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The Big Short
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You are currently reading a thread in /tv/ - Television & Film

Thread replies: 108
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Did any of you guys understand this movie? Could you please explain it to me?
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BANKS BAAAAAD
OBAMA GOOOOD
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>>64987664
what's there to explain?
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>>64987719
you know that dubs guy invested in a bunch of mortgage stocks? Well, why did things go slightly south for him to begin with but then afterwards things went well for him.
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Banks: ayy lets give money to all these retards
Protagonists: whoa thats a bad idea, I bet the real estate market goes down and your company gets rekt
Banks: LOL

later:
Banks: oh fug :DDD
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>>64987763
He was counting on the mortgage BONDS to crash but it took a couple more years then he expected and his boss got in his ass about it.
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>>64987771
Why is a dynamic interest on mortages allowed?
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>>64987809
But I thought it had something to do with the bond prices not reflecting reality due to the banks lying. Why did they after a while begin to reflect reality but didn't to begin with?
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Banks did fucked up shit and knew they would be bailed out at the end of it.

They fucked the regular people and the government and got away with it basically scot free. Also people who had the fore sight to see that the market would crash made lots of money as well.
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>>64987844
Because Standard and Poors, the crediting agency which evaluates the value of the bonds wasn't doing their job.
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Banks lobbied congress to loosen restrictions on taking out mortgages which many financially illiterate people took advantage of to buy houses they couldn't afford, inflating prices and fueling a real-estate bubble, leaving them on the hook for loans they could never pay back, and banks meanwhile were trading bundles of these bad loans called mortgage-backed-securities as investments by obfuscating how dangerous they really were and reaping hundreds of billions of dollars doing it.
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>>64987844
Yeah the S&P and other companies that rate these banks and their bonds were also in cahoots with them. So even when the bets DubsGuy made were supposed to go the way he predicted, they still didn't.

He had to pay a premium every month from the moment he made those bets, his investors were intensely furious.
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>>64987815
Because there's nothing inherently wrong with and there's a demand for it.
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>>64987856
>They fucked the regular people and the government
>the government
>retard thinks it wasn't the government's fault from the beggining
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>>64988291

Government was asleep at the wheel, but it was the assholes in Wall Street who rigged the brakes to break. The movie makes a big point about the difference between criminal negligence and ignorance. The vast majority of Wall Street didn't know it was buying into a lie, it just went along with it because most of the people who work there are just people like you and me who don't know jack shit about how the system really works and need to be spoonfed this shit.
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>>64988291
well idk who had to pay for it at the end. was it the fed printing more shekels to pay or did the government have to pay?

I know the federal reserve is a private entity so not sure why they would have to pay.

economkeks is out of my depth as you can see.
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The financial crisis was triggered by a complex interplay of policies that encouraged home ownership, providing easier access to loans for (lending) borrowers, overvaluation of bundled subprime mortgages based on the theory that housing prices would continue to escalate, questionable trading practices on behalf of both buyers and sellers, compensation structures that prioritize short-term deal flow over long-term value creation, and a lack of adequate capital holdings from banks and insurance companies to back the financial commitments they were making.

The Financial Crisis Inquiry Commission concluded that the financial crisis was avoidable and was caused by "widespread failures in financial regulation and supervision", "dramatic failures of corporate governance and risk management at many systemically important financial institutions", "a combination of excessive borrowing, risky investments, and lack of transparency" by financial institutions, ill preparation and inconsistent action by government that "added to the uncertainty and panic", a "systemic breakdown in accountability and ethics", "collapsing mortgage-lending standards and the mortgage securitization pipeline", deregulation of over-the-counter derivatives, especially credit default swaps, and "the failures of credit rating agencies" to correctly price risk.

