How The Big Short Actually Worked

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Жыл бұрын

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The Big Short with it’s all star cast recounts the events of three groups of traders that bet against the housing market in the years before the sub prime mortgage crisis that would eventually result in the failure of key financial institutions.
The Big Short is unique as a high budget Hollywood production that actually takes the time to properly portray the way that finance really worked behind the scenes and uses financial events to progress the plot rather than focusing on wild parties, sports cars and sexy ladies like some other movies that took a very different approach to storytelling.
Similarly to the Wolf of Wall Street, the big short is a move based off a book only the wolf of wall street was an autobiography written by Jordan Belfort himself and The Big Short: Inside The Doomsday Machine, was a standard non-fiction title that described the role of several players in the creation of the credit default market betting against the American housing market.
The Big Short was written by Michael Lewis, a veteran financial journalist and the book really does read like a 320-page financial article, in that it’s very information dense but also very well researched and verified.
For this video we will only be looking at the players that are in the movie, but the book does go into detail on some people that were either entirely cut from the film or merged into other characters to make the movie entertaining to a broader audience.
Unfortunately, in the process of making it appealing as possible to cinema goers the movie did cut out some very important details, and also just straight up got some things wrong.
So, it’s time to lean How Money Works and give you guys the investment banker’s insight into what really happened in the Big Short.
#thebigshort #investing #finance
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Edited By: Andrew Gonzales
Music Courtesy of: Epidemic Sound
Select Footage Courtesy of: Getty Images
For sponsorship inquiries, please contact sponsors@worksmedia.group
All materials in these videos are for educational purposes only and fall within the guidelines of fair use. No copyright infringement intended. This video does not provide investment or financial advice of any kind.

Пікірлер: 722

@HowMoneyWorks Жыл бұрын

Get 25% off Blinkist premium and enjoy 2 memberships for the price of 1! Start your 7-day free trial by clicking here: www.blinkist.com/howmoneyworks

@danielhale1 Жыл бұрын

The Big Short is a unicorn, bordering on unique. It's brilliantly entertaining and tense, but also informative to a degree that many documentaries don't accomplish (especially anything from The "History" Channel). One of my all-time favorite movies!

@MAXERNEST Жыл бұрын

@Daniel Hale me too ,i liked it when the parties insulted each other ,people worth millions are no different to us mere mortals :} these Masters of the Universe so called, my other fav is Margin call with the Fab Jeremy Irons :}

@thebagelsproductions 3 ай бұрын

Inside Job documentary on the subject 👌

@David.Marquez Жыл бұрын

It's crazy how despite some inaccuracies this movie still ends up being quite loyal to what actually happened

@tashagreen7406 Жыл бұрын

I've read articles of investors who mentioned Janet Lindsey and her consistency in making lots of money from crypto..

@justaweeb14688 Жыл бұрын

Everyone here is a bot. Do not follow any advice or comments here.

@yourmommashouse 9 ай бұрын

How or why is that crazy? lol

@samfisher2306 9 ай бұрын

@@justaweeb14688indeed. It'd be a serious mistake.

@BeelzebubBeelzebub 8 ай бұрын

I’ve read articles from Janet Herp and she says buying options in bio tech companies awaiting FDA approval is the safest way to grow your money.

@MagnusAnand Жыл бұрын

Nice video, although there are some inaccuracies: 1. If I remember correctly, Burry (Scion fund) wasn’t charging management fee 2. Although CDS did exist before, there weren’t in the mortgage bond industry. Michael Burry actually had to ask to create this swap, which took some months. 3. The CDS that Brownfield bought were against triple A bonds on paper, but actually were full of subprime bonds which were shit. 4. In the movie, Jeremy Strong played the character of Vinny Daniel. 5. Michael Burry closed his fund because he felt disappointed by his investors, who took their money out and didn’t follow him, even after the magnificent returns.

@shawnwilcox9618 Жыл бұрын

It explicitly states in the book Dr. Burry rejected the 2:20 payment structure and only took fees on profits generated

@alexvenous1875 4 ай бұрын

Oh, thank you so much! Because I understood the entire financial inception except for one detail: How can the B buckets be "risky investments" if MBS had to pay out a fixed amount to their investors, and they had CDS as "insurance" in case they couldn't? That would eliminate the risk. Now that you clarified that Swaps weren't in the industry of MBS that makes much more sense.

@Hamboarding 3 ай бұрын

Thanks! So they did exist in the CDO market but not in the MBS market? What products was AIG's CDS market in relation to?

@mac.fk14 2 ай бұрын

@@Hamboarding no cdo market was made later and did not have cds but burry asked for it to be made

@TheGeenat Ай бұрын

That’s a lot of serious misses by the content creator. Enough to say that it was at least just as misleading as the movie that he’s criticizing.

@user-iq6cc3df3l 9 ай бұрын

It seems weird to me to basically allow someone to purchase insurance against an asset in which he doesn’t own. I recently rewatched “The Big Short” and I believe the movie brings that up. It was something like, “Well, if you could buy insurance against a neighbor’s house doesn’t that give you an incentive to burn it down?”

