Q&A with Leslie and Andrew Cockburn
BRIAN LAMB, CEO OF SPAN: Leslie Cockburn, when did you first think about doing the American Casino documentary?
LESLIE COCKBURN, CO-PRODUCER, AMERICAN CASINO: Well January of 2008 Andrew and I decided to do the film. We had wanted to do something together a future documentary project. And we’re watching the market very closely after what happened in 2007. You had a mini crash in August and then you had a couple of Bear Sterns Hedge Funds just disappeared.
And also by that time you had on the courthouse steps in any city around here around Washington you had these houses being auctioned once every three minutes basically. So we could see at that point that the one important first of all both of us thought that it could be as important as 1929.
I had just been reading John Kenneth Galbraith’s book on ’29 and Andrew’s father covered the crash of 1929 so we could see these the rumblings and though we better jump on this now. And that with a documentary like this we could actually tie together what was happening in a place like Baltimore with Wall Street.
LAMB: After you got the idea what did you do next?
ANDREW COCKBURN, CO-PRODUCER, AMERICAN CASINO: Well we started talking to people. We’d started, I mean months what we do as journalist is we’re, you know, we’re trained to master, you know, get in touch with the subject very quickly and start to look around to see who was doing interesting reporting about this and we came across Mark Pittman at Bloomberg who had been writing about this before really anyone else and who really spotted what was happening.
And we also started going to Baltimore to, you know, see what was happening on the ground and serendipitously we you know started to meet people who ended up in our film. And very we wanted to meet people who were the not sort of the feckless borrowers of, you know, the ”Wall Street Journal” editorial page liked to describe them, you know, sub-prime victims as, but, you know, to see the ordinary mainstream borrower who was getting into trouble. So we went to things like foreclosure workshops in Baltimore.
People trying to, wrestling with what how do you get out of this situation? And we met there one of those we met Patricia McNair who’s a Johns Hopkins therapist who’s in the film. So we really you know we started to just sort of graft ourselves into the subject both in Wall Street and in Baltimore. And in a way I believe at that stage which was January ’08 what really the memory I have of that period was how inside, how terrified people were on Wall Street.
People were sort of talking in very apocalyptic terms. I remember a trader at a bank, one of the - some one who traded in derivatives at one of the big banks told me. He said, ”I’m sitting here looking at my six screens and it feels like Armageddon.” Oh my God. But this hadn’t yet got onto the front pages of the papers that we were really going over a cliff here.
LAMB: Where do you find money for something like this?
L. COCKBURN: Investors. Fortunately documentaries like this aren’t that expensive to make. You know, I’ve been making documentaries for making films for 30 years now. So I know how to make something without spending way too much money. It’s really about editing as much as possible in the camera really. So we had the camera people who worked on it were people who we’d worked with for many years. The editor was someone who’d I’d been at CBS with for many years.
We edited it at DuArt which is one of the great, old production houses in New York. And so there are ways to do things without spending huge amounts of money. And you go to private investors. There are a number of places to go to find people who will put in relatively small amounts of money. But this we’re not talking about a multi-million dollar project here. You know, this is less than a million dollars.
LAMB: Who did you want to see it?
A. COCKBURN: We wanted several classes of people. We wanted people to see it who are themselves experiencing, you know, the sort of nightmare of foreclosure. We wanted to show that whoever caused this it wasn’t people who’d gotten themselves or necessarily people who’d gotten themselves, you know, into debt because there’s a strain of thought in this country in this crisis that somehow it’s the victims fault. You know, people took out loans they couldn’t afford and got what was coming to them.
We wanted to show people who are in that situation that there were, you know, lots of people like them and maybe they’d been unwise but they hadn’t been sort of wicked in taking out this kind of getting into this kind of trouble. And it’s, you know, something that’s faced by a lot of people who are in other ways completely responsible. And I guess beyond that we wanted everyone to see it because this is a huge this is a mega event.
Mark Pittman who’s in the film he called it at one point. He said to us, ”This is a 100 year storm”. So we want people to everyone wants to know what happened. You know, how come suddenly there we were rolling merrily along, price of houses going up, you know, economy looking good, unemployment, you know, under 5 percent. And suddenly boom, we’re over a cliff and, you know, unemployment is 10 percent or north of that. What happened? So we want to show people that.
LAMB: There’s a lot of shots in the opening of, you know, the boards in New York and all that stuff but we’re not going to show that. I’m going to go where I suspected when I saw it was the political point for you both. And we combine two things, let’s watch that. It’s a couple minutes and then we’ll come back and you can explain why you chose this.
SEN PHIL GRAMM: I say to my clients, ’you’ve heard of mental depression, this is a mental recession.’ You know, we’ve never been more dominant. We’ve never had more natural advantages than we’ve had today. We’ve sort of become a nation of whiners.
MICHAEL GREENBERGER: To understand why this is like a gambling casino. You have to understand what’s at stake here. On a December evening December 15th, 2000 around 7 o’clock Phil Gramm, Republican Senator of Texas, then Chair of the Senate Finance Committee, walked to the floor of the Senate and introduced a 262-page bill as a rider to the 11,000 page appropriation bill which excluded from regulation the financial instruments that are probably most at the heart of the present meltdown.
He not only excluded them from all federal regulation, but he excluded them from state regulation as well which is important because these instruments could be viewed to be gambling instruments where you’re betting on whether people will or will not pay off their loans. And he announced at the time that this measure would be a boon to the American economy and be a boon to Wall Street because they would be free of any supervision in this regard.
