The Big Short Investors Who Lost $9.4 Billion

[@HamishHodder]

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[@joerice4390]

The bundling of bad loans didn't crush the economy... It was the synthetic c d o's which could be bought by anybody, Even though she didn't own the bonds

[@jackspickphone6656]

I'm going to try TIKR based on your ad. It explained the advantages very well.

[@timopint1125]

beating sp500 between 91-2005 . sp500 brother ;) explains everything ;P

[@Eunegin23]

I lived in NYC back then, working in a completely different field. My neighbor was a banker, great parties, interesting (not always nice...) guests. Weird group dynamics. I usually was one of the only non-bankers. After having witnessed them (middle management) I didn't feel comfy with my investment and sold 90% of my stocks in winter 2006/2007. Best decision ever. Then bought my apartment when the prices were low.

[@SteelDoesMyWill]

You're so lucky to have gained that insight by being so close to the problem or at least exposed to the social circles. I can't tell you how many times I wished I'd had the foresight to exit the market in the fall of 2007 (basically trade my stock funds for treasury bonds), and then trade back for all the stock funds in the spring of 2009. Had I done that then I'd probably be retired today (I'm 46). The silver lining (I guess) is that I never traded or sold off my shares while everything plummeted 35%, I just left everything alone and had gained my value back by 2011-2012. Hindsight is always 20/20 and I didn't have a crystal ball, but I'm happy to hear you made smart moves at the right time because you listened to what was going on around you, great job.

[@Eunegin23]

@@SteelDoesMyWill Yes, a crystal ball would be something. I just was lucky. It was more a feeling after I saw those bankers than a rational decision. Plus I moved to Europe at that time and thought buying an apartment there might be a good idea as the prices were low. Which it was in hindsight. Back then others made fun of me. I lucked out.

[@jumpman366]

The thing is to buy up stocks when they hit lows. You would have made a killing since then

[@Eunegin23]

@@jumpman366 Well, always easier in hindsight. I am very happy how everything turned out.

[@jumpman366]

@@Eunegin23 Yea but thats the way of investment. As long as you’re good.

[@Mic_Glow]

NINJA loan I love the "sub-prime" wording too... a way to call total garbage something "just slightly below perfect".... genius.

[@JohnAdams-mu7xd]

Wait till people find out that Banks print money out of thin air to loan for the purchase of your home and then when you default on something they never gave you they get to come in and take the real asset, the home....

[@Johnnypaycheck77]

Derivatives

[@andymoore1527]

They were cynically also called "liars loans" In the finance industry

[@fakeplaystore7991]

The Jews love fancy words to disguise the garbage they're peddling to fleece the goyim. And the goyim never seem to learn the lesson.

[@sparkyfromel]

I got a girlfriend ,one could call sub model quality , I was very drunk , in the morning I was retching my guts for a whole bunch of reasons poor girl , I wish her well at least it didn't cost me more than some drinks

[@jonreznick5531]

I was working at a webcasting company called TalkPoint Communications and we were the ones who webcast the American Subprime Lenders Association summit, and the Eisman-Miller debate definitely happened--across my desk. There were raised voices, and I had a semi-circle of colleagues standing around me asking why a guy was yelling. BearStearns was also one of our biggest clients, as was AIG and GoldmanSachs. We webcast the end of the world, and I nearly SHIT MYSELF when I saw this scene in The Big Short because I lived it in realtime.

[@JCJW101]

Did someone in the audience shout out like in the movie and did Bear Sterns collapse whilst the talk was happening?

[@jonreznick5531]

@@JCJW101 There was shouting that drew colleagues to my desk... but honestly I cannot remember if that was also the day BS collapsed. Bear was *also* a client and all of this stuff happened in the back half of '08.

[@mrphenom1643]

So when did you guys realize shit is hitting the fan?

[@kanupreiya_29]

Wow

[@tomclwd4756]

Do you know if there is a recording of that meeting ?

[@justinweber4977]

This actually makes Forensic Accounting sound like a fascinating career.

[@PumpkinPotatoPie]

It is interesting to see it come together but having to find the connections is mind breaking stuff and most cases end incomplete because they end up settling before the full extent of the crime can be discovered

[@fafoy17]

Just learn accounting you will never be poor knowing everything

[@gabiesanchez8943]

Forensic accountants get d3ath threats too much. The higher the stakes, the higher the desperation, and the more dirty people are willing to play.