@kristijanmadhukar516 9 ай бұрын

I watched the movie but never really understood CDS until this comment. The fact that you don't need to own the mortage to buy its CDS is the last piece I've been missing. Thank you. Edit: Watched the video😂

@Christopher_TG 7 ай бұрын

@@kristijanmadhukar516 Yeah, it's called a naked CDS, where neither the writer nor purchaser of the swap agreement actually owns the underlying bond. It's a highly unusual contract, but since investment banks were confident the housing market wouldn't fail, they were comfortable selling those swaps.

@WizzRacing 7 ай бұрын

Well you need to read more. As the loan was backed by taxpayers ie the Insurance holder on the loans..And the rating companies told the public the loans "Was sound" The movie just exposed the fraud. The Government created.

@johnmcho 7 ай бұрын

In a world with perfect information, allowing shorts will temper prices for overpriced assets. The big problem was the derivative market wasn't well regulated so no one really knew what everyone had while selling these things. Believe it or not, shorting stabilizes prices when regulated properly.

@jarredf30 6 ай бұрын

Yes but it's not quite the same.It's like a stock option. It's not really insurance even though insurance language is used probably to cover up the fact that it's more like a casino bet. An option is just a contract(in everyday terms we call it a bet but the contract makes the terms legally enforceable)between two investors about what will happen to an asset in the future. In your example you wouldn't have any access to the home or a way to burn it down. However,you're still stuck paying those premiums every month for however long the bet is. If what you're betting on doesn't happen before the term ends then you're out of that money. You lose. If it does(house burns down) then you get to collect on it. The owner loses. You can get on any stock trading site right now and do the same without owning a single stock. Just as long as you have the money to pay the premiums. If you bet a stock will rise above a certain amount by a certain date and it does you win....if it doesn't then you lose the premium you paid and the owner of the stock you're betting on or against gets it. However,one investor really can't singlehandedly force a stock to rise or fall in order for him to win a bet. Without some insider trading info(which is illegal) there is no way to be 100% sure what a stock is gonna do and no way to force it to do what you want.

@yung1448 Күн бұрын

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@yung1448 Күн бұрын

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@yung1448 Күн бұрын

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@yung1448 Күн бұрын

Trader EIizabeth Green

@ckarnik Жыл бұрын

What pissed me off wasn't that no one went to jail, its that as soon as our government gave them billions of taxpayer dollars the first thing they did was give themselves huge bonuses.

@Shay416 Жыл бұрын

Then these same businesses turned around and shit on individuals who did the same thing during covid with a stimulus check. Smh.

@rockefellerrepublican3336 Жыл бұрын

The government made a profit on the money they gave out

@drivingmecrazyinla9457 2 ай бұрын

The thought process, right or wrong, is that if they don't give bonuses, the top execs (assumed brain trust) will leave and do other things and the bail out that was just handed out will be futile as no one will be around to lead them out of the mess. My opinion is that, sure, you can think that way, but you trust the same people who led them into the mess to lead them out? If you don't bail out, then trust in the US financial system craters and an even worse recession happens. There are no good answers.

@oneiljerry9460 Жыл бұрын

Real Estate provides cashflow, tax benefits, equity building, competitive risk-adjusted returns, and inflation protection on its own. Whether you invest in physical properties or REITs, real estate may help you diversify your portfolio and reduce volatility. Dividends are what got me into investing in REITs, great way to secure the accumulate wealth, I hold AMT, CCI & PSA. $290k in profits made in 2022.

@alexyoung3126 Жыл бұрын

Consistently investing in high quality dividend paying REITs & companies over the long term is a relatively easy strategy to create generational wealth. My "boring" REITs portfolio paid me over $4,000 in dividends last month.

@joesphcu8975 Жыл бұрын

It's time to make high value games! Discounted dividend stocks. Ever grateful to my CFP "Eileen Ruth Sparks", I now have a six-figure REIT portfolio, which includes, but is not limited to; AMT, SPG & PSA.... I now have 606 shares of AMT which pays dividends of $3800 per year.

@kimyoung8414 Жыл бұрын

I want to play the long term game with well diversified fund. Please how can i reach this CFP of yours?

@joesphcu8975 Жыл бұрын

Most likely, you can find her basic information online; you are welcome to do further study.

@kimyoung8414 Жыл бұрын

Thanks for this tip. Her website popped up on the first page immediately I searched her, I read through her resume and it seems pretty tight. So, I dropped a message & hopefully she replies soon.

@liamhegarty3220 Жыл бұрын

That was hugely informative...thank you!

@Raymondjohn2 9 ай бұрын

To my understanding this just proves how much we need an edge as investors because playing the market like everyone else just isn’t good enough. I've been quite unsure about investing in this current market and at the same time I feel it's the best time to get started on the market, what are your thoughts?

@usieey 9 ай бұрын

Since the crash, I've been in the red. I’m playing the long term game, so I'm not too worried but Jim Cramer mentioned there are still a lot of great opportunities, though stocks has been down a lot. I also heard news of a guy that made $250k from about $110k since the crash and I would really look to know how to go about this.

@maga_zineng7810 9 ай бұрын

There are actually a lot of ways to make high yields in a crisis, but such trades are best done under the supervision of Financial advisor.

@CraigChap_6898 9 ай бұрын

Thats true, I've been getting assisted by a FA for almost a year now, I started out with less than $200K and I'm just $19,000 short of half a million in profit.

