I haven't seen "Inside Job" but wanted to correct one bit of terminology. The S&P 500 index fund holds ~510 stocks. It holds no other funds, just shares of companies that are publicly traded. And these are also the largest public companies in the United States - ones that are watched closely by many people, and aren't easy to manipulate the price without it being noticed and investors suing those responsible.
In times past people gamed the S&P 500 index by purchasing the 501st stock, so over the years Vanguard learned to adapt by purchasing the 501-510 stocks early and waiting. Vanguard also uses derivatives to simulate 100% investments while keeping some available cash for expenses and withdrawals.