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The Big Short
- Subtitles by AnnaGram -

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Hi ya Frank, how are the wife and kids?

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You know, shouldn't y'all be considering
treasury bonds or utility stocks?

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In the late seventies

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banking wasn't a job you went into
to make large sums of money.

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It was a fucking snooze!

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Filled with losers!

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Like selling insurance, or.... accounting

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And if banking was boring...

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then the bond department at the bank
was straight up comatose.

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We all know about bonds....

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You give em to your snot nosed kid
when he turns fifteen

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Maybe when he's thirty
he makes a hundred bucks.

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Boring!

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That is until Lewis Rainieri
came on the scene at Salomon Brothers

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You might not know who he is

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But he changed your life more than Michael Jordan,
the I-Pod and Youtube put together!

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Hey Gentlemen, let's get some money in here.
Let's make some money! What do you say?!

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You see, Lewis didn't know it yet,
but he had already changed banking forever

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with one simple idea.

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The mortgage backed security.

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Or... Private Label MBS

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You got your average persons mortgage

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fixed rate, thirty years, boring!
Same, small payoff. Right!

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But......

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when you add thousands of them
all bundled together

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suddenly, the yield goes up, but the risk is still small,
because....

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Well, they're mortgages,
and who the hell doesn't pay their mortgage?

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What exactly is the credit-rating on this bond?

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This bond gentlemen...
Is AAA-Rating!

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This is exactly what the Michigan State Pension fund
has been looking for!

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I'll buy twenty million!
- Oh come on, live a little!

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Twenty five million!

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The money came raining down!

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And for the first time,
the banker went from the country-club to the strip-club.

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Pretty soon, stocks and savings
were almost inconsequential.

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They were doing fifty, a hundred,
two hundred billion in mortgage bonds

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and dozens of other securities a year.

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And America barely noticed as its
number one industry became boring old banking

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And then... one day,
almost thirty years later, in 2008

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It all came crashing down!

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Bear Sterns was in a death spiral
and the FED brokered it's sale.

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In the end Lewis Rainieri's mortgage
backed security mutated into a monstrosity
that collapsed the whole world economy

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And none of the experts, or leaders,
or talking heads had a clue it was coming.

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And I'm guessing most of you
still don't really know what happened.

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Yeah, you got to have somebody to repeat
so you don't sound dumb, but come on....

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- Our financial institutions are strong!

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But there were some who saw it coming.

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While the whole world was having a big old party,
few outsiders and weirdos saw what no-one else could.

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Not me, I'm not a weirdo, I'm pretty fucking cool,
but... we'll meet again later!

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These outsiders saw the giant lie
at the heart of the economy

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and they saw it by doing something
the rest of the suckers never thought to do.

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They looked

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The Big Short
- Subtitles by AnnaGram-

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Through the nineteen thirties....

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The housing market collapsed...
nationwide.

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By approximately 8 percent.

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And halve of all .. Eh ... worries that...
it wasn't default.

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There were.. Very......

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Specific identifiers.
Extremely recognizable.

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Wait... for instance

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W-w-w-w one of the hallmarks of mania.

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Is that rapid rise and complexity,
and the rates... they are frauded

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Did you know....
They're going up!

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I've always been.. More comfortable.. When alone.

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I believe... maybe... it's because of...
my glass eye.

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I lost the eye...
in a childhood illness.

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Separates me from people.

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Did you know... They're going up!

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Highest frog-rates since the nineteen thirties.

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- No, I didn't know that.

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I mean.. Ghe ghe ghe...
nine ... nineteen thirty three

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the fourth year of the great depression

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- You were playing so great son,
even heard the coach say it!

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Can we just go home?

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All social interf.. Actions
are awkward for me and for the.... person

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Even when i try to compliment...
it somehow... it comes out wrong....

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You have a very nice haircut,
you do it yourself?

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- Huh, What?

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- No, i eh....

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I'm sorry... please...

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Pffffff...

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I'm going on and on.
My wife told me i need to share more.

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- That seems healthy.

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So .. I get the job?
I really think i could help you fund.

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Yeah....
Yeah... sure!

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You're David!...
David.... Great!

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I guess I'll go find a desk.
Is there anything you want me to work on for start?

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Ehh..... Yeah.

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- You could let me know later!

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<s>D... d... d... did ya... did you</s>

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Think it was strange when...

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Ehm...

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the tech-bubble burst in 2001

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And the housing market in San-Jose.

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Tech-Capitol of the world....

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Went up.....

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it's strange...
- No, no!

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It's housing...
housing is always stable... low-risk.

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That's the idea ... yeah.

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I want you to get me....

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The ... eh.... Top-20 selling mortgage bonds

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- So, you want to know
what the top-20 selling mortgage bonds are?

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No, no, no, i want to know
what mortgages are in each one

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- Wha.. Wait...
- Aren't those mortgages made up of

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- Wait... aren't those bonds made up of
thousands and thousands of mortgages?

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Yeah...

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Right away, Dr. Burry.

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Nice guy... all day long.

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Hmm.. Ask anyone... hmm,
pleasure to work with.

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The second my son screws up,

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and...

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You'll hang it to him...
just like my dad did to me.

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You hear the words that are coming out of my mouth.

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Sorry I'm late, no cabs!

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Aaaahh

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So get this....

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I met with this retail banker yesterday..

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I'm supposed to be getting him to invest in a fund,

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instead, i start drilling him about overdraft penalties

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and how his bank will let customers
write ten... twelve cheques

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Before telling them they're overdrawing.

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And this creep....

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is making billions off
screwing over people this way.

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And I'm getting madder and madder,
and i ask him.

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I look him in the face and i say:

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How can you sleep at night, knowing...
that you're ripping off working people.

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And know what he did....
He left!

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He just walks out of the lunch,
doesn't say a word.

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What the fuck is that?
Who's fucked up in that scenario?

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Am i?
Or is this douche-bag?

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Who leaves me hanging...
Is he the fucked up one?

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Trying to make me feel bad about myself!
- We have talk about this numerous times

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Fuck him!
- You can't come in late and hijack the entire session!

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What do you mean, i didn't hijack the meeting.

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Did i hijack this session?
- Yeah

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What do you do?

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I'm in commodities.

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Good luck with that!

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Marc...

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I know you've suffered a terrible loss,

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Do you want to talk about that?

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I don't talk about that.

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Hold on...

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Hold on..
Shit.. I must take this, sorry!

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Sorry!

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I don't care Porter...

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This guy's whole business is build upon
ripping people off, how long can that last?

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Bye everybody!

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85...

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That's 30 days late, that's 60 days late.

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Pay on time.

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These Fico-scores

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They're caught up with their pants....

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30 days late...

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Loan to Value.... maybe 5

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maybe 90

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60 days late, jeez!

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I've never heard of that.

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30 days late

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He hasn't moved all day.

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He does this every few days.

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Hasn't spoken to me since he hired me.

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Michael, how are you guy?!

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I've put out something really interesting...

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Great Michael, whenever you find something
interesting, we all sit to make money.

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What stock are you vowing?

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No, no, no no.. I wanna,
i wanna short the housing market.

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Really?
But the housing market is rock-solid!

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Greenspan just said:
"Bubbles are regional, defaults are rare!"

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Tell em I'll be there in a minute

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Say again!

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Look...
Greenspan's wrong!

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Look, i don't think you mean to do this,
but eh..

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Sometimes you sound very
dismissive and superior.

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It's a fact, Greenspan's wrong.
I don't know how if you want your thr....

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Look, Michael...

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Metro Capitol backed you four years ago
when you were a Doctor with a

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dinky wet page
and some inheritance money,

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We've all done very well, look...
Why don't you just stick with stocks....

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You know me....
I, I, I, I,

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I look for value,
wherever it can be found.

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The fact is

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That these mortgage backed securities

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Are filled with extremely risky
sub-prime adjustable rates.

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And when the majority of these
adjustable rates kick in.... in '07

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They will begin to fail

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and if they fail above 15 percent
the whole bond is worthless.

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- Michael, just take a beat,
we'll talk about this later!

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Lawrence please, don't patronize me,
if ... it .. Is...

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- Mortgage backed securities,
sub-prime loans, tranches....

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Is pretty confusing right?

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Doesn't it make you feel bored....
or stupid....

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Well... it's supposed to.

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Wall-street loves to use confusing terms,
to make you think only they can do what they do.

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Or even better.....

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for you just to leave them the fuck alone.

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So... here's Margot Robbie
in a bubble-bath to explain.

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Basically, Lewis Rainieri's mortgage bonds
were amazingly profitable for the big banks.

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They made billions and billions on their two-percent fee
they got for selling each of these bonds

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But then they started running
out of mortgages to put in them.

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After all, there are only so many homes and so many
people with good enough jobs to buy them... right?

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So the banks started filling these
bonds with riskier and riskier mortgages

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Thank you Hendry

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That way, they can keep that
profit machine churning right?

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00:14:21,950 --> 00:14:26,040
By the way, these risky
mortgages are called: Sub-Prime.

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00:14:26,520 --> 00:14:29,560
So... whenever you hear sub-prime...
think: Shit

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Our friend Michael Burry found out,

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that these mortgage-bonds

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that were supposedly 65 percent AAA,
were actually just, basically full of shit.

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So now he's going to short the bonds

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which means.... to bet against.

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Got it?....
Good!

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00:14:52,460 --> 00:14:53,780
Now fuck off!

215
00:14:53,900 --> 00:14:57,950
It's only a matter of time before someone
else sees this investment, we have to act now.

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00:14:58,070 --> 00:15:00,040
How do you know the bonds are worthless?

217
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Aren't they filled with fucking
thousands of pages of mortgages?

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I read them!

219
00:15:06,360 --> 00:15:07,960
- You read them?
I read.... Yeah!

220
00:15:08,310 --> 00:15:11,980
No-one reads them, only the lawyers
who put them together read them!

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I don't think they even know what they've made

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The housing market is
propped up on these bad loans.

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It's a time-bomb and i want to short it.

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Through what instrument Michael?

225
00:15:27,290 --> 00:15:30,400
There are no insurance-contracts
or options for mortgage-bonds.

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The bonds are too stable!

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Lawrence....

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This is what I'm gonna do....

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I am gonna get a bank to make me one.

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Then.....

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I'm gonna buy it.

232
00:15:48,140 --> 00:15:49,780
I don't want that kind of business!

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Money is not money!
That's bad money!

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00:15:54,050 --> 00:15:56,260
Hey... Excuse me!

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Let me ask you this: What company
treats its customers that shittily and succeeds?

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Fine... OK... Goldman....

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Without proving it

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00:16:06,660 --> 00:16:09,710
When he was a kid he excelled
at studying the Talmud and Yeshiva.

239
00:16:09,830 --> 00:16:12,830
Whatever!
But, one day his Rabbi told his mom why.

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00:16:13,170 --> 00:16:18,220
Paul is a fine boy and Mark is an
excellent student of the Torah and the Talmud

241
00:16:19,290 --> 00:16:20,580
Then what's the problem Rabbi?

242
00:16:21,400 --> 00:16:24,070
It's the reason Mark is studying so hard.

243
00:16:25,020 --> 00:16:28,870
He's looking for inconsistencies
in the word of God!

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00:16:31,490 --> 00:16:32,790
So has he found any?

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00:16:34,460 --> 00:16:37,130
Later Baum started his own fund on Wall-street.

246
00:16:37,720 --> 00:16:39,290
He had an amazing nose for bullshit.

247
00:16:39,410 --> 00:16:42,700
He wasn't afraid to let anyone know,
when and where the bull had gone number 2.

248
00:16:44,500 --> 00:16:47,330
Then a tragedy happened to Mark
and it turned his whole world really dark

249
00:16:47,450 --> 00:16:49,420
and ready to believe the whole system was a lie.

250
00:16:49,660 --> 00:16:50,390
Hold on!

251
00:16:51,700 --> 00:16:54,300
It's Cynthia,
I'll be in the office in twenty minutes.

252
00:16:55,380 --> 00:16:56,260
Hi Honey!

253
00:16:57,980 --> 00:17:01,300
The therapist called....
You did it again!

254
00:17:01,700 --> 00:17:04,590
There were no cabs...
What was i supposed to do?

255
00:17:04,710 --> 00:17:06,540
I worry about you Mark!

256
00:17:06,660 --> 00:17:07,380
At least I went!

257
00:17:09,430 --> 00:17:12,610
You're running around like you
have to right every wrong in the world.

258
00:17:12,730 --> 00:17:14,590
Ok... Fine!
How angry

259
00:17:14,840 --> 00:17:17,870
You know what...
I'm a mean guy and I'm pissed off!

260
00:17:18,890 --> 00:17:24,250
But... It is a shitstorm out here sweetie.
You have no idea the kind of crap people are pulling.

261
00:17:24,370 --> 00:17:27,610
And everybody is walking around like they're
in a goddamn Enya-video.

262
00:17:28,690 --> 00:17:29,930
They're all getting screwed you know!

263
00:17:30,050 --> 00:17:32,700
You know what they care about?
They care about the ballgame!

264
00:17:32,820 --> 00:17:35,470
Or they care about what
actresses went into rehab!

265
00:17:35,750 --> 00:17:37,970
I, I think you should try medication!

266
00:17:38,090 --> 00:17:40,960
No, no, we agreed,
if it interfered with work.

267
00:17:41,190 --> 00:17:43,620
You hate Wall-street,
but maybe it's time to quit?

268
00:17:43,740 --> 00:17:45,750
I love my job!
- You hate your job!

269
00:17:45,870 --> 00:17:47,670
I love my job!
- You're miserable!

270
00:17:47,790 --> 00:17:50,490
I love my job,
I love my job honey!

271
00:17:50,710 --> 00:17:51,400
Mark!

272
00:17:53,250 --> 00:17:56,110
I am sad every day about what happened.

273
00:17:56,230 --> 00:17:59,320
I know you must feel the same,
but you never show it!

274
00:18:05,930 --> 00:18:08,550
I know how close you were to your brother.

275
00:18:11,500 --> 00:18:12,630
CAB!

276
00:18:14,060 --> 00:18:15,490
Where'd ya go pal?

277
00:18:20,850 --> 00:18:21,660
CAB!

278
00:18:27,960 --> 00:18:30,890
Everyday i think you're gonna talk about it,
and you're gonna do!

279
00:18:34,450 --> 00:18:38,030
Will you ever think about
the idea of making a change?

280
00:18:38,150 --> 00:18:42,450
Fine, fine, honey, you know what,
i will consider it, but honestly....

281
00:18:42,810 --> 00:18:44,740
Cynthia I'm OK,
I really am!

282
00:18:44,860 --> 00:18:47,050
Hey, Hey!
No, no, my cab!

283
00:18:47,170 --> 00:18:49,980
That's my cab, that's my cab,
That is my cab!

284
00:18:50,100 --> 00:18:52,330
Schmuck! Fuck you!
- Fuck you!

285
00:18:54,540 --> 00:18:55,850
I'll call you later.

286
00:19:03,220 --> 00:19:06,850
I wanna buy....
swaps on mortgage-bonds

287
00:19:07,460 --> 00:19:09,890
Credit default swap, that will pay off...

288
00:19:10,920 --> 00:19:13,430
If the underlying....
bond fails.

289
00:19:14,240 --> 00:19:16,200
- You want to bet against the housing market?
Yes

290
00:19:16,610 --> 00:19:17,230
Why?

291
00:19:17,620 --> 00:19:21,190
Those bonds only fail if millions of
Americans don't pay their mortgages.

292
00:19:21,620 --> 00:19:23,280
That's never happened in history.

293
00:19:24,250 --> 00:19:26,750
If you'll excuse me Dr. Burry,
that seems like a foolish investment.

294
00:19:27,070 --> 00:19:32,170
Based on... prevailing sentiment of the
market and banks, and popular culture...

295
00:19:32,290 --> 00:19:35,280
Yes, it's a foolish investment.
But eh...

296
00:19:35,400 --> 00:19:36,800
Everyone's wrong...

297
00:19:38,580 --> 00:19:39,580
That's a good one.

298
00:19:42,600 --> 00:19:46,160
This is Wall-street Dr. Burry,
if you offer us free money, we are going to take it

299
00:19:46,280 --> 00:19:50,130
My one concern is, is that.. Eh..
When the bonds fail..

300
00:19:51,400 --> 00:19:53,230
Eh... i want to be certain,

301
00:19:54,360 --> 00:19:58,080
of payment,
in case of solvency issues with the bank.

302
00:19:59,170 --> 00:20:00,750
- I'm sorry, are you for real?

303
00:20:01,700 --> 00:20:04,530
You want to bet against the housing market,
and you're worried we won't pay you?

304
00:20:04,650 --> 00:20:05,740
Yes.. That's correct.

305
00:20:07,500 --> 00:20:10,300
<whispers>
Listen.. I don't think this will work .....

306
00:20:19,520 --> 00:20:21,740
<whispers>
the market on housing is never gonna crash

307
00:20:21,860 --> 00:20:23,800
<whispers>
this is all rock-solid by now

308
00:20:24,390 --> 00:20:26,730
<whispers>
it wouldn't even if we wanted it to.

309
00:20:28,270 --> 00:20:29,820
<whispers>
Kinda hard one to deal with...

310
00:20:30,410 --> 00:20:32,400
<whispers>did he awestruck you?
- Mmhhhh.

311
00:20:34,900 --> 00:20:40,460
Dr Burry, we could work out a pay-as-we-go
structure that would payout if the bonds fail.

