Maxed Out
by James D. Scurlock
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DVD Cover Information
Actor: Beth Naef, Catherine Brown, John Brown, Louis C.K., Mike HudsonDirector: James D. Scurlock
Brand: MHE
Cinematographer: Jon Aaseng
Producer: James D. Scurlock
Writer: James D. Scurlock
Editor: Alexis Spraic
Producer: Alexis Spraic
Producer: Lee Thompson
DVD: Region Code 1
Audio: English (Unknown); Spanish (Subtitled); English (Original Language)
Format: Closed-captioned, Color, Dolby, DVD, NTSC, Subtitled, Widescreen
Picture Format: 1.78:1
Running Time: 90 minutes
DVD Release Date: 2007-06-05
Audience Rating: Unrated
Model: 10086
Studio: Magnolia
Product features:
- Maxed Out takes viewers on a journey deep inside the American style of debt, where things seem fine as long as the minimum monthly payment arrives on time. Shocking and incisive, Maxed Out paints a picture of a national nightmare, which is all too real for most of us.Runtime: 87 mins Format: DVD MOVIE Genre: DOCUMENTARIES Rating: NR Age: 876964000864 UPC: 87696400086
Movie Reviews of Maxed Out
Movie Review: Maxed Out
Summary: 5 Stars
1. Dee Hock believed the organization he created, Visa International would save the world by "allowing spontaneous interconnection into an equitable, enduring, twenty-first-century society in harmony with the human spirit and biosphere". The credit card has shackled individuals, imposed uniformity, destroyed value at an unprecedented rate, and, so far at least, has replaced neither the pound, the yen, nor the dollar. "Hock's company has arguably been the most powerful force behind a massive redistribution of wealth that has left this country less equal than at any time since the Great depression. Hock sought to save the planet from a rigid, hierarchical, oppressive, and bureaucratic organization.
2. Hock worked his way into a job with Seafirst Bank in Seattle, Washington. Seafirst become a licensee of the BankAmericard, the first bank-issued credit card, a job no one wanted. Consumer credit was left to the loan sharks and pawnbrokers. "In Hock's eyes, Bank of America was not just bigness but management charts, uniform standards, titles, stupidity." The BankAmericard licensees were losing vast sums of money to credit card fraud and primitive technology and manual accounting practices. Shareholders want the problems fixed. In response to pressure, Hock reacted by creating an advisory committee (of bank members) called the Visa International which would become the most ubiquitous organization in the history of capitalism. The idea was to issue credit cards quickly, Visa would exist not for profit and exist to create a world of tangible currency replacing paper money with trillions of electronic transactions moving through the mainframe. "Visa would become the ultimate store of value" In practice it has become nothing more than a massive marketing campaign and an electronic swich that routed money from the bank of the payer to the bank of the payee. Hock remain dedicated to technology that would allow small transaction on a grand scale, hoping someday that this technology would empower the masses and give them freedom. Freedom to no longer be forced to interact with nosy, judgmental bankers! Credit cards had created a new currency and a new money supply. The bankers knew Credit cards was about selling a single product, debt.
3. Banks were in the practice of borrowing money from individuals and lend that money to corporations. Consumer lending was not consider profitable because the small loans were time-consuming and the applicants financial situations poor and probable that they would be unable to repay the loans. Consumer credit speculation and poor lending practices had caused massive bank failures in the 1920 and 1930s. Extending credit to credit poor borrowers was "a noose with which to hang himself financially" and generally considered to be an immoral practice. Banks knew that if you give a consumer credit they will probably use it. Banks learned this lesson, in the 1920, when American had overextended themselves buying products of the industrial revolution on credit.
4. Credit cards demand is a function of the supply of available credit. The more credit the bank supplies the more demand are created. The more people begin to depend on credit the more they need to keep accumulating credit, higher and higher credit limits; new credit to payoff old credit; mountains of credit. No other product creates this type of cycle. Credit card is the only product that its price changes: the charge, penalty fees, interest - combine to create a new price for the product or service - terms and conditions change. The Visa has become a natural monopoly.
5. Walter Wriston, Citigroup Center guru, was the "first modern banker to realize that his job was not to teach customers how to save but how to spend as much as possible." In 1970s, Wriston was promising shareholders 15 percent annual increases in profits-just before a perfect economic storm of inflation, war, and technology bust ravaged the economy. Wriston believed countries can't go broke. Wriston was financing less-developed countries old debt replacing it with new debt, the reverse pyramid scheme. Larger and larger liabilities were being piled on top of the original debt. "Eventually the amount of new cash needed to service the old debt and new debt becomes too burdensome and the whole thing collapses beneath its weight. The only exception is where the player prints the currency with which the game is played, which makes the United States government unique among debtors." Wriston set out to conquer the middle class with Credit card debt and interest fees. "There was something seductive-addictive, even-about instant credit." "Wriston meanwhile, laid out his own vison of the promise land-a land in which millions of customers charged all of their purchases to a Citibank credit card and paid high, unregulated interest rates and fees for privilege." Millions of BankAmericard customers were sent letters explaining that their new visa card would soon be arriving: visa logo and name of bank on the front of the card. Wriston sensed opportunity, signed up to be a Visa bank, and sent out millions of Citibank Visa cards to his competitors customers before the replacement cards from their own banks arrived. Wriston preempted his competitors by a couple of weeks and they never recovered. When it came to easy credit, the average customer was lazy and lovestruck.