@usieey 9 ай бұрын

Impressive can you share more info?

@CraigChap_6898 9 ай бұрын

My advisor is ‘’Catherine Morrison Evans’’ she’s highly qualified and experienced in the financial market. She has extensive knowledge of portfolio diversity and is considered an expert in the field. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market

@juselara02 Жыл бұрын

Talking abount Lewis, I also recommend reading his previous book, which is kind of a "prequel" to the Big Short. It is called Liar's Poker and it is related to Lewis's time as a bond trader at Solomon Brothers and the Toxic Culture of Wall Street in the 80s, It is an amazing read!

@bti2270 Жыл бұрын

It's actually called "Liar's Poker" and yes, it is a great book.

@juselara02 Жыл бұрын

@@bti2270 Yes! corrected, thnks!

@butcho7492 Жыл бұрын

His other book When Genius Failed-about Long Term Capital Management- is an amazing read as well.

@tbeller80 Жыл бұрын

He's just all around a great author

@chowsquid 7 ай бұрын

Sorta like wolf of wall street

@Articulate99 5 ай бұрын

Always interesting, thank you.

@TheMarkEntwistle Жыл бұрын

No one compares investment volume as a factor. A contributing factor was that investors began shifting from Real Estate into stock. Previously stock returns were flat but when stock returns began to increase investors shifted asset allocation away from Real Estate toward more liquid stocks. This left Real Estate investors with less and less buyers and caused values to decrease with decreased demand.

@roseymalino9855 5 күн бұрын

'It was a gully'.

@merlinfitz Ай бұрын

As an lnvesting enthusiast, I often wonder how top level investors are able to become millionaires off investing. . I’ve been sitting on over $545K equity from a home sale and I’m not sure where to go from here, is it a good time to buy into stocks or do I wait for another opportunity?.

@SethDonald-mf4vm Ай бұрын

Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks

@ChristopherHoward-kf7yk Ай бұрын

I agree with you. I started out with investing on my own, but I lost a lot of money. I was able to pull out about $200k after the 2020 crash. I invested the money using an analyst, and in seven months, I raked in almost $673,000

@ChristopherHoward-kf7yk Ай бұрын

@@SethDonald-mf4vm I agree with you. I started out with investing on my own, but I lost a lot of money. I was able to pull out about $200k after the 2020 crash. I invested the money using an analyst, and in seven months, I raked in almost $673,000

@DylanMoore-cb7if Ай бұрын

Please will you be kind enough to share the details of the man that helped you?

@DylanMoore-cb7if Ай бұрын

@@ChristopherHoward-kf7yk Please will you be kind enough to share the details of the man that helped you?

@williamc4221 Ай бұрын

I really dislike it when people misapply the term "infamous."Infamous" means to be famous for doing something bad/evil/harmful. Michael Burry isn't infamous. Bernie Madoff is infamous. Sam Bankman-Fried is infamous. Michael Burry is just famous.

@JBG1968 22 күн бұрын

Infamous means more than famous . To be IN famous

@williamc4221 11 күн бұрын

@JBG1968 Sorry but it doesn't.

@69Lovesthebj 7 күн бұрын

@@JBG1968this guy's probably the biggest thing coming out of Mexico!

@nicolasbenson009 8 ай бұрын

To my understanding this just proves how much we need an edged as an investors because playing the market like everyone else just isn’t good enough. I’ve been quite ensured about investing in this current market and at the same time I feel it’s the best time to get started on the market, what are your thoughts?!

@DorathyJoy 8 ай бұрын

That’s true , I’ve been getting assisted by ‘Margaret Johnson Arndt’ for almost a year now , I started out less than $200k and I’m just $19,000 short of half a million in profits.

@DorathyJoy 8 ай бұрын

I am being advised by Margaret Johnson Arndt, an experienced financial professional. If you're interested, you can easily find more information about her as she has accumulated years of expertise in the financial market.

@Chasing-the-outdoors Жыл бұрын

Even today “home value will always go up, it’s a great investment.” People making $50k gross are being approved for $300k homes.. come on.

@donaldlyons17 Жыл бұрын

Well depending on if multiple people living there are making 50K and all paying to live there each year...

@kenyanr1 9 ай бұрын

Thank you for this. Now I almost understand Margin Call.

@johnl.7754 Жыл бұрын

The main reason this all got started was because government loosened the requirements for people to get a house loan. I remember getting a HELOC loan (recommended by bank agent) a few years before the blowup without documented web design freelance income.

@matthewnelson5293 Жыл бұрын

Watching the movie made me read the book. The book was like just a constant ramp up of, "Well, surely this is when the bottom falls out!" Then you find out that was only the beginning of the issue. Great book and I can't wait for Lewis' upcoming book about Sam Bankman Fried

@gcg8187 Жыл бұрын

Dude me too! Let's hope it's better than his book at high-frequency/high-speed/algorithmic trading, which lacked basic facts and common sense. What made the big short fantastic was that it was non-fiction, presented in a cohesive, entertaining fashion. It got me interested in finance haha

@aron2971 Жыл бұрын

angry comment

@fredfart666 Жыл бұрын

This is an angry comment as suggested by Patrick Boyle over referencing the Winklevoss twin’s band. Grrr!!!! 😅

@sibusisomazibuko9936 8 ай бұрын

Thank you

@bigdada018 Жыл бұрын

I'm angry that you've upset Patrick Boyle and I still love this video.

