Inside Job Transcript - Final Version - 9.30.10 - Sony Pictures Classics

Inside Job transcript – Sony Pictures – September 2010 46
NARRATOR: By 2008, home foreclosures were skyrocketing, and the securitization
food chain imploded. Lenders could no longer sell their loans to the investment banks;
and as the loans went bad, dozens of lenders failed.
02:01:13.24
GEORGE SOROS: Chuck Prince, of Citibank, famously said that, uh, uh, we have to
dance until the music stops. Actually, the music had stopped already when he said that.
NARRATOR: The market for CDOs collapsed, leaving the investment banks holding
hundreds of billions of dollars in loans, CDOs, and real estate they couldn't sell.
NOURIEL ROUBINI: When the crisis started, uh, both the budha-, uh, Bush
administration and uh, and the Federal Reserve were totally behind the curve. They did
not understand the extent of it.
02:01:47.27
CHARLES FERGUSON: At what point do you remember thinking, for the first time, this
is dangerous, this is bad?
CHRISTINE LAGARDE: I remember very well, uh, one, uh, I think it was a G7 meeting,
of February 2008. And I remember discussing the issue with, with Hank Paulson. And I
clearly remember telling Hank: we are watching this tsunami coming. And you just –
proposing that we ask which swimming costume we are going to put on.
CHARLES FERGUSON: What was his response, what was his feeling?
CHRISTINE LAGARDE: Things are pretty much under control. Yes, we are looking at,
uh, this situation carefully, and uh – yeah, it's under control.
02:02:30.11
{G7 MEETING, TOKYO
FEBRUARY 9, 2008}
HENRY PAULSON: We're gonna keep growing, okay? And obviously, I’ll, I'll say it: if, if
you kee-, keep, if you're growing, you're not in recession, right? I mean, we, w-, we all
know that.
02:02:45.01
{THE RECESSION HAD ACTUALLY STARTED
FOUR MONTHS BEFORE PAULSON MADE THIS STATEMENT.}