David Denby of the New Yorker wrote a favorable review of “American Casino,” a documentary about the financial bubble by Andrew and Leslie Cockburn.

Out of the Shadows
“American Casino”
by David Denby

Andrew Cockburn is a long-time friend who has done a great job of reporting the financial crisis and the malfeasance that made it possible.  He documents the process whereby a rating agency is paid to do a job of modeling a structured transaction, takes the fee but then merely uses the bank’s own model:

“The movies are still one of the best ways of giving body, flavor, and emotion to the abstractions and puzzlements of an enormous crisis. In the most fascinating scenes in “American Casino”—a terrific documentary chronicling the subprime-mortgage mess and the financial collapse of the past two years—a former banker for Bear Stearns sits in the dark, his face shadowed and his voice (I believe) slightly altered. We might be watching a retired criminal or spy, a man both proud of his dexterity and ashamed of the disaster that it led to. Out of the shadows, he explains how such bizarre instruments as collateralized debt obligations (C.D.O.s) quieted the normal skepticism of investors. Here’s the drill: when the bank assembled a group of mortgage-backed bonds as an investment product, it submitted them to a ratings agency. But the agency, rather than run its own computer models on the trustworthiness of such bonds, he says, merely handed the job back to the bank, which ran its models. Having received a fee of perhaps a hundred thousand dollars for not doing anything, the agency then signed off on the phony ratings,” writes Denby.

My friend Mark Pittman of Bloomberg News is featured in the film.  Kudos to Andrew and Leslie on a fine project.

Chris

Category: Film

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “New Yorker The Current Cinema on “American Casino””

  1. Jdamon33 says:

    The top dogs at the ratings agencies should be put in jail. If this is what was really going on, I have to believe it borders (or crosses) the bar for criminal behavior. When everyone and their mother are relying on what you are supposed to be doing, and you don’t do it – how is that not a crime?

    I mean, I hear the IRS is digging around f*cking garage sales for spare nickles. Just claw back all the hundereds of millions of stolen – and I do mean stolen – taxpayer money spent on big bonuses from these illegal bailouts and you could pay for Obamacare 5 times over (not really, but it sounds good)…

    Anyone wish we were back in the days when GWB were running things??? I know, not many takers, but BHO sure isn’t doing any better (and maybe, I dare say – worse)???

  2. torrie-amos says:

    well, rating agencies, yeah, blah blah, they’ve always done, i’d really like too get the group who authorized 30-40-1 leverage for banks and investment firms, that is not criminal, that is bona-fide insanity, imho, without that leverage they never could have bid up commodities to astronomical amounts, and we probably would have muddled threw, it’s always the last straw, now of cours re-doing it again, now that’s not insane, that is just plain the only hope they got, and it’s all a hope game now, my only hope is that they really do control the markets and keep oil below 85 bucks for the next five years, otherwise, that is all she wrote

  3. Mannwich says:

    The fact that literally nobody of importance has gone to jail in this fiasco is one of the most disconcerting things we’ve seen. Disheartening is an even better word. The rule of law means nothing.

  4. Mannwich says:

    @torrie: That would be Hank Paulson and other notables……..

  5. torrie-amos says:

    manwich, one would think, yet, my guess is hank and others did a hands off, ie, not involved other than approving some report of gargantuan proportions that said all is good, when u have committe’s you have cover………….gone too jail, you should read the tome on enron and what happened, a high stock price and reported earnings, all fasle in hindsight, was all that mattered too all, even though 100′s of folks inside the company and outsiders scratched there heads saying none of it made sense, lay was 100% hands off, skilling was all big picture pie in the sky, and fastow just cooked the books for 3 years, all because the only thing lay and skilling cared about were the numbers, fastow is quite fascinating in a way, he must have learned his trade from madoff

  6. Mannwich says:

    I believe it’s a known fact that Paulson played a big role in getting those leverage limits waived/raised.

  7. Paul S says:

    This film may very well be good but David Denby is a terrible critic and nobody should waste one second reading him.