The 1999 repeal of the Glass-Steagall Act effectively removed the separation between investment banks and depository banks in the United States. Critics argued that credit rating agencies and investors failed to accurately price the risk involved with mortgage-related financial products, and that governments did not adjust their regulatory practices to address 21st-century financial markets.
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>>64988421
The fed made (I think) 3 trillion appear. The Government footed the bill for all the bailouts though.
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>>64988421

You had to pay for it with your taxes in the hopes that Wall Street would reward your good faith with an economy that will have a job for you.
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>>64987815
You mean adjustable rate mortgages? Why wouldn't they be
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>>64987763
He bought insurance on mortgage bonds
He was paying their premiums in case they became worthless, which they did
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They really couldn't have made it easier without sounding childish
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>>64988487

To play devil's advocate, people who realistically have no hope of paying off a home shouldn't be allowed to buy that home. And selling people said home would be greedy and irresponsible. People should choose to invest wisely and live within their means.
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>>64987918
>Banks lobbied congress to loosen restrictions on taking out mortgages

Nope, liberals actually wanted to loosen restrictions on mortgages so poor people could get into houses
look up the HUD
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>>64988544
whoever is giving the loan should look at the persons fiances and see if they can reasonably pay back the loan.
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>>64988421
>>64988472
>>64988482
Do you guys know nothing about monetary policy, no one "paid" for it
the Fed made massive emergency loans that are just now being effectively repaid
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>>64988556

Everyone stood to gain, but the laws and legal measures that aided in the economic recession were created by Congresses dominated by Republicans. They go down in history as the shepherds responsible for the herd going over a cliff.
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>>64988590
The loans aren't being "repaid" the Fed is using even more money to pay the banks to not use the 3 trillion they created.
http://www.npr.org/sections/money/2015/10/23/451228005/episode-659-how-to-make-3-trillion-disappear
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>>64988590
>no one paid for it

so tax payers are paying for it?
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>>64988594
Most of the deregulating was done under Clinton
The vast majority of mortgages loans are HUD mortgages
Clinton expanded all the affordable housing programs

>>64988662
Paid for what? Explain what's being paid for
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>>64988711
paying for the 3 trillion dollars the fed printed and loaned?

or do we pay for it by simply having an extra 3 trillion dollars printed.

I think it's both.
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>>64988742
No one paid for it, that's the point
If inflation took off then anyone holding money would have paid for it, but it didn't
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>>64988711
>Most of the deregulating was done under Clinton

In laws that were drafted and passed by a republican congress.
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>>64988801
but printing another 3 trillion will cause inflation obviously.
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At least the protagonists had the high ground on the banks and were prepared for the meltdown
High ground is pretty important, star wars memes aside
i felt that the scummiest fucker was Goslings character, the dumbest was Karen Gillen and the most autistic was Dubs mgee
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>>64988846
It didn't
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>>64988544
>people who realistically have no hope of paying off a home shouldn't be allowed to buy that home
>selling people said home would be greedy and irresponsible

hahaha get a load of this guy
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>>64988850
name of grill in pic?
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>>64988857
.....

adding more money to the pool means the price of goods will go up because people have more money.
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>>64988662
The Fed can make money appear by magic. I'm serious.
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>>64988885
Karen Gillian in The Big Short you autist.
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>>64988913
It didn't though, the money stayed in cash equivalents for the most part
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>>64988915
https://www.youtube.com/watch?v=UD7-eLRstIw
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>>64987664
tl;dw


jews
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>>64987763
There's literally a line in the movie that explains it:
In finance, having bad timing is the same as being wrong.
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>>64988987
He was also paying insurance premiums while he waited
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>>64988984
But the protag was a jew
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>>64988987

It wasn't about timing or being wrong. It was about an entire industry living a lie, and how that lie was negatively impacting all aspects of life and all social hierarchies regardless of differences.
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>>64989009
jews jewing jews, nothing new here
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>>64989005
what is a mortgage insurance?
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>>64989031

It was his job to jew. It would have been irresponsible for him to ignore his responsibilities when armed with the truth simply because people wouldn't accept it.
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>>64989031
little jew protecting goyim from the financial crash because the jews got lazy?
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>>64989055
basically insurance in case the people stop paying their mortgages
If I make you a loan I can buy financial insurance on that loan in case you declare bankruptcy and default on the loan