GEORGE W. BUSH, 43RD PRESIDENT OF THE UNITED STATES: Too many American families too many minorities do not own a home. There is a home ownership gap in America. The difference between Anglo America and African American/Hispanic home ownership is too big. We’ve got to focus the attention of this nation to address this. And it starts with setting a goal and so by the year 2010 we must increase minority homeowners by at least 5 and half million.
LAMB: Was that right? Is this where you thought the politics of all this started? Phil Gramm, George Bush?
L. COCKBURN: Well we chose Phil Gramm because, you know, there were a lot of things that happened. You can chose a lot of dates but the legislation in December of 2000 was the really big one because it said basically that you couldn’t outlaw derivatives. You couldn’t it made it if you read it it’s very clear that it protects these derivatives, credit default swaps, et cetera. And it allowed them to just balloon beyond control. And Gramm was very was absolutely instrumental in that.
And remember Michael Greenberger who’s voice you hear and who’s talking about it who’s now, you know, he’s a lawyer and professor at the University of Maryland Law School. Greenberger was a regulator so he was on the Commodity Futures Trading Commission so as early as 1998 he was he would have liked to outlaw these kinds of derivatives that have gotten us into so much trouble. But he himself said that that point in December of 2000 was the absolute critical moment. And Phil Gramm was the person who pushed that through.
LAMB: Where did you happen to get this video?
A. COCKBURN: Oh, of Phil Gramm?
LAMB: Yes, what is he doing now?
A. COCKBURN: What is he doing now? He’s apparently he’s Vice Chairman. He’s gone to he’s enjoying his reward as Vice Chairman of the Union Bank of Switzerland. He’s still very powerful in Texas politics I believe.
LAMB: But if you go back to that time period in the year 2000, September, he didn’t do this in a vacuum. That was attached to an appropriations bill. Did that go through at conference, had it ever been discussed in the House of Representatives? Do you know?
A. COCKBURN: Well, it had been discussed, in fact, and had failed. They tried to introduce that commodity features the commodity features modernization act as a separate bill and it hadn’t gone through, it had failed. So what they then did, what Gramm did, with I’m sure plenty of willing assistance, was to take it onto an appropriations bill and this is December 15th, 2000.
You know, everyone’s wanting to go home for Christmas. Bill Clinton was about to leave office, so Clinton signed it and there was its 252 pages tacked onto an 11,000 page bill. So how many people do you think actually read it.
I mean Gramm, if you look at the Congressional Record, there’s a speech by Gramm introducing the bill. And I went to your excellent organization, to CSPAN to get the tape and your researchers dug and delved and tried to find the tape, and then came back and said, ”Well, there is no tape because he didn’t actually give that speech. It was inserted in the record afterwards.”
So this momentous piece of legislation wasn’t even spoken in the Senate, let alone understood.
LAMB: For the record, this is the first time I knew you came to our organization. I had no idea so I mean people do it all the time, but I just wanted to let everybody know that’s not why you’re here.
Go back to the George Bush clip. If my memory serves me, that was at George Washington University.
L. COCKBURN: Well, actually he made that exact same speech again and again and again in 2002, which was very interesting because he was I mean you could look at it one way saying that he was completely you know, very anxious for minorities to have decent housing or you could say I wonder what forces were at play in 2002 to encourage him to do this. I think it was coming from a lot of directions.
If you look at it from Wall Street, in 2002 that was a critical time in the life of CDOs, collateralized debt obligations, because it was just about that time that the smart people on Wall Street decided that instead of being so diversified in these securities, why not just load them up with sub-prime loans. So it was a very dangerous moment. They started pouring sub-prime loans into these products and at such large numbers that it made them much more vulnerable to exploding.
LAMB: What were the Democrats doing along this way about the idea of sub-prime mortgages?
A. COCKBURN: Not enough. I mean there was no one I mean it’s fair to say that no one really at that time was raising alarms. I mean they were I think Sheila Bair, now, you know, the chairman of the FDIC, running the FDIC, she was one of the early people to go to inside to go to Greenspan at the Fed and say, ”Look, this is looking rather dangerous. You should --
There’s another now dead Mr. Gramlich who was a governor of the Fed, he was raising concerns certainly by 2004, but apart from some people on Wall Street who started to bet against subprime loans in 2005, that doesn’t you know, you could say that, unfortunately, no one really raised the alarm when it might have made a big difference.
LAMB: In this next clip, Mark Pittman is a part of it and I know he’s died since then, and I’ll ask you about that in a moment. But and also David is it Attasani, a mortgage broker. Before we show this, where did you find the mortgage broker?
L. COCKBURN: David Attasani was not a mortgage broker. David Attasani worked on Wall Street for a number of firms and he asked us, in fact, not to mention the various firms where he worked, but they all would be extremely familiar to you and, you know, as he describes in the film, some of them no longer existed by the time we went to see him.
A. COCKBURN: What he was doing is he was marketing these, selling these you know mortgages bundled into bonds and he was selling these securities to other banks around Wall Street.
LAMB: Here is this clip.
DAVID ATTASANI: I worked for four companies on Wall Street. Three of them don’t exist anymore. I don’t think anything is really permanent in life. I mean, sure, my grandfather worked for the same company for 20 some odd years in the steel mills of Pittsburgh, maybe 30 years, I don’t know. But he worked for the same company his whole life.
Nothing’s permanent any more. The stock market goes south, you have banks going out of business. It’s just the way people in America live. I don’t think anything I’ve done propelled or inhibited it, I don’t think now. I don’t feel any any responsibility for this mess at all.