[@AC-iz7eh]

Yeah it's almost as dangerous as being a journalist covering the story of a dictator. They will find a way to get you and all you'll be is just an obit in the newspaper for a week or two. There's so many cases of financial investigators being disappeared

[@anotheryoutubechannel4809]

it is! My ex was one and travelled with armed security around the world auditing suppliers. Crazy stories!

[@aggressivedesignnetwork]

I'm a big fan of the Big Short and knowing what went on, but you presented a lot of stuff I didn't know and I appreciate it because it really put some of the stuff that I understood, but didn't see the foundational pieces together.

[@kevinmithnick9993]

x2

[@sunkat2337]

Agree. Good work.

[@toddi412]

same here

[@water_with_lemons]

Please, please read the book. It’s very, very interesting. It goes into the Hubler trade in detail and it’s crazy, it’s the chapter “A Death of Interest”.

[@hey-o8949]

@@water_with_lemonswhat book?

[@doresearchstopwhining]

"A real engineer builds bridges, a financial engineer builds, builds dreams. And when those dreams turn out to be nightmares, other people pay for it." - Andrew Sheng

[@richard8242]

Who puts up the toll booths

[@BRoyce69]

When construction projects are nightmares the engineer isn't footing the bill either. But nice philosophizing

[@ManforSomeMarkets]

Financial engineers can also find ways to structure products that bridge people’s time and risk preference to allow more physical bridges to get financed.

[@doresearchstopwhining]

@@ManforSomeMarkets Sure... But that is not the point. When they took risks the US gov bailed them out. Millions lost everything and the banks came out just fine. Remember that part?

[@ManforSomeMarkets]

@@doresearchstopwhining “They” (Lenders, originators, servicers, insurers, GSE’s, the institutions that bought/traded MBS’s and even the borrowers themselves) took risk in housing and mortgages because general housing prices almost never fell between 1975 to 2006. Agency MBS’s were perceived almost as safe as government debt because people tended to pay, they are collateralized by the property and guaranteed by GSE’s (implicitly the government itself). An implicit guarantee that got more extreme when Freddie and Fannie began buying large amounts of Alt-A and non-agency Subprime to maintain their mandate of affordable housing. The US was/is obsessed with home ownership and investors were/are obsessed with higher yielding products. Combining policy and demand gave perverse incentives to each part of the mortgage value chain. Besides Lehman’s death and the fall of BS/WaMu, there were plenty of banks who never returned to their prior glory (DB, Citi, CS). Fannie and Freddie are still in conservatorship today. Maybe more executives should have went to jail for fraudulent lending practices, but it would be disingenuous to say that banks faced no punishment. And as a reminder the government bailout wasn’t just aimed at banks. Two of the Big 3 auto manufacturers went bankrupt at the time and there was a general loss of confidence in just doing business. Even regular repo and money markets froze. The government not intervening would have been more politically insane than the intervention itself. And no, KZbin comments are unfortunately not transferable college credits. But thanks if you do read and consider my comment. I recommend the Brookings write up on the housing market as well as books like “All the Devils are here” for a glimpse of the GFC, because any analysis of it is an autopsy of Rasputin.

[@tranger4579]

I bought my home for 52 thousand in 2007. I paid it off in 10 years. What my wife and I are going through now is family and friends snubbing us because we own our home outright unlike them who are still making payments on expensive homes. They just can’t grapple the fact that we have no liabilities due to our zero debt. Mortgages are a liability.

[@Shteven]

A new home now goes for like 330k, to 500k+ in some areas. I make $1600 a month after taxes. I have 0 debt and can't afford a place. Or if I want to afford a place, I have to move cross country.

[@tranger4579]

@ that’s the thing. You got to be willing to move. In my neighborhood there is people moving in from other parts of the country due to cheaper housing. Here in south Texas you can find jobs paying what you make or even more. Houses in smaller town older homes now range from 80 to 180 thousand.

