all together was the securitization food chain. A new system which connected trillions of dollars with investors all over the world. Thirty years ago, if you went to get a loan for a home expected you to pay him or her back. You got a loan from a lender who wanted to be paid back. We39。 ve since developed securitization, whereby people who make the loan if they fail to repay. In the old system, when a homeowner paid their mortgage every month to their local lender. And since mortgages took decades to repay, lenders were careful. In the new system, lenders sold mortgages to investment banks. The banks bined thousands of mortgages and loans including car loans, student loans, and credit card debt collateralized debt obligations The investment banks then sold the CDOs to investors. Now when homeowners paid their mortgages all over the world. The investment banks paid rating agencies to evaluate the CDOs were given a tripleA rating investment grade. This made CDOs popular with retirement funds highly rated securities. This system was a ticking time bomb. Lenders didn39。 t care anymore about whether a borrower could repay riskier loans. The investment banks didn39。 t care either. The more CDOs they sold, the higher their profits. And the rating agencies, which were paid by the investment banks of CDOs proved wrong. You weren39。 t gonna be on the hook, there weren39。 t regulatory constraints. So it was a green light to just pump out more and more loans. Between 2020 and 2020 made each year nearly quadrupled. Everybody in this securitization food chain until the end didn39。 t care about the quality of the mortgage. They were caring about maximizing their volume In the early 2020s in the riskiest loans, called subprime. When thousands of subprime loans were bined to create CDOs tripleA ratings. Now, it would have been possible to create derivative products that don39。 t have these risks of deductibles that can be taken on, and so forth. They didn39。 t do that, did they? They didn39。 t. In retrospect, they should39。 ve done. So did these guys know they were doing something dangerous? I think they did. All the incentives financial institutions offered to their mor。