The Big Short
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Thread: The Big Short

  1. #1
    Senior Member tygrus's Avatar
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    The Big Short

    While this was an interesting movie, I thought it was misleading to represent these guys as some sort of heros.

    Basically, they bought credit default insurance products from the banks, then unloaded them onto other banks after the crisis hit. Then those same banks got bailed out by tax payers anyway. Basically tax payers funded these guys windfall as well.


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    Quote Originally Posted by tygrus View Post
    While this was an interesting movie, I thought it was misleading to represent these guys as some sort of heros.

    Basically, they bought credit default insurance products from the banks, then unloaded them onto other banks after the crisis hit. Then those same banks got bailed out by tax payers anyway. Basically tax payers funded these guys windfall as well.
    Interesting. I didn't necessarily think it painted them as heroes, more as a group who could see through the BS. As I recall, a few characters felt as though it was an empty victory at best as they saw people losing their jobs as a result. Wasn't Steve Carrel's character particularly pissed that everybody got bailed out and it was just business as usual?

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    Ben Rickert gets it. This scene is where we find out why he withdrew from the financial markets and retired to a farm to raise bees and organic produce. He knew it was only a matter of time until the financial system collapsed from its own greed.

    https://www.youtube.com/watch?v=0k5aVLi_yhM

    "You bet against the American economy. If you win people lose their homes, their jobs, their retirement savings, their pensions. Every time unemployment goes up 1% 40,000 people die. So don't fucking dance"
    Last edited by Rusty O'Toole; 2017-03-20 at 02:12 PM.

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    Quote Originally Posted by tygrus View Post
    While this was an interesting movie, I thought it was misleading to represent these guys as some sort of heros.

    Basically, they bought credit default insurance products from the banks, then unloaded them onto other banks after the crisis hit. Then those same banks got bailed out by tax payers anyway. Basically tax payers funded these guys windfall as well.
    They definitely weren't heroes-the Christian Bale character was totally irresponsible and reckless with the capital his investors had trusted the guy with-he basically got lucky-lots of guys just as smart as him have gone under mistiming the market moves.

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    This group of people were fundamentally lucky, not smart. If they started even a little sooner, they would have been wiped out, like thousands of other people were. If they started after the bubble burst, they wouldn't have made money - in fact, if you start shorting too late, you can also lose everything - and this happened to thousands as well. On the other hand, every person who invested in the market from 2007 or earlier have all made money if they bought and held, if they could have withstood the drops.

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    You can't have read the book or seen the movie. There were a handful of people who saw a financial meltdown coming because the biggest banks and mortgage companies were carrying out fraud on a massive scale. Some tried to warn the authorities repeatedly and were rebuffed. Michael Burry pointed out that you could predict when the whole house of cars would collapse practically to the day. Second quarter of 2007 when all the option ARM mortgages came up for renewal and the borrowers would be forced to default because they didn't have the money. This was totally predictable because they never had the money to begin with.

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    There was a naval battle in which one ship hit the powder magazine of the other ship. The second ship exploded in a massive fireball and was practically destroyed. A big cheer went up from the sailors on the first ship. The captain called out "Don't cheer boys, those poor devils are dying".

    The sailors remind me of the investors who fought the banks and won. The captain reminds me of Ben Rickerts.
    Last edited by Rusty O'Toole; 2017-03-21 at 12:27 AM.

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    I read the book and watched the movie. It wasn't fraud, but stupidity, incompetence, pack mentality and greed. At least that's how it's described.

    Nobody is described as a hero but a few oddballs figured out what was happening and had the guts to put their and their investors money on it. And they were very imaginative in devising tools to bet against the big boys. It's David vs Goliath.

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    Leaked internal memos revealed banks like Goldman Sachs were calling the AAA rated mortgage securities garbage among themselves, while promoting and selling them to their clients as premium investments.

    There was lots of fraud through dishonest mortgage originations to willful ignorance by bankers and rating agencies.

    Nobody went to jail though. Some got raises and big bonuses, and then laughed at investigating legislative committees.

    Regulators and legislators huffed and puffed, huddled in hearings and meetings, but at the end of the day, taxpayers bailed out the bankers.

    Some........like Steven Mnuchin made a fortune foreclosing on properties and selling them later.

    His punishment was becoming Trump's Secretary of the Treasury.

    I see homes foreclosed,
    Many businesses too,
    Lots of money to be made,
    Just for me and for you.
    And the wealthy think to themselves,

    What a wonderful world.
    Last edited by sags; 2017-03-21 at 01:03 AM.
    Someone planted a tree a long time ago so I can sit in the shade.

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    Quote Originally Posted by sags View Post
    Leaked internal memos revealed banks like Goldman Sachs were calling the AAA rated mortgage securities garbage among themselves, while promoting and selling them to their clients as premium investments.

    There was lots of fraud through dishonest mortgage originations to willful ignorance by bankers and rating agencies.

    Nobody went to jail though. Some got raises and big bonuses, and then laughed at investigating legislative committees.

    Regulators and legislators huffed and puffed, huddled in hearings and meetings, but at the end of the day, taxpayers bailed out the bankers.

    Some........like Steven Mnuchin made a fortune foreclosing on properties and selling them later.

    His punishment was becoming Trump's Secretary of the Treasury.

    I see homes foreclosed,
    Many businesses too,
    Lots of money to be made,
    Just for me and for you.
    And the wealthy think to themselves,

    What a wonderful world.
    Your little hero-bagman Obozo-did a great job on that one.


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