@HowMoneyWorks Жыл бұрын

Patrick Boyle lacks taste in good music

@bobhill9845 Жыл бұрын

@@HowMoneyWorks no u

@zaco-km3su Жыл бұрын

@@HowMoneyWorks Do you have problems with your ears?

@NedAndre Жыл бұрын

I can't believe he traumatized our man Patrick like that. Does his mother know what kind of monster she's raised?

@bigdada018 Жыл бұрын

@@HowMoneyWorks hahahah!!

@mbank3832 Жыл бұрын

This and Margin Call feel more grounded compare to Wolf of Wall Street

@tubewacha Жыл бұрын

Margin call had almost no detail of what went wrong. Huge difference from Big short.

@mbank3832 Жыл бұрын

@@tubewacha true. I really wanna see what is in Eric Dale’s USB drive visually

@eavyeavy2864 Жыл бұрын

Remember rules work differently for rich

@HH-le1vi Жыл бұрын

@@eavyeavy2864 what does this have to do with rules for the rich?

@daksh_joshi11 Жыл бұрын

Too Big To Fail is also a gem

@Deanswain19 Жыл бұрын

The Market have been suffering over the past month, with all the three indexes recording losses in recent weeks. My $400,000 portfolio is down by approximately 20%, any recommendations to scale up my returns before retirement will be highly appreciated.

@gabrielmm3515 Жыл бұрын

Find stocks with market-beating yields and shares that at least keep pace with the market for a long term. For a successful long-term strategy I recommend you seek the guidance a broker or financial advisor.

@Charlescarbajal971 Жыл бұрын

Very true , I diversified my $400K portfolio across multiple market with the aid of an investment advisor, I have been able to generate over $900k in net profit across high dividend yield stocks, ETF and bonds in few months.

@EileenToups Жыл бұрын

@@Charlescarbajal971 .wow ,that’s stirring! Do you mind connecting me to your advisor please. I desperately need one to diversified my portfolio.

@Charlescarbajal971 Жыл бұрын

You can do your research and be on the lookout for one with intelligent strategies who'll help your portfolio maintain an unwavering and a progressive growth. Diana Luise Hines is my FA. She has the Flexibility & Expertise to Meet Your Needs. Verify her yourself

@levinewson9667 Жыл бұрын

@@Charlescarbajal971 Thank you for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.

@gavinshickle1814 Жыл бұрын

As much as I love this movie I personally feel where they really missed the mark was failing to highlight in any way the governments involvement in the financial crises. The government aided and abetted the behavior of the banks. Bad government policies allowed the problem to grow to its ultimate scope.

@edsoncarrillo7211 Жыл бұрын

Spot on!!

@grogery1570 Жыл бұрын

After this happened there were only four AAA rated banks left in the world, the largest Australian banks. The heavy regulations they operated under prevented them from doing any thing stupid. Strange how American banks didn't ask for more regulation after they lost so much.

@Voe198 Жыл бұрын

That was the point of the movie, to absolve the gov. Hollywood is a propaganda machine.

@mulemule Жыл бұрын

That wasn't the vid's primary purpose.

@rider573 Жыл бұрын

For that half of the story, watch the movie Too Big To Fail.

@Milky_Media 6 ай бұрын

Awesome video

@VanPelt54u7fcyde57 7 ай бұрын

The most significant lesson I gained from the stock market in 2023 is that uncertainty prevails, emphasizing the importance of humility. Adhering to a long-term strategy with a competitive edge is key.

@arthurworld9768 7 ай бұрын

Certainty eludes everyone; thus, it's vital to establish your own methodology, handle risk, and adhere to your strategy unwaveringly. This commitment should endure challenges and successes, all while maintaining a commitment to ongoing learning and improvement.

@DeannaPeters-lz8we 7 ай бұрын

Embracing uncertainty, I realized after five years that attempting to predict market outcomes through chart analysis was futile due to the unpredictable nature. My lack of a mentor led to six years of struggle. I transitioned to following the market's direction and adopting a straightforward, disciplined approach.

@rebeccaartgallary 7 ай бұрын

@@DeannaPeters-lz8we Who is the professional who is advising you, if you could perhaps tell us? As a novice investing in stocks without the correct direction of a professional, I have lost a lot of money.

@DeannaPeters-lz8we 7 ай бұрын

I'm guided by Monica Amanda McClure an experienced coach with extensive financial market knowledge. While you can consider other options, her strategy has yielded positive results for me. She offers valuable insights, including entry and exit points for the securities I concentrate on

@rebeccaartgallary 7 ай бұрын

Thanks for sharing, needed this myself. I just looked her page up online and I would say she really does have an impressive background on investing.

@memequy6936 Жыл бұрын

Great video!

@justinschrank4806 Жыл бұрын

The big short CRUSHES wolf of Wall Street as a movie.

@dinocrest1946 Жыл бұрын

Two different types of movies

@daysandwords Жыл бұрын

@@dinocrest1946 People often use that argument to defend a movie that is still vastly inferior. Spiderman 3 (the Sam Rami one) and Spiderman: Into the Spiderverse are also two very diffirent kinds of films. But the latter still crushes the former.

