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Review by Beatrice On 23-Jun-2023
The credit system which has as its center the pretended national banks and the powerful money-lenders, and the moneylenders swarming around them, represents an enormous centralization and assures this class of parasites a fabulous force, such as not only periodically decimates the industrial capitalists, but also intervenes in the most dangerous way in actual production-and this gang knows nothing about production and has nothing to do with it (...) bandits with whom the financiers and speculators are joined
Uses. Until 2006 boom years in the housing market.
The crisis began in the second half of 2006 with rising housing prices and insolvency due to the subprime mortgage bubble, securitizations and underestimation of risks. Anyone was put in a position to get a mortgage without foreseeing what the consequences of such a shockingly aggressive market might be.
The crisis begins to be felt by a few investors, including the eccentric hedge fund manager, Michael Burry, who "despite" his glass eye has rapt vision; Mark Baum, a hedge fund leader and totally challenged in the system in which he believed and now, partly because of the traumatic suicide of his brother, is driven by a strong desire for revenge against the banking giants; two young investors aided by an ex-manager in finance now converted to nature; and the charismatic broker Jared Vennett.
They decide to invest large sums of money on the default of the adjustable-rate mortgage market-that's the big bet!
After a long period of freezing housing market failure, and information asymmetries, will come the years of the most catastrophic financial crash in the contemporary Western world. The most notorious investment banks such as Lehman Brothers disappeared, declaring bankruptcy in September 2008.
Parasitic financial capitalism replaced the monetary mechanism with the credit mechanism and the latter with a derivative and fictitious mechanism. Before, it was known what the various securities represented and to what concrete reality of value they responded; so that those who bought securities or invested knew what they were buying and where their money ended up. Gradually derivative securities (hedge funds, Cdo's, credit default swaps, etc.) emerged and proliferated in the financial markets, taking away all visibility from the system as one no longer knows what actual values they represent and what fundamental assets and/or collateral they relate to. Derivatives, packaged and repackaged with reference to other securities, have become the currency, the monetary mechanism of the financial system. Decried as the intelligence of choice over the mechanics of behavior and extolled as financial innovation over staticity, derivatives have become the liquidity of the system. And by their multiplication they have elevated the values of the underlying securities (stocks, currencies, bonds, mortgages, etc.) by 10-50-100 percent. The collapse of these securities (Cdo, credit default swaps, convertible bonds, etc.) destroyed the fictitious monetary mechanism and the liquidity system of the financial market, causing the banking system itself to unravel.
The film points out that no bank was able to know what was the real amount of infected securities it had. It did not know what value to assign to the collateral assets because the value pricing system on which to base itself had disappeared. In other words, every credit and commercial institution and every financial institution, unable to decipher and quantify its exposure or predict the so-called counterparty risk remained paralyzed in its interbank relationships. Going in search of liquidity and, finding it, keeping it for itself. Thus liquidity injections by central banks to credit and commercial banks remained ineffective in reactivating interbank exchange . Hence, creative finance, which held up the 2001-2007 debt cycle, turned its insane greed for profits and rents (so-called capital gains) into destructive chaos with immense social fallout.
"A whole system of swindling and fraud regarding the foundation, issuance and trafficking of securities..." "Banks and the Stock Exchange are the driving force... to the point that, during the financial euphoria phase, even in the countries where the industrial revolution was born "the capitalist production process appeared merely as a necessary evil to make money." One sees "nations abandoning themselves completely to the capitalist mode of production [devoted] periodically to the vertigo of wanting to make money, without the intermediation of the production process. One experiences paradoxical moments of a much deeper mechanism, anchored in the process of valuing money as capital and seeing society captured by the "fetishism of money."
On all this and much more sensitizes this verbose and adrenaline-fueled film especially where it highlights the unquestionable parallelism between lawlessness and stupidity that makes what used to be called the "American Dream" degenerate into a paralyzing nightmare.
Adapted from Michael Lewis's book, it succeeds in explaining financial slang to the general public, and although it may seem, at times, difficult to understand, McKay succeeds in being particularly creative and eccentric: amidst foam-filled bathtubs and Las Vegas gambling tables he packs picturesque metaphors that are decidedly explanatory.
An acrid-tasting comedy sees at work performances of deviant characters sophisticated enough to mesmerize the viewer into a fecund entertainment of information and overwhelming spectacle.
In the finale, nothing reassuring, indeed: what was a bad custom today continues to be the system governed by the sole criteria of endless accumulation and unbridled competition in the inevitability of that abstract, anonymous and regulating form of all exchanges called the market.
That is, that "nobody" who is still "somebody" as Homer said of whom there is no given evidence.
Finance will take over the economy and politics and dominate the world stage. Finance has become "creative," has completely disengaged itself from the labor-generated economy, moves immense capital and determines the future and fate of entire nations. Politics can only be subjected to such dominance. Each man endeavors to procure for the other man a new need, to force him to a new sacrifice, to reduce him to a new dependence and push him to a new mode of enjoyment and thus economic ruin. Each seeks to create above the other a foreign essential force to find therein the satisfaction of his own selfish need. Thus, with the mass of objects grows the sphere of foreign beings to which man is subjugated, and each new product is a new enhancement of mutual deception and mutual dispossession. Man becomes all the poorer as a man, he has all the more need of money, in order to seize the hostile being, and the power of his money stands just in inverse proportion to the mass of production; in other words, his misery grows to the extent that the power of money increases. Therefore, the need for money is the real need produced by political economy, the only need it produces. The quantity of money increasingly becomes its only attribute of power: just as money has reduced all being to its own abstraction, so it is reduced in its own movement to mere quantity. Its true measure is to be boundless and immoderate. This is also how it presents itself from the subjective point of view: in part the extension of products and needs makes itself the slave - the ingenious and always calculating slave - of inhuman, refined, unnatural and imaginary appetites; private property does not know how to make of gross need a human need; its idealism is imagination, arbitrariness, caprice
The present creation of money out of nothing by the banking system is identical to the creation of money by counterfeiters. The only difference is that those who profit from it are different
TRUTH IS LIKE POETRY: A LOT OF PEOPLE ARE PISSED OFF ABOUT POETRY.
23-Jun-2023 by Beatrice
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