Colson: Is it deja-vu when it’s really happening again? | AspenTimes.com

Colson: Is it deja-vu when it’s really happening again?

with John Colson

Holy financial corruption, Batman — can it be true? Are the same kinds of Wall Street shenanigans that caused the 2008 financial crisis still going on?

Yes, Robin, it's true. Just ask Hollywood.

That's pretty much the message that played over and over again in my brain as I walked from a theater recently after viewing the Adam McKay film "The Big Short."

Based on Michael Lewis' 2010 book with the same title, which lasers in on the causes of the financial crisis, "The Big Short" is a tough film to watch and an even tougher film to fully comprehend.

That's because the underlying financial schemes that brought the world briefly to its fiscal knees are labyrinthine and nearly impenetrable to most of us.

In fact, even the fiscal maniacs who used them to get rich while they despoiled the American dream for millions of people probably never fully understood these toxic financial devices.

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But, hey, what else is new?

If you've ever sat down and talked with a so-called financial whiz kid, you understand fully that they are not from the same world that you inhabit. Their vision is radically short-term, their hearing ability seems nearly nonexistent beyond the sounds of their own voice and the "ka-ching" of their rising personal wealth, and their sense of compassion for the little guys and gals of the world either never fully developed during childhood or atrophied as soon as they figured out that screwing the "other guy" could make them rich.

So the fact that most of them probably never really understood the very devices they were using, beyond the basic understanding that they were making obscene amounts of money, should not be that surprising.

Anyway, regardless of the difficulties encountered by moviegoers, "The Big Short" (either the book or the film) is now on the required-reading or -viewing list for anyone who wants to know more about our recent international meltdown.

Granted, before walking into the theater, you first must be willing to pay close attention to what's going on up on the screen; to compare the on-screen action to your own memory of events leading up to, during and after the financial crisis; and to apply your best analytical skills to unraveling some of the more complex points made by the film — not the sorts of demands normally made of a movie audience.

The reward, however, is worth the effort, as it leaves you with renewed feelings of outrage that of the hundreds of financial experts and executives who should have gone to jail for their fiscal crimes, only two have actually served time, and both of them were low-level traders who came here from other countries.

And the much-ballyhooed "billions" in penalties paid out by such institutions as JPMorgan Chase or Goldman Sachs, two of the worst offenders in the crisis?

Well, as was pointed out a year ago by writer R.J. Eskow on the HuffPost Politics blog, both have made back those billions many times over despite having been guilty of "investor fraud, consumer fraud, perjury, forgery, bribery, violations of sanctions laws against countries like Iran and Sudan, illegal foreclosures on active-duty service members and their families … The list goes on."

And what's worse, the devils who did it to us before are doing it all over again.

At the end of "The Big Short," viewers are warned that there is a new investment vehicle out there, known as the "bespoke tranche opportunity," which is nothing less than "collateralized debt obligations" — the product at the heart of the financial crisis — dressed up a bit and with a new name.

Financial reporter Stephen Matteo Miller, on the U.S. News website, noted that these same financial tricks also failed back around 2001, when the tech bubble burst, and even as far back as 1994-95, in the so-called Tequila crisis that began in Mexico.

So, these collateralized debt obligations and their fiscal cousins already were old news and well-known fiscal booby traps by 2005, when Wall Street started climbing on the bandwagon that rolled the world over a financial cliff three years later.

But Washington wasn't paying close attention, the financial watchdogs at the Securities and Exchange Commission had seen their budgets cut so badly they were essentially playing table tennis in the dark with our nation's fiscal well-being, and Congress had long been bought out in terms of posing any kind of regulatory threat to the financiers who bankrolled the members' campaigns.

Are we poised at the brink of another financial crisis?

No one seems to know, but many

are afraid.

And at the same time that all this is going on, our corporations are scrambling to get out from under U.S. regulatory and tax laws by engaging in something called "tax inversion" — merging with, say, a European firm that acts as a tax shelter for the putative American company's earnings.

What do you think they know that the rest of us don't?

See the movie, and think about it.

jbcolson51@gmail.com

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