Is American Casino the Best Picture of the Year? "And the Envelope, Please ..."

[Crewleader]

November 23, 2009

By MIKE WHITNEY

Andrew and Leslie Cockburn have produced the best movie of the year. American Casino tells the story of the financial crisis, which started with the meltdown in subprime lending and ended up triggering the deepest slump since the Great Depression. The Cockburns skillfully uncover the truth behind the headlines, shining a light on the negligent regulators, the colluding Fed, the unscrupulous ratings agencies, the mercenary banks, the venal mortgage lenders, and the long daisy-chain of opportunists and fraudsters who gorged themselves on the spoils from the biggest swindle in history. This is this generation's big story and it is warmly conveyed by master narrators, Andrew and Leslie. Expect to see them both on Oscar night.

The movie begins in downtown Manhattan, the camera shifting lazily from one sharply silhouetted skyscraper to the next. This is Wall Street, the epicenter of the financial universe. With the edgy murmur of jazz in the background, the Cockburns fix their lens on Senator Phil Gramm and Fed chairman Alan Greenspan, the two policymakers who, more than anyone else, laid the groundwork for the impending market blowup. In testimony before a congressional committee, "Maestro" Greenspan reluctantly admits that he discovered a "flaw" in his theory of how markets work. The film contrasts Greenspan's fumbling defense with sweeping visuals of the endless rows of boarded up homes in downtown Baltimore where the foreclosure epidemic has turned large parts of the city into a ghost-town. This is the Greenspan/Gramm legacy, the triumph of deregulation.

American Casino explains the most complex aspects of the financial collapse in terms that anyone can understand. The movie is an informal tutorial on Wall Street's "innovations", including a brief rundown on collateralized debt obligations (CDOs), mortgage-backed securities (MBSs) and credit default swaps (CDSs). These are the notorious debt-instruments which clogged the credit markets and sent stocks into a tailspin. The Cockburns also interview a number of people who played bit-parts in the market crash. Here we see the shame of a ratings agency executive who caved in to the investment banks and gave them the triple A ratings they wanted, but didn't deserve. There's also a brief segment with a mortgage lender who routinely filed false income statements which allowed unqualified loan applicants to be approved. Then there's a moment with a financial technician who loaded B-rated junk into CDOs that were sold to gullible Korean investors. One of the things that's so disturbing about American Casino, is that it shows how normal, moral people eagerly participated in a profit-skimming operation that was based on repackaging dodgy loans and selling them to credulous investors. They knew what they were doing was wrong, but did it anyway.

http://www.counterpunch.org/whitney11232009.html

[snot]

1. It's excellent. Hope a lot more people see it.