MARK PITTMAN: It really started getting heated in 2004, 2005. The mortgage rates kept dropping for prime mortgages, you know, the ones that most people get and that made the others much more valuable, because they offered much more yield. When you have that much cash flow that’s extra, you can siphon off a whole lot more fees and that is, you know, it’s all about money.
LAMB: Why did you go to Mark Pittman?
L. COCKBURN: Because Mark Pittman, it was you know, when you’re trying to explain this stuff in a film, you really you want to take it slowly and Mark was very, very good at explaining how these things worked and, therefore, I wanted to start with him because he talks about when when the whole subprime market started heating up and he makes this very important point.
You know there are a lot of people who don’t even know what subprime means, so you really had to explain that. That you get more yield, you get more money out of it. The guys on Wall Street make more money out of subprime loans and that was a key thing.
And, also, he introduced the ideas of the fees which indeed were extremely important, as everything on Wall Street is fee based. Certainly with this whole crisis, the things that people were packaging, they wanted to do more and more and more because the yields were so good and the fees were so good.
So Mark is a you know, one of the best unfortunately he at the age of 52 he had a heart attack recently but Mark was one of the great financial reporters of our time, as economist Joe Stiglitz said recently.
And so and I also felt and Andrew did as well that Mark who’s from Kansas City who has a real presence, he’s a real all-American guy and he really is a populist in that he you know, he loves Wall Street, he loved covering Wall Street but he really wanted the rules to be fair.
LAMB: Was it a surprise that he died of a heart attack or did you know he was not well?
A. COCKBURN: Well, no. I mean maybe people in his family knew, but no it was a terrible shock that he you know, when we suddenly heard that he’d gone. I mean I want to say he’d been he’d been so much part of our lives. I mean we got to know him so well during making the film and even after the film appeared.
He was very supportive and, you know, was always ready to explain, you know, to come and do a Q&A, to explain to people because he really wanted ordinary people, not necessarily Wall Street professionals, to understand this, that this you know these huge events which are superficially very complicated that he wanted to be able to understand them so people would know what had happened.
LAMB: By the way, I saw it in the theatre in Washington. Can you see it around the country now or can you buy the DVD?
L. COCKBURN: Right now, it’s been in a theatrical run for two and a half months and so it’s over now. It’s just opened in Europe at the film festival in Amsterdam. So here you can buy it on DVD. You can buy it on our Web site, which is americancasinothemovie.com.
LAMB: Americancasinothemovie.com and it costs how much?
A. COCKBURN: For home viewing, it costs $24.95, shipping included.
LAMB: And what is to determine for either one of you what makes this a success?
A. COCKBURN: Various there’s various ways and one of them the one we like best is when people see the film and come out and say, ”Now, I understand. Now, I get it, what’s happened. I understand I didn’t understand how why the economy suddenly spun out of control, what happened on Wall Street, it all seems so complicated. And now I’ve seen your film and I understand.”
That’s I think I’ll certainly my favorite yardstick.
L. COCKBURN: Also, when this film first opened, it was at the Tribeca Film Festival in New York in the spring. We had three screenings and they were packed with Wall Street people. The Wall Street people it was very interesting because after at the end of each screening, it turned into a real town meeting.
These guys stood up and they started talking to each other and it gave them the first opportunity to really I mean they were yelling at each other. The ratings guys were yelling at the brokers. And it was quite lively and it was exciting to see Wall Street react to this and it was the first time a lot of those people understood what effect it had on people’s lives.
LAMB: I want to come back to that, but here’s another clip, because when you talk about ratings people, this will help fill in the blanks.
UNIDENTIFIED PARTICIPANT: You almost have to follow the money here, right? Because they’re taking their fee from the investment banks. In fact that rating agencies wouldn’t even run their own models.
Meaning that when they rated a deal, they would take their rating agency model give it to the investment bank, investment bank would run the entire model for them, and then give them the results. And then the results would go to rating agency analysts. And that analyst would take it to committee, and that they would eventually agree on the rating. But they didn’t run their own models.
UNIDENTIFIED PARTICIPANT: How do you know this?
UNIDENTIFIED PARTICIPANT: Because I worked in an investment bank and was running the models for them.
FRANK RAITER: I was requested by the head of the CDO group to put some ratings on some bonds that had come in as part of a particular CDO. But we didn’t have any information. We’d never seen the tape.
We hadn’t read the legals, and so we wrote back and said our criteria requires that we have the tape and that we have the legals to make sure it meets our criteria. And they wrote back and said well, we can’t get any of that. You just guess and put a rating on it. And that was clearly a violation of our ethics, so I just told them I wouldn’t do it.
BRIAN LAMB: What’s the importance of this?
A. COCKBURN: Well, the ratings agencies and Frank Raiter was a senior executive at Standard & Poors. He was in charge of all residential mortgage-backed securities, the rating thereof.
They’re like they were absolutely crucial to the whole system and to the disaster, because they were the ones who said, you know, this investment was, you know, that could be rated triple-A, meaning it’s super safe. It’s never going to go broke, or double-A or double-B.
And what they did was as it emerges from what Frank is saying and from what the banker, the anonymous banker said what their essential function in this whole, what’s been going on was to take things that were actually, you know, what sub-prime mortgages which are inherently not so credit worthy.
And basically through the magic of securitization and everything to say that they were invest, you know, triple-A, which was something we used to only apply to things like General Electric and the Exxon corporation.
So they basically took garbage, and they spray painted it with gold paint and said this is gold. And, you know, trillions of dollars were invested on that basis. In stuff that was really garbage, but had been made to look like was presented as gold.
