Banks have been furiously lobbying Congress to weaken the powers of the new proposed Consumer Finance Protection Agency.  Their efforts have born fruit.  In a recent press release the American Bankers’ Association hailed the House Financial Services Committe, led by Barney Frank, for removing  “the unworkable requirement that communications with consumers be ‘reasonable’.”

You really could not make this stuff up.

Lincoln Star-Leger promotes Casino.  Read full review here.

The New Yorker’s David Denby, after calling American Casino “terrific” and “fascinating” in his review, circled back and gave the film a second positive review two weeks later, by way of comparison with another film.  Read his revisit

here

Chris Whalen, the smartest bank analyst in the country, explains why the banks are still on the rocks despite helping themselves to all of our money.

At meetings around the country, Leslie and I are often asked “why would the banks want to foreclose on people when the house is just going to sit there empty?”  Now we learn that, amazingly, the government, in the form of the FDIC, is actually paying banks to foreclose on people who have stopped paying their mortgages.  That’s right.  The Federal Deposit Insurance Corporation, in its desperation to get the bankrupt institutions it has been forced to take over off its books, is giving buyers an incentive to throw people out of their houses.

For a quick outline of how this surreal scheme works, read Phoenix realtor Bob Hertzog’s lucid description of the deal between FDIC and Onewest, the bank that bought the horribly failed California subprime leader Indymac. (Readers should know that in a “short sale” the bank lets the homeowner sell the house for less than the mortgage loan amount and forgives the rest of the loan.)

To learn more, check out The Mortgage Insider on the subject.

Daily Beast’s Lloyd Grove tips Casino!

“When it comes to documentaries about the Wall Street meltdown, don’t let all the hype for Michael Moore’s ‘Capitalism, A Love Story’ deter you from seeing a real gem of a movie, Leslie and Andrew Cockburn’s American Casino. The wife-and-husband team avoid vaudeville shtick in order to offer a fascinating, and occasionally heartrending, morality play of predatory greed in the crazy world of derivatives and collateralized debt obligations and its brutal impact on hardworking African-American home owners in Baltimore. Watching ‘American Casino,’ it’s hard to believe that the pinstriped gamblers have reverted to their reckless ways.”

Jonathan Kim writes,

… American Casino proves that understanding what caused the housing crisis and its effects on individuals, communities, and the economy isn’t nearly as difficult as we’ve been led to believe. And to prevent this from happening again, it’s vital that we understand how it happened and repudiate the failed ideology at its root.

Read more at: http://www.huffingtonpost.com/jonathan-kim/rethink-review-emamerican_b_292894.html

Fantastic New York Times Op Ed cites American Casino,

The Recession’s Racial Divide

by Barbara Ehrenreich and Dedrick Muhammed cites American Casino:

“…In a new documentary film about the subprime crisis, “American Casino,” solid black citizens — a high school social studies teacher, a psychotherapist, a minister — relate how they lost their homes when their monthly mortgage payments exploded. Watching the parts of the film set in Baltimore is a little like watching the TV series “The Wire,” except that the bad guys don’t live in the projects; they hover over computer screens on Wall Street…

“It’s not easy to get people to talk about their subprime experiences. There’s the humiliation of having been “played” by distant, mysterious forces. “I don’t feel very good about myself,” says the teacher in “American Casino.” “I kind of feel like a failure.”

Greed, Arrogance Fuel Subprime Disaster in ‘American Casino’

Interview by Rick Warner

Sept. 9 (Bloomberg) — In January 2008, when Andrew Cockburn and his wife Leslie started making a documentary about the subprime mortgage crisis, the Dow Jones Industrial Average was above 13,000, the U.S. unemployment rate was under 5 percent and Lehman Brothers and Bear Stearns were still big names on Wall Street.

During the next 11 months, the Dow plunged 43 percent, Lehman Brothers and Bear Stearns collapsed and the U.S. economy fell into its worst slump since the Great Depression.