312
00:20:40,580 --> 00:20:43,690
But it would also apply to your payments
if the value of the mortgage-fund goes up

313
00:20:43,810 --> 00:20:45,660
You'd have to pay us monthly premiums.

314
00:20:46,980 --> 00:20:48,730
Is that acceptable Dr. Burry?

315
00:20:51,860 --> 00:20:53,330
Yes.. It is, Yes.

316
00:20:54,040 --> 00:20:55,790
Em.. I have prospectuses on,

317
00:20:56,380 --> 00:20:59,260
six mortgage-backed securities
i want to show you

318
00:21:04,030 --> 00:21:06,110
<whispers>
The majority of them are accepted mortgages.

319
00:21:33,290 --> 00:21:35,210
Dr Burry, these should be fine!

320
00:21:35,740 --> 00:21:40,260
We're prepared to sell you 5 million
in credit default swaps on these mortgage-bonds.

321
00:21:40,680 --> 00:21:42,900
Can we make it a hundred million?

322
00:21:45,080 --> 00:21:47,110
Absolutely! We can make it one-hundred million.

323
00:21:49,430 --> 00:21:52,410
We'll be in touch,
send some paperwork over.

324
00:21:56,150 --> 00:22:00,470
I like these cups, could i take one for my son?
- Have one, Yes, Yes!

325
00:22:00,590 --> 00:22:01,660
Thank you!

326
00:22:02,200 --> 00:22:03,290
Have two!

327
00:22:23,520 --> 00:22:25,840
Is there any way to do two-hundred million?

328
00:22:28,040 --> 00:22:30,220
We can...
But are you sure?

329
00:22:31,180 --> 00:22:34,760
Absolutely...
Absolutely, we can!

330
00:22:47,760 --> 00:22:52,080
- We do, eh... different projects
we do gardening, we do

331
00:22:52,200 --> 00:22:54,530
the bonds.... I'd like to .. Eh...

332
00:22:54,650 --> 00:22:56,880
- It's not bad for yourself to be found extreme

333
00:22:57,100 --> 00:22:58,090
It's very cool!

334
00:23:30,440 --> 00:23:33,970
Hey Randall, what's with the Dom?
Bonuses aren't for three months.

335
00:23:34,090 --> 00:23:38,040
We just sold 200 million in
credit-swaps for mortgage-bonds

336
00:23:38,320 --> 00:23:41,690
Some fund-manager from California,
it's fucking crazy right?!

337
00:23:41,810 --> 00:23:43,440
Only way to make money dog!

338
00:23:43,560 --> 00:23:45,350
- I didn't know there were swaps on mortgages

339
00:23:45,630 --> 00:23:47,980
There are now, we made it for him!

340
00:23:48,250 --> 00:23:50,710
His head must have caught up with his hole
or do something... I don't know.

341
00:23:51,250 --> 00:23:52,960
Want one? No?

342
00:23:53,260 --> 00:23:54,280
Awwwww

343
00:23:54,550 --> 00:23:55,280
Jared

344
00:23:55,940 --> 00:23:58,390
Did you hear about the deal
that Randall did with some fund-manager?

345
00:23:58,510 --> 00:24:00,690
Randall?
Bullshit!

346
00:24:00,920 --> 00:24:03,050
He's a foot-soldier,
I'm sure it's a shit deal.

347
00:24:03,170 --> 00:24:03,890
No, It's for real!

348
00:24:05,260 --> 00:24:06,680
I told you we'd meet later.

349
00:24:06,800 --> 00:24:09,260
Unfortunately... It's in a place like this,
which i would never be in.

350
00:24:09,380 --> 00:24:13,360
I never hung out with these idiots after work, Ever!
I had fashion friends.

351
00:24:14,150 --> 00:24:16,880
Apparently this guy wanted
two-hundred mill in credit default swaps.

352
00:24:17,600 --> 00:24:19,400
Randall made the sale,
can you believe it?

353
00:24:19,520 --> 00:24:21,660
Somebody shorted two-hundred mill
in mortgage bonds?

354
00:24:21,780 --> 00:24:23,000
That was just with Deutsche...

355
00:24:23,420 --> 00:24:25,390
Word is... he had half the town.

356
00:24:26,220 --> 00:24:27,000
How much in total?

357
00:24:27,250 --> 00:24:28,820
1.3 billion

358
00:24:29,050 --> 00:24:29,630
- What?

359
00:24:30,370 --> 00:24:32,930
That's... that's pretty much all of Scion's liquidity!

360
00:24:33,050 --> 00:24:34,740
Michael, this is highly distressing!

361
00:24:35,190 --> 00:24:38,380
Lawrence....
That is not all of our liquidity!

362
00:24:39,270 --> 00:24:42,270
And I'm not certain that you
really understand this trade.

363
00:24:42,390 --> 00:24:43,710
This is a certainty.

364
00:24:43,830 --> 00:24:46,480
Mike, i consider myself a mentor to you.

365
00:24:47,080 --> 00:24:49,950
But our company is not
comfortable with this investment.

366
00:24:50,200 --> 00:24:51,810
Am i being clear?
- Lawrence

367
00:24:51,930 --> 00:24:56,010
I have full autonomy when it
comes to investment strategy

368
00:24:56,460 --> 00:24:57,600
You can read our agreement.

369
00:24:57,720 --> 00:25:00,470
Do not throw our acception-agreement
in my face Michael!

370
00:25:01,350 --> 00:25:04,570
We had an underlying understanding,
you wouldn't act like a goddamn crazy man!

371
00:25:04,690 --> 00:25:05,960
This is not crazy....

372
00:25:06,750 --> 00:25:08,080
it's all very logical.

373
00:25:08,200 --> 00:25:12,790
So now we pay up premiums on these swaps against
housing-market until the mortgages fail?

374
00:25:13,780 --> 00:25:14,720
In other words...

375
00:25:14,840 --> 00:25:18,140
we lose millions until something
that has never happened before... Happens?

376
00:25:22,180 --> 00:25:23,090
That's correct!

377
00:25:56,750 --> 00:25:59,290
- Hello Mark Baum
Oh hey Kathy!

378
00:25:59,410 --> 00:26:02,320
It wasn't me, I had a personal thing this afternoon.
- I'm not your babysitter.

379
00:26:02,440 --> 00:26:04,840
If your appoint makes money for
Mark and Sally I'm happy!

380
00:26:04,960 --> 00:26:07,410
OK... Hey did I hear you're expecting?

381
00:26:07,530 --> 00:26:08,810
Ehh, we're expecting to be expecting...

382
00:26:08,930 --> 00:26:11,210
I'd be upset clearing this out, but we're ..
- That's exciting!

383
00:26:16,070 --> 00:26:17,700
Lump.. In my ball

384
00:26:18,160 --> 00:26:19,990
I'll go in for a scan
- Hmm

385
00:26:20,380 --> 00:26:23,930
Turns out i have large thing,
called an epididymis

386
00:26:24,390 --> 00:26:26,610
Which is a thing that goes around the ball

387
00:26:27,020 --> 00:26:28,470
And is like a sack underneath.

388
00:26:28,590 --> 00:26:33,460
I have an extremely pronounced epididymis
- Enriveted that is.

389
00:26:33,780 --> 00:26:37,330
Almost as large as another testicle on itself

390
00:26:37,450 --> 00:26:40,020
So get this.... Cynthia..
Guys!

391
00:26:40,140 --> 00:26:43,660
Cynthia wants me to quit!
And open a B&B in Vermont.

392
00:26:44,160 --> 00:26:46,950
That's great!
I'd love to see Mark Baum run a Bed and Breakfast!

393
00:26:47,640 --> 00:26:49,530
Like: Here's your steel-cut oatmeal asshole!

394
00:26:49,650 --> 00:26:52,390
Mark refused to kiss the ring
of the people with the checkbooks,

395
00:26:52,510 --> 00:26:55,180
so he had to set up his fund
under Morgan Stanley's umbrella.

396
00:26:56,050 --> 00:26:58,970
His small team reflected his...
distrust of the system.

397
00:26:59,090 --> 00:27:00,600
You guys are sick..
You're sick!

398
00:27:00,720 --> 00:27:02,540
She says, this job is making me unhappy.

399
00:27:02,910 --> 00:27:04,100
- But you're happy when you're unhappy!

400
00:27:04,220 --> 00:27:05,380
I am happy when I'm unhappy!

401
00:27:05,500 --> 00:27:07,750
Bennie Daniel
- You know how to make a muffin?

402
00:27:07,870 --> 00:27:09,290
Mark's numbers guy.

403
00:27:09,410 --> 00:27:11,100
Do you even know how to do laundry? Make a bed?
- Okay!

404
00:27:11,220 --> 00:27:13,710
Bennie lost his father to a
violent crime when he was young

405
00:27:13,830 --> 00:27:15,590
Just like Mark,
he didn't talk about it.

406
00:27:15,710 --> 00:27:17,210
- I don't talk about that!

407
00:27:17,330 --> 00:27:19,360
Cynthia's no joke,
she could actually make him move to Vermont!

408
00:27:19,480 --> 00:27:21,120
I mean, she made me start wearing a suit.

409
00:27:21,710 --> 00:27:25,300
Porter Collins, former Olympic rower,
went to Brown.

410
00:27:25,420 --> 00:27:28,960
He worked with Baum at a previous firm,
and couldn't figure out why no-one listened to Baum.

411
00:27:29,080 --> 00:27:30,790
The guy with all the good ideas.

412
00:27:31,160 --> 00:27:36,030
Sir, yeah, i know, do you have the wrong
Front-Point? Cause there is another
Front-Point in this same building that is Baum's

413
00:27:36,150 --> 00:27:39,370
And Danny Moses, the optimist of the bunch.

414
00:27:40,080 --> 00:27:43,740
And a hell of a trader, which is the
only reason they put up with his bullshit optimism.

415
00:27:44,380 --> 00:27:48,400
You're a weird caller, you take longer
with a wrong number than anybody else

416
00:27:48,520 --> 00:27:54,000
I mean... it's this guy... from... Deutsche,
who was talking about shorting housing bonds.

417
00:27:55,600 --> 00:27:58,070
And then, in the middle of the call
where I had realized he had the wrong Front-Point.

418
00:27:58,190 --> 00:28:01,120
And then... and then...
cause he wanted the one on the eighth floor.

419
00:28:01,240 --> 00:28:03,160
He wanted to short housing bonds?
- Hmmm

420
00:28:03,280 --> 00:28:05,670
- It happens like five times a day,
that somebody uses the wrong front-point.

421
00:28:05,790 --> 00:28:07,300
We should change our name!

422
00:28:07,420 --> 00:28:09,680
Wait, wait...
He wanted to short housing bonds?

423
00:28:10,070 --> 00:28:11,390
Who bets against housing?

424
00:28:12,900 --> 00:28:14,390
What's the ABX at?

425
00:28:14,510 --> 00:28:18,360
What's ABX? - It tracks sub-prime mortgage bond value.
- Go back to sleep!

426
00:28:18,750 --> 00:28:21,400
The ABX is at ... eh....

427
00:28:21,520 --> 00:28:25,110
Wow! It's down,
It's down 3 points since last year, that's weird.

428
00:28:25,230 --> 00:28:26,600
I haven't heard a peep about that!

429
00:28:26,960 --> 00:28:30,530
What was this guys name?
Jared Vennekt... Vennett

430
00:28:30,650 --> 00:28:33,180
That's right!
These lucky sons of bitches caught wind

431
00:28:33,300 --> 00:28:37,020
of one of the best trades in
Wall-street history from a wrong number.

432
00:28:37,140 --> 00:28:39,790
They should've paid 10 percent
to my Fox ticket system.

433
00:28:39,910 --> 00:28:41,830
He was Jared Vennett, Vennett

434
00:28:41,950 --> 00:28:45,550
Jared Vennett, from Deutsche, sounded very sketchy.
- Sounds like a douche-bag.

435
00:28:56,420 --> 00:28:59,570
OK.. Hi.... how are you?!
- Have a seat!

436
00:28:59,690 --> 00:29:03,610
Hey mister Vennett from Deutsche Bank,
what do we have?

437
00:29:12,720 --> 00:29:15,780
So, how many people have you
talked to about this trade? - A few.

438
00:29:16,530 --> 00:29:18,030
There's definitely some interest.

439
00:29:18,150 --> 00:29:18,470
Ohh..

440
00:29:18,590 --> 00:29:20,000
My boss would have my ass

441
00:29:20,120 --> 00:29:21,000
are you crazy Jer?

442
00:29:21,120 --> 00:29:21,580
Get lost!

443
00:29:21,700 --> 00:29:22,560
Fuck you!

444
00:29:23,430 --> 00:29:25,880
Which is why you're here
talking to us on the wrong number?

445
00:29:26,240 --> 00:29:28,440
Sounds like there's a lot of interest.
- Alright.

446
00:29:29,150 --> 00:29:32,760
A few people had invited us in,
just to laugh at me on this deal, is that you?

447
00:29:32,880 --> 00:29:33,760
Is that what this is?

448
00:29:33,880 --> 00:29:36,050
That's not what this is,
that's just how Mark is.

449
00:29:36,850 --> 00:29:37,700
Let's see what you got.

450
00:29:37,820 --> 00:29:40,300
I'm sorry, do you smell that, what is that?
- What?

451
00:29:40,420 --> 00:29:42,570
What's that smell?
- Cologne?

452
00:29:43,110 --> 00:29:44,720
No....

453
00:29:46,180 --> 00:29:47,370
Opportunity!

454
00:29:47,780 --> 00:29:49,400
No... Money.

455
00:29:49,900 --> 00:29:52,280
I smell money...

456
00:29:52,400 --> 00:29:53,380
Chris....

457
00:29:53,720 --> 00:29:55,030
goddammit!
- I'm sorry.

458
00:29:58,320 --> 00:30:00,170
This is your basic mortgage bond.

459
00:30:00,580 --> 00:30:02,820
Alright, the originals were simple.

460
00:30:02,940 --> 00:30:06,600
They were just thousands of
AAA-mortgages bundled together,

461
00:30:06,720 --> 00:30:08,560
guaranteed by the US-government.

462
00:30:08,680 --> 00:30:10,320
The modern ones are different.

463
00:30:10,440 --> 00:30:13,990
They're private.
And they're made up of layers of tranches.

464
00:30:18,910 --> 00:30:21,170
Highest level AAA's getting paid first.

465
00:30:21,290 --> 00:30:24,100
The lowest rated B's getting paid last,
taking on defaults first.

466
00:30:24,580 --> 00:30:27,280
No obviously if you're buying B's
you could make more money.

467
00:30:27,400 --> 00:30:29,910
But, they're a little risky,
sometimes they fail.

468
00:30:32,180 --> 00:30:33,100
Chris...

469
00:30:37,140 --> 00:30:41,670
Somewhere along the line, these B's and BB's
went from a little risky to dogshit.

470
00:30:42,060 --> 00:30:43,360
Where's the trash?

471
00:30:44,990 --> 00:30:47,410
I'm talking rock-bottom Fico-scores.

472
00:30:48,870 --> 00:30:50,570
No Income-verification.

473
00:30:51,810 --> 00:30:53,840
Adjustable rates...
Dogshit!

474
00:30:55,940 --> 00:30:58,760
The default-rates are already up
from one to four percent fellas.

475
00:30:58,880 --> 00:31:01,430
And if they rise to eight percent...
and they will!

476
00:31:02,160 --> 00:31:04,040
A lot of these BBB's
are going to zero too.

477
00:31:04,160 --> 00:31:06,170
And that....
You're too close...

478
00:31:07,560 --> 00:31:09,070
Is an opportunity.

479
00:31:09,190 --> 00:31:13,160
OK, You're saying that at 8 percent
the bonds fail and we're already at 4 percent?

480
00:31:13,280 --> 00:31:15,930
That's right.
- If they go to eight.... It's Armageddon.

481
00:31:16,290 --> 00:31:18,950
Yeah that's right.
- How come nobody's talking about this?

482
00:31:19,070 --> 00:31:20,680
And you're completely sure of the math?

483
00:31:21,120 --> 00:31:22,080
Look at him...

484
00:31:22,990 --> 00:31:24,210
That's my Quant!

485
00:31:24,330 --> 00:31:25,280
- Your what?

486
00:31:25,400 --> 00:31:28,690
My quantitative... My maths specialist!
Look at him!

487
00:31:29,620 --> 00:31:32,430
You notice anything different about him?
Look at his face!

488
00:31:33,140 --> 00:31:35,570
Look at his eyes!
I'll give you a hint..

489
00:31:35,690 --> 00:31:36,960
His name is Yang!

490
00:31:38,660 --> 00:31:41,540
He won a national maths competition..
In China!

491
00:31:41,920 --> 00:31:43,910
He doesn't even speak English!

492
00:31:44,650 --> 00:31:46,290
Yeah!
I'm sure of the math.

493
00:31:48,030 --> 00:31:49,740
Actually, my name is Jeong,

494
00:31:49,860 --> 00:31:51,730
and... I do speak English

495
00:31:51,850 --> 00:31:55,300
Jared likes to say it though..
Because he thinks it makes me seem more authentic

496
00:31:55,420 --> 00:31:58,600
And... i got second in that
national math competition

497
00:31:58,720 --> 00:32:01,940
So.... You're offering us a chance
to short this pile of blocks?

498
00:32:02,060 --> 00:32:02,830
How?

499
00:32:03,510 --> 00:32:06,010
With something called a credit default swap.

500
00:32:07,040 --> 00:32:11,080
It's like insurance on the bond, and if it goes bust,
you can make 10-to-1.