[@JackBeNimble-fb1fn]

Well, your mortgage is an asset to the buyer, because like a bond it's a fixed rate investment they can acquire, and the variable risk was supposed to be moderated by pooling many loans into a large security of such loans. The only real problem was that because Banks always turn loans over to liberate their capital (and live off the fees generated), they and the mortgage originators didn't actually care how low quality the buyer was, and they wrote too many garbage loans. The mortgage brokers got their $5k bonus on any sub-prime because the loan RATE on a sub-prime loan is higher to compensate for the risk. The bank issuing the mortgage loan got their fees. But many MBS absorbed enough high risk loans that default rates exceeded projections. But it wasn't by accident, pooling higher risk (higher rate) loans creates a better return security to sell into the investment marketplace, and investors want high return securities (unless they fail). AS FOR family & friends 'snubbing' you, it may be because you've crowed about your genius in home buying. So don't do that. Fact is, you're not as well off as you could've been, if you had bought a house for $100k, and paid it off in 15 or 20 yrs, real estate ownership creates new millionaires every day. And also, had you bought growth stocks with the cash you had after getting a cheap money mortgage, instead of paying off your mortgage early, that would've returned even more than the capital appreciation of your house. Investing is about getting cheap credit/loans and putting that cash into growth stocks in an up market. But congrats on paying off the mortgage early, even if you did miss out on capital appreciation in stocks.

[@alienrenders]

OOOHHhhhh. This movie makes SO much more sense now. I never really understand that scene at the end.

[@shivambajpayee5801]

Beautiful thing about finance guys is that they call "poisoning the water supply" as offloading which is equivalent to terrorist attack with chemical wepon

[@chaundadon2612]

I was blown AWAY at this movie, really opened my eyes as someone who was just a teenager when my mothers houses got foreclosed on in the housing market crash … I went deep into the rabbit hole of information. This video just makes me want to watch this movie again for everything I missed.. great breakdown !

[@bluehorseshoe444]

When I saw the title, I thought this video was going to be about Phil Falcone... now there's a fascinating Wall Street story no has really told yet... guy was one of the biggest winners on the short housing bet... guy was a legit billionaire, he even owned part of the Minnesota Wild, but 10 years later he was flat broke

[@lonelydogclub]

To be honest why would someone continue trading that aggressively with a billion dollars? He and his offsprings could live indefinitely from it and have whatever they want to have.......

[@WreckerR]

@@lonelydogclub Because someone like that always wants one more dollar...

[@knitwitchpgh]

​@@lonelydogclub Greed. You think someone who got to a billion is gonna be satisfied? Bezos has more money then him and any offspring for a century could spend

[@choncha23]

It sounds like what is happening today. I have friends who have, but they have a lot of student loan debt and consumer debt. The reason they didn't feel like living paycheck to paycheck was because of the low-interest rates. It's happening all over again. A lot of people are one job lose away from their assets being seized.

[@joshuapowers4623]

That's not really the same thing, that's more the result of these very same types of people making life near unaffordable for everyone else in the name of increased profit. Can't get very many well paying secure jobs anymore without some kind of secondary education, Can't get that anymore without some kind of loan. And the term "paycheck to paycheck" has nothing to do with not taking on debt, in fact it means it's highly likely you'll be forced to take on debt at some point. Because what it means is your income barley covers your reoccurring expenses, and there's nothing left to cover the rare, unexpected, occasional expense.

[@knitwitchpgh]

1:46 ironically after i bought my house last year my mortgage was immediately (two weeks) bought by a different mortgage company and immediately i thought "well im in a CDO" 😂😂

[@mikeyh0]

Our national debt is FOUR times what it was in 2008. The next crash will crush our entire economy.

[@tjinc2001]

The Big Short is one of my favorite movies. Your insight and analysis has enhanced my understanding. Thank you! Entertaining and educational.

[@CodeRonin42]

I worked for First American mortgage during this time and I remember getting 3-4" thick stacks of single page letters of foreclosure notices for some person's home every single day. I remember the moment in my mind they stopped becoming people and just became another number. I ended up quitting not long after that. I don't think we ever really recovered but just got used to walking around with an open wound.

[@lorenzogiubellino9477]

Honestly this is the best and clearest summary of the big short, really amazing

[@kroanosm617]

A perfect case of "You can't make this sh it up."