And because of that, that is why we’ve had such a huge disaster. Because, you know, things were basically assigned false ratings because according to this anonymous banker at least I think we know who he is, but he didn’t want his name used they were basically, in bed - they were being paid by the investment banks to give these ratings.
And in fact, the investment banks were doing the rating, you know, were running the models, as he said. And then basically these were rubber stamped by the ratings agency, and then passed on to the public.
LAMB: Moody’s, Fitch, I believe. Is that the name of it?
A. COCKBURN: Moody’s it was the big three. There’s Moody’s, Standard & Poor which are the biggest two and then Fitch.
LAMB: Go back to that scene where we saw the investment banker in silhouette. Can you tell us where that what that scene was behind him without giving away who he is? I mean is that
L. COCKBURN: I won’t say. I won’t say what it is behind him. It’s just a
LAMB: It’s not a it’s not a real picture behind him? I mean it’s not a....
L. COCKBURN: No, no, it’s real. He’s sitting in a real place, and it’s there’s nothing distorted there. He’s simply his voice is distorted, and he’s dark. It’s his silhouette.
LAMB: How did you find him?
L. COCKBURN: Well that took a long time. That took, you know, we spent months and months and months talking to more and more and more people on Wall Street. And you know how you do it. You meet one person and finally they say I want to introduce you to somebody.
We it was very important to us to meet the guys who were absolutely at the heart of the business of making CDOs these Collateralized Debt Obligations that blew up in everybody’s face. It takes time, and we had many, many meetings with groups of these people from different banks.
This person happened to have been at Bear, at Bear Stearns. He was very brilliant at what he did. I don’t want to say too much more about him, except that he represents a group and it’s not a big group of people who really understood these securitized vehicles.
The problem for Wall Street people with coming on camera and showing their face the reason why you don’t see them all the time is they have deferred compensation rules so that if you went on camera, you could lose literally millions of dollars in compensation.
And also, you know, you kind of sign away your life when you take one of these jobs, and you agree to a lot of things that make it very difficult for you to go public. So that’s why you hear some of the experts, but you rarely get to hear the bankers like him talk the way bankers talk to each other.
And that was a we couldn’t have made this film without because he’s the heart of the matter, really. In that, you know, there’s a moment I don’t know whether you have them in your clips but there’s a moment later on where he actually takes you through how you make a CDO. And from a CDO, how you make a CDO squared.
And at that moment, the audience understands the incredible scam of making these things that were packed with, in some cases, you know, a 1-1/2 million subprime loans rated triple-A and sold off to as he describes at Korean bankers.
But the ratings agencies there is this inherent conflict of interest here. The ratings agencies, the big three, you have the government saying everybody has to. You know, they have this kind of quasi government it’s the stamp of approval.
So they’re acting as our regulators, and yet they’re paid by the investment banks. And, you know, the guys in Korea or in Germany, they’re not going to buy anything, nor is the California Pension Fund going to buy anything that doesn’t have a triple-A rating when you think that that would be the first thing that would have been changed since this whole thing.
You know, Frank Raiter, the ratings executive said, if only what he had been doing, if it had been tightened up, this whole thing wouldn’t have happened. But right now, it’s not they’re not being regulated.
The relationship with the banks is still the same. The only thing we really see is there are a couple of dozen suits around the country against the ratings agencies. I know that Ohio has taking the lead in that. They’re suing them, so we’ll see what happens.
LAMB: Go back to the Tribeca Film Festival in New York City, where you showed this three times.
UNIDENTIFIED PARTICIPANT: Yes.
LAMB: And there were the discussions that broke out afterwards. Were you there in the audience?
A. COCKBURN: Yes, we were this started off as people asking us questions. But as the Wall Street, as someone as Leslie said that the house was basically full of Wall Street people. And pretty soon instead of, you know, us having to answer the question, someone else would jump up from another part of the theatre and say, wait a minute, you know, I was you were at the ratings agency. You did that. Well, you know, it was your fault, not ours. And it turned into this extraordinary debate, this town meeting.
LAMB: Did anybody in that in those sessions get mad at you for what you had how you portrayed them in the film?
A. COCKBURN: No. No, no, no. Everyone, I mean, that was gratifying. People no one people didn’t get mad at us. They were in a way they were pleased with, you know, that we’d laid the whole thing out.
It was almost cathartic for them, that here was a forum, you know, that the way we were providing a, sort of a backdrop on a forum so they could really, you know, say have their say and talk about what had happened.
LAMB: How did you two divide up the responsibilities?
A. COCKBURN: Well, Leslie’s the filmmaker here. She’s the she directed the film, and I did journalism. And
LAMB: Who wrote the script?
A. COCKBURN: Oh, Leslie.
L. COCKBURN: Well, there isn’t much of a script in this film. This is it’s just people talking. You know we have no narration, so it’s just and when you see the writing on the cards, it’s deliberately very dry. It’s very straightforward.
So it isn’t a script that’s pulling you through the film. It’s the people who are pulling you through. So although we both share a writing credit, I would say there isn’t really a script at all. It’s simply it’s laid out so that one person follows on from the last person, and to explain it.
LAMB: How much of the music is original?
L. COCKBURN: Well, Andrew found the original music.
A. COCKBURN: It’s we would because we were spending time in Baltimore, and we, you know, I knew that Baltimore, you know, is a very musical city. So suddenly I thought well maybe, you know, maybe people are doing music about this.