501
00:32:11,200 --> 00:32:14,830
Even 20-to-1 return,
and it's already slowly going bust.

502
00:32:14,950 --> 00:32:17,370
10-to-1, 20-to-1....
No way!

503
00:32:17,490 --> 00:32:19,000
And no-one is paying attention.

504
00:32:20,230 --> 00:32:22,340
No-one is paying attention.

505
00:32:22,790 --> 00:32:27,280
Because the banks are too busy
getting paid obscene fees to sell these bonds.

506
00:32:27,400 --> 00:32:28,820
But wait.... You are the bank

507
00:32:28,940 --> 00:32:32,130
You work for the bank,
i bet your margins are pretty nice and fat.

508
00:32:32,250 --> 00:32:34,180
Let's not talk about my margins by the way.

509
00:32:34,840 --> 00:32:37,650
Being nice and fat....
That's a nice shirt, do they make it for men?

510
00:32:38,350 --> 00:32:39,220
Aren't you the bank?

511
00:32:39,340 --> 00:32:40,250
I work for the bank!

512
00:32:40,960 --> 00:32:42,170
I don't think like a bank

513
00:32:42,290 --> 00:32:44,370
Big banks, small bank...
I like to make money.

514
00:32:44,700 --> 00:32:47,090
Alright...
Let me put it this way....

515
00:32:47,330 --> 00:32:49,010
I'm standing in front of a burning house,

516
00:32:49,130 --> 00:32:51,760
And I'm offering you fire insurance on it

517
00:32:52,000 --> 00:32:54,510
- How can these underlying bonds be...
as bad as you say?

518
00:32:54,630 --> 00:32:55,490
It wouldn't be legal!

519
00:32:55,840 --> 00:32:57,320
Nobody knows what's in them!

520
00:32:57,780 --> 00:32:59,450
Nobody knows, what's in the bonds,

521
00:32:59,570 --> 00:33:02,250
I've seen some that are 65 percent AAA-rating.

522
00:33:02,660 --> 00:33:07,110
That i know, for a fact, are filled
with 95 percent sub-prime shit.

523
00:33:07,230 --> 00:33:08,910
With Fico's below 550

524
00:33:09,030 --> 00:33:10,080
Get the fuck out of here!

525
00:33:10,200 --> 00:33:11,370
Want me to really blow your mind?

526
00:33:11,490 --> 00:33:14,440
When the market deems a bond too risky to buy,
what do you think we do with it?

527
00:33:15,400 --> 00:33:16,700
Take a guess!

528
00:33:16,820 --> 00:33:18,060
I don't know, you tell me!

529
00:33:18,340 --> 00:33:19,160
Alright...

530
00:33:19,280 --> 00:33:21,530
You think we just warehouse it on the books?

531
00:33:21,650 --> 00:33:24,800
No, we just repackage it,
with a bunch of other shit that didn't sell

532
00:33:24,920 --> 00:33:26,520
and put it into a CDO.

533
00:33:26,870 --> 00:33:29,430
A CDO?
- Yes... a CDO.

534
00:33:29,550 --> 00:33:30,450
What is that?W

535
00:33:30,700 --> 00:33:33,660
Where we take a bunch of
B's, BB's and BBB's that haven't sold,

536
00:33:33,980 --> 00:33:35,450
and we put em in a pile...

537
00:33:37,250 --> 00:33:41,500
and when the pile gets large enough,
the whole is suddenly considered 'Diversified'.

538
00:33:41,910 --> 00:33:43,840
And then... the whores of the rating agency,

539
00:33:43,960 --> 00:33:48,130
Give it a 92 / 93 percent AAA-rating,
no questions asked...

540
00:33:50,110 --> 00:33:52,420
Holy... what!
Say that again!

541
00:33:53,290 --> 00:33:54,950
Collateralized Debt Obligations

542
00:33:55,550 --> 00:33:58,070
It's important to understand,
because it's what allowed the housing crisis

543
00:33:58,190 --> 00:34:00,560
to become a nationwide economic disaster.

544
00:34:01,490 --> 00:34:04,780
Here's world-famous chef
Anthony Bourdain to explain.

545
00:34:09,160 --> 00:34:12,810
OK, I'm a chef on a Sunday-afternoon
setting the menu of a big restaurant.

546
00:34:12,930 --> 00:34:17,080
I ordered my fish on Friday, which is
the mortgage-bond that Michael Burry shorted.

547
00:34:17,440 --> 00:34:19,310
But... some of the fresh doesn't sell..

548
00:34:19,430 --> 00:34:21,080
I don't know why, maybe it just came out,

549
00:34:21,200 --> 00:34:22,750
halibut has the intelligence of a dolphin.

550
00:34:22,870 --> 00:34:24,500
So... what am i gonna do?

551
00:34:24,620 --> 00:34:28,970
Throw all this unsold fish,
which is the BBB-level of bond, in the garbage?

552
00:34:29,090 --> 00:34:30,120
And take the loss?

553
00:34:31,840 --> 00:34:32,740
No way!

554
00:34:32,860 --> 00:34:35,230
Being a crafty and
morally honorous chef that i am...

555
00:34:35,350 --> 00:34:39,840
Every crappy levels of the bond i don't sell...
i throw into a seafood stew.

556
00:34:40,110 --> 00:34:43,640
It's not old fish!
It's a whole new thing!

557
00:34:43,760 --> 00:34:46,610
The best part is....
They're eating retailed halibut!

558
00:34:47,380 --> 00:34:49,170
That... is a CDO.

559
00:34:49,290 --> 00:34:52,160
I just need to know
how these could possibly be correlated.

560
00:34:52,520 --> 00:34:56,700
You're like D- D- Dora the Explorering,
you're the first person who has found this...

561
00:34:56,820 --> 00:34:59,090
So.. Hold on..
So mortgage bonds are dogshit?

562
00:34:59,370 --> 00:35:01,850
CDO's are dogshit wrapped in catshit.

563
00:35:02,880 --> 00:35:04,470
Yeah... that's right!

564
00:35:04,860 --> 00:35:08,320
Institutions treat these CDO's like
they're as solid as treasury bonds.

565
00:35:08,440 --> 00:35:10,420
And they're going to zero..

566
00:35:10,840 --> 00:35:15,030
No, that can't be right, there, there, are
500 billion in housing bonds sold last year alone

567
00:35:15,150 --> 00:35:18,340
The ratings agencies, the banks....
the fucking government?

568
00:35:18,620 --> 00:35:20,560
You're saying they're all
asleep at the wheel?

569
00:35:20,680 --> 00:35:24,140
Yeah!
My whole department is long on this stuff.

570
00:35:24,940 --> 00:35:26,790
They call me chicken little.

571
00:35:27,630 --> 00:35:29,310
They call me Bubble-boy.

572
00:35:31,530 --> 00:35:33,340
A's ... Zero.

573
00:35:33,700 --> 00:35:36,850
B's.. Zero,
BB's ..... Zero.

574
00:35:36,970 --> 00:35:38,940
BBB's .... Zero.

575
00:35:40,970 --> 00:35:42,300
And then that happens!

576
00:35:42,420 --> 00:35:43,820
What... is that?

577
00:35:46,000 --> 00:35:47,920
That's America's housing market.

578
00:35:50,900 --> 00:35:52,760
Thank you.
- Fucking A Jared!

579
00:35:52,880 --> 00:35:54,650
Shut your fucking mouth!

580
00:36:07,990 --> 00:36:09,850
Bye Jared!

581
00:36:15,600 --> 00:36:16,750
I don't like it!

582
00:36:18,190 --> 00:36:19,490
He's playing us.

583
00:36:20,720 --> 00:36:24,170
He's playing us, he's got too much skin in the game,
and he's dumping his position.

584
00:36:25,350 --> 00:36:26,590
What if he's right?

585
00:36:27,070 --> 00:36:29,410
You want him to be right!
- Yes, I do!

586
00:36:30,030 --> 00:36:33,610
The banks have given us twenty-five percent
interest rates on credit cards.

587
00:36:33,730 --> 00:36:36,670
They have screwed us on student-loans,
so we can never get out from under.

588
00:36:36,790 --> 00:36:40,140
Then this guy, walks into my office and says:

589
00:36:40,520 --> 00:36:43,260
"Those same banks got greedy,
they lost track of the market"

590
00:36:43,380 --> 00:36:45,610
And i can profit off of their stupidity

591
00:36:45,730 --> 00:36:47,220
Fuck! Yeah!
I want him to be right!

592
00:36:47,730 --> 00:36:51,130
I mean, how come you don't hate this guy?
He's everything you taught us not to trust!

593
00:36:51,250 --> 00:36:54,840
You can't hate him! He is so transparent
in his self-interest that i kinda respect him.

594
00:36:55,260 --> 00:36:57,200
Would i buy a car from him?...
No!

595
00:36:58,820 --> 00:37:02,320
Is he right about the mortgage market?
Let's find out. Let's find out!

596
00:37:03,930 --> 00:37:05,700
Look... It's two very simple questions:

597
00:37:06,070 --> 00:37:09,510
Is there a housing bubble?
And if there is... how exposed are the banks?

598
00:37:11,230 --> 00:37:13,640
Let's get on this quickly too,
because if he is right...

599
00:37:14,140 --> 00:37:17,500
Every loser with a couple million bucks
in a fund is gonna be jumping on us.

600
00:37:18,110 --> 00:37:19,110
Let's go!

601
00:37:26,940 --> 00:37:30,330
J.P. Morgan-Chase, J.P. Morgan-Chase.

602
00:37:30,640 --> 00:37:34,440
OK.. Don't!...
Stop Saying J.P. Morgan-Chase!

603
00:37:34,560 --> 00:37:36,070
I got a good feeling about this

604
00:37:36,190 --> 00:37:38,960
Just a meeting though, you know...
It's just a meeting!

605
00:37:39,970 --> 00:37:41,910
People have meetings all the time...
You know!

606
00:37:42,030 --> 00:37:43,880
People drink their coffee,
they have a meeting...

607
00:37:44,000 --> 00:37:45,930
Brownfield Funds?
- Yes! Yes!

608
00:37:46,210 --> 00:37:49,410
Hey! Hello... Ted!
Chris... I 'm on Ted's Desk.

609
00:37:49,530 --> 00:37:53,070
I'm Charlie, I'm Charlie Geller,
I'm Jamie, Jamie Shipley.. Hi!

610
00:37:53,190 --> 00:37:57,050
We're so excited to get setup
on your trading platform!

611
00:37:57,170 --> 00:37:58,910
Here, eh.. Have a seat a second.

612
00:37:59,670 --> 00:38:00,700
Alright!

613
00:38:01,920 --> 00:38:04,910
So I... Ted did ask ehm..
To do us some meeting in front.

614
00:38:05,030 --> 00:38:07,770
But I eh... I couldn't find
any marketing material on you guys..

615
00:38:08,410 --> 00:38:11,340
Oh... we just moved here from Boulder.

616
00:38:11,850 --> 00:38:13,650
Oh, can we see some of your offering documents?

617
00:38:13,910 --> 00:38:16,410
Well Brownfield has it own... money...

618
00:38:17,130 --> 00:38:18,740
It's our money... Yeah.

619
00:38:19,090 --> 00:38:21,020
Well can you tell us how much you manage?

620
00:38:21,140 --> 00:38:24,290
Of course!
We're doing 30 million right now.... eh...

621
00:38:24,410 --> 00:38:28,250
But we started four years ago,
with a hundred-ten thousand.

622
00:38:28,370 --> 00:38:29,830
Wow!
- So as you can see,

623
00:38:30,050 --> 00:38:33,340
that's pretty phenomenal returns.

624
00:38:33,460 --> 00:38:35,910
We wanna get an
ISDA-agreement with J.P. Morgan,

625
00:38:36,030 --> 00:38:38,230
So we can deal in long-term options.

626
00:38:39,440 --> 00:38:41,260
- That's really cool!
Yeah!

627
00:38:53,410 --> 00:38:54,990
That is so cool!

628
00:38:55,460 --> 00:38:56,410
Thank you!

629
00:38:56,530 --> 00:39:00,650
But eh.. You guys are under
the capitol requirements for an ISDA.

630
00:39:01,290 --> 00:39:02,310
By how much?

631
00:39:02,770 --> 00:39:04,030
Er.. How much eh...

632
00:39:04,150 --> 00:39:06,600
One billion four-hundred-seventy millions

633
00:39:06,720 --> 00:39:07,070
So...

634
00:39:08,080 --> 00:39:08,890
A lot!

635
00:39:11,120 --> 00:39:12,450
This makes us look bad doesn't it?

636
00:39:12,570 --> 00:39:15,560
That we didn't know
what the capitol requirements were.

637
00:39:15,680 --> 00:39:16,670
I..... eh..

638
00:39:17,240 --> 00:39:18,620
It's not great!

639
00:39:19,280 --> 00:39:19,990
But, eh.....

640
00:39:20,400 --> 00:39:21,770
Keep up those returns

641
00:39:21,890 --> 00:39:24,990
And give us a call
way down the line you know?

642
00:39:25,110 --> 00:39:25,810
OK?

643
00:39:25,930 --> 00:39:27,580
OK, of course!
Thanks Chris!

644
00:39:27,700 --> 00:39:29,390
Have a good one guys!
- Thank you Chris!

645
00:39:33,470 --> 00:39:34,520
Shit!

646
00:39:36,250 --> 00:39:40,400
Who the fuck schedules
a meeting at 4:50 in the afternoon?

647
00:39:41,540 --> 00:39:45,000
Dude, B of A and Bear
didn't even return our calls

648
00:39:45,120 --> 00:39:48,740
and even fucking Morkovia blew us off!
- I know man!

649
00:39:49,010 --> 00:39:53,350
Here's the prospectuses of all the other losers
who didn't make it past the lobby.

650
00:39:53,640 --> 00:39:54,830
I don't think i can do this anymore..

651
00:39:54,950 --> 00:39:57,730
Yo, I'm young yet,
i can still do something with my life!

652
00:39:58,090 --> 00:40:00,610
I miss Colorado anyway.
The weed's better!

653
00:40:01,090 --> 00:40:03,320
Gentleman... i need you to leave!

654
00:40:03,440 --> 00:40:04,820
Yep, Yeah we're going, Let's go!

655
00:40:04,940 --> 00:40:06,410
Look at this, Look at this!

656
00:40:06,850 --> 00:40:10,240
This guy says that the
housing market is a giant bubble!

657
00:40:12,920 --> 00:40:14,980
OK, so this part isn't totally accurate.

658
00:40:15,250 --> 00:40:19,340
Now, we didn't find Jared Vennett's housing bubble pitch
in a lobby of a bank that rejected us.

659
00:40:19,560 --> 00:40:22,930
Truth is... ehm..
A friend had told Charlie about it

660
00:40:23,050 --> 00:40:25,240
And I read about it,
in Grand Central's trade observer.

661
00:40:25,360 --> 00:40:26,430
This is crazy!

662
00:40:26,830 --> 00:40:29,740
This is..... crazy stuff!

663
00:40:29,860 --> 00:40:31,800
Shit! Here they're saying that
there's 10-to-1 returns,

664
00:40:32,200 --> 00:40:35,180
on Credit Default Swaps
for mortgage backed securities

665
00:40:35,930 --> 00:40:38,500
and the whole housing market
is about to collapse.

666
00:40:39,110 --> 00:40:43,770
For Jamie and Charlie, the housing market
doomsday prediction was music to their ears!

667
00:40:51,030 --> 00:40:53,360
They had started working out of Jamie's garage,

668
00:40:53,480 --> 00:40:57,670
with a 110 thousand Jamie had saved
taking sailboats up and down the east-coast.

669
00:40:59,250 --> 00:41:01,160
Our investment-strategy was simple.

670
00:41:01,280 --> 00:41:05,560
People hate to think about bad things happening
so they always underestimate their likelihood.

671
00:41:05,680 --> 00:41:07,740
Their strategy simple and brilliant.

672
00:41:08,720 --> 00:41:09,790
What he said!

673
00:41:09,910 --> 00:41:14,780
Jamie and Charlie found: Markets will sell options
very cheaply on things they think will never happen.

674
00:41:14,900 --> 00:41:17,800
So, when they were wrong, they were wrong small.
But when they were right.......

675
00:41:17,920 --> 00:41:19,990
They were right big!
- Boooooom!

676
00:41:25,250 --> 00:41:28,920
Within a few years they had turned
a 110 grand into 30 million

677
00:41:29,420 --> 00:41:33,440
Then it was time to go to New York City,
And so far..... It wasn't going very well

678
00:41:33,560 --> 00:41:35,010
So what if it does seem interesting?

679
00:41:35,130 --> 00:41:37,230
Nope, no bank will give us our ISDA.

680
00:41:37,350 --> 00:41:39,040
We're dead in the water...

681
00:41:40,580 --> 00:41:43,070
These kind of trades are
totally out of the question!

682
00:41:43,190 --> 00:41:44,640
- We gotta call Ben!

683
00:41:45,860 --> 00:41:46,940
Pffff

684
00:41:47,060 --> 00:41:48,550
Call Ben!

685
00:41:49,270 --> 00:41:52,150
Ben Ricker was a former trader
in Singapore for Chase.

686
00:41:52,270 --> 00:41:54,100
Quit the whole game in disgust!

687
00:41:54,220 --> 00:41:56,810
He just happened to be Jamie's
neighbor when they were in Colorado

688
00:41:56,930 --> 00:41:58,640
and they met, walking dogs....

