The Big Short

Hi ya Frank, how are the wife and kids?

You know, shouldn't y'all be considering

treasury bonds or utility stocks?

In the late seventies

banking wasn't a job you went into

to make large sums of money.

It was a f***ing snooze!

Filled with losers!

Like selling insurance,

or accounting

and if banking was boring...

Then the bond department at the bank

was straight up comatose.

We all know about bonds...

You give em to your snot nosed kid

when he turns fifteen

maybe when he's thirty

he makes a hundred bucks.

Boring!

That is until Lewis rainieri

came on the scene at Salomon brothers

you might not know who he is

but he changed your life more than Michael

Jordan, the I-pod and YouTube put together!

Hey gentlemen, let's get

some money in here.

Let's make some money!

What do you say?!

You see, Lewis didn't know it yet,

but he already changed banking forever

with one simple idea.

The mortgage backed security.

Or... private label mbs

you got your average persons mortgage

fixed rate, thirty years, boring!

Same, small payoff. Right!

But

When you add thousands of them

all bundled together

suddenly, the yield goes up, but the

risk is still small, because...

Well, they're mortgages, and who the

hell doesn't pay their mortgage?

What exactly is the

credit-rating on this bond?

This bond gentlemen...

Is AAA-rating!

This is exactly what the Michigan state

pension fund has been looking for!

I'll buy twenty million!

Oh come on, live a little!

Twenty five million!

The money came raining down!

And for the first time, the banker went

from the country-club to the strip-club.

Pretty soon, stocks and savings

were almost inconsequential.

They were doing fifty, a hundred,

two hundred billion in mortgage bonds

and dozens of other securities a year.

And America barely noticed that it's number

one industry became boring old banking

and then one day,

almost thirty years later, in 2008

it all came crashing down!

Bear sterns was in a death spiral

and the fed brokered it's sale.

In the end Lewis Rainier's

mortgage backed security mutated

into a monstrosity that collapsed

the whole world economy

and none of the experts, or leaders,

or talking heads had a clue it was coming.

And I'm guessing most of you

still don't really know what happened.

Yeah, you got to have somebody to repeat

so you don't sound dumb, but come on

Our financial institutions are strong!

But there were some who saw it coming.

While the whole world was

having a big old party, few

outsiders and weirdos saw

what no-one else could.

Not me, I'm not a weirdo,

I'm pretty f***ing

cool, but we'll

meet again later!

These outsiders saw the giant lie

at the heart of the economy

and they saw it by doing something the

rest of the suckers never thought to do.

They looked

through the nineteen thirties

The housing market collapsed...

Nationwide.

By approximately 8 percent.

And halve of all .. Eh... worries that...

It wasn't default.

There were.. Very...

Specific identifiers.

Extremely recognizable.

Wait... for instance

w-w-w-w one of the hallmarks of mania.

Is that rapid rise and complexity,

and the rates... they are fraud-ed

did you know...

They're going up!

I've always been.. More comfortable..

When alone.

I believe... maybe... it's because of...

My glass eye.

I lost the eye...

In a childhood illness.

Separates me from people.

Did you know... they're going up!

Highest frog-rates since

the nineteen thirties.

No, I didn't know that.

I mean.. Ghe Ghe Ghe...

Nine... nineteen thirty three

the fourth year of the great depression

you were playing saying great son,

even heard the coach say it!

Can we just go home?

All social interf.. Actions

are awkward for me and for the... person

even when I try to compliment...

It somehow... it comes out wrong...

You have a very nice haircut,

you do it yourself?

Huh, what?

No, I eh...

I'm sorry... please...

Pffffff...

I'm going on and on.

My wife told me I need to share more.

That seems healthy.

So .. I get the job?

I really think I could help you fund.

Yeah...

Yeah... sure!

You're David!...

David... great!

I guess I'll go find a desk. Is there

anything you want me to work on for start?

Eh... yeah.

You could let me know later!

s D... d... d... did ya... did you/s

think it was strange when...

Ehm...

The tech-bubble burst in 2001

and the housing market in San-Jose.

Tech-capitol of the world...

Went up...

It's strange...

No, no!

It's housing...

Housing is always stable... low-risk.

That's the idea... yeah.

I want you to get me...

The... eh... Top-20 selling mortgage bonds

so, you want to know

what the top-20 selling mortgage bonds are?

No, no, no, I want to know

what mortgages are in each one

- what.. Wait...

- Aren't those mortgages made up of

wait... aren't those bonds made up of

thousands and thousands of mortgages?

Yeah...

Right away, Dr. Burris.

Nice guy... all day long.

Hmm.. Ask anyone... Hmm,

pleasure to work with.

The second my son screws up,

and...

You'll hang it to him...

Just like my dad did to me.

You hear the words that are

coming out of my mouth.

Sorry I'm late, no cabs!

Aah

so get this...

I met with this retail banker yesterday..

I'm supposed to be getting

him to invest in a fund,

instead, I start drilling him

about overdraft analysis

and how his bank will let customers

write ten... twelve cheques

before telling them they're overdrawing.

And this creep...

Is making billions off

screwing over people this way.

And I'm getting madder and madder,

and I ask him.

I look him in the face and I say:

How can you sleep at night, knowing...

That you're ripping off working people.

And know what he did...

He left!

He just walks out of the lunch,

doesn't say a word.

What the f*** is that?

Who's f***ed up in that scenario?

Am I?

Or is this douche-bag?

Who leaves me hanging...

Is he the f***ed up one?

Trying to make me feel bad about myself!

We have talk about this numerous times

f*** him! -You can't come in late

and hijack the entire session!

What do you mean, I didn't

hijack the meeting.

Did I hijack this session?

Yeah

what do you do?

I'm in commodities.

Good luck with that!

Marc...

I know you've suffered a terrible loss,

do you want to talk about that?

I don't talk about that.

Hold on...

Hold on..

Sh*t.. Let's take this, sorry!

Sorry!

I don't care Porter...

This guy's whole business is build upon

ripping people off, how long can that last?

Bye everybody!

85...

That's 30 days late, that's 60 days late.

Pay on time.

These fico-scores

they're caught up with their pants...

30 days late...

Loan to value... maybe 5

maybe 90

60 days late, jeez!

I've never heard of that.

30 days late

he hasn't move all day.

He does this every few days.

Hasn't spoken to me since he hired me.

Michael, how are you guy?!

I've put out something

really interesting...

Great Michael, whenever you find something

interesting, we all sit to make money.

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