Underwriting is one of the biggest things investment banks do
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>>64989159
so why did Michael Burry buy insurance mortgages when no-one was loaning money off of him for a mortgage?
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>>64988940
I wonder who's behind this post
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>>64987664
They stop every five minutes to explain it all to you.
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>>64989256
I don't understand the question
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>>64989279

Maybe OP has OCD, have you ever thought of that you insensitive fuck???
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>>64989279
I know shit about economy. Going in the hall with like 10 other people, there's only 1 person who understood it all. For a pleb like me, the racist asian math genius gag was quite fun.
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>>64989298

why was he paying insurance premiums?
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>>64988850
Bale's character IS autistic irl, he has Asperger's.
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>>64989360
what hall?
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>>64989368
It's just like any other form of insurance
Car insurance protects you if your car gets damaged
Financial insurance protects you if your investments lose value
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>>64989402
The cinema/movie theatre?
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>>64987664
>>64987664
It was a bit too preachy and pseudo moralistic. I find it funny that the main characters, the ones who took advantage of the situation were bankers and they didnt even try to warn common people despite knowing about the bubble two years before the incident. they are not good guys after all, they just want the monet, so why root for them? There's no point. The only character more or less good was Brad Pitt's, but he was also a vegan.
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>>64989256
The mortgage insurance is called a Credit Default Swap.

The buyer of the CDS makes a series of payments (the CDS "fee" or "spread") to the seller and, in exchange, receives a payoff if the loan defaults. It was invented by Blythe Masters from JP Morgan in 1994.

In the event of default the buyer of the CDS receives compensation (usually the face value of the loan), and the seller of the CDS takes possession of the defaulted loan.[1] However, anyone can purchase a CDS, even buyers who do not hold the loan instrument and who have no direct insurable interest in the loan (these are called "naked" CDSs).
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>>64989489

It takes a war veteran to tell you why war is bad.
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>>64989489
Most clever people saw the housing bubble bursting

The houseflipping meme and lack of government control of banking made it inevitable.
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>>64988350
>people like you and me who don't know jack shit about how the system really works

talk for yourself kid
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>>64989528
so he bought naked CDSs?
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Let's start at the very base level.

The housing market was a bubble. Lenders were giving loans to anyone and everyone.

Banks packaged these loans together as financial products that investors could gamble on.

The main characters in the film made a bet that these loans would default (people wouldn't be able to pay back their loans). It worked like insurance - the main characters would pay a monthly premium to the banks packaging these loans and if the loans defaulted, the banks would pay insurance.

The banks were happy to make these deals because they believed the housing market wouldn't crash.

They believed the market wouldn't crash because rating agencies gave these toxic financial products AAA ratings.

These toxic financial products got AAA ratings because the rating agencies were SCARED that banks would have their financial products rated by a competitor. The rating agencies were charging fees for ratings.

And then, it turns out that there were "synthetic CDOs" which is the same insurance example above but this time you're betting on the credit default swaps which were betting on the subprime mortgages. A real shit show - the stakes were just getting higher and higher.

And then it all came tumbling down... oh but everything is okay now because Obama said we're strong.
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>>64989489
>and they didnt even try to warn common people

Warn common people? Ok fine the banks did some predatory loans but people were doing shady stuff with sub-prime loans too. Buying two or three homes or buying one WAY over budget being you only need to to hang to it for a few months right? During the rise in California you could make 20% on a home before it even closed escrow.

as the market peaked people should of looked at like the POS condo near my friend's and gone "265k for that? Pass" and the market would of balanced on it's own. Oh but nooooooo sub-prime and fuck it, dump 265k being "It will go up!!".. and then of course after the crash my friend bought another condo in the same area for 85k..

greed fueled a lot of the problems and while the bankers were shitty no one was forcing people to pull equity out of a home 3 times in 4 years and buy boats and cars. Oh and then when they lost the house it's the banks fault, of course.
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>>64987664
banks tried to create money by banking that house owner will pay for it somehow, but they did no quality control so that it was doomed to fail at some point. some people saw this coming and pretty much bet on that to fail, but when it finally happened the rating organizasitions, wouldnt admit that they won at first until the demand on their "betting papers" rose
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>>64988913
Actually America is less vulnerable to that because it can leverage a certain amount of potential inflation onto the international oil market, preserving the domestic economy.
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>>64989932

