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In Your 50s? Absorb Lessons of 'Inside Job'

HUNT VALLEY, Md. ( TheStreet) -- It is not my desire to promote paranoia or incite bitterness and hatred toward the financial industry, but as 50-somethings or older undoubtedly relying on Wall Street for retirement funds, your decisions will be better informed when you recognize one thing:

Most of those clamoring for your brokerage, banking and insurance business are following policies designed to enhance their corporate bottom lines, not yours.

If you're not wary of Wall Street, you may want to watch -- despite its flaws -- the movie Inside Job.

If that isn't quite sinking in, you may want to watch -- despite its flaws -- the movie Inside Job.

I read Michael Lewis' The Big Short in January. That book was an insider's view of the financial collapse. It tells the story of the collapse in lurid (and often vulgar) detail, from the inside out, while Inside Job (ironically) is actually a retelling from an outsider's perspective, with the benefit of hindsight and complete with a catchy soundtrack and Matt Damon as narrator. It begins: "The global economic crisis of 2008 cost tens of millions of people their savings, their jobs and their homes. This is how it happened."

And if it stuck merely to "how it happened," I could've given it the highest marks. Instead writer and director Charles Ferguson chose to proffer, directly and through a great deal of implication, his thesis on how the crisis could've been avoided (through more and better regulation). That gives the film a less objective journalistic feel, but didn't cost it its two-thumbs-up rating from me (I'm sure they were relieved), nor did it stop it from winning last year's Academy Award for Best Documentary.

The film surprised me with a preamble set not in the struggling U.S. heartland or on battered Wall Street, but in Iceland. The story of Iceland's economic demise -- almost a microcosm of ours but in a country too small to bail itself out -- is fascinating, and the sweeping Icelandic landscape accompanying the story made me want to visit.

A few tidbits that grabbed my attention:

Investment banks -- the companies that raise money to birth companies -- used to be partnerships, not publicly traded. This is noteworthy because when the banks were private partnerships, if the companies they brought to life failed it was the partners' own money that was lost. The conversion to public companies -- initially spurned by most of the establishment firms -- meant, among other things, that investment bankers could make more money and spread the risk of each transaction to shareholders instead of bearing it themselves. Eventually, each of the major investment banking firms went public.
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