American Casino movie trailer from Leslie and Andrew Cockburn on Vimeo.
I was listening to the C-SPAN Q&A podcast which was an interview with producers Leslie and Andrew Cockburn on their new independent film called American Casino which chronicles the breakdown of subprime lending via Wall Street. The starting point is subprime mortgage lending in poor neighborhoods of Baltimore.
The foil is Phill Gramm, Chairman of the Senator Finance Committee who in a masterstroke of politcal management, on December 15, 2000 at 7pm, appended a 260 page financial de-regulation bill to an 11,000 page appropriations bill just before the holidays, and because it was in the 11th hour, it was likely few read it and Clinton signed it. The bill exempted the financial instruments used in the credit boom from federal and state regulations – free of any supervision.
Gramm is now Vice Chairman of UBS.
This topic is nothing we haven’t heard before but its focus on Gramm is an interesting angle. I listened to the entire C-SPAN interview and while I enjoyed it, the story feels a bit tardy (although certainly very important because the pain is still playing out).
This systemic breakdown will continue to facsinate many for generations to come – hopefully serve as case study fodder at MBA programs as well.
The film credit pronouces:
“AMERICAN CASINO IS A POWERFUL AND SHOCKING LOOK AT THE SUBPRIME LENDING SCANDAL. IF YOU WANT TO UNDERSTAND HOW THE US FINANCIAL SYSTEM FAILED AND HOW MORTGAGE COMPANIES RIPPED OFF THE POOR, SEE THIS FILM.”
-Joseph Stiglitz, Nobel prize-winning economist
A few days after I heard the podcast, a federal judge threw out the lawsuit by the city of Baltimore against Well Fargo:
ruling that the city could not prove that the bank’s lending practices had resulted in broad damage to poor neighborhoods.
Perhaps a case of bad timing for the film makers? But but still a compelling story.
ASIDE: Speaking of film making (sort of) check out my friend Andrea Powell‘s home improvement series for Lowe’s.
Great site! I need to ask a favor … My site is a link in your sidebar under “Regions: South” and is listed as Tallahassee Real Estate. Can you please change the link to “http://www.manausa.com” as the former link is no longer valid. Thank you very much! Joe
Good trailer. ‘course posting it here is sort of like preaching to the choir. but I’m gonna spend $25.00, buy the video and watch more of the sermon.
Thanks. I don’t think those of us who brush up against mortgage lending in real estate can get enough of this kind of education.
Apparently nothing is being done at the roots as far as initiating regulation to prevent a repeat of the lending bubble, so we may remain voices in the wilderness. As we havwe witnessed, our function is a little late and feeble in the mortgage transaction process to make a significant impact, but yell we must.
There is an article in the Sept 30 1999 Wall Street Journal which tells of Bill Clintons putting the lean on Fannie and Freddie to loosen up and lend with expanded criteria to allow less credit worthy and less quailfied people to purchase homes. Also Barney Frank in 2003 fired Freddie’s President because he refused to loosen any more.