All reports and numbers are pointing to a recovering economy during Obama's tenure (at cost, of course). By the numbers, the economy is getting better and we're on track to escaping the gravity of the recession barring another mass CDO shitstorm (which is forming right now). Does the physical world in which we occupy reflect the numbers being put out? Yes and no is the best answer.
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>>64990068
America is less vulnerable to that overall because the USD is the worlds reserve currency and USD always has a large demand.

some people say the Yuan or whatever the chinks use will eventually overtake it, but we all know that's a complete joke.

How exactly do they leverage these loans into the oil market? economics is 2 hard 5 me
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>>64989489

>and they didnt even try to warn common people despite knowing about the bubble two years before the incident

You mean like the part where one of those guys working with Brad Pit went to the Wall Street Journal and they told him to fuck off?

And the characters in the movie are never presented as heroes, hell at the end The Goose tells people he was just in it to make money and he doesn't care what you thought of him. The closest thing to a "good" person in the story is Bale.
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>>64990147

Thats wishful thinking being pushed by euro bankers who want to break free of the dollar's stranglehold. Its kind of sad whenever I read about how British banks are trying to start up joint monetary funds with the Chinese.
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>>64990245
Chinese banks are some of the biggest in the world though.


However with China's recent economic problems yea I can see how the USD will still be strong. Especially with them sanctioning North Korea which is major part of their economy.
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>>64990297

Doing business with a bank is one thing. Declaring a sand castle to be a stable pillar of the world economy is something else.
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>>64990147

Have you ever wondered why American anti-Iran sentiment in foreign policy has scaled up sharply over the past 10, 15 years ago? Because Iran announced plans to start dealing crude on the IOB in non-dollar denominations, in defiance of the Saudis' influence over OPEC. The second that occurs one of two things happen: the Saudis find a way to price Iran out of the market, which they're unlikely to be able to do since they're already having to offload in bulk to stay afloat, or the world starts dealing in non-dollar currencies, the dollar ceases to be the reserve currency, the US forex takes a massive hit and America dies a death, because even with all its current economic advantages over the rest of the world it's still struggling to keep its head above water.

The dollar's tenure as reserve currency is not nearly as concrete as you claim it to be.
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>>64990395
>: the Saudis find a way to price Iran out of the market, which they're unlikely to be able to do since they're already having to offload in bulk to stay afloat

Aren't they doing that right now low by selling for incredibly low prices to piss off/ tighten the screws on Russia?

Oil is like below 30 a barrel atm
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>>64990485

They're doing that as a defensive measure, not an offensive one.
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>>64990535
seems like a form of economic warfare to me
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>>64990590

Its a rather simple relationship in this case: if the Saudis don't sell you oil, someone else will. So the Saudis made the decision to be the biggest seller at the current price point, fucking over its competitors. But it was clearly not their first choice, and the current situation is hardly ideal.
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>>64990485

That's my point. They're taking drastic measures right now against Russia, if they don't want to end up in a pit of economic despair they're going to have to pull back and recover, they're not going to be in any fit state economically to take a dip again to work against Iran, especially since the economic sanctions Iran's been working under for the past while are about to come to an end. The Saudi populace is completely spoilt, they're already getting all buttmad because their oil at the pump is 20c a litre, they won't tolerate the kind of economic pressures the Saudis would have to put in place to bottom out Iran.
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>>64989932
From this it seems like the ratings agencies are the ones at fault for lying and not the banks.
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>>64990678
hmm okay I guess it's a win win for the U.S cause they get to fuck with Russia and denigrate Saudi Arabia's power which means in turn the ISIS will have less power. if the U.S is really against ISIS

economkeks is such a struggle
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>>64990737

The US relies on the Saudis' power an dominance in the oil market, that's all that keeps the world using dollars as a reserve.

