Tfw too dumb to understand The Big Short

>illegal to turn down people for home loans basically
that's not even remotely true. I'd love to manage even a small bank and have the government roll up telling me I have to loan money to Juan who doesn't have a pot to piss in

Why did it ruin the movie for you? Hit too close to home on your damaged, deluded psychology?

>visit racist inlaws who blame the housing crisis on poor people and minorities
>that scene

nah, that made the movie amazing for me

And you'd get fucked.

It was ham fisted as fuck.
>saying it twice
Holy fuck

Neat on your part.

by what law?

the law of the markets?
>you have to give juan money
>he's not going to pay back!
>it's ok

I'm not an attorney

what the flying fuck are you talking about? How can the government force a private entity to give away money? Are you insane?

then don't say the government does X without any evidence

im gonna try explain it from memory to see if i get it so someone tell me if i'm wrong

>people get loans to buy a house
>banks sell loans in chunks to...???
>bankers start giving out loans to people who clearly can't/wont pay them back
>banks conspire with the loan rating agencies to make them look like they will be paid back
>??? don't know these are shit loans that will never get paid off so they buy them
>all the loaners from that period begin to stop paying
>??? starts to bleed money as a result
>stock prices plummet
>main characters saw this coming
>they decide to buy insurance on the loans that won't be paid back
>get paid hundreds of millions in insurance money when the loans stop being paid

am I even fucking close?

the ??? is because i have no idea who was buying the loans. Other banks? fuck

the cra meme has been debunked

They were betting on good loans groups being paid back, and others were betting on those bets succeeding, and bankers were putting shit loans in good loans groups.

At least that's what I got out of it.

>default on your mortgage which you signed on, the biggest most important investment of your life
>cucks will defend your failure because they don't like their in laws

Wew

no you got it a bit wrong

??? is mostly the bigger banks - Morgan Stanley, Bear, etc. They're the ones who knew the shit was rotten to the core but they bought it in bulk and then shorted it (bet against it) at a massive profit.

Actually at some point the banks were feeding the insurance fund so much shit that they started feeling queasy and started shorting THEIR stocks

>literally nothing about the main cause of the crash, the federal reserve

Why don't we just kill all liberals?

>I rely on shitty hollywood propaganda films to form my political views

But it's not propaganda, it reveals the jews conspiracy. THis movie is redpilling as fuck.

This betting concept though. i get that it's effectively betting but what's the actual process? i mean to say, surely they don't just say "I want to bet x dollars that this market will crash". am i right that it's some sort of insurance? what's being bought and sold there? and were they betting against the mortages themselves or the stock of the banks that held them? or is "the housing market" an entirely separate thing? why am i so stupid?

>THis movie is redpilling as fuck.
>denies the involvement of the federal reserve
>redpilled

lmao

I bet the conclusion you got from this movie is "we need to tax da ebul 1%"

1. Wall Street Banks bought mortgage debt from local brokers, so they could resell them to groups like unions and such that wanted to make mass investments for their member's retirements. These were the "mortgage-backed securities" and "CDO"s the movie talked about

2. These were very popular, and considered risk-free, so the demand was very high from Wall Street to buy more mortgages so they could sell them as repackaged securities. They had to start buying lower quality mortgages to meet demand

3. Because Wall Street banks no longer did due diligence as to what they were buying, local mortgage brokers stopped doing any kind of checks on who they could give mortgages to. This is shown in the scene in Florida where the local guys target poor immigrant, and the stripper has 5 houses. Local brokers don't care if the buyer defaults because they have already sold the mortgage to Wall Street. The ratings agencies (Moody's, S&P) are supposed to see this and rate the securities as the trash they are, but they are for-profit businesses and decide to just rubber-stamp everything as AAA so that they could keep getting business.

4. A bubble formed, in that many people who could not afford to own a house were being given loans to buy houses. This led to more houses being built than the economy could actually support

5. Eventually in these risky mortgages the homeowner defaults on their loan and their house transfers back to whomever holds the mortgage. In a normal economy this gets the lender most of their money back because they just resell the house to someone new. But in a bubble, suddenly there will be many homes on the market at once. In this crowded market prices will be lower, and banks that hold the houses will have to sell them for a lower price. Now on the overall transaction the lender will lose money because what they hold is worth less than what they paid (a toxic asset).

6. The securities that Wall Street was selling, CDOs, were based on the idea that you would pool up many debts, and then as interest comes back from those loans, it's divided up and given to the people that hold the CDOs for it. So you buy one of these CDOs expecting it to keep paying you back gradually until by the time it expires you have made more money off of it than what you paid. IF the debts become toxic, now the holder of a CDO will no longer make their money back that they paid for it.

7. This result is bad for people who had invested their savings in these securities, because they lose the money they were expecting it to bring back to them. This is what tanked the economy. Many large banks had also been investing in them too.

the only difference between the poors, niggers, etc is that the banks were able to put a gun to the head of the US population and take their tax money as some kind of consolation lol

>surely they don't just say "I want to bet x dollars that this market will crash"
that's exactly what they do. There are fancy words for it like "synthetic derivatives" but essentially you're just putting some money on the table that says a market is going up or down

and then those bets pile up so instead of guy losing 10x, he loses 10x and then everyone behind him loses 100000x in bets

>am i right that it's some sort of insurance?
in a way, yes

>nd were they betting against the mortages themselves or the stock of the banks that held them?
they were betting against the mortgages and eventually against the stocks of the insurance funds who were taking those first bets because they were taking in a lot of shit. It's like you know you're giving the old grandma down the street fake money and you're betting that at some point she won't be able to pay rent

8. The main characters of the Big Short happened to see this all happening, so they decided to "short" the market, ie invest in a way where they would profit if it collapsed. They did this by buying "credit defaut swaps" which are very similar to insurance; the owner pays a fee regularly until it expires, but if at any point the item referenced in the swap defaults, the issuer has to buy the item for full price. For example, if I wanted to short X, I could buy a swap for it for say $10, where I pay $1 per month for 12 months. If X doesnt default, I lose the $12. If say X defaults in 2 months, I would lose $2 but gain the $10 value of the swap. In the Big Short, the subject of the swaps is the mortgage-backed CDOs. So the characters have to pay large periodical fees while the CDOs are OK, but then once the CDOs default they get a huge payment.