  8. BG says:

    Yes, that is the amazing thing. What this relatively small circle of financial terrorist have done to the US and global financial system makes 9/11 look like peanuts dollar-wise; but still people in federal agencies that are empowered to enforce US security laws refuse to perform their duties.

    It’s surreal what has already happen and what is destined to happen in the future; but, apparently no one did anything that measures up to a single illegality.

    The most significant term I’ve learned throughout all of this is “regulatory capture”. If you can’t see it playing out all around you, then, my friend you are fucking blind.

    I can not believe we find ourself here and apparently no one has done anything wrong!!…… Say what???

    IMHO, we have been in the eye-of-the-storm for the last 6 months or so. This financial catastrophe is far from being over. Problems resulting from this will be with us for the rest of our lives.

  9. clawback says:

    “I mean, I hear the IRS is digging around f*cking garage sales for spare nickles. Just claw back all the hundereds of millions of stolen – and I do mean stolen – taxpayer money spent on big bonuses from these illegal bailouts and you could pay for Obamacare 5 times over (not really, but it sounds good)…”

    I enjoyed reading this. My sentiments exactly. In Britain and Ireland the govt gets worked up over people’s trash, their recycling and the EU is banning incandescent light bulbs. It’s the same everywhere, it would seem — petty crimes and misdemeanors committed by little people are treated like major freakin’ offenses, but the big boys (and girls) get taxpayers to support their lifestyles. I’ve said it a hundred times and others have too, but I’ll say it again: I’m sick and tired of it, but I just don’t know what to do. After TARP, the “stimulus” and now health care reform, it’s pretty clear TPTB have no intention of listening to us. Again, same thing in Europe — the Irish voted down the Lisbon treaty in a referendum, but the other countries have decided they’ll just have to vote again, until the Irish get it right. (OK, I’ll stop before I really get started, but I know others feel the same way.)

  10. JoWriter says:

    @ clawback – “I just don’t know what to do.” Several posters here have recommended hunkering down, growing your own food and ‘getting off the grid’ as much as possible. Fine.

    But if you and the rest of us want to actually fix it, we have to do the, to some, unthinkable. Support a viable Third Party! The current Tea Party movement is ripe for formation of a Third Party, though I myself prefer the Libertarian Party, since they actually have some electoral experience and some political experience.

    Yes, I know, you’re throwing away your vote. Yes, I know, if you don’t vote the other guy will win. Yes, I know, the third party is made up of kooks, naifs, and just plain uncool people. But I’ve seen nonpartisan sniping, correct in my opinion, at both parties. Are any of the complainers active in either of those parties? I thought not. If you were, you’d know that they consist of kooks, naifs, and just plain uncool people. So you have to look at the principles animating the people in the party. If the principles do not sanction theft, (hint: LibParty) you have a chance to turn things around.

    Yes, it’s time for me to stop, too -

  11. bubba says:

    maria “i got a big fat zero on celebrity jeopardy” bartiromo proves once again that she’s the dumbest thing on tv (not counting the fox news “reporters” that is)….

    http://tpmdc.talkingpointsmemo.com/2009/09/bartiromo-asks-44-year-old-congressman-if-medicares-so-good-why-arent-you-on-it.php?ref=fpblg

  12. Marcus Aurelius says:

    Looks like we’ll have to talk to BR about this concept of “vacation” (whatever that means).

  13. cvienne says:

    @bubba

    Personally, I’d nominate Trish Regan as dumbest…

    An underscore to this is the fact that she is a regular on Chris Matthews Sunday Morning show. Chris needs a cupcake he can beat up on. I don’t really watch much TV, but I’ve seen that show on occasion and watched TR change her mind 3 times in the middle of the same sentence.

  14. manhattanguy says:

    U.S. Aug. ADP employment down 298,000

    “The decline in employment was more than the consensus forecast of Wall Street economists of a decline of 250,000 in nonfarm payroll in August, which also includes the government sector.”

  15. Does this mean casin0 is no longer a banned word?