689
00:41:58,920 --> 00:42:00,240
But Ben was dark...

690
00:42:00,490 --> 00:42:02,320
He didn't just think
the whole system would fail

691
00:42:02,550 --> 00:42:04,360
He thought the whole world
was going down!

692
00:42:04,480 --> 00:42:06,870
This salad's .... Oh.. Hmmm good!

693
00:42:06,990 --> 00:42:09,540
You know, every one of these
vegetables is fresh from my garden

694
00:42:11,640 --> 00:42:12,840
You guys should start your own garden!

695
00:42:12,960 --> 00:42:15,750
What you gotta do is
get your soil off petrol chemicals,

696
00:42:16,330 --> 00:42:20,360
Use wood-ash and urine,
help destroy the soil, creates mono-nitrate,

697
00:42:20,480 --> 00:42:22,270
Seeds are gonna be the new currency!

698
00:42:22,390 --> 00:42:27,070
And not those Frankenseeds from Monsanto,
I'm talking about good healthy organic seeds.

699
00:42:27,190 --> 00:42:29,640
Make yourself a garden, learn to live off the land!
- A fucking lunatic!

700
00:42:29,760 --> 00:42:31,780
Ben had real experience in a big bank,

701
00:42:31,900 --> 00:42:35,550
Jamie and Charlie, never even been
in a Manhattan bank bathroom!

702
00:42:35,780 --> 00:42:39,040
But Ben was done with the banking world,
he was very clear!

703
00:42:39,160 --> 00:42:40,920
Do you realize that?
- Alright, let's crunch some numbers,

704
00:42:41,040 --> 00:42:43,430
Then maybe we'll talk about calling Ben
- I don't wanna crunch the numbers,

705
00:42:43,550 --> 00:42:45,780
When haven't we crunched the numbers?
- Seriously guys!

706
00:42:45,900 --> 00:42:48,620
- I need you out of here
Of course, Yes Mam!

707
00:42:48,740 --> 00:42:50,990
One second!
- We're going, we're going!

708
00:42:52,470 --> 00:42:55,410
Oh god, i hate this!
This is a total waste of time!

709
00:42:55,530 --> 00:42:57,260
Come on!
Would you relax!

710
00:42:58,310 --> 00:43:01,610
I think this is a housing development
about forty-five minutes outside of town.

711
00:43:01,730 --> 00:43:03,360
Mark wants us to check that out first.

712
00:43:03,480 --> 00:43:05,590
I hope there's some
Cuban restaurants on the way there,

713
00:43:05,710 --> 00:43:08,140
because i heard the
Cuban food is amazing in Miami.

714
00:43:08,330 --> 00:43:10,970
Please don't be Chipper
in the face of me being miserable!

715
00:43:11,090 --> 00:43:12,650
It really makes me hate you!

716
00:43:12,770 --> 00:43:15,720
How is wanting to eat good food,
being Chipper?

717
00:43:17,180 --> 00:43:18,640
Hello?

718
00:43:19,290 --> 00:43:21,000
Hello?

719
00:43:48,350 --> 00:43:49,700
What's up man?
What do you want?

720
00:43:50,020 --> 00:43:53,600
Hello, I'm surveying mortgage owners
who are over 90 days delinquent

721
00:43:53,620 --> 00:43:55,340
I'm looking for a Harvey Humpsy

722
00:43:56,100 --> 00:43:57,340
You want my landlord's dog?

723
00:43:59,420 --> 00:44:01,980
Your landlord filled out his
mortgage application using his dogs name?

724
00:44:03,600 --> 00:44:04,300
I guess so!

725
00:44:04,960 --> 00:44:07,400
Wait, has that asshole not been
paying his mortgage?

726
00:44:07,400 --> 00:44:08,880
Coz, I've been paying my rent!

727
00:44:08,880 --> 00:44:10,900
Well, yeah he is over 90 days delinquent

728
00:44:11,180 --> 00:44:12,320
Seriously man!

729
00:44:12,860 --> 00:44:13,980
Am i gonna have to leave?

730
00:44:17,340 --> 00:44:19,420
My kids just got setup in this school man!

731
00:44:19,820 --> 00:44:21,500
Hey.... How are ya?

732
00:44:22,620 --> 00:44:24,900
My name is Ken!
- You're Ken?

733
00:44:25,140 --> 00:44:27,100
Ehm.. You should talk to
your landlord about that

734
00:44:27,100 --> 00:44:29,700
I'm sorry i don't have anymore information,
but you ehm....

735
00:44:30,500 --> 00:44:32,640
You have a great day!
Cya Ken!

736
00:44:32,660 --> 00:44:34,800
There's books everywhere!
- Books everywhere?

737
00:44:36,060 --> 00:44:39,020
Seriously...
Is everything gonna be ok?

738
00:44:39,340 --> 00:44:41,620
You should call...
You should call him!

739
00:44:42,520 --> 00:44:43,320
You should give him a call!

740
00:44:43,740 --> 00:44:45,320
It's not my fault dude!
I've been paying!

741
00:44:49,380 --> 00:44:50,220
Hello!

742
00:44:54,340 --> 00:44:56,160
I think somebody just left

743
00:44:57,580 --> 00:44:59,360
All they took was the TV.

744
00:44:59,940 --> 00:45:01,100
It's weird!

745
00:45:02,120 --> 00:45:04,080
They didn't even clean up the counter

746
00:45:13,120 --> 00:45:14,180
Oh, god!

747
00:45:25,520 --> 00:45:26,960
It's like Chernobyl!

748
00:45:27,680 --> 00:45:30,380
It's like a hundred houses,
it can't be four people living here.

749
00:45:32,840 --> 00:45:34,880
No, fuck that!
- Shit!

750
00:45:50,160 --> 00:45:51,960
He's been there for seven hours

751
00:45:52,040 --> 00:45:54,460
What is he looking at?
- I heard he had a breakdown!

752
00:45:54,640 --> 00:45:56,700
Just let him is what i think

753
00:45:58,760 --> 00:46:00,080
Dr. Burry's office

754
00:46:00,360 --> 00:46:03,320
No, he actually prefers that you e-mail him.
Excuse me!

755
00:46:08,780 --> 00:46:09,800
Hey Lawrence!

756
00:46:12,220 --> 00:46:17,880
We have no confidence in your ability
to identify macro-economic trends.

757
00:46:19,980 --> 00:46:21,920
You flew here to tell me that?
Why?

758
00:46:22,260 --> 00:46:25,220
Every, E- E- Anyone
can see there's a real-estate bubble

759
00:46:25,880 --> 00:46:29,020
Actually no-one can see a bubble,
that's what makes it a bubble

760
00:46:29,160 --> 00:46:31,160
There's still warns!

761
00:46:31,480 --> 00:46:32,940
There are always markers!

762
00:46:33,660 --> 00:46:35,180
Mortgage fraud

763
00:46:36,220 --> 00:46:41,040
Quintupled since 2000 and the
average take-home pay is flat, but ...

764
00:46:41,200 --> 00:46:44,840
Home-prices are soaring, that means
the homes are dead, not assets

765
00:46:44,940 --> 00:46:47,540
So Mike Burry of San Jose,
a guy who....

766
00:46:47,880 --> 00:46:51,120
gets his haircut at Supercuts,
and doesn't wear shoes,

767
00:46:51,440 --> 00:46:54,000
knows more than
Alan Greenspan and Hank Paulson....

768
00:46:55,960 --> 00:46:58,760
I haven't talked to Hank,
but yes he does.

769
00:47:00,080 --> 00:47:04,200
That's cute, that's cute!
Are you being sarcastic with us Mike?

770
00:47:07,240 --> 00:47:10,940
Lawrence....
I don't know how to be sarcastic!

771
00:47:12,000 --> 00:47:13,240
I don't know how to be funny

772
00:47:13,500 --> 00:47:16,840
I don't know how to ...
work people..

773
00:47:18,380 --> 00:47:20,320
I just know how to read numbers!

774
00:47:20,820 --> 00:47:22,880
How big is your short position right now?

775
00:47:23,540 --> 00:47:24,480
Eh....

776
00:47:24,920 --> 00:47:26,700
1.3 billion

777
00:47:26,960 --> 00:47:27,980
And the premiums?

778
00:47:28,160 --> 00:47:30,900
Eh, we pay ... eh... roughly...

779
00:47:30,960 --> 00:47:32,560
80 to 90 million

780
00:47:33,780 --> 00:47:37,480
Each year, which is surprising,
because i was the first to do this trade

781
00:47:37,540 --> 00:47:40,680
Watch, It will pay!
I may have been early, but I'm not wrong!

782
00:47:40,820 --> 00:47:43,700
It's the same thing!
It's the same thing Mike!

783
00:47:43,960 --> 00:47:47,920
You're managing a fund of what?
555 million?

784
00:47:48,740 --> 00:47:52,100
In six years,
it will all be gone!

785
00:47:53,020 --> 00:47:53,960
On one bet

786
00:47:55,100 --> 00:47:57,880
The second quarter of '07
is when the adjustable rates kick in!

787
00:47:58,020 --> 00:47:59,680
And then the defaults will skyrocket!

788
00:48:00,240 --> 00:48:01,180
Yeah, says you!

789
00:48:01,280 --> 00:48:05,300
How much is eligible for withdrawal before they're due?
Say in the next two quarters.

790
00:48:06,340 --> 00:48:08,080
If your investors panic

791
00:48:12,080 --> 00:48:13,860
Three-hundred-and-two

792
00:48:14,940 --> 00:48:16,260
My god Mike!

793
00:48:21,320 --> 00:48:24,000
No-one will pull out,
that would be suicide man

794
00:48:24,100 --> 00:48:28,100
Down 17 percent for the year,
but if they trust me, and they trust me!

795
00:48:28,180 --> 00:48:30,860
No-one trusts you!

796
00:48:30,960 --> 00:48:33,880
No-one!
- I've sent several e-mails to my investors

797
00:48:33,980 --> 00:48:35,340
Letting them know that the.. The....

798
00:48:37,480 --> 00:48:40,880
It's the second quarter of '07
is when our housing positions show returns

799
00:48:43,000 --> 00:48:45,180
and ehm...
I've been very clear!

800
00:48:45,780 --> 00:48:48,220
People will withdraw their money!

801
00:48:49,020 --> 00:48:52,540
Why? You'd have to be so stupid!

802
00:48:52,720 --> 00:48:56,220
If, if if the funds capitol drops too much....

803
00:48:56,440 --> 00:48:59,740
then the swap's contracts are voided

804
00:48:59,840 --> 00:49:01,180
and then the banks....

805
00:49:02,100 --> 00:49:05,140
get to keep all of it, all of it!

806
00:49:05,260 --> 00:49:06,640
The contracts are voided?

807
00:49:07,500 --> 00:49:09,080
The contracts are voided!?!

808
00:49:10,340 --> 00:49:11,760
Holy shit!

809
00:49:12,320 --> 00:49:13,600
O, motherfucker!

810
00:49:13,840 --> 00:49:14,700
Michael....

811
00:49:15,780 --> 00:49:17,040
Give me my money back.

812
00:49:20,900 --> 00:49:24,040
Michael, do you hear me?
I want my money back!

813
00:49:26,860 --> 00:49:28,460
Give me my fucking money back!

814
00:49:30,200 --> 00:49:31,320
You motherfucker!

815
00:49:32,500 --> 00:49:35,860
The market is in an itsybitsy
little gully right now

816
00:49:35,980 --> 00:49:39,880
Like everybody said:
"OK, that was crazy, let's just all calm down!"

817
00:49:41,860 --> 00:49:45,540
I sold that house for 350,
the year it was built.

818
00:49:45,620 --> 00:49:50,700
Two years later... 480, then 585,
maybe eighteen months ago.

819
00:49:51,200 --> 00:49:54,160
This couple bought it for 650 last year!

820
00:49:54,560 --> 00:49:57,200
He'd let it go for that....
Hi John!

821
00:49:59,400 --> 00:50:01,160
It will break his heart,
but he'll let it go

822
00:50:01,280 --> 00:50:02,400
Why is he selling?

823
00:50:02,960 --> 00:50:04,760
Neither one is working right now

824
00:50:05,800 --> 00:50:07,980
Surely, they're motivated right?

825
00:50:08,700 --> 00:50:11,360
As motivated as one can be
in this neighborhood.

826
00:50:11,820 --> 00:50:14,560
This house on the left,
I'd say they're properly motivated.

827
00:50:14,600 --> 00:50:16,360
Wow!
A lot of people seem very motivated.

828
00:50:16,660 --> 00:50:20,320
It's just a gully that's all.
Just nerves

829
00:50:21,140 --> 00:50:22,640
So... where do we stand?

830
00:50:23,760 --> 00:50:25,440
I need to talk to my wife

831
00:50:25,620 --> 00:50:27,820
ehm..
This market won't last!

832
00:50:28,000 --> 00:50:31,760
Actually, can i talk to a mortgage broker?
Anybody you recommend? Anybody you like?

833
00:50:31,880 --> 00:50:33,620
Yes, yes,
There's someone, absolutely!

834
00:50:33,940 --> 00:50:36,520
Yeah, bitch better like me,
sent her ass to Cabo!

835
00:50:38,060 --> 00:50:41,100
So is Morgan Stanley recruiting us?
Is that..

836
00:50:41,180 --> 00:50:44,020
No, eh no.
The bank owns our hedge-fund

837
00:50:44,100 --> 00:50:47,900
We're not really a part of it,
we invest in financial service companies.

838
00:50:47,980 --> 00:50:50,580
We're trying to understand
the residential mortgage business.

839
00:50:50,660 --> 00:50:52,820
How many loans do you write each month?

840
00:50:53,660 --> 00:50:55,100
I don't know, about six

841
00:50:55,240 --> 00:50:56,460
What was it four years ago?

842
00:50:57,820 --> 00:51:00,500
Ten.... but maybe fifteen.

843
00:51:00,600 --> 00:51:02,660
I was a bartender,
now i own a boat!

844
00:51:03,800 --> 00:51:06,960
So, how many of these are eh..
Adjustable rate mortgages?

845
00:51:07,180 --> 00:51:08,120
Well, most.

846
00:51:09,080 --> 00:51:10,940
Yeah, I'd say about ninety percent

847
00:51:11,260 --> 00:51:14,160
The bonuses on those
skyrocketed a few years ago

848
00:51:14,320 --> 00:51:15,680
Adjustables are bread and honey

849
00:51:15,760 --> 00:51:17,980
So, do applicants ever get rejected?

850
00:51:22,520 --> 00:51:23,540
Seriously?

851
00:51:24,520 --> 00:51:26,440
Look if they get rejected
I suck at my job!

852
00:51:26,500 --> 00:51:28,180
Even if they have no money?

853
00:51:28,360 --> 00:51:31,240
Well, my firm offers a N.I.N.J.A. loan.

854
00:51:31,520 --> 00:51:36,280
No Income No Job Application,
I just leave the income-section blank if i want.

855
00:51:36,440 --> 00:51:37,420
Corporate doesn't care.

856
00:51:37,760 --> 00:51:41,060
These people just want homes,
and they go with the flow.

857
00:51:41,780 --> 00:51:43,320
Your companies don't verify?

858
00:51:47,020 --> 00:51:48,940
If I write a loan on Friday afternoon,

859
00:51:49,880 --> 00:51:51,520
Big bank is gonna
buy it by Monday lunch.

860
00:51:52,260 --> 00:51:53,540
Deal!
Same here!

861
00:51:55,440 --> 00:51:57,700
Could you hold on a second?
- Yeah

862
00:52:03,880 --> 00:52:06,340
I don't get it...
Why are they confessing?

863
00:52:06,740 --> 00:52:10,120
They're not confessing....
They're bragging!

864
00:52:19,300 --> 00:52:23,080
Do people have any idea
what they are buying?

865
00:52:25,100 --> 00:52:26,460
I focus on immigrants!

866
00:52:26,460 --> 00:52:29,700
Once they find out they're getting homeless..
They'll sign where you tell em to sign.

867
00:52:29,820 --> 00:52:32,240
They don't ask questions,
don't understand the rates.

868
00:52:33,600 --> 00:52:35,100
And you target them with red soup?

869
00:52:35,600 --> 00:52:38,160
Their credit actually isn't bad enough for him.

870
00:52:39,700 --> 00:52:41,320
Look I'm a yield guy

871
00:52:44,200 --> 00:52:46,720
I make two thousand on a fixed rate prime

872
00:52:47,720 --> 00:52:51,100
But i CAN make ten thousand on
a sub-prime adjustable

873
00:52:51,380 --> 00:52:53,860
Trust me, I'm not driving that 7-series..
Without strippers

874
00:52:54,420 --> 00:52:57,400
No-one on the pole has good credit,
and they're all cash-rich.

875
00:52:57,860 --> 00:53:00,140
I think I read Warren Buffett
said something like that

876
00:53:01,800 --> 00:53:02,880
Who's Warren Buffett?

877
00:53:03,380 --> 00:53:06,960
OK, So, strippers....
like exotic dancers...

878
00:53:07,460 --> 00:53:08,540
Nude, 'n all...

879
00:53:08,760 --> 00:53:09,420
Topless..

880
00:53:09,500 --> 00:53:11,200
Strippers?
- Yeah, Hmmmm.

881
00:53:15,020 --> 00:53:16,940
Can you introduce us?
Yes!

882
00:53:17,500 --> 00:53:18,280
Yes!

883
00:53:20,740 --> 00:53:24,040
I always get option to pay adjustable.
I'm a private contractor.