Maybe there’s some kind of, you know, because we’d looked, we’d had other tracks, you know, using Bruce Springsteen singing Woody Guthrie and so forth, is also in the film. But we went to Baltimore and asked around and found there’s a very sort of local music studio there and said well does anyone, you know, what’s the chances of getting any sort of currents or street music about foreclosure and mortgages and this nightmare that’s happening.
And actually 60 we got 60 tracks presented to us which we used three which are just these kids. I mean the most one that’s we play used twice over the end credits in the film and then at the end credits was a group of three young people aged 11 to 14 who recruited got together at a after school program and recorded this very sort of heartbreaking song called ”Losing My Home.”
LAMB: At the very, very end when they when you run the billboards
A. COCKBURN: Yes.
of the numbers?
A. COCKBURN) Yes.
LAMB: Well why don’t we run a little bit of that and
A. COCKBURN: Sure.
so we can see what you’re talking about.
UNIDENTIFIED SINGERS: Want to know why we in this issue wishing that we yeah and what is wrong. It’s one of those things, baby, hard to explain, government policies is winning the scene.
UNIDENTIFIED SINGERS: I don’t understand, you work all the time. And now we’re here homeless broke without a dime. Yes, I work hard, but it’s just not enough. We got to hang in there ’cause these times are tough. Raise the percentage on your mortgage and your house is gone, raise the percentage on your mortgage and your life is gone. Raise the percentage on your mortgage. Raise the percentage on your mortgage.
I’m so sick of crying ’til your house is gone, ’cause the house, my house. Raise the percentage on your mortgage. It’s when you slip into your mortgage. I’m so sick of crying, I’m devastated ’cause I lost my house, my house
LAMB: Again those how old are those kids?
A. COCKBURN: From 11 to 14.
LAMB: Who wrote the song?
A. COCKBURN: They did. They had a the producer is a very talented lady in Baltimore called Emotion. I mean she helped. I think she helped tidy up the I mean sort of helped them with the lyrics, but it was their idea and they, you know, they composed it and it was based basically on personal experience.
LAMB: Those numbers that we were seeing on the screen were what?
A. COCKBURN: They were the numbers from this last summer of the total bailout that’s been given to the financial sector by us the well both by the Treasury and by the Federal Reserve. As you can see, the numbers are kind of enormous. We keep we’ve heard a lot about the $700 billion dollar TARP program and that’s often spoken of as the sum total of what’s been given in help to Wall Street.
But as you can see from here, it’s a lot more than that. In fact, the total commitment was $12 trillion of which, what, $4 trillion has been spent so far. So it’s we, you know, most people don’t quite realize how much of our money and, you know, our, you know, our credit as, you know, American citizens has been invested in shoring up this Wall Street.
LAMB: How hard was it to get these figures?
L. COCKBURN: We got these figures from Mark Pittman and Bob Ivry, this the Bloomberg team. Mark Pittman decided early on that he wanted to do his own figures. He didn’t believe the figures. He wanted to check it out himself.
And the two of them did it twice. They did it in let’s see they did it in January first, when it as $8 trillion the government had committed by that time $8 trillion. And by March, it was $12 trillion. Now it’s obviously higher.
LAMB: Make a little bit of a transition here. We’ll see one fellow that we saw earlier, but then we move to the Baltimore scene and you’ll see the teacher you got involved in this. Let’s watch.
DAVID ATTASSANI: Some people ask, you know, what do you think caused all this, you know? I always say I think it comes down to greed.
UNIDENTIFIED SINGERS: They ain’t just stairs. They ain’t just halls. It ain’t just work and they ain’t just walls. This place was a house, man it’s where we call home, now we got to give it up ’cause of subprime loans. They ain’t just stairs.
We done been here for so long, man since I was a kid. I remember every moment, everything that we did. Home for functions, events and the holidays. Had the family get together, how we all would play. Now it’s only a memory. As I give this eulogy, I bring the dead, hey, you call this a democracy. But it’s reality
DENZELL MITCHELL: I just think it’s immoral for there to be such a huge boom around the housing industry. A lot of people made a lot of money. But now all of these people who bought during that period are losing their homes. I teach about social justice issues, human rights issues. I mean, I actually have a class Issues in Social Justice and Human Rights.
DENZELL MITCHELL: Let’s take a little quiz.
DENZELL MITCHELL: And I’ve been considering talking with my students about the mortgage crisis and what that does. There’s a loss of security, you know. There’s huge stress. It’s terrible.
UNIDENTIFIED MALE: Forty thousand, could you bid a 40, I got 37,000, eight, 89. Do I hear 40,000? $37,889.99 I need an answer at this time, $37,889.99 once, twice, third and final call.
LAMB: Let’s work walk back from the foreclosure auction there on the steps of what?
L. COCKBURN: Courthouse steps, Baltimore. And we went, you know, you could any day of the week at that time, in early 2008, you could see these guys on the steps selling these houses a very long list every morning. So what we did was we went to the auctions and simply drove around Baltimore with our cameras, going to these different addresses.
And on the first day we did it, one of the first houses we went to was the house that belonged to the high school teacher, Denzel Mitchell the house had just been auctioned with a caveat that it could be affected by a bankruptcy filing we went and he had just come back from filing for bankruptcy that morning.
So he was at his house. He was loading up all the boxes. The house had been completely dismantled. So we went around the house with him. He was in complete shock. But that’s how we found Denzel.
And it turns out of course he was, you know, incredibly articulate and a very, very interesting case because we were able eventually to track his mortgage all the way into a securitized product at Goldman Sachs.
LAMB: The Almalene Wade is that the correct she’s a reverend?