[@RideAcrossTheRiver]

Byyyeeeeeee Kaaaaathyyyyy

[@sixtolezcano3]

Nobody ever talks about the US Congressional Banking committee politicians like Barney Frank who set the whole system up, told the banks the govt would backstop them and convinced them that they would be required to lend to subprime buyers or get shut out of the whole system. Not Michael Lewis, not the players, nobody ever brings this up.

[@HadEnough2]

Exactly

[@SecondPlaceInTheGeneticLottery]

It's not talked about much, because it was a much smaller piece of the puzzle. Blaming Congress is designed to deflect from the greed that largely caused the crisis. I worked for one of the firms at the center of it and we used to half-joke with one of the C-level executives that "I hope you look good in orange". Everybody was making boat loads of money.

[@leonelfederico245]

@@SecondPlaceInTheGeneticLottery Are you sure it's a small part of the puzzle? It was the Clinton Administration who used the Community and Reinvestment act of the Carter Administration to convince the banks and investment firms to allocate assets into the sub-prime segment. The trade off protrayed in the book (or one of the books I read) stated that Clinton's Admin told the banks that if they wanted to continue their orgy of consolodation, they would have to lend to lower credit segments of the market. Indeed, greed played a large role, but as usual the negative externalities of an idea to promote "fairness" was met with ugly consequences. Perhaps greedy businesses and stupid politicians would be apropos.

[@brentfarvors192]

Nor do any taxpayers, asking where their bailout returns are now that the market is doing well...

[@shuaibsaleem569]

Congress literally made the system and then told these guys hey we did this go crazy lmao ​@@SecondPlaceInTheGeneticLottery

[@X19-x5f]

I knew something was up when, in 1998, my wife and I applied for a mortgage of $159,000 and they said we actually qualified for a mortgage of $250,000. They said "You could completely furnish the house or even buy a bigger house and furnish that one". We said "No Thanks" and walked away with our smaller mortgage, and I told my wife at the time that something bad is going to happen with this whole mortgage thing, but I was an unsophisticated with money at the time and didn't know how to act on my instinct.

[@lbowsk]

It happened all over just like this. The banks were and are as crooked as hell. Everyone wanted to blame the mortgage holders, but the BANKS were just giving money away and fomenting the crisis.

[@zulfakaraspar2311]

It is going to happen again. You should learn from success stories and dig further.

[@dennissvitak148]

It get's worse. I was given the name of a reputable banker from Stifel Bank, here in St. Louis..and old money brick and mortar bank. Hell..they have their bank's name on the St. Louis Cardinals' baseball uniform. Anyway, I applied for a loan, and here's the phone conversation. Him..."How much do you want?" Me..."3". Him..."I'll give you 7." Ummm...NOPE. The loan was for $289,500.00. There is no way in hell I could ever have managed a five thousand dollar a month loan. Well..maybe...but I would have been house-poor.

[@roycesanders4315]

Ok boomer

[@marsmellow1589]

It`s the same now. We can borrow with our current income up to 300 000 pounds. Bought a bouse for 125 000. Deposit 32 500. Nice house somewhere in Wales. Bought based on a single salary so that we can still live like we do now if one of us loses income, separate or whatever. The mortgage guy just kept pushing that 300 000 mark. Big fucking finger.

[@jdrancho1864]

I've watched this movie sooo many times, it is one of my favorites. But I could never make sense of the scene where Eismann sits in his boss' office and has this revelation about the outfit he works for. I just moved past it, thinking it has no real relevance. Thank you for laying this out for us and putting the scene into context. As many times as I have watched this movie, I find out new angles that I hadn't known existed.

[@penitent2401]

Make $42mil by fraud, get fined $7mil. Sounds about right.

[@sirlost94]

Don’t hate the players, hate the game

[@penitent2401]

@@sirlost94 those players are the ones who rigged the game that way.

[@alvydasjokubauskas2587]

They only proved 7 million was fraud money, so thats what they got. For other millions, they did not have proof or time to find it all. Beurocracy got killed by beurocracy....

[@handlethesenutz]

​@@sirlost94we can quite easily do both.

[@apocratos0174]

Dont hate the players of the game....hate those who didnt paid their debts.