Keep an eye out though, I think you'll see the US cosying up to Iran a little more over the next couple of years. A second Iran-centric petrodollar deal would not be surprising.
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>>64990806
Well recently a deal has been struck between U.S and Iran regarding their nuclear program.. I guess that's the precursor, we'll help you as long as you promise not to have nuclear weapons because then you are too dangerous to have as an ally.
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>>64990844

The ultimate US goal is to get Iranian oil out into European and American markets (instead of Russia) and to get American corporations and investments into Iran. This relationship will strengthen Western ties and influence over Iran, weakening Russian projection in the Middle East, and hopefully stabilizing regional tensions in the long run between Sunnis and Shia led by Iran and Saudi Arabia.
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>>64990806
lol just went to leddit and here's a topical website on what we are discussing

http://thefreethoughtproject.com/declassified-emails-reveal-natos-true-motive-topple-gaddafi-stop-creation-gold-backed-african-currency/#B1itEQrCxIMtupiX.16
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>>64990395

You completely overestimate the "reserve currency" status. Protip: It doesn't matter a lot.

But there are many people who build ridiculous conspiracy theories around that.
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>>64990972
If it didn't matter a lot how come the West went into both Iraq and Libya because they threatened the USD as a reserve currency?

>>64990928
>>64990928
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>>64990928

Gold backed currency is the worst idea possible.

>thefreethoughtproject.com
alright, lolbertarians.
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>>64990972
>Protip: It doesn't matter a lot.

Explain yourself. The vast economic advantages of being a worldwide reserve currency are self-evident.
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>>64991035
Except emails can't lie anon. It's not like they forged some emails from the french president or whoever and then made an article on it.

Also why do you think a gold backed currency is a bad idea?
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>>64991008

>implying

Iraq was a conservative conspiracy to jumpstart contracting and to seize oil assets, and it worked for a while in the US economy's favor.

Libya was a deteriorating situation which arose during the Arab Spring, and its oil fields needed to be secured. Furthermore, it was readily apparent that the Gaddafi family were too corrupt to hold onto power and would not have been able to stabilize the situation without massive loss of life. And NATO never invaded Libya by ground, it supplied air support with mixed results. The ultimate goal of intervention in Libya was regional containment.
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>>64987664
i was stupid enough to think this is sequel to moneyball
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>>64991104
Anon you didn't argue your point at all.

Also the website I provided directly contradicts what you said about Libya, and this is from emails between Hilldog and Sarkozy.

The email identifies French President Nicholas Sarkozy as leading the attack on Libya with five specific purposes in mind: to obtain Libyan oil, ensure French influence in the region, increase Sarkozy’s reputation domestically, assert French military power, and to prevent Gaddafi’s influence in what is considered “Francophone Africa.”

Most astounding is the lengthy section delineating the huge threat that Gaddafi’s gold and silver reserves, estimated at “143 tons of gold, and a similar amount in silver,” posed to the French franc (CFA) circulating as a prime African currency.
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>>64991168

I'm not that anonfag, /pol/tard or reddittard or whatever you're pretending to be today. I simply pointed out that you're just plain wrong.
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>>64991249
You can't post that and not say why:(

Also this is from emails, it's not like a journalist is making this up.
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>>64991046
>The vast economic advantages of being a worldwide reserve currency are self-evident.

What are the "vast" economic advantages?
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I just found out you need to pay someone to buy stock for you.

This is the most jewish thing I've ever heard of.
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Do you like that Margot Robbie was in this movie?
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>>64990696
And you know,...fat, useless americans who had no goals, talent or income but wanted a house and a nice car,...and then (as full grown adults mind you) through their hands in the air and said the banks tricked us, they told me I could afford this....god forbid anyone actually read or understood what they were buying

e.g. the dumb stripper slut from the movie...although she wasn't fat
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>>64991911
It should be the loaners job to ensure that whoever is taking a loan can pay it back.

I do agree that they are dumb for taking those loans.
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>>64991358

I'm not going to sit here tediously explaining the advantages of a robust externally-supported forex to you m8
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