What the financial crisis of 2008 showed is that markets do not necessarily work by the assumptions, or ‘abiding principles', that its philosophers would have us believe. For instance, the notion that basically unsound mortgages can be turned into gold through “structured product innovations” unrestricted by any supervision other than the existence of a market for them, came unstuck when even Mr Ben Bernanke admitted to some confusion as to what those products were.

Wide and insufficiently understood complex financial instruments seemed to fly in the face of the view disseminated by eminent economists that self-regulated markets were the most transparent.

The flip side of the coin was, of course, the information gap. With assets of dubious quality, from the murky to the toxic, bundled into sophisticated financial instruments — structured credit products in the secondary market — that only the issuers understood (and among them too just a handful of traders), information became even more exclusive and skewed. This process contradicted another market principle — of financial inclusion.

The corollary was yet another rupture with ‘principles', as investors surrendered their responsibilities for due diligence to credit ratings agencies, with consequences that sparked the implosion that followed.

A film's Parables

These themes of an American tragedy implicit in information asymmetry, and lack of transparency that centralises knowledge of sophisticated financial products to a small cabal that creates fools' gold for gullible investors, have been wonderfully presented in a Bollywood film.

A comedy weakly posing as a thriller, Phas Gaye Re Obama directed by Subhash Kapoor and produced in late 2010 is set against the American recession that has also hit India, though we learn that obliquely.

The film tells the story of Om Shastri (Rajat Kapoor), a highly successful businessman in America, hit by the recession.

Shastri has to find the funds to keep his mortgaged house and family from the streets. In desperation, he returns home to sell his ancestral property in a village in Uttar Pradesh.

The prodigal son carries with him a mythology of success that hides his desperation. That mix of illusion and reality creates the real text of the film and the parables that define its uniqueness. A real-estate broker wises up Om to the reality of a depressed housing market, a bitter irony considering everything. Om doesn't realise it but, in a moment, he will step into the world of illusion, of greed and financial huckstering as an ‘asset.'

He is kidnapped by a gang led by a petty gangster, Bhai Sahab who expects this expatriate's family in America to pay a huge ransom that will finance his ambitions to enter Parliament and “fling chairs at the Speaker”.

The film gets funnier by the minute in a seamless sort of way; the victim is told the ransom terms. Slowly, but inevitably, Bhai Sahab realises Om is broke. He cannot believe it, he is shattered.

Then Hunni, a sidekick besotted with America, hits upon a plan. When the members agree with mounting excitement, they join hands and chant: “Yes we Can!”.

Information asymmetry

The plan? To “sell” Om to Ali, another but bigger gangster who has learnt of the NRI's arrival, but little else. Ali bites at the prospect of juicing the America-returned, pays Bhai Sahab an initial deposit “earnest money” which, in good faith and as greed, Bhai Sahab shares with Om, remitting the funds to the mortgage or bank in America.

Now, the film turns even more comic without the usual buffoonery that passes for wit in Bollywood. Its comedy is located in the dialogue and situations met with quiet desperation and cunning fatality.

Ali soon realises he holds a sub-prime asset, in fact a toxic asset because he already paid out a huge sum to Bhai Sahab who is frolicking in the hills with his gang members.

Once again, the toxic mortgage is securitised; he is sold to the female Ogre, Munni, a man-hating gangster with her army of Amazonians who feed off torturing men-prisoners and the local police chief.

The price is upped. Both the earlier investors have to be compensated. The value of the toxic asset includes rewards for Ali, Bhai Sahab and, of course, Om, who once again pitches himself into the deal.

In yet another round of high value structuring of the asset, Munni sells off Om to the biggest gangster of all: The minister for animal welfare who runs the biggest kidnap-extortion racket from his remote farmhouse to fund party and himself.

The value has quadrupled and Om's house has been redeemed in America. He wants to go home. Dhananjay Singh, the choleric piles-afflicted minister, expects the biggest ransom of his career from this “catch”.

In a denouement, Om escapes. The minster is humbled, but in a wonderful twist, he helps Om get to the airport in his car to the loud applause of television and a public that now wants him to become the chief minister of the state.

“Yes We Can”

In the final scene, as Om is on his way to the airport, Munni and Bhai Sahab accost his vehicle: Munni hands Om his share of the loot from Dhananjay Singh but Om refuses. Munni and Bhai Sahab bid him farewell, then merge gangs to the chorus “Yes We Can”.

The parable of the sub-prime mortgage and its avatars bundled into an ever more valuable “product” sold to gullible and greedy investors relying on hearsay, and the mythology of American success is played (with some wonderful variations) to great comic and telling effect.

But the most amazingly ironical twist in this parable-ridden film is in the use of Obama's redemptive rallying call: Yes We Can!

It bookends the circles of deceit, the start and finish of financial engineering by greedy hucksters, an article of faith for the expanding den of Mafiosi.