@chuckschillingvideos Жыл бұрын

That's an egregiously low threshold.

@prateekpanwar646 Жыл бұрын

@@daysandwordsGonna cry? … But seriously, I agree with spiderverse.

@nolesy34 Жыл бұрын

You guys cant even stick to one set of similar movies 😂

@845835 Жыл бұрын

Wall Street stays out of jail because there is no difference between fraud and risk. Ryan's character in the film makes this point when he mentions his brother in law and the difference between stupid and illegal. Wall Street gets to be crooks because what they do can be easily blamed on stupid risk and when so many governments and the entire Treasury had their culpability there was no jail time coming. In fact the government and Wall Street made a profit off the collapse. It was the average person who suffered the most.

@ctvxl 8 ай бұрын

The rating agencies (S&P and Moodys) were giving CDOs artificially high ratings even though they were full of very very high risk mortgages. They did this knowingly. Those who were in on it at the banks and these agencies committed fraud, and should have gone to prison for it, but never did. Also, mortgage lenders were handing out loans to people who they *knew* were unable to pay. They would allow the borrowers to put any income, etc. they wanted on the loan applications and looked the other way. This is also fraud, and those responsible should have gone to prison, but again, none ever did. The game is rigged. Everyone in the game knows it. It is just how the world works, and what will ultimately lead to the collapse of the entire system. It *always* does eventually...

@Sforschondetta 8 ай бұрын

Exactly. the govt gutted the risk assessment in the market in order to spur growth by essentially backing the mortgages with the tax dollar ie bailout

@chowsquid 7 ай бұрын

Credit rating could have put a stop to all of this collapse, but there is no liability on a credit rating. It’s an opinion. You can’t jail your grocer if he said the oranges taste great but you think it’s terrible. But folks treated the ratings as gospel

@ctvxl 7 ай бұрын

@@chowsquid The credit rating agencies did much more than just have a "bad opinion" - They knew the instruments were full of bad mortgages, yet rated them however the banks told them to anyway in exchange for their business aka for money. That is conspiracy to defraud no matter how you look at it.

@davidknightx 5 ай бұрын

So what you're saying is there's absolutely no reason for Wall Street or the government not to do it again. I mean, what was the worst of it? Occupy Wall Street? A bunch of people camped outside banging drums for a 3 months? I remember video footage of investors high up in the building looking and laughing.

@Zed_Oud Жыл бұрын

Real estate speculation got away from us because we ignored Henry George for the last century. We need a Land Value Tax to prevent speculation and enrichment on limited resources like land and water rights. Property taxes are a corruption of the LVT, they include the useful building sitting on the unproductive land. Right now the property market is so expensive because investors are running businesses to pay off owning land investments.

@markbaker4425 4 ай бұрын

While i agree. The world is run by landlords. Youd need serious political upheaval to get it implemented

@NathanHarrison7 Ай бұрын

Great video. Great content. Thank you. One recommendation is to slow the cadence down a bit. Felt like a race. It would be more enjoyable and easier to glean some of the facts with a little bit slower pace.

@thejoker8484 Жыл бұрын

i love your videos man , you always add some salt of reality not like any other influencer

@markwmosley Жыл бұрын

One of my favorite movies. Entertaining and educational all at once.

@sunnindawg 9 ай бұрын

Excellent

@errorfive Жыл бұрын

Off to a hot start on content this year 😎

@ryanshuell-mu9sx Жыл бұрын

This is all true! Very well done!!!

@pumplesdorskiner Жыл бұрын

Thanks for the video! Honestly, I'm still not entirely sure where the movie went wrong. I understand that CDS are basically insurance with premiums, but the other differences seem pretty subtle.

@mikatu Жыл бұрын

The movie was accurate but apparently Michael didn't "invent" the finantial instrument since the banks were already using it at the time.

@rightwingsafetysquad9872 10 ай бұрын

He didn't invent CDS. But he was the first to buy them against CDOs.

@cuzmariosaidso Жыл бұрын

A Credit Default Swap is basically insurance if the basket of mortgage Defaulted. Had AAA rated mortgages ever Defaulted NO. So they created this Swap and he paid a high premium to keep it, not a very low premium like regular insurance.

@steffidas4785 6 ай бұрын

I enjoyed watching this movie though it took time to get it,but it was very good😎and the best part was they got the point that all those housing loans and bonds that were given it was not based on actual money or assets,that base of the horrendous financial catastrophe was a bubble

@navodadesilva99 Жыл бұрын

This is a very good video 🔥 🔥

@weeslayer Жыл бұрын

I recommend the book The Lords of Easy Money by Christopher Leonard. The similar thing is happening yet nobody knows or cares

@oscarmaxwell713 Жыл бұрын

Great vid

@johannes.pilkahn Жыл бұрын

Mars Junction? I'll never recover from this.

@HowMoneyWorks Жыл бұрын

Mars Junction got robbed of a Grammy

@scottn7cy Жыл бұрын

@@HowMoneyWorks Mars Junction was robbed of talent.