[@rifelaw]

The problem is a CDS is an insurance policy regulated not as an insurance policy but as a security. First, you don't need an "insurable interest". You can't buy insurance on someone else's property or life, but you can buy a swap against securities you don't own. This means the swap and related markets can be several times the size of the assets they are securing, which they in fact were. When an asset-tracking investment class becomes several times larger than the asset class it's supposedly tracking, it's tulip time. Second, an insurance policy can't be traded up and down an investment chain; a CDS and related instruments can. Which means your "insurance policy" is worth only as much as the ability to pay of the weakest link in that investment chain, regardless of any repo agreements.

[@seanwebb605]

They weren't mortgage backed assets. The bonds were the returns on the mortgages backed by an asset. The house!

[@applelandry4233]

He said the credit agencies gave high ratings because if not the bank would go to another agency. That's not true. They gave high ratings because they had no obligation to be honest. And they still don't.

[@uwesca6263]

Quiet funny how there are laws for everything. Except for stuff that really matters.

[@alibizzle2010]

This would make sense if their where mot emails from investment banks threatening to fire a rating agency if they didn't give a CDO a higher rating

[@applelandry4233]

⁠​⁠@@alibizzle2010well that's a certainly a way of saying you're missing the point. Them firing or going to another bank is literally the same effect...loss of revenue. And my point, which still applies, is that the rating agencies had no obligation to be honest. Officers of a company have a fiduciary responsibility, lawyers have a legal obligation to represent to the best of their abilities, ratings agencies, whose products impact millions, have a responsibility only to businesses in their ecosystem.

[@C00kiesAplenty]

​@@alibizzle2010 Banks being able to threaten them with replacement is a symptom not a disease. The real issue is they they are under no obligation to actually rate things honestly..

[@erikrohr4396]

A lack of obligation to a particular thing isn't a motivation to do the opposite.

[@ryansteele2677]

I think one of the scariest things about the whole crisis was how little actual collision occurred... Especially near the end, it seems there was some joint efforts made to cover losses and whatnot, but generally speaking, it seems that the parties involved were all just looking out for themselves and their bottom line, and as a result, multiple entities worked together without actually working together... They didn't have to actually colude bc all of their interests alligned on their own...

[@jasonpollock9259]

*collusion

[@belle6631]

Synthetic CDO’s are exactly what they sound like, selling insurance on a CDO tranche is economically the same as owning the CDO tranche outright….biggest difference is the CDO tranche has finite dollar size, but I can sell ‘infinite’ insurance on it….which is why the synthetic CDO market was 20x larger than the cash CDO market

[@chaundadon2612]

Please explain this theory in depth, really trying to understand

[@usapangreligion]

thanks. you're the only one who made me understand the big short and the financial crash of 2008. 😊

[@josephlopez4871]

The fact that no one went to jail over this is beyond maddening

[@roseymalino9855]

Whom would you send to jail? Each person was just doing their job. Would you want to be the person to justify why you turned down a mortgage anywhere along the chain? Everything was heavily political then. Rejecting a loan could cause the person / company racist, sexist, anti-something or other. The attitude was if something was wrong, someone above me would reject it.

[@collinmerideth8274]

They hid the rating of the bonds, waiting till they unloaded their own trash before readjusting the bonds. It’s fraud. It’s illegal. Also, rating absolute trash as AAA is also fraud.

[@roseymalino9855]

@@collinmerideth8274 Actually, no. The ones unloading the trash bonds were not the ratings companies. A couple of years ago, companies brought 648 SPACs public. In theory each was worth at least $10. Many were rated higher. And many actually sold at extremely higher prices than their ratings for awhile. Most were worthless and are now gone. The few remaining are near worthless. If ratings analysts actually and truly possessed meaningful proficiency, they would have all the money.

[@slugma_nuts]

Thank you for covering that scene at the end about Barry - it was the scene I couldn't quite follow other than "i was betting against Morgan Stanley.. Which is me", but hearing the real life story is shocking

[@wanderingknight10]

He didn’t tell the full story the same guy that lost 9 billion ended up getting all that back plus more.

[@adityachoudhary5606]

I was really waiting for the story but he started the ad

[@tritonh5683]

The common term from Wall Street and Especially our government is “I assume no risk for my decisions” If they must take responsibility for a fail economy, then none of these bad decisions will ever be made or a lot less frequent. Because if their job and livelihood is on the line, yeah their decision will be very different.

