The Big Short (Official Thread)

[MartyMcFly]

lets just say it got a 10/10

yeah, guilty as charged I guess

 

[TheGodling]

i wish carrell's character did... i mean THEY didn't ruin shyt

nobody really ruined anything who got rich


it'd be like if you knew 9/11 was going to happen... you go back in time... tell everyone you know, it's gonna happen.... nobody believes you for shyt, no matter how many people, in how many positions you tell

so you go ahead and buy life insurance for all the people who gonna die

yea you a piece of shyt for making money off the situation... but the situation was gonna happen whether you bought the insurance or not

The "problem" was that Baum thought that when the crisis would hit, he'd be making a lot of money at the expense of the greedy banks and investors, not realizing that they would stoop as low as to commit fraud and sell the wrongly rated CDO's to unaware buyers while investing in the credit default swaps, knowing the bubble was about to pop for real. shyt got ruined but the banks lied and faked their way through the initial stages to save their own asses.

 

[The Devil's Advocate]

The "problem" was that Baum thought that when the crisis would hit, he'd be making a lot of money at the expense of the greedy banks and investors, not realizing that they would stoop as low as to commit fraud and sell the wrongly rated CDO's to unaware buyers while investing in the credit default swaps, knowing the bubble was about to pop for real. shyt got ruined but the banks lied and faked their way through the initial stages to save their own asses.

I gotta watch this again.


So that was the whole thing with the Asian guy. He thought he'd be getting at the banks. But when he found out the guy who worked for the investors, was also fukking them over through the banks.... That's when he realized he'd have to fukk over everyone to make money?


Cause it looked like at some point, besides bale, the other groups went to press and higher ups and that conference and tried to warn as many people as they could. And nobody would listen or report it

That's why I thought they didn't do wrong. Cause they tried to stop it. But after it went down.... Boom.... And everyone was getting fired and houses foreclosed.... Carrel still didn't sell

How did the common man still not know to not buy that shyt. Let alone investors who were buying it

 

[TheGodling]

I gotta watch this again.


So that was the whole thing with the Asian guy. He thought he'd be getting at the banks. But when he found out the guy who worked for the investors, was also fukking them over through the banks.... That's when he realized he'd have to fukk over everyone to make money?


Cause it looked like at some point, besides bale, the other groups went to press and higher ups and that conference and tried to warn as many people as they could. And nobody would listen or report it

That's why I thought they didn't do wrong. Cause they tried to stop it. But after it went down.... Boom.... And everyone was getting fired and houses foreclosed.... Carrel still didn't sell

How did the common man still not know to not buy that shyt. Let alone investors who were buying it

Baum & co were going around interviewing investors and banks because they couldn't believe that shyt could really be that broken and nobody did anything about it. Guys like the Asian dude were evidence that they didn't just know shyt was broken, they did it while laughing as they cashed in on it.

The idea was always to take down guys like him (the Asian dude) and the banks, but again, when the bubble popped, instead of the system breaking down, Wall Street and the banks committed mass fraud to make the system seem stable while dumping their worthless CDO's on unknowing people before Baum, Burry, etc. could cash in their CDS's. That's the reason the two young dudes tried to go to the press, because they were essentially screwed over.

 

[The Devil's Advocate]

Baum & co were going around interviewing investors and banks because they couldn't believe that shyt could really be that broken and nobody did anything about it. Guys like the Asian dude were evidence that they didn't just know shyt was broken, they did it while laughing as they cashed in on it.

The idea was always to take down guys like him (the Asian dude) and the banks, but again, when the bubble popped, instead of the system breaking down, Wall Street and the banks committed mass fraud to make the system seem stable while dumping their worthless CDO's on unknowing people before Baum, Burry, etc. could cash in their CDS's. That's the reason the two young dudes tried to go to the press, because they were essentially screwed over.