L. COCKBURN: Yes.
A. COCKBURN: Yes.
LAMB: How’d you find her?
A. COCKBURN: We found her just through sort of word of mouth in Baltimore. Someone said there was this minister of the church who was living in her car, who’d had, you know, had a we were interested particularly because something I mentioned earlier which was, you know, that people say oh well, these people got into trouble because they took out loans they couldn’t afford.
They wanted to buy a bigger and better house. They were, you know, getting houses they didn’t deserve. Almalene was one of the many people who lost their homes who owned her house free and clear. She didn’t she had inherited that house from her parents and then took out a loan on the house to she wanted to make some improvements because she wanted to sort of do a have an assisted living sort of operation in the house for people in the church.
And, you know, was borrowed $28,000 and as she says in the film, she didn’t her life is destroyed, she’s lost her house, she’s, you know, living in a car and just hard to believe that all this happened because of $28,000.
LAMB: Here’s a little bit from the Reverend Wade.
ALMALENE WADE : Right now I live my life in pain and some days I’m depressed because I miss my home. I’m homeless and it’s just hard. It’s a struggle. It’s devastating. It’s upsetting. It’s unbelievable. But it’s real. I don’t have a home anymore and I’ll never forget this as long as I live. This is a house that I grew up in most of my life. I came here in 1961 with my mother and my father.
I’ve been here a lifetime and I went to school here. I went to junior high school, went to high school, went to college. And we used to have a church next door and the neighborhood was just home. This was just home.
I wanted to do a assisted living here. I wanted to help people. And the property wasn’t in the proper condition that it needed to be. So I was advised to take the equity out of the property some of the equity and do a loan and start my project that way.
The loan was for $28,000. It’s really sad that all of this was lost over $28,000. The monthly payments was close to like $300 a month but I was on a fixed income. And it was just it just got to be too much. Wells Fargo was the mortgage servicer, and that’s who serviced my loan and who I got the loan through.
I really at that particular time didn’t know all the ins and out of a mortgage loan. I just took it by faith that I was going to be OK. Settlement was really fast. You just don’t know. You know, you’re trusting your mortgage broker. You’re trusting the settlement people. You’re trusting the bank. And what else can you do? You really don’t have a clue.
You’re just happy to have someone say yes, we will finance you. Yes, you are approved. Yes, you can go to settlement.
LAMB: What would happen today from what you know, if she went in for a loan like she got before?
L. COCKBURN: If she was looking for a loan?
LAMB: I mean, has anything changed? She says she doesn’t she trusted all these people
L. COCKBURN: She would not get a loan at this point. You know, loans it’s much, much, much tougher to get a loan these days. So, no I she shouldn’t have been given a loan at that point. And she knows that now.
LAMB: What happened to her church?
A. COCKBURN: The church is gone. I mean she’s, you know, she’s not functioning as a minister now. She’s basically surviving, but I mean just a question on the loan, that loan was for 7-1/2 percent. I mean that’s it was already and it was actually the possibility of rising to just almost 13 percent.
L. COCKBURN: Thirteen percent with a possible rise every six months.
LAMB: How much responsibility does the individual have in this to read? I know there are stacks and stacks of paper. But how much of it is our responsibility?
L. COCKBURN: Well, that’s we explored that at some length in the film. And we have, you know, you meet in the film you meet Robert Strupp, for example, who’s a community lawyer and Anne Norton who’s another community lawyer in Baltimore. And both of them and they’re very smart lawyers say that, believe me, smart lawyers don’t understand all the jargon in these loans.
And the loans were all tied to all kinds of fancy numbers and LIBOR rates and stuff that was very individually tailored. Not all these loans were alike. So even if you read one of them all the way through, you wouldn’t necessarily know what the next one was going to be like.
And frankly no one reads their loan documents. I haven’t actually run into a human being who has read every single document before they sign. And Robert Strupp points out that in the film he points out that these it got so lax that people, as he said, people were signing being signed up for mortgages, you know, on the hood of their car.
It was it would be done late in the afternoon when people had to pick up their kids from daycare. And that they would be penalized if they monetarily if they didn’t pick them up on time.
So you’re going to have to pay a fee. So you have a half an hour. You sign the documents. And what happened often in Baltimore and elsewhere which we found out from the community groups like St. Ambrose that helps people who are in terrible trouble because of foreclosure that they would get to the signing and the numbers were different.
This happened to Denzel Mitchell. They would get to the signing. They’d be told one thing, so they really believed that they could afford these payments. And they’d get to the signing and it wouldn’t be the same number because various things, obligations had been left out.
So there was a real sleight of hand going on.
LAMB: It’s interesting that in the next clip we’re going to see, the mayor of Baltimore who has since been convicted of one count, and I she hasn’t been sentenced as yet but it was she was charged with a lot of counts that were dropped or she was acquitted but she was found guilty since then. And her name is Dixon, Sheila Dixon.
Let’s watch this and I’ll ask you about that and the other people we’re seeing.
UNIDENTIFIED PARTICIPANT: You have people that are homeless looking for a place to live. So an unoccupied house becomes a house that gets broken into. They know other homeless people that need a place to stay. They take over the house and they start renting rooms. So they start their own business on a house that somebody’s left.
UNIDENTIFIED PARTICIPANT: Want to check the Reddis property?
UNIDENTIFIED PARTICIPANT: Baltimore was real prime for investors. Investors come in. They see an opportunity. They grab a property. They’ll start doing some rehab and try to sell it to somebody first time homebuyer that can take advantage of some of the programs out there for first time homebuyers.
