Satyajit Das: An Insider's View of "Inside Job"
Watching the new documentary, "You increasingly get the feeling of sitting in a room with putrefying flesh all around, letting off odors," says Satyajit Das.
The documentary was made by director Charles Ferguson, a onetime software entrepreneur and former senior fellow at the Brookings Institution. It features interviews with several Wall Street heavyweights, including Paul Volcker, Eliot Spitzer, and George Soros. Among the financial experts who appear in the film to illuminate some part of Wall Street's inner workings is Minyanville contributor Satyajit Das. As a former trader who worked for CitiGroup and Merrill Lynch, Das is known as a global authority on derivatives and risk management. He's also the author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives (2006 and 2010, FT-Prentice Hall). (Read excerpts from the book here.) We asked Das to share his take on the new film and experiences on set.
Minyanville: What would you say is the lesson of this film?
Satyajit Das: Trust no one with your money, including yourself. Most experts don't know what they are talking about. Financiers generally have so many conflicts of interest they develop mental conditions making them completely incomprehensible and financially illiterate except when calculating their own bonuses.
MV: What is your on-screen interview about? What comments did you make?
SD: I was interviewed about credit derivatives. I tried very hard not to make an absolute fool of myself and not sweat as the room, which was the size of a closet, was excruciatingly hot. I understand from having watched Broadcast News that sweating on camera would fatally damage my chances of any future appearance in a visual medium. I took the approach that "I was born not knowing and have had only a little time to change that here and there." I also tried to maintain plausible deniability later, taking Donald Rumsfeld's advice: "I'm working my way over to figuring out how I won't answer."
MV: That's funny. But what did you end up saying about credit derivatives?
SD: Well I tried to explain how a credit default swap works and some of the problems with it. So I just remembered everything other people had said and did a mash-up. I said that they could be tools of "niceness" and "good" but in the hands of "vampire squids" could be used to do "naughty things" and "evil." Generally [my goal] was to explain how derivatives link the financial system in a way that is difficult to understand, and when things go wrong how the losses get transmitted throughout the system, often unexpectedly and certainly unintentionally. As profanity would leave me on the cutting room floor I found myself hugely restricted in the range of opinions I could express.
MV: What is the most compelling part of the documentary?
SD: I thought it would be obvious. It's when I appear! But don't blink or you will miss it.
My next most favorite moment is when Charles Ferguson exposes the participation of prestigious academics, who provided the age of money with seductive economic credibility. Harvard's Martin Feldstein and Columbia University's Glenn Hubbard earned large consulting fees from financial institutions. Confronted on camera, Feldstein glowered, squirmed, and smiled, in the words of one reviewer "like Yoda with a hemorrhoid".
MV: Do you think this movie will lead to any changes in the way Wall Street works? For example, will university economists now think twice before accepting funding for a study that supports a financial institution's political agenda? Or are any other changes likely?
SD: I think that the film does a good job of putting together a cohesive narrative about a whole chain of events that created the conditions for the global financial crisis. It also shows the part a whole lot of people played in it. Whether or not you agree with the film's message, I think it will definitely help most people get a clearer view of the events and how hard it will be to get out of it or avoid a repeat performance.
But I doubt whether it will change much at all. Wall Street is Wall Street; people are people. A few years down the track everyone will have forgotten the lessons. I think the only thing history teaches us is that we don't learn much from history. The sheer amounts of money to be made create a febrile environment where behaviors are hard to change. Wall Street always comes back -- bigger, more greedy but not necessarily better.
MV: What are the other shocking revelations that come out of the film? Do you think bankers and traders will be as surprised by the film as anyone else?
SD: Bankers and traders will view the film through the lens of their own vanity and hubris. Michael Douglas tells the story (in fact in every interview) of how after Wall Street came out in the 1980s, he used to approached by bankers who told him how much they admired Gordon Gecko (I have a feeling bankers couldn't figure out that Douglas was playing Gecko rather than being him!). Douglas had to remind them that he was the bad guy. So they won't be surprised at all.
Ordinary people will find the film more disturbing. It may confirm their concerns about how Wall Street and K Street run and ruin their lives.
The thing that is most shocking is how large the problem is and how many people claim to have known about the problems but seemed not to have done much about it.
MV: Who comes off looking the best? Are there any heroes or would-be heroes?
SD: I don't think there are any real heroes in the film. I think that you increasingly get the feeling of sitting in a room with putrefying flesh all around, letting off odors. Remember the whole thing would have been impossible without the acquiescence of everybody. Did the ordinary person mind when their 401(k)s were bulging? Did they mind when they were getting richer as their house soared in value? It is a very broad-based problem. Bankers took advantage of a specific set of condition very cleverly. I think it is important not to forget that the problems are part of the DNA of modern societies.
MV: A columnist at Forbes said "Inside Job makes Oliver Stone's Wall Street look like a comic strip." Would you agree with that statement?
SD: What's wrong with comic strips? I love them. I only really learned recently that superheroes weren't real -- so disappointing.
Inside Job tries to dig into the real story. Oliver Stone is a polemic filmmaker interested in an entertaining narrative filled with human interest where money is a backdrop to a tale of redemption and hubris. Very different works and a little unfair to compare them I think.
MV: Do you recommend the film?
SD: I am told that this is a product endorsement! I have a policy of not doing this, but how much are you offering?! Do I now qualify as a movie star and get more?
Satyajit Das in Inside Job: Credit derivatives can be "tools of niceness and good but in the hands of 'vampire squids' could be used to do naughty things.
Also see: The Top 10 Lessons of Wall Street Movies.
And see the movie trailer below:
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