884
00:53:24,240 --> 00:53:25,400
Can't hear you, I'm sorry!

885
00:53:25,540 --> 00:53:29,760
I always get option to pay adjustable,
I'm a private contractor, i need the flexibility.

886
00:53:29,820 --> 00:53:32,220
And you tell the
mortgage company what you do?

887
00:53:32,280 --> 00:53:33,720
I write: Therapist

888
00:53:34,320 --> 00:53:36,100
You can touch me!
- Always?

889
00:53:36,600 --> 00:53:37,820
Only in V.I.P.

890
00:53:37,900 --> 00:53:40,340
No, no, no you say
you always do adjustables

891
00:53:40,420 --> 00:53:42,360
And you have more than
one loan on a property?

892
00:53:42,400 --> 00:53:43,640
Everybody does!

893
00:53:43,760 --> 00:53:45,520
At least down here
- I'm sorry what?

894
00:53:45,660 --> 00:53:48,400
Everybody does!
At least down here

895
00:53:48,440 --> 00:53:50,300
That way you'll only
put down like five percent

896
00:53:50,440 --> 00:53:52,540
Well prices have
leveled off though, right?

897
00:53:52,600 --> 00:53:54,200
Yeah, it's a gully

898
00:53:54,580 --> 00:53:57,780
Would you mind not moving anymore?
I'll still pay you!

899
00:54:01,980 --> 00:54:04,580
Sorry...
We're not alone.

900
00:54:04,720 --> 00:54:07,460
OK, look..
If home-prices don't go up,

901
00:54:07,540 --> 00:54:09,620
You are not going to be able to refinance

902
00:54:09,780 --> 00:54:11,260
And you're going to be stuck paying

903
00:54:11,540 --> 00:54:15,520
whatever your monthly payment is once it jumps up,
whenever your TISA-rate expires

904
00:54:16,140 --> 00:54:18,480
Your monthly's could go up
two- to three hundred percent!

905
00:54:18,680 --> 00:54:20,480
James says i can always refinance!

906
00:54:20,660 --> 00:54:22,620
Well... He's ... A liar.

907
00:54:22,800 --> 00:54:25,920
Actually in this particular case,
James probably is wrong.

908
00:54:26,000 --> 00:54:27,940
Two-hundred percent?

909
00:54:28,520 --> 00:54:29,480
On all my loans?

910
00:54:29,560 --> 00:54:33,320
What do you mean? All your loans?
We're talking about two loans on one house right?

911
00:54:33,800 --> 00:54:35,700
I have five houses

912
00:54:35,960 --> 00:54:37,080
And a condo..

913
00:54:39,680 --> 00:54:40,540
Hey, there's a bubble!

914
00:54:41,340 --> 00:54:42,240
How do you know?

915
00:54:42,460 --> 00:54:43,680
Trust me. Call Vennett,

916
00:54:43,760 --> 00:54:45,840
Buy 50 million in swabs on the NBS

917
00:54:45,900 --> 00:54:48,560
What do we got?
- Garibaldi's are BBB!

918
00:54:49,080 --> 00:54:49,840
Mark, are you sure?

919
00:54:50,700 --> 00:54:52,440
Yeah, yeah! It's time to call bullshit!

920
00:54:52,520 --> 00:54:53,460
Bullshit on what?

921
00:54:53,460 --> 00:54:54,900
Every fucking thing!

922
00:55:19,140 --> 00:55:21,880
Front-Point, Front-Point!

923
00:55:22,860 --> 00:55:24,740
Is this America's angriest hedge-fund?

924
00:55:24,820 --> 00:55:27,320
Hi listen, I got one last question for you

925
00:55:28,120 --> 00:55:29,320
How are you fucking us?

926
00:55:31,560 --> 00:55:33,000
There's a nice way to say that Vinnie...

927
00:55:33,200 --> 00:55:34,200
I'm serious

928
00:55:34,980 --> 00:55:37,780
We'll buy your swaps,
but only if you say how you're fucking us.

929
00:55:38,220 --> 00:55:40,400
I'm not fucking you Vinnie,
I'm kissing you

930
00:55:40,620 --> 00:55:43,600
I'm looking deep into your eyes
as i make love to you Vinnie.

931
00:55:43,720 --> 00:55:46,780
I'm handing you the deal
of the century on a fucking platter!

932
00:55:47,060 --> 00:55:48,000
What do I get out of it?

933
00:55:48,320 --> 00:55:51,860
Easy..
I got a 20 million a month negative carrier

934
00:55:51,960 --> 00:55:55,280
I got bosses trying to pull the plug,
because they're thinking I'm out of my fucking mind

935
00:55:55,980 --> 00:55:56,560
Alright?

936
00:55:56,800 --> 00:56:00,180
We make this trade,
those problems aren't so big anymore

937
00:56:00,720 --> 00:56:02,880
And sure...
Swaps are a dark market so...

938
00:56:03,100 --> 00:56:05,640
I set the price, whatever price i want.

939
00:56:05,800 --> 00:56:08,780
And when you come for the payday,
I'm gonna rip your eyes out

940
00:56:08,960 --> 00:56:10,540
I'm gonna make a fortune

941
00:56:10,680 --> 00:56:12,460
But the good news is Vinnie,
you're not gonna care

942
00:56:12,600 --> 00:56:14,160
Cause you're going to make so much fucking money!

943
00:56:14,700 --> 00:56:15,700
That's what I get out of it

944
00:56:16,240 --> 00:56:17,260
Wanna know what you get out of it?

945
00:56:17,420 --> 00:56:20,220
You get the ice-cream, the hot-fudge,
the banana and the nuts!

946
00:56:21,180 --> 00:56:22,500
Right now I get the sprinkles

947
00:56:22,560 --> 00:56:24,020
And yeah.... if this goes through...

948
00:56:24,300 --> 00:56:25,640
I get the cherry.

949
00:56:28,000 --> 00:56:29,100
You get the sundae!

950
00:56:32,000 --> 00:56:32,980
Alright, I'll buy that.

951
00:56:33,780 --> 00:56:34,580
Thank you!

952
00:56:35,040 --> 00:56:36,280
So what do you say?

953
00:56:37,240 --> 00:56:38,660
Want me to make you a market?

954
00:56:39,100 --> 00:56:40,520
We'll take 50 million

955
00:56:40,880 --> 00:56:42,500
Garibaldi-4 Triple-B

956
00:56:44,360 --> 00:56:46,420
Sharpen your pencils,
I'll get the paperwork ready

957
00:56:48,640 --> 00:56:50,300
Aahhh... Fuck you too!

958
00:56:52,340 --> 00:56:53,720
YES!

959
00:56:56,160 --> 00:56:57,300
That's right!

960
00:57:00,840 --> 00:57:04,760
He has so many numbers,
and i always forget,

961
00:57:05,280 --> 00:57:07,980
Which one he prefers, cause he's very specific!
- Just pick the first one

962
00:57:08,160 --> 00:57:10,600
I don't know if it's the first one
- Just try it!

963
00:57:10,900 --> 00:57:11,640
OK

964
00:57:30,220 --> 00:57:31,140
Ben Ricker

965
00:57:31,220 --> 00:57:32,700
Hey Ben it's Jamie!

966
00:57:34,520 --> 00:57:36,780
Jamie, you know you're not
supposed to use this line.

967
00:57:38,780 --> 00:57:39,820
Told ya...

968
00:57:41,020 --> 00:57:44,220
OK, let's try number two out of fourteen.

969
00:57:55,920 --> 00:57:56,940
Ben Ricker

970
00:57:57,020 --> 00:58:00,440
Ben, why do you do that man?
You're a retired trader, ok..

971
00:58:00,440 --> 00:58:02,800
No-one is listening to your calls!
- The NSA has a 52 billion dollar budget

972
00:58:02,980 --> 00:58:06,000
and the ability to tens of millions calls a second,
you think they're not using it?

973
00:58:07,100 --> 00:58:09,920
OK, I promise i will refrain from saying,

974
00:58:10,020 --> 00:58:13,200
Ben Ricker and dirty bomb
in the same sentence

975
00:58:14,060 --> 00:58:16,100
Jesus!
- I'm sorry dude!

976
00:58:17,480 --> 00:58:18,280
Ben Ricker

977
00:58:18,480 --> 00:58:20,620
Did you get a chance to look at
what we sent you Ben?

978
00:58:21,040 --> 00:58:23,060
It's Charlie....
I'm here too!

979
00:58:23,860 --> 00:58:26,240
Hi Charlie, Yeah I did, Hold on!

980
00:58:32,200 --> 00:58:33,460
Ben, you still there?

981
00:58:33,600 --> 00:58:34,320
Yeah

982
00:58:35,400 --> 00:58:36,520
I'll be honest gentlemen

983
00:58:37,740 --> 00:58:39,040
you scared the shit out of me!

984
00:58:39,640 --> 00:58:43,300
That's a good thing right?
That means that this Vennett guy is not wrong!

985
00:58:44,760 --> 00:58:45,720
No, he's not!

986
00:58:48,740 --> 00:58:49,340
Cool

987
00:58:49,460 --> 00:58:50,720
Tell me more about these CDO's

988
00:58:51,080 --> 00:58:55,780
Yeah yeah, ehm, OK
Vennett mentioned the CDO's, but actually,

989
00:58:56,000 --> 00:59:00,220
We took a look and they're way worse then even he
realizes - These things don't even make sense Ben.

990
00:59:00,220 --> 00:59:03,660
We can't even model them
- It's a hundred times bigger than the NBS

991
00:59:03,840 --> 00:59:05,400
and ninety percent AAA-rating?

992
00:59:05,560 --> 00:59:08,500
Yes, over ninety percent
- It's incredible!

993
00:59:08,600 --> 00:59:11,540
Yeah, I took a good hard look at
the CDO's you want to short.

994
00:59:12,560 --> 00:59:14,660
They're brilliant!
Worthless, total crap!

995
00:59:15,700 --> 00:59:17,980
Jamie, very good!

996
00:59:18,120 --> 00:59:21,500
What can i say.. I, I'm, I'm,
good at finding shit!

997
00:59:21,540 --> 00:59:26,080
So Ben, we shorted the BB's and the BBB's,
and the risk is relatively low,

998
00:59:26,560 --> 00:59:28,940
Pay-off is like 25-to-1

999
00:59:31,580 --> 00:59:33,540
OK, so why are you calling me?
I don't do this anymore!

1000
00:59:33,640 --> 00:59:34,520
Look, Ben...

1001
00:59:36,220 --> 00:59:39,000
We need you to help us get the ISDA.

1002
00:59:39,960 --> 00:59:42,620
If we get a hunting license,
we can short this crap

1003
00:59:42,960 --> 00:59:45,640
We know you hate Wall-street,
we're not asking you to do the trading

1004
00:59:45,720 --> 00:59:47,040
We're simply asking you to...

1005
00:59:47,500 --> 00:59:48,660
To help us.

1006
00:59:48,920 --> 00:59:51,580
To get a seat at the fucking table

1007
00:59:53,240 --> 00:59:54,560
It's a pretty ugly table guys

1008
00:59:55,020 --> 01:00:00,060
Look Ben, the system fucked up
in a big, big way here, OK?

1009
01:00:00,160 --> 01:00:04,740
And somehow... we, eh..
Know before anyone else.

1010
01:00:05,580 --> 01:00:08,440
You know, this is a
once in a lifetime deal!

1011
01:00:11,300 --> 01:00:12,280
I'm thinking

1012
01:00:17,100 --> 01:00:19,040
OK, I'll call Deutsche Bank

1013
01:00:19,120 --> 01:00:20,520
Thank you Ben!

1014
01:00:21,140 --> 01:00:24,400
Oh and Bear, what about Bear?
They have some reprehensible product!

1015
01:00:25,080 --> 01:00:27,480
- OK, Bear will trade with anybody!

1016
01:01:16,800 --> 01:01:18,620
I'll see if i can push it through

1017
01:01:18,720 --> 01:01:20,340
And oh, thank Jared for us.

1018
01:01:21,640 --> 01:01:23,840
We couldn't go inside?

1019
01:02:08,900 --> 01:02:11,020
Hi, it's Mark,
I need to talk to Vinnie right now!

1020
01:02:11,120 --> 01:02:11,960
Wait a second

1021
01:02:15,600 --> 01:02:19,400
How it is that you are fucking us,
Cause what we are seeing here,

1022
01:02:21,680 --> 01:02:23,400
Morgan Stanley building fast!

1023
01:02:23,680 --> 01:02:27,800
Are we all jocks at the same computer-screens?
- Can we talk to one person please?

1024
01:02:28,240 --> 01:02:30,160
OK, yeah.
- What do you mean, you're in the tower?

1025
01:02:30,720 --> 01:02:31,760
Vinnie, are you there?

1026
01:02:32,840 --> 01:02:34,660
Mark, are you there? Hello?
- Yeah, Yeah, Did you hear?

1027
01:02:34,840 --> 01:02:36,600
Mortgages defaults have
gone through the roof!

1028
01:02:36,900 --> 01:02:38,420
Anybody jumping off the building yet?

1029
01:02:38,500 --> 01:02:40,400
Why would they?
Sub-prime mortgages are up?

1030
01:02:40,520 --> 01:02:44,900
What?
- Vennett wants 1,9 million more in collateral by-close

1031
01:02:45,060 --> 01:02:46,480
Vennett's asking us to post collateral

1032
01:02:46,560 --> 01:02:47,940
What the hell is going on?

1033
01:02:47,980 --> 01:02:49,840
We don't know,
but Deutsche is on the phone demanding payment

1034
01:02:49,960 --> 01:02:52,760
Call Vennett, call that little shit!
- Call Vennett!

1035
01:02:52,820 --> 01:02:53,820
Tell him to get his ass down here

1036
01:02:53,920 --> 01:02:55,960
So, sub-prime loans go bad,

1037
01:02:56,060 --> 01:02:59,140
but sub-rime bonds, which are made up
of sub-prime loans, are more valuable?

1038
01:02:59,540 --> 01:03:01,600
They want another 1.9 million by market close

1039
01:03:01,600 --> 01:03:06,400
What about the ratings-agencies? Moody's, S&P?
Are they downgrading the CDO's or mortgage-bonds

1040
01:03:06,500 --> 01:03:09,240
Where are the ratings-agencies at?
- They're the fucking same!

1041
01:03:09,400 --> 01:03:10,620
Nope, They're all still Triple-A!

1042
01:03:10,620 --> 01:03:11,640
What the hell!

1043
01:03:12,160 --> 01:03:15,280
Are you fucking kidding me?
Those fuckers, those motherfuckers!

1044
01:03:15,500 --> 01:03:18,280
They go public and all the care about
is their bottom-line and their shit!

1045
01:03:18,340 --> 01:03:19,780
Mark, that's not all...

1046
01:03:20,420 --> 01:03:23,120
The Morgan Stanley risk-guys are here
- They called in Kathy Tao

1047
01:03:23,220 --> 01:03:25,340
I'm trying to convince her
to make her sell us swaps

1048
01:03:25,440 --> 01:03:28,020
Apparently eh, tying up six years of insurance payments

1049
01:03:28,060 --> 01:03:30,900
with hopes of a housing-Armageddon
is not prudent investing.

1050
01:03:30,980 --> 01:03:32,120
What did Kathy say?

1051
01:03:32,380 --> 01:03:34,920
Nothing yet,
she keeps asking if this is one of your crusades

1052
01:03:35,320 --> 01:03:39,120
OK, I want you to walk back in there
and very calmly, very politely

1053
01:03:39,120 --> 01:03:41,140
Tell the risk-assessors to fuck off!

1054
01:03:41,600 --> 01:03:44,620
And then meet me over at Standard & Poors,
we're gonna talk to Georgia

1055
01:03:45,900 --> 01:03:49,740
Get that fuck Jared Vennett in this office
I want to bash his fucking head in

1056
01:03:54,780 --> 01:03:55,800
Uh, gentlemen...

1057
01:03:56,620 --> 01:03:58,000
I spoke with Mark Baum

1058
01:03:58,280 --> 01:03:59,840
He says: to fuck off!

1059
01:04:13,800 --> 01:04:15,300
I don't see a damn thing.

1060
01:04:17,060 --> 01:04:19,360
Aaah, my eye-doctor is always busy

1061
01:04:19,400 --> 01:04:23,860
I end up taking any appointment
and my whole morning gets shot to hell!

1062
01:04:25,560 --> 01:04:26,460
So...

1063
01:04:27,100 --> 01:04:28,120
Alrighty

1064
01:04:29,160 --> 01:04:31,180
Front-Point Partners

1065
01:04:32,180 --> 01:04:33,700
How can Standard & Poors help you?

1066
01:04:34,580 --> 01:04:38,640
Well, we don't understand why the ratings-agencies
haven't downgraded sub-prime bonds

1067
01:04:38,700 --> 01:04:41,060
since the underlying loans are clearly deteriorating

1068
01:04:41,660 --> 01:04:45,920
Well, the delinquency-rates do have people worried,
but they're actually within our models

1069
01:04:46,220 --> 01:04:46,720
So

1070
01:04:47,300 --> 01:04:48,240
Says you?

1071
01:04:49,220 --> 01:04:53,000
You're convinced the underlying mortgages
in these bonds are solid loans?

1072
01:04:54,220 --> 01:04:56,160
That is our opinion yeah.
- Oh crack the tape!

1073
01:04:56,460 --> 01:04:58,240
Have you looked at the loan-level data?