[@kevinstoneham1245]

Great video in helping explain some of the finer elements of what was going on in the film.

[@terrevoges3242]

the fact that none of these thieves didn't go to jail is a travesty

[@narcissusabcd]

I tried to understand this film watching a lot of videos. This was the clearest explanation

[@williambakker745]

I know of a Dutch bank ceo who at the time did not know the difference between the Dutch (European) and American mortgage system. In America the mortgage is on the house and the person can walk away from the property, giving the keys to the bank. In Europe the mortgage is on the persons (man and woman) with the house as collatoral. And any remaining debt after (forced) selling of the house will still be payable to the bank for the rest of your lives.

[@FlyingSagittarius]

It works like that here too, the only way to get rid of a mortgage for good is to file bankruptcy.

[@SprakanaKerum]

Europeans seem to be more mature than Americans in every aspect of governance

[@criSOME1]

Lol you mean that continent that couldn’t create a constitution after hundreds of years of government?

[@jumpman366]

Mortgage means death pledge

[@ToblerX]

Excellence recap, fascinating all the intricacies and nuance at play during the GFC.

[@justas070707]

Hamish, appreciate the content and effort as always 👏

[@dkchen]

To be fair the rating agencies didn’t know how to rate these bonds. They used the banks formula to rate these bonds.

[@muratt1163]

Not knowing how to rate delinquent assets is kinda strange for a risk researchers

[@jumpman366]

Oh please. Don’t be naive…

[@dkchen]

@@muratt1163 Well, at that time they didn't know they were delinquent. They were confused just like everybody else.

[@Rainy_Day12234]

There is a problem among financial academics and practicers not understanding inherent risks that aren’t factored into their mathematical models…not knowing what they don’t know and their risk exposure is open tailed…just because it hasn’t happened recently doesn’t mean it’s never going to happen.

[@DKH712]

I studied Finance and what you talk about has always fascinated me. Pricing and risk management used to be more subjective, but with all the mathematical models we have now, it gives pricing and risk management an air of objectivity. But like you said, this ´objective´ way of looking at things favours certain risks while ignoring others. So in a way it is subjective, but it´s a subjectivity that we like to copy of of each other. This is dangerous because if everyone is wrong in the same way, then when shit hits the fan and the assumptions of the models aren´t holding up, then it goes bad for everyone at the same time, and the impact is magnified. In practice not everyone will use the exact same models, but there is significant overlap. Maybe we should shift to a more bayesian model of risk and pricing where expert opinions are also factored in. This would allow more diversity in pricing and risk assessments.

[@markcasey2517]

Hey man. Thanks for representing Australia so beautifully. Love the analysis.

[@johnallen5999]

The transition into the promo was flawless.

[@roseymalino9855]

You have to admit the collapse of subprime mortgages gave us a really entertaining movie. Entertaining, at least, for those not skewered by the collapse.

[@cookinthekitchen]

Good research thanks

[@keithrezendes6913]

Great channel thx you

[@Sharkdog11b]

Subscriber for life right here man you’re great at what you do

[@vinaysuryawanshi9410]

what an explanation, man, of the complex subjects. commendable

[@smoideen]

The rating agencies should have been sued into the ground and prosecuted with jail time. Don’t see any difference between their conduct and Arthur Anderson’s handling of Enron

[@joshsmith6043]

Peter Schiff famously predicted all of this during a speech to lenders and real estate salespeople.

[@M0rmagil]

Investors WERE buying “safe” mortgaged back assets. The CDOs weren’t unsecured loans, and that’s the problem, because it lulled just about everyone to assume they could not lose. There’s no such thing as a free lunch, or a risk free investment.

[@jessicasquire]

I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.

[@terenfro1975]

The problem with betting against a financial system is the corruption inside those systems are very strong. In order to actually get paid, the majority of investors have to side with you on seeing the mistake. What happens is the corrupt system will just cover itself until it can't be hidden any more.

[@resa574]

Nah the broader market just reflects economic cycles

[@Rainy_Day12234]

Politically it’s impossible for public administrators and politicians not to do everything in their power to offset corrective forces even if knowing the costs… they’re forced to act propping up asset prices with newly created money from the Fed causing short term inflation and creating distortions in capital flows who knows how destructive..kicking the can down the road

[@tomlxyz]

Nah, even without corruption it doesn't work out most the times even if you're generally correct. If you bet against, you need a counter party who won't offer an open ended deal. You have to give specific number and date or else you'll lose even if you were right in general.

