The Big Short Page #2

What stock are you vowing?

No, no, no no.. I wanna,

I wanna short the housing market.

Really?

But the housing market is rock-solid!

Green span just said:

"Bubbles are regional, defaults are rare!"

Tell em I'll be there in a minute

say again!

Look...

Greenspan's wrong!

Look, I don't think you mean to do this,

but eh..

Sometimes you sound very

dismissive and superior.

It's a fact, Greenspans wrong.

I don't know how if you want your thr...

Look, Michael...

Metro capitol backed you four years ago

when you were a doctor with a

dinky wet page

and some inheritance money,

we've all done very well, look...

Why don't you just stick with stocks...

You know me...

I, I, I, I,

I look for value,

wherever it can be found.

The fact is

that these mortgage backed securities

are filled with extremely risky

sub-prime adjustable rates.

And when the majority of these

adjustable rates kick in... in '07

they will begin to fail

and if they fail above 15 percent

the whole bond is worthless.

Michael, just take a beat,

we'll talk about this later!

Lawrence please, don't patronize me,

if... it .. Is...

Mortgage backed securities,

sub-prime loans, tranches...

Is pretty confusing right?

Doesn't it make you feel bored...

Or stupid...

Well... it's supposed to.

Wall-street loves to use

confusing terms, to

make you think only they

can do what they do.

Or even better...

For you just to leave them the f*** alone.

So... here's Margot Robbie

in a bubble-bath to explain.

Basically, Lewis

rainieri's mortgage bonds

were amazingly profitable

for the big banks.

But then they ran out of

mortgages to put in them.

After all, there are only

so many homes and so many

people with good enough

jobs to buy them... right?

So the banks started filling these

bonds with riskier and riskier mortgages

thank you Henry

that way, they can keep that

profit machine churning right?

By the way, these risky

mortgages are called: Sub-prime.

So... whenever you hear sub-prime...

Think:
Sh*t

our friend Michael burry found out,

that these mortgages bonds

that were supposedly 65 percent AAA,

were actually just, basically full of sh*t.

So now he's going to short the bonds

which means... bet against.

Got it?...

Good!

Now f*** off!

It's only a matter of

time before someone else

sees this investment,

we have to act now.

How do you know the bonds are worthless?

Aren't they filled with f***ing

thousands of pages of mortgages?

I read them!

You read them?

I read... yeah!

No-one reads them, only the lawyers

who put them together read them!

I don't think they even

know what they've made

the housing market is

propped up on these bad loans.

It's a time-bomb and I want to short it.

Through what instrument Michael?

There are no insurance-contracts

or options for mortgage bonds.

The bonds are too stable!

Lawrence...

This is what I'm gonna do...

I am gonna get a bank to make me one.

Then...

I'm gonna buy it.

I don't want that kind of business!

Money is not money!

That's bad money!

Hey... excuse me!

Let me ask you this: What company treats

its customers that shittily and succeeds?

Fine... ok... Goldman...

Without proving it

when he was a kid he excelled

at studying the Talmud and yeshiva.

Whatever!

But, one day his rabbi told his mom why.

Paul is a fine boy and mark is an

excellent student of the torah and Talmud

then what's the problem rabbi?

It's the reason mark is studying so hard.

He's looking for inconsistencies

in the word of god!

So has he found any?

Later Baum started his

own fund on wall-street.

He had an amazing nose for bullshit.

He wasn't afraid to let anyone know,

when and where the bull had gone number 2.

Then a tragedy happened to mark

and it turned his whole world really dark

and ready to believe the

whole system was a lie.

Hold on!

It's Cynthia,

I'll be in the office in twenty minutes.

Hi honey!

The therapist called...

You did it again!

There were no cabs...

What was I supposed to do?

I worry about you mark!

At least I went

you're running around like you

have to right every wrong in the world.

Ok... fine!

How angry

you know what...

I'm a mean guy and I'm pissed off!

But... it is a shitstorm

out here sweetie. You

have no idea the kind of

crap people are pulling.

And everybody is walking around like

they're in a goddamn Enya-video.

They're all getting screwed you know!

You know what they care about?

They care about the ballgame!

Or they care about what

actresses went into rehab!

I, I think you should try medication!

No, no, we agreed,

if it interfered with work.

You hate wall-street,

but maybe it's time to quit?

I love my job!

You hate your job!

I love my job!

You're miserable!

I love my job,

I love my job honey!

Mark!

I am sad every day about what happened.

I know you must feel the same,

but you never show it!

I knew how close you were to your brother.

Cab!

Where'd ya go pal?

Cab!!

Everyday I think you're gonna talk

about it, and you're gonna do!

Will you ever think about

the idea of making a change?

Fine, fine, honey, you know what,

I will consider it, but honestly...

Cynthia I'm ok,

I really am!

Hey, hey!

No, no, my cab!

That's my cab, that's my cab,

that is my cab!

Schmuck! F*** you!

F*** you!

I'll call you later.

I wanna buy...

Swaps on mortgage bonds

credit default swap, that will pay off...

If the underlying...

Bond fails.

You want to bet against

the housing market? Yes

why?

Those bonds only fail if millions of

Americans don't pay their mortgages.

That's never happened in history.

If you'll excuse me Dr. burry,

that seems like a foolish investment.

Based on... prevailing sentiment of the

market and banks, and popular culture...

Yes, it's a foolish investment.

But eh...

Everyone's wrong...

That's a good one.

This is wall-street Dr. burry, if you offer

us free money, we're going to take it

my one concern is, is that.. Eh..

When the bonds fail..

Eh... I want to be certain,

of payment,

in case of solvency issues with the bank.

I'm sorry, are you for real?

You want to bet against the housing market,

and you're worried we won't pay you?

Yes.. That's correct.

whispersListen.. I don't

think this will work...

whispers

the market on housing is never gonna crash

whispers

this is all rock-solid by now

whispers

it wouldn't even if we wanted it to.

whispers

kinda hard one to deal with...

whispers

did he awestruck you?

Mmhhhh.

Dr burry, we could work

out a pay-as-we-go

structure that would

payout if the bonds fail.

It would also apply to your payments

if the value of the mortgage-fund goes up

you'd have to pay us monthly premiums.

Is that acceptable Dr. burry?

Yes.. It is, yes.

Em.. I have prospectuses on,

six mortgage-backed securities

I want to show you

whispers the majority of

them are accepted mortgages.

Dr burry, these should be fine!

We're prepared to

sell you 5 million in

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