So Baum etc went under cause of this. Losing a shytload of people's money. While wall st and banks got the bailout and was cool about it

And in turn, the others had to sell their shyt/take settlements from Baum and them. Instead of the banks/wall st


So in the end they ended up getting rich, but only cause they fukked over the same people that the banks/wall st fukked over?

 

[TheGodling]

So Baum etc went under cause of this. Losing a shytload of people's money. While wall st and banks got the bailout and was cool about it

And in turn, the others had to sell their shyt/take settlements from Baum and them. Instead of the banks/wall st


So in the end they ended up getting rich, but only cause they fukked over the same people that the banks/wall st fukked over?

Well, they didn't exactly go under because they made tons of money, but yeah, in the end the money they made was largely over the backs of the same people that the banks and Wall Street screwed over as they hit damage control. Baum and maybe Pitt's character were of course the only ones who felt any remorse over this.

 

[ryderldb]

So how did they all make money in the end? Did they sell their CDS to investors or did the banks pay them out since the MBS defaulted?

 

[The Devil's Advocate]

So how did they all make money in the end? Did they sell their CDS to investors or did the banks pay them out since the MBS defaulted?

this one of these movies that makes it fukking point


shyt was so damn confusing to us common brehs... you can see exactly how everyone got fukked over... dude on reddit, combined with a few posts in here, is as close as you can get to it.....

seems a few people are confused by the whole financial crisis/housing bubble and how it related to the movie. so here's a brief summary. Disclaimer, I'm not a finance guy, just really interested in this stuff

How Mortgages are SUPPOSED to Work:

• You walk in to a bank and ask for a loan to buy a house. The Bank will give you the money IF you're well qualified meaning you have a job, you have savings, you have a down payment and you have good credit. They give you the money, you get a house and you pay the bank every month (principal + interest).

What the banks REALLY DID during 90's and early 2000's that led to the collapse of the markets

• They started approving people for mortgages who had no business applying for a loan. One banker used the term, "these people didn't have a pot to piss in, but we got them a mortgage"
• They took several mortgages and "bundled" them in to groups and sold those bundles to large investment banks.
• The investment banks called these bundles "mortgage back securities or MBS". and they sold these MBS's as bonds and stocks to anyone who wanted to invest in them.
  
  
• At first, they only bundled the best mortgages. These MBS's were rated AAA (Triple A) by the credit agencies (S&P, Moody's and Fitch). Remember in the movie when Mark Baum (Steve Carell) asks the old lady why they were rating the MBS's triple A? The old lady was working for S&P. To give you an idea of Bond ratings, a US Bond isn't AAA, it's actually AA. Canada is AAA, Greece (which went Bankrupt) is rated Junk (or close to Junk).
  
  
• Investors LOVED MBS's because they provided a very high rate of return. Traditionally the safest investment are US treasury bonds. But in 2006, US bonds were only paying around 1% interest. This meant if you bought a 10 year T-Note (10 year treasury bond) you would only make 1% every year in interest which is nothing. Investors love US bonds b/c they're safe, but at 1% they want something that provides a better rate of return.
  
  
• That's when the big investment banks started offering MBS's. MBSs are great because (1) they're "safe" since housing prices always go up (yeah right!) (2) All the MBS's were rated triple A meaning the banks made sure everyone was qualified to get a mortgage (LOL!) and (3) MBS's had a MUCH higher interest rate, between 5%- 7%. Investors LOVED this and started buying up MBS's anyway they could.
  

this is where it went bad

• The demand for MBS out-grew the supply, so the banks started to loosen the requirements to get approval for a mortgage to the point where you could get a NINJA loan. (no income no job or asset verification). This was eluded to in the movie when Mark Baum's staff were talking to the 2 brokers in Miami who were bragging about selling mortgages to immigrants.
  