“It was a big story when we started, but it got even bigger as we were making the film,” Andrew Cockburn said. “We certainly didn’t know that all these huge banks would fail and that the market would crash.”

The Cockburns examine the roots and ramifications of the subprime debacle in “American Casino,” which shows how the resulting financial crisis has affected Main Street as well as Wall Street. The film is playing in New York and will open in other U.S. cities throughout September and October.

Andrew Cockburn, 62, whose father Claud covered the 1929 stock-market crash for the Times of London, has made numerous documentaries with his wife. They also wrote and produced “The Peacemaker,” a 1997 Hollywood thriller starring George Clooney and Nicole Kidman.

Cockburn, who lives in Washington, spoke to me on the phone last week while visiting New York to promote the film.

Gold Garbage

Warner: Why did you call it “American Casino”?

Cockburn: Because all these financial institutions were making very risky bets. It was just like a casino, except there were no rules.

Warner: Before you made this film, did you understand the subprime mortgage problem?

Cockburn: Not really. I knew it was a major problem, but I didn’t understand all the terms like derivatives and credit- default swaps. And I didn’t understand that people were taking garbage and spray-painting it gold.

Warner: How did it happen? Why were there no regulations to prevent it?

Cockburn: The deregulation started with the Reagan administration and continued through the Clinton years. In December 2000, something called the Commodity Futures Modernization Act effectively prevented any regulation of credit-default swaps and other derivatives.

Not Deadbeats

Warner: Mortgage lenders specially targeted low-income, minority areas for these subprime loans. Why?

Cockburn: Interest rates were so low that anyone with any money or financial acumen had already refinanced. So the fresh market was all these poor people who didn’t usually have access to credit. Banks were willing to lend them money even if they didn’t meet the guidelines because they could charge very high interest rates and they made money off every transaction.

Warner: You follow the cases of a high-school teacher, a minister and a clinical therapist in Baltimore who lost their homes because of subprime loans. So we’re not just talking about deadbeats, are we?

Cockburn: We wanted to make the point that most people who defaulted on their loans weren’t irresponsible lowlifes. They were hard-working people who found themselves in a situation they couldn’t control.

Warner: A lot of people got very rich making these subprime loans. Was it all about greed?

Cockburn: Greed and arrogance. They never thought it would turn into such a disaster.

Note: Bloomberg News reporter Mark Pittman was interviewed for “American Casino” and his comments are included in the film.

To contact the writer on the story: Rick Warner in New York at rwarner1@bloomberg.net.

“The most awkward aspect of Leslie and Andrew Cockburn’s sensationally effective subprime-mortgage-catastrophe doc American Casino is also its most compelling. The movie leaps back and forth between two milieus seemingly a million miles apart: talking white heads—Wall Street analysts and ex-traders (faces shadowed and voices distorted) who explain how much money could be made pushing loans on people with little chance of paying it back—and neighborhoods where the damage has hit home. The Cockburns travel to Baltimore, where dazed, middle-class African-Americans cope with foreclosures and evictions, having been misled into thinking their monthly payments would be hundreds of dollars less than they were. After more charts and white talking heads (Phil Gramm calling us a nation of whiners and Alan Greenspan—looking a hundred years old—admitting to Congress that there was “a flaw”) and a look at the obscene amounts of the house’s money gambled away by greed-drunken traders, we’re in Stockton, California, among the empty mini-mansions, where abandoned swimming pools are a hotbed of West Nile virus. What a metaphor. An infamous internal e-mail from one Standard & Poor’s analyst to another should be emblazoned over Wall Street: “Let’s hope we are all wealthy and retired by the time this house of cards falters.” The Cockburn’s own gamble—the abrupt changes in scale—pays off. You’ll never hear an economist explain derivatives again without thinking of the woman who walks away from the camera, weeping, as her mortgage broker refuses her check or the child’s doll splayed out on the floor of a vacated house. — David Edelstein”

Read the full review here.