Financial Crises SSDD

The more things change, the more they stay the same.

My husband and I watched two movies this past week whose subject matter addresses the state of our health insurance industry, the state of our financial health and our continual dependence on an uncaring, for-profit-only Corporate America.  The stories are similarly stocked with requisite bad guys, used generically not genderically (sic) lacking the ethics and moral compass to do anything other than protect themselves at the risk of screwing hundreds of thousands of "little people". The protagonists are quiet men with high ideals, now destroyed by the prototypes of their calling, who take on their individual Goliaths because it's the right thing to do.

Similarities between the films are striking.  The film we saw first, "Margin Call", was inspired by the Wall Street financial crisis and a fictional firm's reaction to learning they've invested a huge percentage of their portfolio into toxic mortgages.  

The fictional head of a Wall Street firm “John Tuld” (a composite character resembling Merrill Lynch’s John Thain and Lehman Brothers’ Dick Fuld and played by the wonderfully villainous Jeremy Irons) is told that the firm is drowning in toxic mortgage-backed securities. Tuld orders his traders to rid the firm’s balance sheet of the junk by dumping it on unsuspecting counterparties and customers. Forbes.com 10/25/11

The second movie, The Rainmaker, is about a newly graduated lawyer who hasn't yet passed the bar exam.  He is hired by a less-than-ethical ambulance-chasing firm and given a wrongful termination of health insurance suit to defend.  The company is of Prudential proportions and ruthless in their mandate to "deny all claims" at the outset, then play a departmental shell game ("Who's got my insurance claim now?) betting the hapless, in this case dying, insured will give up and go away.  

Both films are well directed, predictably frustrating with less than satisfying endings.  Because, real life isn't all that satisfying is it?

"Margin Call" released in 2011.  "The Rainmaker" released in 1997, based on John Grisham's 1995 book of the same name.  Both have excellent casts and performances resonating with

issues past, present, and future. 

And doesn't that say something about we the people and the choices we continue to make?

Too Big to Fail or Too Big For Their Britches?

HBO debuted "Too Big to Fail" the other night.  It's the story of the bank crises, the fed's involvement and the scare tactics used to convince Congress they had to pass emergency legislation to bail out some failing banks while others were left to fail.  I watched it with skepticism as it painted a somewhat heroic picture of then Treasury Secretary Hank Paulson, former CEO of Goldman Sachs, as well as Ben Bernanke, Chairman of the U.S. Federal Reserve.  Both men were appointed by George W. Bush.

Most of us were bamboozled into believing the bank bailout was the only way to save the economy, both domestic and foreign.  We were led to believe the money we gave the banks would be re-paid, credit loosened and the economy stimulated as banks used the money to lend again for new business loans, home purchases and the like.

But that didn't happen.  This rush to save the banks was much like the rush to invade Iraq after 9/11.  It happened too fast, there was too much pressure put upon Congress, no strict criteria for the banks to follow other than to pay back the money.  The American people?  We had little to say about the mess.  We barely understood it.  But we weren't consulted either. 

Thursday eve,  Huff Post led with this screaming headline and a story that supports what my gut told me at the time:

 The Fed Loses Cred (excerpt)  

In the midst of the global financial crisis in 2008, the Federal Reserve lent Goldman Sachs, Credit Suisse and Royal Bank of Scotland at least $30 billion each at interest rates as low as 0.01 percent with no public disclosure of the details, Bloomberg News reported on Thursday.

The latest revelations about the covert infusions of credit provided by the Fed to some of the world's largest banks has amplified accusations that the central bank is a power unto itself, operating according to its own devices and in the interest of major financial institutions -- and beyond accountability to taxpayers.

It gets worse but you'll want to read it yourself.  The purveyors of the mess are enjoying their beach homes, their yachts, their golden parachutes.  They aren't suffering.  We are. 

When are we going to demand repercussions and responsibility from these institutions via our elected officials, our judicial system, our President? 

Or are they all in on the fix? 

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