But let’s just be clear. Investors are in business to make money. They want a return on their investment. Do they really care whether or not the person can hold onto the home for the long haul? Probably not. Because once the property’s sold, they’re gone.
I think the record reflects that this is a part of a foreclosure as well, a part of the pain, a part of the pain in the city.
MAYOR SHEILA DIXON: And you have to put additional revenue and support in the neighborhood by boarding up homes, by other people’s properties’ depreciating as a result of the vacant properties. I mean it takes away revenue that you can use to re-stabilize an area.
So it’s costing us with additional police, fire, resources coming out of housing and community development. You know, all those other support services that help to keep a community thriving and growing.
LAMB: Had she been indicted when you interviewed her?
A. COCKBURN: No, no
LAMB: And do you know exactly what happened to her when she was convicted of one count? She had not been sentenced.
A. COCKBURN: She has not been sentenced so, you know, whether she’ll have to step down as mayor or not at this time isn’t clear. There’s plenty of people who, you know Baltimore’s a very political city plenty of people who’d like the job.
Well, you know, I’ve got to say what she was whether or not she was convicted or anything or whatever she did any mayor in America could have said and would have said or certainly should say what she said. I mean this crisis has, you know, has had this incredible municipal effect on cities. Because you have suddenly the tax base shrinks. All these houses are empty.
You’ve got a huge problem with abandoned property which they’re trying like in Baltimore and in other cities they’re trying to force the banks the people who have foreclosed, taken the property back to at least maintain them. You know, to cut the grass and stop them turning into sort of into ruins.
And, you know, it costs them, you know, huge amounts costing cities huge amounts to sort of look after these houses. You saw the crew earlier who were going around boarding them up, trying to deal with squatters who move in and do sort of irresponsible things like leaving the oven on, you know, in danger of burning down the block.
So this what we’re trying to what we’re explaining in that segment is this isn’t just things that happen something that happens to an individual, an individual homeowner. What it does what it’s done is impact whole cities.
I mean something else when a house goes into foreclosure when that house is boarded up when that went into foreclosure, the bank takes it back. And then the bank may later auction it off at 50 cents on the dollar, or whatever, certainly just to get rid of it. That crashes the price of every other house in the neighborhood.
So you get you know, everyone else’s house values are going down, so more and more people are finding that they’re paying, you know, more for their mortgage is now much greater than the value of their house. So they may default.
And it’s, you know, is has an escalating thing. It’s had a huge effect on American cities.
LAMB: I want to remind anyone that’s watching, if they want to watch the whole documentary, it’s AmericanCasinothemovie.com is your Web site. And you can buy it for $24.95 and it’s been in the theaters for the last couple of weeks.
Does it bother you when you see us chop up your documentary? Because you’re setting a mood as you watch it. And by the way, how long is it?
L. COCKBURN: It’s 89 minutes, so it’s regular feature length. And I don’t mind it. It’s actually fascinating to see what you’ve chosen. You’ve chosen different things from other people in terms of the clips
LAMB: There’s a lot of things we could have chosen as you know. There’s a lot missing.
L. COCKBURN: Yes, when you make a film, you’re building a mood throughout. You’re going through and there are certain rhythms. But there are also sections that are self-contained.
LAMB: I know numbers are sensitive. Can you give us a range of what this kind of thing costs to do?
L. COCKBURN: You know, I’m not sure what other people would spend on something like this. I suspect that we spend less simply because when you’ve been making films for a long time, what you do is you waste less material. There’s something called a ratio which you might it might be 50:1 or 20:1 in terms of the hours that you shoot and the hours that you actually use.
And for us it’s quite low.
LAMB: Is it can I get a range, like it’s documentaries usually cost between a half a million and a million?
L. COCKBURN: Oh I think some people, you know it could go from less than a half a million. It could go from a quarter of a million to 2.5 or 3 million. Some people can spend quite a lot.
If you have a big staff, if you have a lot of people, if you’re running around the world, if you’re shooting a lot, you can really
LAMB: How many shooting days did you have?
L. COCKBURN: Oh I can’t remember exactly how many days. But let’s see it’s probably maybe thirty shooting days.
A. COCKBURN: There’s only one day, I think it was just of all the days we shot I think it was only one day where we didn’t use something from the day. Practically everything got used.
I don’t think everything we shot got used, but we got something from every day.
L. COCKBURN: In the edit room people can spend months if not years in the edit room on documentaries or regular features and we’re moving along at the sort of pace that we have to move if we’re working with Frontline or 60 Minutes or any of these places where you really you have a deadline.
LAMB: And when was the last day that you finished your work?
L. COCKBURN: Well, we added a couple of things. We finished in February and then in March we one of the people who we focused on in Baltimore who was in the process of foreclosure, they lost their home. So we added it to the film that they had lost the home.
And then in August we or sorry end of July we added some figures right at the end to make sure that all the figures were correct.
LAMB: Before we close down we got a couple minutes to go. I like to go back and get video from when we first met and that was on ”Booknotes” in September of 1991. I don’t think I’ve seen you since then Andrew was here for another show. Let’s watch this is where the story a little bit of where you two met.
L. COCKBURN: We met in London years ago. We met at a club called Zanzibar actually in London.
LAMB: What were you doing?
L. COCKBURN: I was at the time I was finishing graduate school over there at SOAS which was the School of Oriental and African Studies. I was also had just started working at ”NBC News.”
LAMB: Where’s home originally?
L. COCKBURN: San Francisco.
LAMB: And what is your relationship?
L. COCKBURN: Well, we’re married and we work together we make films together for ”PBS Frontline” and we write books together. So it’s a very close relationship.