  
• EVERYONE in the chain of command was making a LOT of money during the growth period. The guy who hosted a weekly seminar on "how to invest in real-estate" got a referral fee. The women who helped you file "paper work" got a nice commission when the loan was approved. The small bank that approved the mortgage got a commission when they sold the mortgage to a bigger bank and so on. The credit agencies who were supposed to evaluate these MBS's were (and continue to be) incentivized by the big banks to give out AAA ratings. Everyone was making so much money that they had no reason to stop and ask or verify the information.
  
  
• The big banks started taking on some really really crappy mortgages and the MBS's that were rated AAA were suddenly filled with bad mortgages that shouldn't have been rated so high. These were called SUB-PRIME mortgages.
  
  
• Normally there are preventive measures to ensure sub-prime borrowers and lenders don't over extend themselves. For example you always hear on the radio "come buy a car, we approve everyone!" that may be true, but sub-prime borrowers will have to pay a huge penalty in the form of a higher interest rates. However the Banks took advantage of unsuspecting borrowers by giving them teaser rates (Get 0% interest today!!! no job no asset verification, we approve everyone- Come buy your dream house and get 2 rental properties while you're at it, use the rental income to pay for your house!). I mean if the bank tells you, you've been approved for a $300k mortgage at just $1,200/mo with $0 down, who wouldn't take it?? Especially when it seems EVERYONE is doing it??? It's crazy, but it happened. People just didn't ask. They were just happy to get approved and it made perfect sense, "use rental income to pay back the house.".
  
  
• To make matters worse, the Credit agencies were still rating the MBS's AAA even though they knew they were crap! and eventually people would default.
  

How it crashed

• The economy started to go south in 2006 and suddenly people started to default on their mortgages. at first it was slow, but within months, default rates started to grow exponentially. In addition when the "teaser rates" expired, people's monthly payment jumped by as much as 200% (also eluded to in the movie). So even if some people managed to keep their jobs, it wasn't enough to meet the new monthly payment requirements. Imagine you pay $1,200/month and all of a sudden you're told you now have to pa $2,500/month.
  
  
• Because people weren't paying their mortgages, the banks weren't making money and investors weren't getting their monthly checks. Demand for MBS's dropped and the Big Banks were stuck carrying a bunch of crappy Mortgages that were completely worthless!.
  
  
• Before word got out to the general public, The banks began liquidating their MBS's as quickly as possible to smaller banks, small investment firms and eventually to the general public. It's as if a used car dealer discovered all the breaks on their cars were faulty and rather than doing the right thing and alerting the authorities or at least letting their customers know, they just put all the cars on sale for 50% off and hope people would buy them. Only in this case, even when customers asked if anything was wrong, they flat out lied and said the car was in perfect working condition. Add to this, they told the credit agencies "please don't tell on us, until we get rid of these MBS's and of-course they obliged.
  
  
• By the time the news broke in the summer of 2007 of the magnitude of the collapse, the big banks had managed to unload a fair amount of their MBS's and they were able to absorb the losses (thanks to the bailout). The smaller banks failed and investors lost everything.
  

How these guys in the movie made money

• These guys realized that the quality of MBS's weren't as good as the investments banks were claiming. At the beginning of the movie, Michael Burry (Batman) asks "how is it that dot com crash didn't affect housing prices in the areas that were so dependent on the industry?". He started to look at these mortgages and noticed a lot of people were defaulting. The other guys in the movie basically did the same thing.
  
  
• So all of them basically bet AGAINST the MBS. When you BET against a stock, it's called "shorting" which means you think the stock price will go down instead of up. These guys went to the big banks and basically said "we'll pay you a monthly fee and we'll bet against these MBS's. In 2 years if WE'RE right YOU have to pay US. If WE'RE wrong, you just made a TON of money from our premiums plus all the money we'll owe you".
  
  
• In the end, these guys were right. MBS's crashed and they all got a huge pay-out. The suspense in the movie was them knowing WHEN to sell. If they sold too early and MBS's dropped, they would miss out on higher profits. If they sold too late, the would risk letting the banks go under and as a result, not get anything.
  