[@muratt1163]

Corruption won't last long in the market

[@PigdogEsq]

Hamish, a few things. First: CDOs and Synthetic CDOs were different, it was the former not the latter that were the huge market. Second, Kathy is not Mark's boss, she's essentially his banker, who lent the capital for Mark & Frontpoint's position, with Frontpoint also renting space from and using the trading/banking platform and infrastructure the bigger bank to make their trades.

[@ashwinvasavada8401]

Nice work. Original and well researched.

[@arthurov]

Amazing research, immediately subscribed to your channel.

[@dotsovertonesinging]

Great analysis, especially with the real life references. One of my best movies ever. Recording your video in Imax? what is that clarity?

[@checkforme234]

I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.

[@nmm2177]

They might just go up again. It's a lottery.

[@vincentkosik403]

Great stuff..this was very revealing and thank you

[@waylaidsavant]

Boom! Great share. I never knew the deets of this subplot

[@Alex-cw3rz]

And the general public that had nothing to do with this, got punished much more harshly than them.

[@JohnJ-p7o]

Here in Canada every building is sold out years before the first brick are laid. I can't decide if this is good or bad?

[@ashishbadoni2862]

Hey Hamish, great content. Subscribed

[@JP-hu8wi]

Great vid 👍🏽

[@flazerflint]

I really liked the cdo manager's acting

[@jimparsons6803]

I've heard that mortgages are a specialized form of contracts. Under Contract Law, I think, contract can be assigned, hence the CDOs. I have the DVD, liked that they kept the information easy to understand and the fact that the folks that were doing the malfeasance were depicted as 'not getting it,' or not carrying. That is what also came across with CBS' 60 Minutes on their several spots on this topic. Mores the 'Yikes!'

[@knitwitchpgh]

4:49 trying to sue when they didnt even use your name 😂

[@Raymondcraw1967RaymondCrawley]

The market's direction can swiftly change, with indexes frequently transitioning from a bear market to a bull market precisely when the news is most negative and investor sentiment reaches its lowest point.

[@andthefunkybunch1466]

The "buy back*" mistake seems like a pretty big correction that probably just warrants re-recording that whole section.

[@cristianbunea9848]

GREAT VIDEO BUDDY! I wouldn't dream in a modern colony as Romania, my home country, that such transcripts would exist.

[@SWOBIZ]

The US Government (Freddie Mac, Fannie Mae, FHA and VA) were the greatest source of subprime mortgages. They guaranteed or securitized them 75% of all subprime mortgages.

[@gordo3582]

When I saw your vid title I thought it was going to be about Carl Icahn. You should do another vid on Carl Icahn because he ALSO lost $9 BILLION in his "big short" just over the last several years and his case is particularly interesting because he was recently featured in an HBO documentary "Icahn: The Restless Billionaire" where they didn't mention any of this massive loss. He is famous for being an activist shareholder. His Wiki entry described him as "Widely regarded as one of the most successful hedge fund managers of all time and one of the greatest investors on Wall Street".

[@dennissvitak148]

2006. The company I worked for went belly up. My 401(k) money was about 100k at that time. I parked it in CD's, for two years. It was the highest yield at the time. From the time I moved it over, to when I put money back INTO the markets, the stock market went from 14k to 8k. I didn't lose a dime, and in fact, made about 12k. My money then doubled, and then doubled again, by the time I retired. Thank you housing bubble! I got very, very lucky.

[@NathanHarrison7]

Another excellent video. Thank you.

[@eren__morwen5947]

When I heard the existence of synthetic CDOs I had exact reaction as Mark Baum. My jaw just dropped to how someone can be so negligent My question is, does this still happen? Are CDOs, synthetic CDOs etc still in the play? Are we heading into another 2008?

[@Megaawesomeguy]

No something as insane as synthetic CDOs are no longer around and mortgages are now under much stricter scrutiny.

[@Imsosmrt1999]

I worked as a subprime underwriter. We did 100% financing at stupid rates with a 4% fee. So congrats, you own a house you have no business owning and you are instantly underwater, more so if you have to sell. Good times.

