Overview And Personal Reflection Of The Movie Zeitgeist Addendum

Introduction. Chapter A. Historical background. Zeitgeist Movement and Accountability. Kant’s Categorical Imperative. Not profitable to be ethical. Chapter B. Credibility of the movie. The effect of the movie on me. Positive and improvement aspects. Conclusions. Bibliography.

This essay will focus on the analysis and personal opinion on the Internet movie ‘Zeitgeist Addendum’. This movie was produced by Peter Joseph in 2008. The main idea of this movie is to show a reality and consequences that money-based system has on humans, and the best solution out of this is resource-based economy. This essay will focus on discussing what topics are discussed in relation to ‘Business ethics’ book by A. Crane and D. Matten. Following that, the credibility and personal opinion of the movie will take place. Finally, the positive and improvement points will be presented, while conclusions and recommendation will sum up this piece of work.

The movie ‘Zeitgeist Addendum’ was produced by P. Joseph and was released in October, 2008, right in the middle of the financial crisis. The movie mentions this aspect very subtly during the beginning of the film by blaming the Federal Reserve Bank of devaluating the monetary base by increasing the supply of money. Following the tech bubble and the economic trauma that followed the terrorist attacks on the U.S. on September 11, 2001, the Federal Reserve stimulated the struggling U.S. economy by cutting interest rates to historically low levels. As a result, the housing market soared for several years. In order to capitalize on the home-buying frenzy, some lenders extended mortgages to those who could not qualify for traditional loans because of a weak credit history or other factors. Investment firms were eager to buy these loans and repackage them as mortgage-backed securities (MBSs) (Kurt, 2014). In the beginning of 2000s, families were allowed to borrow up to more than 100% of the value of their property; therefore, families in the low/ middle income class took this chance with unbelievable deal. Banks did not worry about families not being able to pay back their borrowed money, because in that case, banks could just seize the property and sell the house due to the speculative bubble which had now formed over the real estate market. In order to lessen their risk, banks made a decision to secure their contractual debts on financial markets by means of Collateral Debt Obligations (CDO). According to financial dictionary (n. d.), the Collateral Debt Obligation is ‘an asset-backed security backed by the receivables on loans, bonds, or other debt. Banks package and sell their receivables on debt to investors in order to reduce the risk of loss due to default’. High risk was one of the features of this security; therefore, this attracted a lot of investors. /However, at that moment in time, the housing market in the United States suffered greatly as many home owners who had taken out sub-prime loans found they were unable to meet their mortgage repayments. As the value of homes plummeted, the borrowers found themselves with negative equity. With a large number of borrowers defaulting on loans, banks were faced with a situation where the repossessed house and land was worth less on today’s market than the bank had loaned out originally. The banks had a liquidity crisis on their hands, and giving and obtaining home loans became increasingly difficult as the fallout from the sub-prime lending bubble burst.