Name : Nila Akbaria Kusumaningsih

ID : 1500004520

Summary of Inside Job Movie

Part I : How We Got Here

- Investment bank called Morgan Stanley had 110 employees and capital around $12m, it kept on
increasing until they had around 50,000 employees in 2009. Since the investment bank went
public the salary of workers outside of investment banking was increased 25% and inside banking
increased about 150%. But there were many workers in financial sector went to jail because of
fraud and many people lose their saving. Investment bank started merge and develop
monopolies.
- Many companies dropped and investment in internet stocks was lost. Ten investment banks
(Citigroup, Goldman Sachs, UBS, Morgan Stanley, Merril Lynch, Lehman Brothers, J.P. Morgan,
Deutsche Bank, Credit Suisse and Bear Stearns) paid punishment around $1.4b
- CDOs made retirement funds which was very risky because lenders still received commission
whether mortgage was repaid or not, since they sold the mortgage to investment bank.
- Subprime was combined with other debts in CDO package. When CDO received high rating so
does subprime. It was riskier and higher interest rate, therefore demand of subprime was high,
because it will bring big commission when it sold.

Part II: The Bubble

- Home sales, housing prices exploded due to mortgage and it creates biggest financial bubble
- Investment firms earned big amount of money and CEOs received big bonuses.
- Regulator let it happen and everything is uncontrolled.
- AIG promised cover the cost if there was a default on the insured CDOs, and divided income
between higher level manager and paying bonuses. As a result, investment bankers spent
bonuses on luxury items and wrongdoing business expenses
- There was a con about CDOs, but some of them still continued to trade them.

Part III: The Crisis

- Global financial analysts (IMF, Nouriel Roubini of New York University, and Allan Sloan of
Fortune Magazine) warned about the crisis but it was ignored by federal Reserve System.
- Debts are still not paid yet as a result bankrupt due to mortgage.
- Lehman Brothers recorded lost and stock collapse and other investment firms still rated double
before they collapsed and AIG which acquired by US Government did not have money.
- Foreclosure and job losses grew due to of saving money to prepare the crisis and avoid
fraudulent investment gamblers. This is when financial become crisis and depressing

Part IV : Accountability
- Companies collapsed while the CEOs received millions dollars and walked away

Part V : Where Are We Now

- Manufacturing jobs are low and IT jobs are needed more even it required high education which
Americans cannot afford.
- The Presidential administration of the United States has officially changed, the same Wall Street
players are now economic advisors in the new administration
- The people who have the power need to change the situation to make everything back to normal.