I would only add a small caveat that the swaps were structured in a way that if the securities rose instead of fail, the monthly fee paid by the characters would rise with them. I think this was why Christian Bale's big whales were so mad at him. He jumped a little early and almost lost his entire fund

The Equal Credit Opportunity Act, the Community Reinvestment Act (particularly regarding its later amendments), the Financial Services Modernization Act of 1999, and several others.

ECOA says you can't deny a credit to Juan if you gave one to Cletus under the same conditions

CRA says you can't get government money (FDIC) unless you have schemes to offer poor people credit, all covered and none of it a gift

GLB just allows institutions hybrid functions as insurers, investment and commercial banks

basically you don't know what you're talking about

>ECOA says you can't deny a credit to Juan if you gave one to Cletus under the same conditions
The ECOA has been bastardized to basically mean, in practice if not on paper, that you can't say no to minorities and poor people.

CRA more or less forces institutions to offer people credit who are high credit risks.

GLB is why these banks, with all this money tied up in high-risk lending, were so entrenched in our financial systems.

>you can't say no to minorities and poor people.
again, you're just saying this shit. Why isn't every Mexican north of Tijuana lining up for a free money credit under ECOA? Why aren't all banks failing right now under the weight of bad credit? We know they're not being bailed out so they're taking the hit

>CRA more or less forces
"we won't offer you financial support if you don't to X" is VERY different from "you HAVE to do X"

No they'd get bailed out so Juan's fucked. The government wanted that true, but the banks took advantage of it expecting a bailout if things went wrong.

God how many cuts did that scene require? Her trying to rattle off all that information was like watching Liam neeson try to scale a fence.

What I don't understand is stock prices only fall of everyone is selling their stocks. So if everyone just held on for a little while longer, stocks would be fine. Bullshit economic logic.

What the fuck is the point of that? Gambling on the market shouldn't even be a thing. It's just destined to fail.

Margin Call > The Big Shart

Money. It was guaranteed money. Small risk huge pay out

>mfw classcucks still think mortgage defaults tanked the economy, and not the finance industry being propped up by betting on risky mortgages, industry "watchdogs" being given a profit incentive to hand out positive credit ratings, or the finance industry deregulation under the Neoliberal administrations of 1980-2008.

PROTIP: the first thing politicians and rich people do when they fuck up is blame poor people with no power.

>da guvmint is at fault for the choices I made as a CEO #ronpaul2054

t. every single jew from Wall Street and every single virgin from Cred Forums

>tfw to intelligent to post on Cred Forums

*two

Fuckign retard

Everybody knows this, that's why Obama got elected and why Hillary is going to obliterate Trump

This video explain what really happened to the markets and why.

m.youtube.com/watch?v=bx_LWm6_6tA

The main character of the movie basically made a bet on the happening and he finally wins.

The ratings people conspired with the lending banks to make the very risky stocks based on risky mortgages seem like they were AA solid no risk.

The big shorters just complicatedly bet that that would end up going bad which it did.

>tfw to intelligent to watch any piece of filmography with a script

>be movie guy of the group
>this movie plays
>I see the cast and the reviews and I think it's a jackpot
>friends didn't like it
>they didn't understand it
>spend rest of the night like zombies because watching a two hour movie was too tiring for them

Not being a dick,but it was explained simply in the movie. Even if you don't understand the terms,you should understand it when they dumb it down. Oh and one of the guys in the group thinks himself as an entrepreneur and he was surprised that two of the guys only got out 70 million dollars out of the crash because he thought it made people filthy rich.

>tfw too intelligent for hollywood crap

>70 million
>Not super-rich

He is one of those guys who is always talking about future success,having villas and yachts and shit. He also has very distorted view of money and is greedy.

I know a guy like that too. Willing to step on anyone to get rich.

The bank bubble bursting was the resulting of the rich elite and the fucking plebs.

Rich Elite loved giving on loans people couldn't pay back, and the plebs were retarded enough to take them

Don't get why the film tried to portray the poor as "victims", the type of people who would actually take these loans were the worst of the worst.

>Big Short
>Intelligent
Man it was basically just any given Economist article from 2008 stretched out in movie form

Also Hollywood is fucking terrible, they're the Wall Street of the West.

"Sorry guys we can't pay you for this movie which grossed 1.4 billion, see we actually LOST money:^)"

I respect people like that if they can actually back it up.

Usually they just lease Lincolns and lie all the time.

...

>finish watching movie
>feel like an idiot studying STEM instead of making millions in finance

Was it autism?

What a terribly boring fucking concept of a movie, holy fuck. Let's make a movie about waiting at DMV as well.

How did they make his eye look one direction different to the other? Is Bale that good of an actor he can do that with his eye?

>tfw too smart to understand The Small Tall

Most of you are retarded and this thread showcases the staggering collective intelligence of this board

Google collateralized debt obligations and actually bother to read about the housing crisis you ignorant neckbeards

Kek. You can even notice some continuity errors in it

>neoliberal administrations
>1980 to 2008
wew