 

[The Devil's Advocate]

so what i'm getting in common folk speak is

1. banks approve any fukking body for mortgage..

2. banks then took those mortgages and sold them to investment banks

3. investment banks then took those mortgages and sold them as stock and bonds to the common man

skip a few years

5... those shytty loans from step 1, common man couldn't pay them anymore. they were adjustable rates... so one month you'd pay 1500.... 2 years later it would jump to 3500 a month

6. now the banks got no money cause nobody was paying... but they are stuck with the mortgages anyway

7. banks hurry up and sell the rest of the shytty mortgages for dirt cheap to the investment banks and therefore the common man

8. THE NEWS GETS OUT... but the banks already sold all the shyt... so the common man and investment banks are left holding the worthless loans that they paid money for

• So all of them basically bet AGAINST the MBS. When you BET against a stock, it's called "shorting" which means you think the stock price will go down instead of up. These guys went to the big banks and basically said "we'll pay you a monthly fee and we'll bet against these MBS's. In 2 years if WE'RE right YOU have to pay US. If WE'RE wrong, you just made a TON of money from our premiums plus all the money we'll owe you".
  
  
• In the end, these guys were right. MBS's crashed and they all got a huge pay-out. The suspense in the movie was them knowing WHEN to sell. If they sold too early and MBS's dropped, they would miss out on higher profits. If they sold too late, the would risk letting the banks go under and as a result, not get anything

 

[BobbyBooshay]

Enjoyed it , Gosling and Carell were great.

Liked how they used the cameos to explain things

 

[hashmander]

Ok.....
I watched 98% of the movie.
8 mins left bit I had to catch the train.
My issue with the movie is this....

The exposed fraud, great!
But only bank fraud.

I'm really hoping they also criticized the Obama administration for bailing them out in the remaining 8 mins.
And the fallacy in govts "too big to fail" motto.

If they do not then this movie was made by dumbass liberal progressives that hate corrupt rich people/banks but will not critique a democratic president because they are a bunch of lefties.

That will turn this movie from a 10/10 to a 6/10!!!

you mean candidate obama? that bailout was a couple sentences written by hank paulson in september 2008. i could see if you said for not prosecuting them or something.

 

[Nature Boy Ric Flair]

THE NATURE BOY FINALLY WATCHED THIS CRACK LAST NIGHT


LIKE THE @TheGodling SAID THIS GOTS TO BE ONE OF THE BEST MOVIES OF THE YEAR



TOO BAD AMERICANS TOO BUSY CARING MORE ABOUT THE c*ntDASHIANS




WOOOOOOOOOOOOOOOOOOOOOOOOOO

 

[Domingo Halliburton]

I wonder why Michael Burry (Christian Bale) is the only one who let them use his real name. The rest of the characters names are changed from the real life people.

 

[The Devil's Advocate]

I wonder why Michael Burry (Christian Bale) is the only one who let them use his real name. The rest of the characters names are changed from the real life people.

he was the only one who didn't give any fukks about the people losing out on money

you notice he never warned anyone... actually stopped people from withdrawing... went on some "say your welcome bytch" type of shyt after he was right... then tried to call up press to tell everyone how he knew he was right.... etc etc etc


in real life most his investor left AFTER he got them money, cause they still thought he was a dikk


imagine how much of dikk you have to be for people to make 400% gains and still not fukk with you



everyone else involved was kinda remorseful they got rich off people going homeless

 

[Ethnic Vagina Finder]

Movie was aight. I've seen a lot of Wall Street movies and documentaries about the housing bubble so I understood everything. They broke it down perfectly but because I understood the history of how it happened in real life, I looked at it as the put too much effort into explaining the technical aspects.

I feel like this movie came out a few years too late. Wish it would've been made sooner like 2012 or 2013. it would've had a bigger impact.