Hacker Cinema
Too Big to Fail
2011 · Film · 97 min
Directed by Curtis Hanson
An intimate look at the epochal financial crisis of 2008 and the powerful men and women who decided the fate of the world's economy in a matter of a few weeks.
4 positive2 neutralfrom 6 commenters
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6 comments on Hacker News
I would recommend watching the docudrama 'Too Big to Fail'
Have you watched Too Big to Fail by HBO films? It has some great actors (Paul Giamatti fan club here!) and is really entertaining and well done: https://www.youtube.com/watch?v=fXQ5VfBTNpg
Too Big To Fail is also quite good and the third leg of my personal "Great Recession Trifecta."
https://en.wikipedia.org/wiki/Too_Big_to_Fail_(film)
Both of the movies The Big Short and Too Big To Fail have a moment where they're watching people come out of a subway or walk down the street, and say something like, "They don't have any idea what's about to hit them."
It sort of feels like that now. Lots of normality still. There is definitely something not right about the stock market not feeling the impact of millions of unemployed and more than half of retail stores missing rent payments.
Maybe there's macroeconomic explanations involving credit and the Fed. Maybe the stock market is in fact disconnected from the general economy as a whole, and is really just a plaything for giant corporations and the 1%. Maybe it's not as bad as it seems. Maybe everyone's betting on a V shaped recovery after the virus fades. But as we saw during the financial crisis, everything seems fine until it isn't - then things go pear shaped in a hurry.
This is the correct answer, I think. The people who made the mortgages were no longer the people that owned the mortgages. The banks didn't even hold on to them, they sold them in tranches to investors. So no one in the actual industry had any incentive to do anything other than close mortgages.
People could get no down-payment mortgages, could get mortgages with bad credit, could get mortgages on houses they couldn't afford, because all the mortgage originators just fudged the paperwork. No one wanted to find a reason to not provide the mortgage.
Everyone being able to buy a house heated the market up, and as people got used to the market going up and up, it was seen as a good investment, and more people bought more expensive houses they couldn't afford, and mortgage originators did more shady things to make it happen.
A lot of these mortgages were adjustable rates that started at a really low rate, and in 3 years could shoot up to a much higher rate. An optimistic consumer wouldn't worry much about that. But when the time came, some people couldn't pay the crazy increase in their mortgage. The foreclosures coming onto the market depressed the market.
So the bubble finally popped, and someone owned a house that they bought for $750,000 with no money down, an adjustable mortgage for the whole $750,000 that started at 4% and in three years shot up to 8%, and when that happened the house could only be sold for $450,000. So they just stopped paying the mortgage and walked away. The foreclosures further depressed prices, created a very nasty cycle.
I worked in land records at the time, and the standards for the mortgage originators were just horrible. Not bothering to record mortgages in the correct town, not bothering to do a lot of things.
There are a few movies that are really interesting that described what happened, real life thrillers IMO. "Margin Call" is awesome, "The Big Short" explains what happened really well and is pretty funny at times, and "Too Big to Fail" is from the regulators point of view. It's kind of awkward but still really interesting.
He wants to end the Fed outright, which is how we avoided a total disaster in 2008-9. But this is mostly because Bernanke, who is a student of the Depression was somewhat listened to.
The various scenes in "Too Big To Fail" where Bernanke speaks seem to have actually happened. To the limit of a narrative movie's ability to tell such a story, it looks pretty close.
And WHAT volatility??? We're so stable we're hidebound.