1074
01:04:58,580 --> 01:05:01,860
What you think we do here all day? - They're giving
these loans to anyone with a credit-score and a pulse

1075
01:05:01,980 --> 01:05:04,260
Excuse sir! What do you think we do here all day?

1076
01:05:04,260 --> 01:05:05,460
Not sure, I guess that's why we're here.

1077
01:05:05,460 --> 01:05:06,380
Here's what I don't understand

1078
01:05:06,380 --> 01:05:07,640
We can't re-recheck and then check again!

1079
01:05:07,740 --> 01:05:11,600
If these mortgage-bonds are so stable, so solid

1080
01:05:11,880 --> 01:05:14,380
Have you ever refused to rate?

1081
01:05:14,380 --> 01:05:16,440
You're delusional!
- We stand behind it Georgia!

1082
01:05:16,480 --> 01:05:20,360
Have you ever refused to rate
any of these bonds upper-tranches AAA?

1083
01:05:21,320 --> 01:05:22,600
Can we see the paperwork on those?

1084
01:05:22,600 --> 01:05:27,020
Oooh, I'm under no obligation to share that information
with you, whoever you might be.

1085
01:05:27,020 --> 01:05:30,300
Just answer the question Georgia,
can you name one time in the past year?

1086
01:05:30,300 --> 01:05:35,200
Where you checked the tape and you didn't
give the banks the AAA-percentage they wanted?

1087
01:05:37,960 --> 01:05:41,240
If we don; t give them the ratings,
they'll go to Moody's right down the block.

1088
01:05:41,960 --> 01:05:45,820
If we don't work with them
they will go to our competitors

1089
01:05:46,160 --> 01:05:48,560
Not our fault,
simply the way the world works.

1090
01:05:53,620 --> 01:05:55,420
Holy shit!
- Ah yes, now you see it!

1091
01:05:57,120 --> 01:05:58,120
And I never said that!

1092
01:05:59,420 --> 01:06:00,580
You're selling ratings for fees

1093
01:06:01,660 --> 01:06:02,300
A ratings shop

1094
01:06:02,840 --> 01:06:04,880
You could afford to make less,
make less.

1095
01:06:05,660 --> 01:06:06,820
Nobody said that!

1096
01:06:07,620 --> 01:06:09,840
And it is not my decision,
I have a boss.

1097
01:06:10,100 --> 01:06:13,200
Are you kidding me?
- No I am not kidding you!

1098
01:06:15,020 --> 01:06:16,500
Is that the angle you're taking?

1099
01:06:16,500 --> 01:06:18,360
So now anybody who has a boss,

1100
01:06:18,640 --> 01:06:22,660
Can't be held responsible for doing
shitty and illegal things! What are you? Four?

1101
01:06:23,100 --> 01:06:24,800
No, eh, eh, I am not four!

1102
01:06:25,540 --> 01:06:27,340
Mister Baum, I am not, no!

1103
01:06:27,780 --> 01:06:30,840
And I wonder, I wonder,
what your incentives might be.

1104
01:06:31,160 --> 01:06:35,100
Is it maybe in your best interest
to have the ratings changed? Is it, perhaps?

1105
01:06:37,640 --> 01:06:40,120
How many credit default swaps do you own?

1106
01:06:42,260 --> 01:06:43,660
Doesn't make me wrong

1107
01:06:45,560 --> 01:06:46,780
just makes you a hypocrite!

1108
01:07:28,000 --> 01:07:30,200
Raaaaaahr!

1109
01:07:30,200 --> 01:07:33,360
Mortgage-delinquencies went up
and the CDO's got more valuable, unbelievable!

1110
01:07:33,360 --> 01:07:35,780
We know, it's completely backwards!

1111
01:07:36,020 --> 01:07:39,140
I just called an old friend at Bear
he didn't even know what a CDO is.

1112
01:07:39,140 --> 01:07:43,680
Yeah, I just had to wire Bear and Deutsche
seventy thousand dollars

1113
01:07:43,680 --> 01:07:45,980
It's like two plus two equals...

1114
01:07:46,780 --> 01:07:47,340
Fish!

1115
01:07:47,680 --> 01:07:48,280
Great!

1116
01:07:48,900 --> 01:07:50,160
You bought into a rigged game

1117
01:07:50,500 --> 01:07:54,180
We lose everything..
I'm gonna have to move back in with my mom!

1118
01:07:55,480 --> 01:07:56,340
Can't do that

1119
01:07:56,780 --> 01:07:58,260
Well, alright i got a colonic in a couple of mins

1120
01:07:59,140 --> 01:08:00,240
Wait a minute, hold on! Ben!

1121
01:08:00,840 --> 01:08:01,500
Ben, look!

1122
01:08:02,240 --> 01:08:07,320
Either the banks are clueless
and they don't know how to value these CDO's or...

1123
01:08:08,300 --> 01:08:13,300
they're suck crooks that...
the CDO's are worth shit, and they're hiding it!

1124
01:08:16,320 --> 01:08:17,200
I think we should buy more swaps!

1125
01:08:18,660 --> 01:08:21,460
What?
- Suck it up and pay up fellas we made a deal

1126
01:08:21,580 --> 01:08:23,560
No way, No!

1127
01:08:23,560 --> 01:08:27,500
Are you fucking kidding me?
You come in here you fucking fucking!
- You're a fuck, how do you even seriously?

1128
01:08:27,780 --> 01:08:30,100
No, no, no!
- Yeah!

1129
01:08:30,180 --> 01:08:36,440
You're unbelievable!
<indistinct shouting and cussing>

1130
01:08:36,640 --> 01:08:38,580
No, no, no!

1131
01:08:38,880 --> 01:08:40,280
Seriously, colonic once a year!

1132
01:08:40,280 --> 01:08:43,740
Ass!
- You got a matching little butler-boy you butt-fuck!

1133
01:08:48,040 --> 01:08:48,740
Are you done?

1134
01:08:49,120 --> 01:08:52,220
Think so yeah
- God i pulled a muscle in my bowl from yelling

1135
01:08:55,260 --> 01:08:57,820
Mortgage defaults have done nothing
but go up!

1136
01:08:58,980 --> 01:09:01,420
Yet you quote us
a higher price on the bonds

1137
01:09:03,040 --> 01:09:04,960
Please explain that to me!
There's no way that makes sense!

1138
01:09:05,080 --> 01:09:07,260
There's no way you're
marking these swaps appropriately!

1139
01:09:08,840 --> 01:09:10,380
I mean, why shouldn't we back out
of this trade right now?

1140
01:09:13,260 --> 01:09:16,720
Didn't I say, that when we made this deal,
that the rating-agencies, the SEC

1141
01:09:16,840 --> 01:09:19,000
and the big banks were clueless!
Didn't I say that?

1142
01:09:19,860 --> 01:09:21,900
Didn't I say it?
- Yes you did, you did!

1143
01:09:22,720 --> 01:09:23,400
Shut up!

1144
01:09:24,280 --> 01:09:27,400
Now their foot's on fire and they think
their steak is done, and you're surprised?

1145
01:09:27,400 --> 01:09:29,680
That's not stupidity...
that's fraud!

1146
01:09:30,280 --> 01:09:33,600
Tell me the difference between stupid and illegal
and I'll have my wife's brother arrested.

1147
01:09:36,120 --> 01:09:39,380
That was funny! - I guess you just don't
realize how clueless the system really is!

1148
01:09:40,640 --> 01:09:43,020
Yes, there's some shady shit going down!

1149
01:09:43,020 --> 01:09:46,180
But trust me, it's fueled by stupidity!

1150
01:09:47,800 --> 01:09:48,660
Look at yourselves!

1151
01:09:49,720 --> 01:09:52,180
You know you passed yourselves off
as cynical people but....

1152
01:09:53,320 --> 01:09:55,180
You still have some faith in the system don't you?

1153
01:09:55,820 --> 01:09:56,460
I don't

1154
01:09:57,060 --> 01:09:58,120
Well, except for Vinnie!

1155
01:09:59,100 --> 01:09:59,700
Who gives a shit?

1156
01:09:59,980 --> 01:10:01,480
No way!
- Look!

1157
01:10:01,980 --> 01:10:04,880
Either we're right, or we're wrong
in a giant, giant way!

1158
01:10:05,320 --> 01:10:08,340
And if we're wrong then we gotta
find someone to help us get out of this trade

1159
01:10:08,980 --> 01:10:11,500
I'm not feeling remotely confident that we're right

1160
01:10:11,500 --> 01:10:13,560
And, and... If we're wrong

1161
01:10:14,060 --> 01:10:18,100
Who's gonna tell us?
Who understands this stuff? It makes no sense!

1162
01:10:21,060 --> 01:10:22,480
I think we need to go to Vegas!

1163
01:10:22,860 --> 01:10:24,560
What's in Vegas?
- Vegas?

1164
01:10:25,200 --> 01:10:26,680
What the hell is in Las Vegas?

1165
01:10:28,200 --> 01:10:30,860
The American Securitization Forum
is there next week

1166
01:10:31,520 --> 01:10:35,600
Every bond and CDO-salesman, sub-prime lender
and swap-trader is gonna be there

1167
01:10:36,220 --> 01:10:37,020
I'm telling you

1168
01:10:37,400 --> 01:10:38,980
Your bet is against their money,

1169
01:10:38,980 --> 01:10:41,900
it's about time you find out
just how dumb that money really is

1170
01:10:41,900 --> 01:10:42,920
God no, I hate Vegas!

1171
01:10:43,140 --> 01:10:45,980
I hear the food has gotten really good in Vegas,
they have a Nobu now

1172
01:10:46,860 --> 01:10:47,840
could you fucking stop!

1173
01:11:34,020 --> 01:11:36,940
...in a sense?
- If the bond is rich, it is.

1174
01:11:37,280 --> 01:11:39,560
Rich just means overpriced

1175
01:11:40,280 --> 01:11:42,860
I can't sleep on a plane so I did my homework
- OK, let's focus!

1176
01:11:43,580 --> 01:11:44,340
What's our goal?

1177
01:11:45,200 --> 01:11:47,680
Figure out if this is a deal of a lifetime or...

1178
01:11:47,680 --> 01:11:50,840
everyone knows here something we don't
and we're gonna get royally screwed

1179
01:11:51,200 --> 01:11:53,500
Right, remember that
when you meet with guys from Bear!

1180
01:11:54,120 --> 01:11:55,660
I'll set you up with a face-to-face

1181
01:11:55,920 --> 01:11:57,060
Awesome, where is that?

1182
01:11:57,360 --> 01:12:01,460
Holy shit! Five years ago Securitization
was a loser-convention

1183
01:12:01,880 --> 01:12:03,740
a hundred, maybe two-hundred people would show

1184
01:12:04,080 --> 01:12:06,020
500 billion dollars a year later, you get this!

1185
01:12:06,100 --> 01:12:07,780
There's a lot of smuck-looking people in here huh!?

1186
01:12:07,780 --> 01:12:11,240
It looks like someone just hit a piñata
that was filled with white people who suck at golf

1187
01:12:11,680 --> 01:12:14,280
I mean, who are all these clowns?
- Ah come on, I think it looks fun!

1188
01:12:14,440 --> 01:12:17,280
Charlie, Vennett says these are
the people we're betting against.

1189
01:12:18,020 --> 01:12:21,860
Yeah, here we go
Chris on my left, Chris, on my left!

1190
01:12:22,640 --> 01:12:26,660
Gentlemen! - When do we get a chance to
face-time with some of these lovely folks?

1191
01:12:27,040 --> 01:12:28,220
Chris, give em the key-cords!

1192
01:12:28,600 --> 01:12:30,040
Do you even know which key-cords you're giving out?

1193
01:12:31,000 --> 01:12:33,660
First of all, how was your travel?
- Uneventful?

1194
01:12:33,840 --> 01:12:36,100
Uneventful!
- OK, I've been here for six hours!

1195
01:12:36,260 --> 01:12:39,980
I've already been to the Gym, I had two poached eggs,
and I played blackjack with Harry Dean Stanton

1196
01:12:40,100 --> 01:12:41,400
Thank you for your diary!

1197
01:12:41,940 --> 01:12:44,800
Face-time! I'd like some face-time!
- Just remember, we're here just to gather information!

1198
01:12:45,140 --> 01:12:48,400
We're gathering information,
we're not advertising our short-position!

1199
01:12:48,780 --> 01:12:50,960
Right? We don't want to spook anybody!
Can we do that?

1200
01:12:50,960 --> 01:12:52,480
You got a big mouth,
and you like to run it

1201
01:12:52,480 --> 01:12:55,200
Can you just keep it shut for a few minutes?
- OK, OK!

1202
01:12:55,380 --> 01:12:56,920
Yeah, don't worry, we'll play nice!

1203
01:12:57,180 --> 01:12:57,960
Ladies and gentlemen!

1204
01:12:58,920 --> 01:13:00,600
Business is good!

1205
01:13:01,200 --> 01:13:02,580
Profits are strong!

1206
01:13:02,580 --> 01:13:07,780
And the mortgage continues to be
the bedrock on which this economy is built.

1207
01:13:12,740 --> 01:13:16,440
Yes, we had to take some losses
in our sub-prime department last year,

1208
01:13:16,480 --> 01:13:19,940
But those losses,
will be contained at only five percent!

1209
01:13:20,400 --> 01:13:20,860
Now

1210
01:13:21,380 --> 01:13:22,760
In our residential sector...

1211
01:13:22,960 --> 01:13:23,940
Mark, it's not a Q&A!

1212
01:13:24,020 --> 01:13:27,160
Of those variable rate-packages were gobbled up by the

1213
01:13:27,520 --> 01:13:28,920
I have a question please!

1214
01:13:32,580 --> 01:13:36,680
Sir, the Q&A is after my statement,
but you know what, you seem anxious!

1215
01:13:36,680 --> 01:13:38,980
How can I help you?
- How are you? Fine, thank you!

1216
01:13:39,200 --> 01:13:40,400
Would you say,

1217
01:13:40,400 --> 01:13:43,880
that is it a possibility,
or a probability

1218
01:13:43,880 --> 01:13:46,920
that sub-prime losses stop at five percent?

1219
01:13:47,540 --> 01:13:48,480
Thank you!

1220
01:13:48,480 --> 01:13:52,960
I would say it is a very strong probability, indeed!

1221
01:13:53,800 --> 01:13:56,500
So, ehm, back to the residential sector,

1222
01:13:56,500 --> 01:13:59,140
when we rolled out the new variable rates package
- Excuse me!

1223
01:13:59,160 --> 01:14:00,980
The ehm. He he he!

1224
01:14:02,640 --> 01:14:03,240
Zero!

1225
01:14:03,820 --> 01:14:04,700
Zero!

1226
01:14:05,700 --> 01:14:06,860
ZERO!

1227
01:14:07,140 --> 01:14:09,800
There is a zero percent chance

1228
01:14:10,040 --> 01:14:13,680
that your sub-prime losses will stop at five percent!

1229
01:14:14,060 --> 01:14:14,880
Zero!

1230
01:14:15,120 --> 01:14:15,900
Excuse me!

1231
01:14:17,120 --> 01:14:19,560
I have to take this
- He must be from Bank of America!

1232
01:14:21,800 --> 01:14:24,000
No, I'm really not doing anything right now!

1233
01:14:24,320 --> 01:14:26,940
As I was saying, our residential sector
- uh huh, and how are the kids?

1234
01:14:27,160 --> 01:14:29,540
Consumers reacted to our packages

1235
01:14:29,700 --> 01:14:32,780
Mark Baum really did that!
When we were in Vegas he did that!

1236
01:14:32,780 --> 01:14:34,520
He said that... he took the call,

1237
01:14:35,440 --> 01:14:36,720
Now you see what i had to deal with!

1238
01:14:48,080 --> 01:14:49,320
Woohoo!

1239
01:14:53,260 --> 01:14:55,260
This Uzi is fucking awesome!

1240
01:14:55,380 --> 01:14:57,900
If I can get this CDO-machine to run
for another two years

1241
01:14:57,900 --> 01:15:00,580
and then, I'm rich as fuck
and I got my house in Aspen!

1242
01:15:01,480 --> 01:15:06,080
But do you have any concerns about
the performance of the underlying securitizations?

1243
01:15:06,140 --> 01:15:08,040
It's easy to see that delinquencies,

1244
01:15:08,040 --> 01:15:10,700
eh, default-rates are on the rise right now!

1245
01:15:11,220 --> 01:15:13,040
Could you please stop being such a buzz-kill dude!

1246
01:15:13,740 --> 01:15:15,840
We didn't bring you out here
to talk about work bro!

1247
01:15:16,220 --> 01:15:17,540
Why'd you bring us out here?

1248
01:15:17,800 --> 01:15:20,600
Because we need to be able
to expense the ammo to a client!

1249
01:15:21,160 --> 01:15:23,320
We're gonna shoot some terrorists,
watch out boys!

1250
01:15:24,420 --> 01:15:27,240
These guys are morons!
- Fucking tool!

1251
01:15:29,680 --> 01:15:30,860
Woo!-
Fuck Yes!

1252
01:15:30,860 --> 01:15:32,760
Boom, yeah man BOOM!

1253
01:15:32,760 --> 01:15:36,580
We ought to be buying every swap we can get
our hands on! - Just hold on okay, hold on!

1254
01:15:37,160 --> 01:15:41,440
My brothers ex-girlfriend works for the SEC,
she just told me she's in town, okay!?

1255
01:15:41,440 --> 01:15:45,260
So if we're missing something,
maybe she can tell me, give me some insight.