LAMB: What other books have you written?
L. COCKBURN: This is our first together. But I wrote a book called ”Out of Control” which was about the Reagan Administration activities in Central America. It was about covert operations down there. Andrew wrote a book called ”The Threat” which was about the Soviet military.
LAMB: Where were you from originally?
A. COCKBURN: I was from Ireland. I grew up in Ireland. My father’s Scottish but
LAM B: Where in Ireland?
A. COCKBURN: County Cork, East Cork.
LAMB: And what was life like growing there and when did you leave there?
A. COCKBURN: Life was interesting it was like actually we didn’t have in the early years we didn’t have a car or a telephone or a fridge. So I grew up, you know, we went everywhere by horse. I grew up in the sort of 19th Century way. I mean there’s no difference between the way we were living and someone 100 years before.
Communicated by telegrams, perfectly, if I can tell people who under the age of 110 that’s it a perfect viable way to live. I left there I guess when I was 17 and went to work in London.
LAMB: How many books and documentaries and Frontlines have you done since 1991?
A. COCKBURN: Oh, God well there’s been let’s see one, two, three, three, four books. Frontlines there’s been a couple.
L. COCKBURN: Many ”60 Minutes” pieces.
A. COCKBURN: Many, many ”60 Minutes” pieces.
LAMB: My memory when your daughters are like about 10, 7 when you were here before, what’s the story now? I know one of them is quite prominent out there in the world.
L. COCKBURN: Yes one of them is an actress. She’s a people would of seen her on ”House” probably her name is Olivia Wilde she plays 13 on ”House” and she also does movies. And our other daughter is a lawyer and an artist Chloe Cockburn and is now doing racial justice issues, litigation at the ACLU in New York.
LAMB: And we always ask you about your brothers, Patrick is where now?
A. COCKBURN: Well, Patrick is he’s currently is at home in Canterbury, England. But he’s deciding whether he’s been deciding whether to return to Kabul or Bagdad, that’s where he spends
LAMB: And Alexander
A. COCKBURN: Alexander is living in Northern California where he’s got his Web his newsletter CounterPunch.org CounterPunch.org. And engaged in ever more interesting architectural projects on his house.
LAMB: As a last clip you have a little rap song and Secretary Hank Paulson, former Treasury Secretary, in a hearing situation this is only a minute or so. Let’s run this and then we’ll wrap it up.
SECRETARY HANK PAULSON: This morning we meet for a hearing on the turmoil of U.S. credit markets recent actions regarding government sponsored entities, investment banks and other financial institutions.
HERBIE HANCOCK: Everybody’s broke and everybody knows they’re messing your money, Everybody’s broke.
SEN. CHRISTOPHER DODD: This is not just a cosmetic issue and a feel good issue.
HANCOCK: We all ain’t got no money, I don’t think it’s very funny, Everybody’s broke.
PAULSON: The tax payer already is going to suffer the consequences if things don’t work the way they should work.
HANCOCK: Welcome to the great depression. Oh, this is a double dip recession enough is never quite enough, oh say can you see, oh the cost of living is killing me, I can’t afford to buy my own tin cup.
LAMB: The video you must of gone in there with that idea because you weren’t in a normal position where you shot all that.
L. COCKBURN: Well, actually it’s no it didn’t work that way. It was shot before the idea happened. That music you might want to say how we ended up with that music.
A. COCKBURN: That music we heard about that’s a Herbie Hancock track actually written first, I think he produced it in 1982 when there was actually a bad recession. The way we heard about it we heard about it was from former traders from Bear Stearns who said they were playing that track in the Bear Stearns trading room as things were going south. ”Everybody’s Broke” it was like a mordant song. So it’s very an eloquent actually if you listen to all the words it’s a very good song about financial recession.
LAMB: In 60 seconds both of you I’ll give you 30 seconds each. What did you learn the most what was the most important thing you learned from this experience?
L. COCKBURN: You better go first.
A. COCKBURN: So unfair. Well, the most important thing to learn is when they, you know, where I thought was when they tell you that things are too complicated for you to understand all this financial stuff it’s not true. They’re just trying to blind you. It’s, you know, it’s very simple. This was loan sharking although, you know, they guilt edge, you know, lousy products. It’s not our fault.
L. COCKBURN: I think what I learned is having spent so much of my life now covering stories overseas, wars, you know, sort of post apocalyptic scenes in Somalia or Afghanistan. That what amazed me was how much damage could be done right here at home through this terrible collapse. It was really an eye opener for me to see how the destruction in whole neighborhoods and just how bad it can get.
LAMB: Leslie Cockburn and Andrew Cockburn writers and producers of American Casino. And again the Web site is americancasinothemovie.com. Thank you for joining us and we’ll run these credits again so we can see some of those numbers.
L. COCKBURN: Thank you.
COCKBURN: Thank you so much.
UNIDENTIFIED SINGERS: Making this issue, wishing that we in what is wrong. It’s one of those things baby hard to explain government policies went insane. I don’t understand you work all time and now we’re here homeless, broke without a dime. Yeah, I work hard but it’s just not enough I got hang in there because these times are tough. Raise the percentage on your mortgage and the house is gone. Raise the percentage on your mortgage and your life is gone. Raise the percentage on your mortgage. Raise the percentage on your mortgage. I’m so sick of crying ’til your house is gone because we lost my house. Raise the percentage on your mortgage. Raise the percentage on your mortgage. Get away. I’m so sick of crying I’m devastated because I lost my house I’m sick of all this.