[@woolfel]

I used to work in the investment banking world building compliance system. What I learned about investment banking world made me feel that entire world is completely corrupt and F-ed up beyond hope. Even though the fed gov requires every firm run rebalance and compliance check regularly, most do not and simply assume they will pay fines. Those fines are passed on as management fee to the people buying into the fund. One of the banks that tanked during the crisis was Wachovia and I know for a fact they didn't run compliance regularly. They weren't the only investment bank that didn't follow the rules. If both dem and republican parties didn't screw with the SEC and purposely strip them of funding and power to do their job, it might not have happened. Until voters stop supporting both parties, this kind of crash cycle will continue and that 0.01% will get even richer.

[@iansisberg5745]

Yes. I agree with you. It's "Bad"!!! It's "Very Bad"!!!!! But, what other "Political Party" is there to support???!!!" There's only "2 Political Parties" in America to support. The "Democrats and the Republicans"!!!!! That's it!!! 😐😐😐😐😐

[@apocratos0174]

Yep But the thing is...those cdo managers got to keep their pockets filled, to an extent, so they werent wrong

[@adeelb3678]

Tom Cruise: "So I got another safety guy" = Bank: "We got another rating agency"

[@GustavoSilva-ny8jc]

2:05 NINJA?! Why am i not surprised... also YOU HAVE A FIRM???

[@alexmaccity]

Thanks Hamish.

[@desertadvisor]

Great job 👏🏻

[@isarmararnason8195]

Awsom video dude keep it up!

[@joelrunyan1608]

Every single one of these people should have been sent to prison and stripped of all the money they stole from us

[@mikewatt8706]

in Ireland there were abandoned houses in my village that you couldn't give away for free in 1995. by 2005 the same houses were selling for 200 k. i knew something was wrong as it wasn't as if a gold mine opened in the area. the banks were begging people to borrow.

[@RideAcrossTheRiver]

Banks were inflating the local housing market?

[@justatiger6268]

Why didn't Wing Chau short the housing market himself if he knew it was all a steaming pile of garbage?

[@samotian0331]

That's basically a massive conflict of interest. Imagine managing CDOs and telling investors that they're safe but then betting that they'll fail.

[@genegrant4332]

He was an insurance agent, can’t think of anything more useless than an insurance agent.

[@muratt1163]

Most people did not know and him, he was just a salesman, who was making a living on fees

[@CramStoker]

I was actually a subprime loan during the crisis. It was crazy. My dad who was a AAA mortgage was like whaaaat

[@seanwebb605]

I think it was a convention for securities. Not specifically sub prime mortgage bonds. Even if that is the group of portfolio managers and such who attended.

[@hkraytai]

The movie did not mention at the time banks were under pressure to lend money to people with bad or no credit so they could buy houses in the name of fairness and opportunity.

[@KeithRowley418]

Very clear explanation.

[@38skippers]

Nothings changed

[@leonelfederico245]

Yours is the scariest observation yet. What happens when the trillions of $ injected into the economy during covid dries up? I haven't seen any improvements in productivity to offset these injections, so....Yikes!

[@ryaj2356]

A bail out should never happen in the private market. Let them fail when they fail. It’s part of the actual open market.

[@SaltyChip]

In this movie, anyone who smiles, loses money while the upset and pissed off people make all the money in the end of the day.

[@almabe7608]

This video was dope my boy! 🙌 Kudos to you

[@lilhaxxor]

Very interesting. Thanks.

[@Nngmm1]

G’day Hamish. Very much enjoyed this video. I’ve watched The Big Short 3 times and had so many holes in my understanding even after the 3rd watch! This video has been excellent for me. Much appreciated.

[@RyanInterceptor]

This was a great video

[@jeg5438]

Any idea whats going to happen this time around with the housing markets?

[@JoeRogansForehead]

I have no understood why the banks were giving loans to anyone before this. It’s because the banks were just bundling them up and getting them off the books. The more money lent , the more money made without any actual risk if the person defaults

[@shooter7a]

Yes. Mortgage originators were basically salesmen working on commission.

[@elcookiemonsteru]

And yet, they never learn and history keeps repeating itself....