1256
01:15:45,360 --> 01:15:49,400
In the mean-time, you go to the main floor
to buy some more swaps

1257
01:15:49,400 --> 01:15:52,940
Well actually, we're about to invest in housing bonds.

1258
01:15:53,660 --> 01:15:56,360
I was just wondering if
the SEC is worried about them at all

1259
01:15:56,360 --> 01:15:59,100
I know you're not allowed to tell me specifics,
but, just generally.

1260
01:15:59,100 --> 01:16:01,200
Ow, we don't investigate mortgage bonds

1261
01:16:01,420 --> 01:16:04,640
Truth is, since we had our budgets cut,
we don't investigate much!

1262
01:16:07,000 --> 01:16:09,140
Then why are you here? I thought..
- I'm not here for the SEC!

1263
01:16:09,860 --> 01:16:11,240
I'm here on my own dime

1264
01:16:12,520 --> 01:16:15,220
I'm floating my resume to some big banks!

1265
01:16:15,740 --> 01:16:17,140
How's your brother by the way?

1266
01:16:17,500 --> 01:16:19,460
How are you floating your resume to big banks?

1267
01:16:19,460 --> 01:16:22,420
I mean, you're supposed to be
the ones policing the big banks

1268
01:16:22,420 --> 01:16:23,500
Grow up Jamie!

1269
01:16:23,740 --> 01:16:27,560
There must be some kind of law
against working for a financial institution

1270
01:16:27,560 --> 01:16:30,740
right after you've been working
in financial regulation right?

1271
01:16:31,040 --> 01:16:31,800
No!

1272
01:16:32,560 --> 01:16:33,080
No!

1273
01:16:34,520 --> 01:16:35,300
Hey!

1274
01:16:36,040 --> 01:16:36,920
Dougie!

1275
01:16:37,660 --> 01:16:41,660
Hey, come over here! What are you doing at Caesar's?
- He's a Goldman

1276
01:16:43,820 --> 01:16:48,660
We can do BBB-level swaps
at 500 basis points, maybe!

1277
01:16:48,840 --> 01:16:52,580
You're praising the swaps,
like the bond is gonna collapse

1278
01:16:52,940 --> 01:16:55,220
Even though the bond-value is going up? Really?

1279
01:16:55,740 --> 01:16:58,620
Exciting times!
- What the hell is going on?!

1280
01:17:56,820 --> 01:18:00,780
Lewis, Can you come early tomorrow, please?

1281
01:18:00,840 --> 01:18:04,780
I need to unload the AIG and
country-wide Freddy Mac positions

1282
01:18:04,840 --> 01:18:07,120
so we can afford the premiums on the

1283
01:18:08,520 --> 01:18:10,900
core mortgage-shorts on the swaps

1284
01:18:11,820 --> 01:18:12,880
No problem Dr. Burry

1285
01:18:15,200 --> 01:18:16,380
Dr. Burry!

1286
01:18:20,160 --> 01:18:22,180
If the investors withdraw,
what's gonna happen here?

1287
01:18:22,980 --> 01:18:23,920
Are we done?

1288
01:18:24,080 --> 01:18:25,460
Honestly I don't know!

1289
01:18:30,320 --> 01:18:31,700
The, the...

1290
01:18:33,740 --> 01:18:35,240
the bonds aren't going down!

1291
01:18:37,040 --> 01:18:37,920
They won't move!

1292
01:18:38,380 --> 01:18:39,340
It's possible

1293
01:18:40,220 --> 01:18:44,420
That we are in a completely fraudulent system.

1294
01:18:46,220 --> 01:18:49,040
Or... you're,
you're wrong.

1295
01:18:53,560 --> 01:18:54,860
Sure!

1296
01:18:55,360 --> 01:18:58,580
It's possible,
I just don't know how!

1297
01:19:04,520 --> 01:19:05,460
I guess....

1298
01:19:05,560 --> 01:19:06,100
when...

1299
01:19:06,620 --> 01:19:08,020
someone's wrong, they never..

1300
01:19:08,740 --> 01:19:10,560
They never...
Know how!

1301
01:19:15,360 --> 01:19:17,560
See you in the morning!
- Yeah.

1302
01:19:19,360 --> 01:19:21,140
Even Bear up their prices!

1303
01:19:22,120 --> 01:19:24,120
They keep calling us Brownhall

1304
01:19:24,760 --> 01:19:27,240
you just don't have the money or the reputation,
don't take it personal!

1305
01:19:27,640 --> 01:19:30,880
I don't think i have the strip-club in me tonight
I'm just gonna get some drinks around.

1306
01:19:31,900 --> 01:19:35,840
Watch some Pay-per-view
book us some flights out for the morning.

1307
01:19:36,580 --> 01:19:38,980
D- d- deal, we need a deal, right, a deal.

1308
01:19:39,460 --> 01:19:43,680
Uhm, we need a deal we can afford,
we need a deal they're not gonna refuse!

1309
01:19:44,000 --> 01:19:46,500
So... What can we do?
We can....

1310
01:19:48,340 --> 01:19:51,020
The AA-tranches,
What if we bet against the AA-tranches?

1311
01:19:51,020 --> 01:19:53,020
Who's not gonna take that bet?

1312
01:19:53,160 --> 01:19:56,240
We know that they say
they're ninety-five percent AAA-rated

1313
01:19:56,240 --> 01:19:59,660
But in reality, they're more like
twenty-five percent, some of them are zero percent!

1314
01:20:00,940 --> 01:20:03,660
We also know that if the bottom-tranches
fail at over eight percent

1315
01:20:03,660 --> 01:20:05,840
The upper-tranches are affected
and they go to zero.

1316
01:20:06,260 --> 01:20:09,400
I'll bet you right now,
that those AA's are actually like B's!

1317
01:20:09,740 --> 01:20:12,920
I rarely ever say these words
but i think Charlie is right!

1318
01:20:12,920 --> 01:20:14,380
Look, Ben!

1319
01:20:16,420 --> 01:20:17,060
Pay-off!

1320
01:20:18,540 --> 01:20:21,780
Is 200-to-1, but they're all taking
the ratings off face value

1321
01:20:22,220 --> 01:20:25,480
They're charging penny's on the dollar
to bet against Double-A's

1322
01:20:26,900 --> 01:20:28,900
Just when i start thinking
you guys are clowns!

1323
01:20:29,840 --> 01:20:31,980
No-one on the planet is betting against Double-A's

1324
01:20:32,500 --> 01:20:35,160
The banks will think we're either high,
or having a stroke

1325
01:20:35,480 --> 01:20:37,280
And they'll take every dime we have to offer!

1326
01:20:40,400 --> 01:20:41,300
Kind of brilliant!

1327
01:20:43,580 --> 01:20:45,360
This is what we did,
that no-one else thought of.

1328
01:20:45,760 --> 01:20:48,080
Not even Baum or Berry thought
to short the Double-A's

1329
01:20:48,740 --> 01:20:49,680
But we did.

1330
01:20:50,060 --> 01:20:51,580
Little Brownhall Capitol

1331
01:20:52,160 --> 01:20:55,860
So we're interesting in shorting
some of the AA-tranches of CDO's

1332
01:20:57,100 --> 01:20:58,580
Come on guys, what's the angle?

1333
01:20:58,880 --> 01:21:01,180
I've got no angle, we're new to this,
we're just so hyped!

1334
01:21:01,180 --> 01:21:04,600
We wanna do fifteen million
in swaps on the Double-A tranche

1335
01:21:05,680 --> 01:21:06,700
I don't understand!

1336
01:21:06,740 --> 01:21:08,680
You can buy as much
Double-A tranches as you want!

1337
01:21:11,320 --> 01:21:13,080
Forty million against the Double-A

1338
01:21:13,700 --> 01:21:16,240
Brother, I would sell you as much as you want!

1339
01:21:16,240 --> 01:21:18,500
I understand perfectly Bob!
Want the deal?

1340
01:21:20,740 --> 01:21:22,920
That's cool, that's alright with me!

1341
01:21:30,580 --> 01:21:31,940
He's gone!

1342
01:21:34,000 --> 01:21:36,440
Don't do that!
Stop, Stop!

1343
01:21:36,960 --> 01:21:38,640
Stop that!
- Charlie! Wooooh!

1344
01:21:38,680 --> 01:21:40,780
Stop it, Stop!

1345
01:21:42,620 --> 01:21:43,260
What?

1346
01:21:45,200 --> 01:21:46,680
Do you have any idea what you just did?

1347
01:21:46,940 --> 01:21:50,060
Come on, we just made the deal of our lifetime,
we should celebrate!

1348
01:21:50,060 --> 01:21:52,020
You just bet against the American economy!

1349
01:21:52,020 --> 01:21:53,400
Fuck yeah we did!
- Yeah!

1350
01:21:53,400 --> 01:21:55,580
Which means!
Fuck yeah! OH!

1351
01:21:55,580 --> 01:21:57,600
Which means...
If we're right....

1352
01:21:59,460 --> 01:22:01,060
If we're right, people lose homes!

1353
01:22:01,300 --> 01:22:02,400
People lose jobs!

1354
01:22:02,840 --> 01:22:05,160
People lose retirement savings,
people lose pensions!

1355
01:22:06,060 --> 01:22:08,480
You know what i hate about fucking banking!
It reduces people to numbers!

1356
01:22:08,480 --> 01:22:10,440
Here's a number!
Every one percent unemployment goes up,

1357
01:22:10,440 --> 01:22:12,440
40 thousand people die!
Did you know that?!

1358
01:22:12,440 --> 01:22:14,700
Did you know that?
- No, I didn't know that!

1359
01:22:16,500 --> 01:22:17,900
We were just excited!

1360
01:22:20,340 --> 01:22:21,900
Just don't fucking dance!

1361
01:22:23,280 --> 01:22:24,620
Alright!
- Where are you going?

1362
01:22:29,400 --> 01:22:31,220
Whoah, I just got really scared!

1363
01:22:33,160 --> 01:22:34,540
First of all, great show today!

1364
01:22:35,140 --> 01:22:35,900
You were terrific!

1365
01:22:36,080 --> 01:22:38,280
Thank you!
- Your big mouth was a revelation!

1366
01:22:38,460 --> 01:22:39,640
I appreciate that!

1367
01:22:40,220 --> 01:22:41,880
You worried you,
and your swaps were getting played?

1368
01:22:41,880 --> 01:22:44,660
Well, this is an opportunity for you
to meet who you're betting against!

1369
01:22:45,380 --> 01:22:47,140
Try not to get too righteous
and listen a little!

1370
01:22:47,140 --> 01:22:48,700
OK, Fine!
Who is this guy?

1371
01:22:48,700 --> 01:22:50,440
A real solid-gold asshole!

1372
01:22:50,640 --> 01:22:51,640
I'm a CDO-manager

1373
01:22:51,980 --> 01:22:54,060
A CDO-manager?
- Yup, at Harding Advisors

1374
01:22:54,960 --> 01:22:58,160
I didn't realize that there
was anything to manage with CDO's

1375
01:22:58,800 --> 01:22:59,980
Oh, well.

1376
01:23:00,780 --> 01:23:04,660
We select the securities that go into
the CDO-portfolio and monitor the assets

1377
01:23:04,660 --> 01:23:06,520
I do most of Meryll-Lynch's CDO's

1378
01:23:06,520 --> 01:23:09,020
Do you represent the investors or Meryll-Lynch?

1379
01:23:09,720 --> 01:23:10,340
The investors!

1380
01:23:10,700 --> 01:23:11,540
You do.

1381
01:23:12,020 --> 01:23:13,200
Yeah!
- But...

1382
01:23:13,600 --> 01:23:16,120
Meryll-Lynch isn't gonna send you
any costumers unless you put

1383
01:23:16,320 --> 01:23:18,560
Merrill-Lynch's bonds in your CDO....

1384
01:23:20,120 --> 01:23:20,980
Good question!

1385
01:23:20,980 --> 01:23:22,840
Let's just assume Merrill and I have a...

1386
01:23:23,580 --> 01:23:24,860
we have a good relationship

1387
01:23:25,600 --> 01:23:27,420
You have a good relationship with Merrill-Lynch?

1388
01:23:27,940 --> 01:23:29,100
We've been doing business together

1389
01:23:29,100 --> 01:23:30,600
And so the CDO's..

1390
01:23:31,060 --> 01:23:31,960
That you create

1391
01:23:32,260 --> 01:23:34,580
are, are, are, of the highest quality

1392
01:23:35,160 --> 01:23:36,020
and the highest of value!

1393
01:23:36,020 --> 01:23:37,600
Absolutely!
- Absolutely!

1394
01:23:38,320 --> 01:23:41,420
Are you at all concerned
about the rising default-rates?

1395
01:23:43,840 --> 01:23:49,080
I assume no risk for
this produce myself Mark

1396
01:23:49,560 --> 01:23:50,520
Okay!

1397
01:23:52,520 --> 01:23:53,700
So let me get this straight

1398
01:23:53,880 --> 01:23:55,000
The bank calls you up

1399
01:23:56,220 --> 01:23:57,760
They give you the bonds they wanna sell

1400
01:23:57,760 --> 01:24:00,920
They give you clients,
they give you money to run your business,

1401
01:24:01,700 --> 01:24:03,360
Give you fat fee's for doing so

1402
01:24:03,540 --> 01:24:05,880
but you represent the investors?

1403
01:24:06,960 --> 01:24:07,880
Is that right?

1404
01:24:07,940 --> 01:24:08,520
Yeah!

1405
01:24:09,280 --> 01:24:10,820
But we're not in the Merrill-Lynch building!

1406
01:24:10,960 --> 01:24:12,460
OK, where are you?
- We're in New Jersey!

1407
01:24:12,900 --> 01:24:13,960
You're twenty minutes away!

1408
01:24:14,560 --> 01:24:16,840
Five, if you use the helicopter!

1409
01:24:18,320 --> 01:24:19,400
That's funny eh?

1410
01:24:19,740 --> 01:24:21,000
That's hilarious!

1411
01:24:24,020 --> 01:24:24,960
Oh boy!

1412
01:24:25,600 --> 01:24:27,220
Your boss is about to explode!

1413
01:24:27,920 --> 01:24:29,680
No, he's too curious to explode!

1414
01:24:29,740 --> 01:24:31,060
Hold on, say that again!

1415
01:24:31,060 --> 01:24:33,180
CDO A, has parts of CDO B

1416
01:24:33,460 --> 01:24:37,600
And CDO B, has parts of CDO A
and then they both get put inside CDO C.

1417
01:24:37,760 --> 01:24:39,340
Yeah and that one is called CDO square!

1418
01:24:39,620 --> 01:24:41,680
A CDO of a CDO!

1419
01:24:42,220 --> 01:24:42,660
Right?

1420
01:24:43,220 --> 01:24:46,780
And then there's CDO's made up of the opposite
sides of the bet you made with the swaps

1421
01:24:47,100 --> 01:24:49,280
We call them, synthetic CDO's

1422
01:24:49,280 --> 01:24:53,200
What did you just say? Synthetic CDO's?
That is fucking crazy!

1423
01:24:53,400 --> 01:24:54,400
It's not!
It's awesome!

1424
01:24:56,700 --> 01:25:00,440
His face is starting to boil
He looks like the bad guy from DOOM

1425
01:25:04,180 --> 01:25:05,560
Alright, let's say...

1426
01:25:06,540 --> 01:25:10,060
You have a pool of 50 million in sub-prime loans

1427
01:25:10,240 --> 01:25:12,480
How much money could be out there betting on it

1428
01:25:13,400 --> 01:25:17,120
In your synthetic CDO's and swaps?
Right now! Tonight!

1429
01:25:17,740 --> 01:25:18,740
50 million.. Hmm..

1430
01:25:21,040 --> 01:25:22,180
A billion dollars

1431
01:25:22,360 --> 01:25:23,020
What?

1432
01:25:24,300 --> 01:25:27,480
If the mortgage-bonds that
Michael Burry discovered were the match...

1433
01:25:28,940 --> 01:25:32,920
How much bigger is the market for insuring
mortgage bonds than for actual mortgages?

1434
01:25:34,200 --> 01:25:35,280
About twenty times!

1435
01:25:35,460 --> 01:25:37,400
If the mortgage bonds were the match...

1436
01:25:37,740 --> 01:25:40,200
Then the CDO's were the kerosene soaked rags.

1437
01:25:40,320 --> 01:25:42,920
And the synthetic CDO was the atomic bomb

1438
01:25:42,920 --> 01:25:45,440
with a drunk president
holding his finger over the button

1439
01:25:45,680 --> 01:25:48,040
It was at that moment
in that dumb restaurant

1440
01:25:48,040 --> 01:25:51,080
with that stupid look on his face
that Mark Baum realized

1441
01:25:51,220 --> 01:25:53,780
The whole world economy might collapse!

1442
01:25:57,240 --> 01:25:58,260
And i know what you're thinking!

1443
01:25:59,400 --> 01:26:01,480
What the fuck is a synthetic CDO?

1444
01:26:04,020 --> 01:26:07,680
Well, here's Dr. Thaler,
father of behavioral economics,

1445
01:26:07,680 --> 01:26:09,680
and Selena Gomez to explain!

1446
01:26:10,660 --> 01:26:13,420
Ok, so here's how a synthetic CDO works!

1447
01:26:14,120 --> 01:26:16,460
Let's say i bet ten million on a black jack hand.

1448
01:26:16,960 --> 01:26:21,720
Ten million, because this hand is meant
to represent a single mortgage bond

1449
01:26:24,940 --> 01:26:27,160
Okay, Selena has a pretty good hand here!