@HowMoneyWorks Жыл бұрын

@@scottn7cy LOL

@jackporter3865 11 ай бұрын

Jeremy Strong portrayed Vincent Daniel, who did not go to prison LOL. Him and Porter Collins run there own fund and are great guys! They spoke with my finance class about their time at Frontpoint and it was great!

@andresbard Жыл бұрын

I recently made more purchases. Saving money for a market downturn is likewise a bad idea. There are numerous ways to look at recessions and depressions, we cannot always expect to make large returns, and taking chances is better than doing nothing. The bottom line is that you will achieve remarkable results by diversifying your portfolio and making wise decisions. My portfolio's raw earnings rose by $608k in just 5 months.

@andrewlogan7737 Жыл бұрын

Despite my confidence in your advice, my recent stock purchases, and the fact that I am an AMC shareholder, I haven't been able to accumulate anything. I had already been in the hole for too long prior to the downturn. What's the investing procedure?

@danieljackson87 Жыл бұрын

With Ruth Loralann Brennan’s guidance, I've been investing for a while, and I couldn't be happier. Her company offers the broadest financial guidance currently accessible, has given me the best ROI while safeguarding my capital. It never squanders my money on dangerous speculation or poor risk-management techniques.

@danieljackson87 Жыл бұрын

@James Cooper Check up on Ruth; in 2020, she attracted a lot of attention. I'm not sure whether I have permission to say anything, but... okay. She acts as my mentor and manages my portfolio.

@valorielogan Жыл бұрын

@@danieljackson87 I looked up Ruth's profile online since I was curious. I saw her website, her credentials, and how tight she came across. At first, I thought this was overblown nonsense.

@tanha8178 Жыл бұрын

And here came the comment that start a thread about some amazing financial advisor. Beware of fake gurus ads in comment section.

@moncorp1 Жыл бұрын

This video was horrible at describing the different tranches of mbs. The lower ratings of each "bucket" as they 're called here was strictly because of the credit rating of the borrowers and the actual product. There were loans given out back prior to the great recession known as "liar loans". There were actually loans available where the borrower could state their income on the mortgage application and no income verification would be done. You could make $74,000 a year and claim you made $200,000 a year and no one would verify this. There were also variable rate loans and other time bomb loans. There were many bad loan products that were doomed to fail back in the days prior to the great recession. These loans would be insured by companies like AIG and others. This insurance would vault these bbb rated loans to AAA status. Then groups of these loans would be sold off to investment banks and the like. Problem was that these banks thought they were buying AAA rated securities when in fact they were buying garbage products dressed up to look like AAA rated ones. Couple that with property appraisers on the take and making inflated appraisals and you have a recipe for disaster. There are still calls to this day to bring back liar loans (and similar bad mortgage products). The dolt at the start who talked about no one going to jail. Well, there weren't just a few people responsible for this. You couldn't build enough jails to hold the number of people that were responsible. The crimes were committed from the top of these banks all the way down to loan officers and appraisers.

@butcho7492 Жыл бұрын

Excellent analysis!!!

@j10001 7 ай бұрын

Often, mortgage brokers were filling out loan applications for borrowers (who had, up to that point, told the truth about their income) - and the broker would quietly plug in whatever income level was needed to qualify for the loan! Borrowers wouldn’t even see the application with the false info until they were seated at the closing table signing a stack of legal documents. For most borrowers, at that point, it felt rather late in the process to pull out of the deal-if they even noticed the discrepancy.

@orlandomartinez2124 Жыл бұрын

I didn't like that you 🤕 Patrick Boyle 👂. New to the channel, great content☺️!

@cbatchler Жыл бұрын

What site did you use to view Cornwall's 13F?

@GTFAN87 Жыл бұрын

@HowMoneyWorks At 16:14 you've got three quotes on the screen for a brief moment, but two of the quotes are the same.

@laerzzyziz2381 Жыл бұрын

JUSTICE FOR PATRICK

@garrymugen486 Жыл бұрын

I feel the script for this video was done by ChatGPT it's got a lot of info, but there isn't any clarity like earlier videos.

@zaco-km3su Жыл бұрын

Mars Junction sucks. Did you warn anyone at least?

@hasbulla2012 Жыл бұрын

Great video. I love this film but I’m not very financially literate. I always got the gist of the story but sometimes missed the small details. Can’t wait to watch this again now I’ve seen this video.

@KingNisch13 Жыл бұрын

Patrick Boyle sent me here to berate you for subjecting us to horrible music, and I ended up learning something from this extremely inciteful, and very well-made video. Now, I don't know where to register my rage!!!!

@justme.9711 Жыл бұрын

What about the two guys that started in their garage? What were they doing? please explain.

@deuce38 4 ай бұрын

I live in Florida. I witnessed new young mortgage brokers swapping information on how to bypass underwriting protocols. I walked away. An acquaintance called me and wanted me to partner up because his banker would not give him anymore mortgages. I said no thanks. Home and lot prices were going up daily as people played the flip with nothing to support the price point. It was corrupt and insane. A young man said his girlfriend’s house value was up and she was going to sell. Told him she better hurry up but this wasn’t going to last. I’m talking about obscene prices for lots and homes where I would not live with nothing but intangible delusion to support the price. If you had a pulse, you could get a mortgage. Then it happened and there were vacant houses everywhere. One small nice pool home bought by a young couple in our neighborhood sat vacant for over seven years, roof caved in. It was eventually bought and restored. It’s in a nice neighborhood. Was grateful for my ability to seek the truth and be responsible.

