How does the movie compare to real life issues?

It's a bad movie and there are a lot of bad movies today.

The only thing it even comes close to touching is the housing bubble and stock market crash but it pretty much butchered those.

Hope this helps.

Fist of all, the guy that made a coment on how it butchered the 2008 market crash and housing bubble is a complete and total idiot. He obviously has no clue on either history, nor economics....or politics for that matter. This movie is in fact exactly what happened, so much so that some of your investment banking institutions within the film, i.e Louis Zabel takes on the real life personification of Bear Stearns, remember them? Please see http://en.wikipedia.org/wiki/Bear_Stearns and reference Subprime Mortgage and Hedge Fund Crisis. You will see the similarities of the fictional group, and its real life counterpart.

As far as the issues at hand, the housing bubble, which is the only reference that parallels with this particular film can simply be summed up as this:

Basically The Community Investment Act of 1977 pushed banks to make home loans to low income individuals. But at the time commercial banks were not allowed to offer full service loans (laws passed during the Great Depression).

All that changed in 1999 with the passage of Gramm-Leach-Bliley Act, signed by President Clinton! Well that did it...the banks now merged with other financial institutions and started thinking like investment houses instead of banks.

You have heard of Fannie and Freddie Mac, correct? These government affiliated programs forced banks to lend to individuals who quite frankly couldn't afford the loans, and who shouldn't be allowed a loan in the first place. What were the banks to do, they are being forced by our government to hand out high risk loans (sub-prime mortgages)

With the huge capital now on the market (from the banks being in play) they came out with all sorts of complex financial instruments (derivatives) and ways of selling them to the unsuspecting public. The days of a bank self servicing a mortgage it wrote disappeared as banks got clever and begun to sell their mortgages WITHIN 48 hours of writing it. This way they did not have a stake in who the loan was to or if the loan was ever going to get paid back. They were satisfied giving away FREE MONEY and making .25% on it for doing so.

Banks are often viewd as the bad guy, but what would you do if you were forced to lend money to individuals that you knew wouldn't pay you back? I would assume you would look for loopholes and ways to capitalize and insure your investment. This is exactly what the banks did, and what you see in the movie in regards to hedging and CDOs, http://en.wikipedia.org/wiki/Collateralized_debt_obligation

If you want a complete history or economic lesson, please feel free to email me. I can tell you anything you want to know about the housing bubble, its exact cause, who was responsible, what parties tried to prevent it, and who benefited from it. Everything I say is easily searchable, eventhough many do not want to believe it. People think blaming the rich and labling them croney capitalists is the answer, or maybe occupying Wall Street is the answer. If you are looking for someone to blame, blame Washington politicians, not the Wall Street bankers, they were just smart enough to see what was going to happen, and they used it to their advantage (thats what's beautiful about the free market!)

"...blame Washington politicians, not the Wall Street bankers, they were just smart enough to see what was going to happen, and they used it to their advantage..."

who helps to put the politicians where they are? nothing to do with banks? Hmmm.

Anyway, the film doesn't mention how certain banks' mortgages were created and aimed specifically at minorities, which they knew they could never pay back.