6. "In 1996, Americans charged a record $1 trillion on the Visa cards." In 2004, with foreclosures, bankrupticies, and defaults all at higher levels than during the Great Depression, President Bush awarded Wriston the Presidential Medal of Freedom."
7. Mortgage related bonds are the heavy weight of debt financing, weighting in at $6.5 trillion. The contenders are Corporate bonds, $5.4 trillion, US treasuries, $4.3 trillion, and Munical bonds at $2.4 trillion.
8. The Subprime meltdown gave people what they wanted, homeownership. 70% of American's buy homes, 15% are deliquent, and 1 in 5 are expected to be diliquent. The blame for the rising number of foreclosures is poor loaning practices which extends credit to high risk buyers. Additionally, the adjustable rates after two years have power slammed the homeowner with a mortgage payment exceeding of their percent income they can afford. The unsound loaning practices will have the affect of tighting up the loan practice laws, more legislation laws protecting against poor loan practices, more tax based agencies to regulate loans and punish the banks for violations of regulation. The subprime meltdown starts with the loan origination which is sold to wall street investment banks, who pool the loans together into a mortgage backed security bond, Investors buy the bond and the mortgage payments pay dividends to the investor in terms of yield. Safe bonds pay low returns and high risk bonds pay higher rates and this is called securization. The carnage from the adjustable rate suggests more buyers are investing short term ownership of their homes.
1. Mortgage companies are scrambling to work out deals for subprime borrowers to stay in their homes. However, Investors are fighting loan modifications because they are not in their best interest fearing Mortgage companies will give out to many, the loan modifications will go too dead beat borrowers with a high probablity of being late again in a reoccurring pattern, and a strong level of doubt that many of the subprime borrowers merit a rescue plan. 2. Lenders usually end up losing money on a foreclosure. 15% of the sub prime borrowers are 60 days late on payments. The practice of no money down on loans extended credit too borrowers with weak credit. The loan modifications include reducing the interest rate or stretching out terms. Two elements have moved against home owners: a. dropping house prices is causing an emerging buyers market b. too much credit is forcing home owners to fall behind on payments. (lenders want borrowers to keep up with their payments - run faster is the charge) 3. Different classes of investors have different interests. Holders of the highest ratings are first to collect payments on interest based on risk. The bond structure is such that there is cash flow for obligations to the investor and leaving a cushion for defaults. If after three years of good performance the cushion may be reduced. In some cases the cash goes first to the lower rate security investors and the high risk rates investors are last to get a payment. In this case loan mods benefit the low risk investor and boosting the credit ratings. The high risk investors want the residuals to be stockpiled as insurance against defaults, so they don't lose out on profits for their payments.
10. The Subprime crisis will require billions of dollars in bailouts to stablize. Up to 1.5 million additional US homeowners may lose their homes to foreclosure. CDO collaterial is heavily backed by RMBS. ARM rates are due to adjust causing a new wave of foreclosures. Lender liquidity is expected to dry up. The subprime mortgage market is a trillion dollar business. Hedge funds are among the big losers in the Subprime sector. The subprime crisis will have an impact on the broader markets and economy.
Summary of Maxed Out
Synopsis:Item Type: DVD Movie
Item Rating: NR
Street Date: 06/05/07
Wide Screen: yes
Director Cut: no
Special Edition: no
LanguageENGLISH
Foreign Film: no
Subtitlesno
Dubbed: no
Full Frame: no
Re-Release: no
Packaging: Sleeve Please note: This supplier will be closed on 11/24, 11/25, 12/26, 1/2 for the holidays. The shipping cut off is 12/10 to try and have the products delivered by Christmas.
In Maxed Out, author/director James D. Scurlock (Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders) takes on America's debt crisis. Consequently, he touches on related issues like race, corporate malfeasance, and political subterfuge. Scurlock?s multi-media approach incorporates statistics, news excerpts, and interviews, but it's rarely dull (comedy bits from Louis CK and tunes from Queen and Coldplay don't hurt). Speakers include economic professors, debt collectors, pawn brokers, investigative reporters, beleaguered consumers, and even Robin Leach (Lifestyles of the Rich and Famous). Instead of New York and Los Angeles, he concentrates on mid-size cities, like Minneapolis, Oklahoma City, and Seattle. Plenty of small towns also come into play. Though he never presses the point himself, Scurlock allows his subjects to note the similarities between the credit industry and the drug trade (others use such incendiary terms as "rape"). One thing he neglects to mention, however, is pride. If house payments are ruining your life, selling that property may be the only solution. In most cases, however, it's hard not to feel for those individuals who didn't know what they were getting into before they signed their lives away. For some viewers, this will be a dispiriting documentary--three subjects recount the suicides of relatives who found their debt too much to bear--but in explaining exactly how lenders and creditors make money, Maxed Out can help others to avoid some of their most egregious practices. In other words, debt may be a downer, but knowledge is power. --Kathleen C. Fennessy
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