@alexvenous1875 4 ай бұрын

One thing I don't get: at 6:47 he says that Mortgage backed securities HAVE to pay out a fixed amount of money to their investors, that's why they have "insurance". In case they can't. But the later analogy at 11:16 with buckets says that the B bucket doesn't always gets filled and that's why they are "riskier investments". But how can there even be risk with MBS if they have insurance (CDS) to pay in case the bucket doesn't get filled?

@salguodrolyat2594 3 ай бұрын

The bucket situation is the reason why the insurance is taken out. So the bucket situation happens before and to protect themselves the buyers take out the insurance against the possibility that the buckets won't get filled.😁

@controlledchaos7432 Жыл бұрын

Mars Junction...? Patrick "P. Biddy" Boyle deserves better

@wasbeer30 Жыл бұрын

little glitch happening at 2:26 .still fantastic video but lil note from one editor to another🙃

@reviancbell Жыл бұрын

speaking of making money, the first in-video ad was interrupted by a KZfaq ad. lol

@InvestOrama Жыл бұрын

Another awesome video! How can I learn to edit and narrate like this?

@Darruus 9 ай бұрын

As a p&c underwriter, it blows my mind that you can buy insurance on something you don’t own. In p&c insurance you have to have “insurable interest” in a something to insure it, usually meaning you own it.

@Christopher_TG 7 ай бұрын

And that was the most common way for CDS's to be sold: to bond holders and lenders to insure the loans they were issuing. But these banks were so certain that the housing market would not collapse that they were comfortable selling "naked" CDS's to these investors.

@chowsquid 7 ай бұрын

It’s banks selling insurance on something they have no idea how to insure. Imagine a P&C selling insurance assuming things don’t catch fire or ain’t no such thing as hurricanes 🎶….or pandemics.

@lucasbiaggini Жыл бұрын

It's about time you make a video about the scammers using bots to promote "investment coach's" in the comments section of every video you release.

@moreinfo472 Жыл бұрын

If people went to jail then it probably wouldn’t be so close to happening again!

@jumahbrady670 10 ай бұрын

Facts 💯

@shinysun7071 Жыл бұрын

i think it is eleventh time i try to understand this film, but when it comes to cdo I always give up :(

@roseymalino9855 5 күн бұрын

You're not alone; CDO investors didn't understand them either.

@JohnS-il1dr Жыл бұрын

I remember going into an elevator and telling my friend that the bubble is gonna burst. The person who overheard our conversation laughed and said a bubble was just a myth. I told him to be patient and just wait. He just shook his head. This was in 1998.

@dannyarcher6370 Жыл бұрын

_I may have been a decade early but I wasn't wrong._

@chowsquid 7 ай бұрын

Wrong on timing. There’s a saying in short positions. “The market can be wrong longer than you can stay solvent” If the bubble dragged on longer, m.burry could have been insolvent and have to dissolve his fund with big losses.

@nickphillips3799 11 ай бұрын

At 5.26. Check the typo.

@cookster155 Жыл бұрын

mars junc...... oh my

@cookster155 Жыл бұрын

@whatsappme121 absolutely not!

@vmp2707 Жыл бұрын

This is a great movie

@pickerrs Жыл бұрын

Great video, but Patrick Boyle tells us that Mars Junction might be your fault. Shame on you (but only for that).

@jomercurio1520 4 ай бұрын

The details in the movie that "were not quite right" or "not explained in enough detail" is for a couple of reasons. Firstly, its a movie, and entertainment product which in this case is also a learning product to further the general publics understanding of a complicated subject. And you have to get it across to them in about two hours, without losing their attention by throwing too much technical jargon at them. For example the scene where Dr. Burry first attempts to get the bank to make him a contract the woman repeats back to him "so you want to bet against the housing market?" In reality that would have never been said but its there to make sure people understand basically why hes there and what hes trying to do. Its super hard to make learning entertaining at the same time. But they did just that.

@fireball0762 Жыл бұрын

news without politics, WOW. and you learn more in a short time than taking a college class on it

@demigod8522 4 ай бұрын

1:46 got me a little confused because it seemed like the guy was inside his own head skipping his internal dialogue to reach the conclusion

@user-le8ix3ew8j Жыл бұрын

so this time is the commercial subprime . How do I profit from it???

@Failure_Is_An_Option Жыл бұрын

This Mars Junction business just opened a jar of spicey pickles that you want no part of. Life choices is not like choosing the right pickle.

@doliver5447 4 ай бұрын

When something bad happens, the question should not be, “well, who goes to jail over this, who shall be the scapegoat?” The system had weaknesses. That’s it.

@d2maveric Жыл бұрын

i was having so much trouble with a lot of what the movie said. i couldn't wrap my head around the CDO's The movie didn't explain them well. You give a better explanation as to what they were and how they worked. The whole part of the movie with Selena Gomez in it is a bad analogy. At least that's how I see it.

@dmytrosoroka7335 Жыл бұрын

Thanks from Ukraine for your video!

@scottn7cy Жыл бұрын

Stay strong Ukraine!

