Watched "The Big Short" housing bubble movie

[The Rabbi]

The banks ain't your freaking enemy. They lend money for cars and homes. If you want to consider how bad it can be under moderate socialism just revisit Barney Frank's claim that Fannie Mae was solvent when it was on the verge of collapse. If you want idiots like Frank controlling the production and sale of goods and services vote for Sanders.

The issue was the banks investing shareholder money in derivatives. GS possibly would have limited the number and type of banks doing this

No, it wouldn't have. Nor was that a significant issue.

 

[bendog]

The banks ain't your freaking enemy. They lend money for cars and homes. If you want to consider how bad it can be under moderate socialism just revisit Barney Frank's claim that Fannie Mae was solvent when it was on the verge of collapse. If you want idiots like Frank controlling the production and sale of goods and services vote for Sanders.

The issue was the banks investing shareholder money in derivatives. GS possibly would have limited the number and type of banks doing this

No, it wouldn't have. Nor was that a significant issue.

You read the book, fake rabbi. LOL

 

[g5000]

I finally saw The Big Short this weekend. Overall, it did a very good job of explaining the causes of the crisis, and highlighting the men who saw it coming.

There were some weird factual mistakes, though. For instance, they made it sound like credit default swaps were invented for Michael Burry, and that is far from the truth. CDS had been around for years before Burry bet against the market. The whole reason AIG collapsed is because of CDS. And the very first CDOs built by JP Morgan were insured by CDS, back when all of it was perfectly legitimate and sound business practice before everyone got greedy and stupid.

They also made Baum react as if he had never heard of CDOs before. That can't possibly be true. It had to be poetic license, so that Baum's "ignorance" could be used as a vehicle to educate the audience. They still didn't do a good job of explaining it. The wood tower blocks were fine, but my idea of using cups dipping in the revenue stream is better.

They also did a shitty job of explaining what a synthetic CDO is. Using Selena Gomez and a mathematician to explain it was brilliant, but they fucked it up.

Overall, though, a very good movie. My favorite moment was when Baum is talking to some mortgage brokers ("I used to be a bartender!") and then took his guys aside and asked, "Why are they confessing?" and then one of his henchmen explains, "They aren't confessing. They are bragging."

Awesome. That's exactly what it was like. They completely nailed the whole absence of skin in the game, and how the brokers would sell their toxic paper up the pipeline as long as the demand for the paper was there.

They also did a good job of capturing the, "If we don't do it, our competitors will" attitude which prevailed along the entire chain.

And as I watched Burry and Baum and the two little players stressing over the continued payments of their CDS premiums, I kept thinking of John Maynard Keynes when he said, "The market can stay irrational longer than you can stay solvent."

I think some key points of the film sailed a mile over the average moviegoer, though. At two points in the film, the protagonists become frustrated at the fact the cost the Wall Street firms are charging for a CDS is going up at the same time the same firms are refusing to acknowledge their CDOs are broken.

Shipley, Geller, and Baum all become very frustrated at this, and say this is clear evidence of massive fraud, but I doubt the movie audience understood why.

In fact, the period 2006 to 2007 is when the worst types of fraud began to occur. There was some fraud before that, but mostly stupidity. However, 2006 to 2007 was sheer fraud on a very large scale.