@traviscummings9178 Жыл бұрын

Pretty new to the channel, but if you don't have it yet, I'd love to see you cover Gordon Gekko's practices from Wall Street

@demigod8522 4 ай бұрын

It's absolutely disgusting how Credit Default Swaps would be allowed... we hear about millionaries and the occasioanal billionaire individuals, but a company being able to save TRILLIONS in an "insurance" sounds like a corrupt scheme on an entirely different level

@maciekjedrzejewski6554 Жыл бұрын

Haven't understood a single thing, but enjoyed movie scenes. Keep it up, mate!

@andrekovski Жыл бұрын

Let's pretend you wanted to be a homebuyer in 2004: You would get to the local bank and take out a mortgage and buy a home. You were obligated to pay a monthly amount until you paid off the whole loan. The local bank would sell your loan (you would still pay to them, but they would wire the money to the loan buyer) and a big bank would buy it. They clumped thousands of bought loans into packages and sold them to investment companies (to use the money to buy more loans like yours). The hedgefunds and investment companies bought them so they would get a return on the amount given (e.g. gave 10 mil and expected 15 mil back). Having 1000 different loans in the same pack, meant that if some of the mortgages (like yours) would default, the interest from the others + the value of the sold house would cover the losses and still turned a profit. The guys in the video figured out that more and more packs contained more and more bad loans (the local bans would lend huge amounts of money to people with bad credit history and they would buy overpriced houses, thus they couldn't make their payments and big banks bought them just to sell them fast to the next sucker). When they figured it, they took insurance saying: if the packs won't turn a profit, pay us a sum of money that covers our losses and turns a profit for us. For the isurance to work, they paid tens of millions to the insurance companies and waited for the price of the houses to fall abruptly. In 2007-2008 the prices of houses fell greatly and many people were unable or unwilling to make payment and defaulted on the loan en-masse (for 1000 in a pack, 600 or 800 defaulted) and as the packs wouldn't return money, the hedge funds, investment companies and banks started to not get paid for what they gave for the packs and some went bankrupt. The ones taht took insurance against the packs, had to be paid in full by the insurance companies and they were paid when the Congress voted to send money to the insurance companies to pay their policies and the insured parties got away from the crisis scot-free. tl;dr - small banks gave bad mortgages, those got bought by big banks, big banks clump thousands of loans into packs and sell the packs to investors. Mortgages default en-masse and cause the investors to lose everything (except for those insured). Hope this helps, I tried to simplify this as much as I could

@maciekjedrzejewski6554 Жыл бұрын

@@andrekovski Thanks, I must've not payed enough attention. I knew finance world was/is fucked up, but didn't expect it to be so damn stupid

@viewer491 Жыл бұрын

I just noticed you have 600k Damn I remember being here when you had less than 10k

@newares8140 4 ай бұрын

974k now

@overteched158 Жыл бұрын

I remember having my brain shutdown when they started talking about CDOs at the restaurant.

@finnwheatley2194 Жыл бұрын

The other thing that is interesting about this is that Paulson was actually selecting individual MBS with Goldman - maybe that’s the allusion they were making in the Burry scene with GS

@SunCityJohnny 10 ай бұрын

Here’s a mistake for you: Jeremy Strong’s real life counterpart is Vincent Daniel not Chip Skowron…17:06

@gregh2367 Жыл бұрын

This is a very good video and I enjoy your channel. I am not a bot. Lol

@whatsup3519 Жыл бұрын

One question. Why should I buy growth share which don't pay money. If someone buy that share then only I get money. What if no one buy it. In that case what will happened

@tombraon1006 Жыл бұрын

That is how the market works... you pay for the opinion of others. If the big players doesn't think stock ABC will go up, than it wont because they don't buy it. That is the risk.... luckily we can short🤷🏻‍♂️

@farfa2937 Жыл бұрын

1) Nothing happens, you just have a share and no money. 2) If no one buys, then the price will go to 0 as holders try to undercut eachother to sell.

@scottn7cy Жыл бұрын

Mars Junction is terrible. You should feel ashamed of yourself.

@infinitelyblank2774 Жыл бұрын

I am participating in Patrick Boyle's insidious scheme to boost you in the KZfaq algorithm.

@danielj6824 Жыл бұрын

The Federal Reserve was not mentioned once in the movie.

@roseymalino9855 Жыл бұрын

Federal Reserve? Fannie Mae, Freddie Mac, & House Financial Services Committee were up to their ears in this.

@jj4791 7 ай бұрын

Regans vision, enacted by Clinton of all people, required by law that banks lower their lending standards in an attempt to get 50% of the population into their own home, up from 40-some percent. Because they determined that homeowners were more responsible and less prone to crime. As if making more renters own homes will solve this fundamental issue. The banks refused in the early 90s. But were GRANTED a GUARANTEE by the government to be bailed out if everything went as badly as they feared. Lol!

@srdjan455 4 ай бұрын

Having watch both the movie and this video I'm still not sure I fully understand it all.

@detolao 7 ай бұрын

Error at 16:13, you put the same text twice. Wrong

@Brocktoon68 2 ай бұрын

The most horrid thing about this movie is that AIG still exists. They were the most egregious player at the time, writing naked credit default swaps without doing any due diligence. They were Bear Sterns in the movie, shaking their money-maker.