1450
01:26:27,160 --> 01:26:31,160
Showing eighteen, dealer showing seven
That's a really good hand for Selena!

1451
01:26:31,620 --> 01:26:34,100
Good odds,
In fact her chances of winning this hand

1452
01:26:34,280 --> 01:26:35,600
are eighty-seven percent

1453
01:26:35,720 --> 01:26:37,320
So, my odds are good

1454
01:26:37,700 --> 01:26:38,920
I'm on a winning streak

1455
01:26:39,240 --> 01:26:41,820
Everybody in this place
wants to get in on the action

1456
01:26:42,100 --> 01:26:43,160
How could i lose right?

1457
01:26:43,380 --> 01:26:45,120
Now this is a classic error

1458
01:26:45,120 --> 01:26:47,800
In basketball it's called the Hot-Hand-Fallacy

1459
01:26:48,240 --> 01:26:50,360
A player makes a bunch of shots in a row

1460
01:26:50,660 --> 01:26:52,700
People are sure they're gonna make the next one

1461
01:26:52,880 --> 01:26:54,980
People think, whatever is happening now

1462
01:26:54,980 --> 01:26:57,620
Is gonna continue to happen into the future!

1463
01:26:57,760 --> 01:26:59,460
During the real-estate boom

1464
01:26:59,500 --> 01:27:01,320
Markets were going up and up!

1465
01:27:01,320 --> 01:27:03,040
And people thought they would never go down!

1466
01:27:03,140 --> 01:27:06,900
So people who are watching and think
that I won't lose will make a side-bet

1467
01:27:07,180 --> 01:27:09,360
Now this, is the first synthetic CDO

1468
01:27:09,420 --> 01:27:10,420
I love Selena Gomez!

1469
01:27:11,280 --> 01:27:12,740
I'll bet you fifteen million, she wins!

1470
01:27:12,740 --> 01:27:14,440
And I'll give you 3-to-1 odds!

1471
01:27:14,860 --> 01:27:15,860
3-to-1 odds?

1472
01:27:16,540 --> 01:27:18,180
Okay, I'll take that bet!

1473
01:27:18,880 --> 01:27:19,600
Now!

1474
01:27:19,940 --> 01:27:24,040
Somebody else is gonna wanna make
a bet on the outcome of their bet!

1475
01:27:24,050 --> 01:27:24,760
15 million she wins!

1476
01:27:24,760 --> 01:27:27,560
That will lead to synthetic CDO number two!

1477
01:27:27,780 --> 01:27:28,180
Hey!

1478
01:27:28,660 --> 01:27:32,300
I bet you 200 million,
that lady in the glasses, wins that bet!

1479
01:27:32,860 --> 01:27:34,100
She probably will win!

1480
01:27:34,460 --> 01:27:35,800
So i want great pay-off!

1481
01:27:36,000 --> 01:27:37,060
How about 20-to-1?

1482
01:27:37,380 --> 01:27:38,200
Deal!

1483
01:27:38,720 --> 01:27:43,320
And this will go on and on,
with more and more synthetic CDO's

1484
01:27:43,400 --> 01:27:47,120
And we can transform
an original ten million dollar investment

1485
01:27:47,340 --> 01:27:49,060
Into billions of dollars

1486
01:27:50,140 --> 01:27:51,340
You're Ok?

1487
01:27:52,880 --> 01:27:53,920
No!

1488
01:27:55,440 --> 01:27:57,320
I actually feel pretty sick!

1489
01:28:02,420 --> 01:28:04,660
So I'm going to leave

1490
01:28:05,980 --> 01:28:07,920
You think I'm a parasite don't you mister Baum?

1491
01:28:09,040 --> 01:28:10,860
But apparently society values me,

1492
01:28:11,500 --> 01:28:12,700
very much.

1493
01:28:13,640 --> 01:28:15,840
In fact, let's do this!

1494
01:28:17,320 --> 01:28:18,820
I'll tell you,

1495
01:28:19,060 --> 01:28:20,680
how much I'm worth.

1496
01:28:21,280 --> 01:28:23,200
You tell me how much you're worth!

1497
01:28:24,240 --> 01:28:26,520
You are an incredibly...

1498
01:28:26,900 --> 01:28:28,680
big piece of shit!

1499
01:28:34,840 --> 01:28:38,140
Short everything that guy has touched,
I want half a billion more in swaps

1500
01:28:38,940 --> 01:28:41,180
Sure about that?
The collateral calls could bankrupt you!

1501
01:28:41,180 --> 01:28:41,840
Yeah!

1502
01:28:42,080 --> 01:28:43,260
Where are you going?

1503
01:28:43,260 --> 01:28:47,460
I am going to try to find
moral redemption and to re-lactate

1504
01:29:52,220 --> 01:29:53,920
Hey, Hey, Hey!

1505
01:29:57,620 --> 01:29:59,600
These are percentages

1506
01:30:01,260 --> 01:30:03,540
Honey, I do think the economy might collapse!

1507
01:30:03,780 --> 01:30:07,040
You've been saying that
the system is broken for years Mark

1508
01:30:08,560 --> 01:30:09,880
Why are you so shocked?

1509
01:30:12,640 --> 01:30:16,100
It's more twisted, than i could have imagined!

1510
01:30:16,540 --> 01:30:18,560
You love to be the virtuous one

1511
01:30:18,700 --> 01:30:20,380
I'm a banker, I'm a part of it!

1512
01:30:20,380 --> 01:30:21,500
You always have Mark!

1513
01:30:22,200 --> 01:30:24,860
Like you're untainted
- It changed me, it changed me!

1514
01:30:24,860 --> 01:30:26,420
Into a person,

1515
01:30:26,420 --> 01:30:28,760
who is not able to reach out to someone

1516
01:30:28,760 --> 01:30:30,580
He was in pain, my brother was in real pain!

1517
01:30:30,620 --> 01:30:33,900
I lost so much!
- There is no perfect way to help

1518
01:30:36,720 --> 01:30:38,520
It sounds scary!

1519
01:30:39,260 --> 01:30:42,480
So, Stop...
trying to fix the world!

1520
01:30:42,480 --> 01:30:43,620
He told me

1521
01:30:43,620 --> 01:30:47,080
You're not a saint,
saints don't live on Park Avenue!

1522
01:30:47,140 --> 01:30:48,460
That he was having bad thoughts.

1523
01:30:48,520 --> 01:30:51,640
Just feel the feelings,
like the rest of us!

1524
01:30:51,740 --> 01:30:56,340
My first response... Was,
to offer him some money.

1525
01:30:56,340 --> 01:30:58,460
I offered him fucking money!

1526
01:31:04,480 --> 01:31:06,940
His face was so smashed!

1527
01:32:34,140 --> 01:32:35,000
Michael?

1528
01:32:35,580 --> 01:32:37,020
Michael?
- Yes, Yes!

1529
01:32:37,020 --> 01:32:38,720
Is everything Ok?
- Yes honey!

1530
01:32:39,360 --> 01:32:39,940
Sure?

1531
01:32:39,940 --> 01:32:41,140
Yeah baby!

1532
01:32:43,040 --> 01:32:44,200
All fine, hehe!

1533
01:32:53,480 --> 01:32:56,060
To all investors, as you may know,

1534
01:32:57,220 --> 01:33:00,980
Our agreement allows me,
to take extraordinary measures

1535
01:33:00,980 --> 01:33:03,280
When markets aren't functioning properly

1536
01:33:04,440 --> 01:33:06,320
I currently have reason to believe

1537
01:33:06,320 --> 01:33:10,100
The mortgage-bond market is fraudulent

1538
01:33:12,660 --> 01:33:17,020
So, in order to protect investors
from this fraudulent market

1539
01:33:17,600 --> 01:33:20,440
I've decided to restrict investor's withdrawals

1540
01:33:20,640 --> 01:33:22,620
Until further notice.

1541
01:33:22,620 --> 01:33:26,980
Sincerely,
Dr. Michael J. Burry

1542
01:34:45,460 --> 01:34:47,220
Oh my god dude, will you,

1543
01:34:47,420 --> 01:34:48,660
Please stop changing the channel

1544
01:34:48,660 --> 01:34:50,660
It's been driving me crazy!
- Fine!

1545
01:34:50,980 --> 01:34:53,100
Just put the business-news on please. Thank you!

1546
01:34:53,100 --> 01:34:54,660
And the S&P picked up three points

1547
01:34:54,660 --> 01:34:55,460
Jesus!

1548
01:34:55,460 --> 01:34:56,980
Mortgage Meltdown continues

1549
01:34:57,360 --> 01:35:00,040
sub-prime mortgage-lender New Century Financial

1550
01:35:00,060 --> 01:35:02,680
Once the industry-leader by the way,
filed for bankruptcy

1551
01:35:02,840 --> 01:35:04,680
The company immediately, Ahem!

1552
01:35:05,460 --> 01:35:06,740
Good time for my voice to go

1553
01:35:06,740 --> 01:35:08,740
Fired 3,200 workers

1554
01:35:08,940 --> 01:35:11,440
The manufacturing-index also
put out the month of march

1555
01:35:11,440 --> 01:35:12,680
It's starting....

1556
01:35:12,680 --> 01:35:14,460
A warning that the economic growth could slow

1557
01:35:14,460 --> 01:35:17,280
The institute of sub-prime assets
also reported a rise of prices

1558
01:35:17,280 --> 01:35:18,980
I'm gonna call my mom!

1559
01:35:21,420 --> 01:35:23,980
The principle source of
the slowdown of economic growth

1560
01:35:24,300 --> 01:35:28,740
Time, and time, and time again
have I bought them back from you Marcus

1561
01:35:28,740 --> 01:35:30,040
We've know each-other for seventeen years

1562
01:35:30,040 --> 01:35:31,420
She 's got some lungs on her I'm impressed!

1563
01:35:33,740 --> 01:35:35,040
Can't help but enjoy it.

1564
01:35:36,220 --> 01:35:39,500
There's no fucking way, there's no fucking way,
that the big banks are that stupid!

1565
01:35:40,420 --> 01:35:41,940
Bye Kathy!

1566
01:35:46,960 --> 01:35:48,080
Well?

1567
01:35:49,180 --> 01:35:52,860
Kathy thinks it would be
a good idea if we sold our shorts

1568
01:35:52,900 --> 01:35:53,660
What else is new?

1569
01:35:53,660 --> 01:35:56,000
And she said that Morgan-Stanley will buy them

1570
01:35:56,040 --> 01:35:56,880
Holy shit!

1571
01:35:57,680 --> 01:35:58,520
What did you say?

1572
01:35:58,940 --> 01:36:00,760
I told her we're not selling shit!

1573
01:36:06,760 --> 01:36:10,120
Ah, if you need the.. Ehm,
files for 2005

1574
01:36:10,780 --> 01:36:14,240
Mister Field's suit is very specific
to files from the past year

1575
01:36:14,540 --> 01:36:17,760
Good, then get out!
Say hi to Lawrence for me! And both do!

1576
01:36:21,640 --> 01:36:23,180
You can't call me back for a week?

1577
01:36:23,400 --> 01:36:25,040
I'm so sorry Mike!

1578
01:36:25,680 --> 01:36:28,980
Goldman had a systems failure,
I lost a ton of messages!

1579
01:36:29,160 --> 01:36:33,000
B of A said they had a power outage,
And Morgan-Stanley said their server crashed!

1580
01:36:33,580 --> 01:36:33,980
Huh!

1581
01:36:34,260 --> 01:36:35,520
That's weird!

1582
01:36:35,520 --> 01:36:38,700
Meh, I will, I will call it..
Improbable Sue.

1583
01:36:39,780 --> 01:36:41,820
Where do you have our position-mark?

1584
01:36:42,460 --> 01:36:44,020
I think it's the same Mike

1585
01:36:44,280 --> 01:36:46,860
What? Can you explain that to me please?

1586
01:36:46,860 --> 01:36:49,660
H-H-H How can the value
of an insurance-contract

1587
01:36:49,660 --> 01:36:53,860
Not be affected by the demise
of the very thing it insures?

1588
01:36:53,860 --> 01:36:56,660
They're independent markets,
They're not always correlated!

1589
01:36:56,880 --> 01:37:00,240
I know it sounds odd,
but these are very complicated products!

1590
01:37:01,300 --> 01:37:03,080
They ARE correlated!

1591
01:37:03,080 --> 01:37:06,180
They're gonna lose their houses, They're gonna
lose their jobs, They're gonna lose their p..

1592
01:37:09,020 --> 01:37:10,440
Will you listen to me!

1593
01:37:11,180 --> 01:37:13,780
This is like.... The end of capitalism!

1594
01:37:13,940 --> 01:37:16,780
This is like the dark ages all-over again!

1595
01:37:18,420 --> 01:37:21,740
I don't want to talk to dad!
Okay, I love you too, save your money!

1596
01:37:22,660 --> 01:37:25,940
She says I need to be on Xanax,
and double my dose of Zoloft

1597
01:37:26,920 --> 01:37:30,700
I asked Bear-Stearns to price our shorts
They tell me the CDO's still haven't moved

1598
01:37:30,740 --> 01:37:31,820
This is fucking insane!

1599
01:37:32,480 --> 01:37:35,540
You realize that?
These people are crooks and they should be in prison!

1600
01:37:36,460 --> 01:37:39,340
Look at the theta-graphics,
you can see that the CDO's are worth zero!

1601
01:37:39,340 --> 01:37:40,580
So you know what they're doing huh?

1602
01:37:40,580 --> 01:37:42,380
You know what they're doing right?
- Yeah!

1603
01:37:42,380 --> 01:37:43,560
They're unloading them...

1604
01:37:43,580 --> 01:37:45,400
They're selling their dogshit CDO's

1605
01:37:45,400 --> 01:37:46,880
Then they go to another bank

1606
01:37:46,880 --> 01:37:50,620
And short the shit, while they fucking sold it!
- Whoo ho ho, Let's go to the press man!

1607
01:37:50,740 --> 01:37:53,960
This is a massive story!
Who wouldn't publish it?

1608
01:37:54,960 --> 01:37:56,080
Robert Redford!

1609
01:37:56,080 --> 01:37:59,540
Shorting the ones they were gonna buy
- I got it, I got it!

1610
01:37:59,680 --> 01:38:01,400
I got it, I got it...

1611
01:38:01,400 --> 01:38:02,740
And what am I supposed to do?

1612
01:38:03,320 --> 01:38:04,700
Want me to write a piece called:
"We're all fucked!"

1613
01:38:04,960 --> 01:38:07,380
Yes!
That's a perfect title!

1614
01:38:07,720 --> 01:38:11,220
Casey, Right now, every bank in town
is unloading these shit-bonds

1615
01:38:11,220 --> 01:38:13,020
unto unsuspecting customers

1616
01:38:13,020 --> 01:38:16,180
and they won't devalue them
until they get them off their books

1617
01:38:16,180 --> 01:38:20,760
This level of criminality is unprecedented
even on fucking Wall-street!

1618
01:38:22,200 --> 01:38:23,260
Jamie...

1619
01:38:23,700 --> 01:38:25,020
This is me being honest here okay.

1620
01:38:25,620 --> 01:38:27,660
It took me years to
build my relationships on Wall-street

1621
01:38:27,980 --> 01:38:29,540
No bank or ratings-agency

1622
01:38:30,040 --> 01:38:32,020
Is gonna confirm a story like this

1623
01:38:32,020 --> 01:38:34,120
just because it comes from two guys in a...

1624
01:38:34,880 --> 01:38:38,280
sorry garage-band hedge-fund
that thinks it's the apocalypse.

1625
01:38:39,620 --> 01:38:40,320
Wow!

1626
01:38:40,920 --> 01:38:43,680
I thought you were for real Casey
You know, I have to say, I really did!

1627
01:38:45,120 --> 01:38:47,160
Yeah Jamie, you try
being for real with a three-year old

1628
01:38:47,160 --> 01:38:48,800
and a wife getting her masters-degree

1629
01:38:49,420 --> 01:38:52,260
I'm not gonna burn my
reputation on your wild hunch

1630
01:38:53,300 --> 01:38:53,980
Wow!

1631
01:38:56,200 --> 01:38:58,560
Thanks for coming guys,
totally fucking awesome to see you!

1632
01:38:58,560 --> 01:39:01,080
Yeah. I, Casey I, I,
I've always hated you

1633
01:39:01,080 --> 01:39:04,780
Because you were a prick in college
and you are a prick today!

1634
01:39:05,460 --> 01:39:07,700
Thanks Charlie!
Still living with your mom?

1635
01:39:08,420 --> 01:39:10,060
Charlie, Come on!

1636
01:39:10,260 --> 01:39:12,260
It's Mark Baum again. Call me!

1637
01:39:12,540 --> 01:39:14,100
Sub-prime bonds fell off a cliff

1638
01:39:14,260 --> 01:39:16,460
Rumor has it default-numbers are huge!

1639
01:39:16,500 --> 01:39:19,060
Who got their remittance-data early?
I bet it's Goldman

1640
01:39:19,140 --> 01:39:20,620
Nah, Fuck you very much!

1641
01:39:20,620 --> 01:39:23,660
Jared!
It's chaos down here, where are we?

1642
01:39:23,660 --> 01:39:27,080
.. And see, he wept,
for there are no more worlds to conquer

1643
01:39:28,540 --> 01:39:30,040
Shane...

1644
01:39:30,340 --> 01:39:31,780
Shane!

1645
01:39:33,160 --> 01:39:33,820
Well...

1646
01:39:34,140 --> 01:39:36,320
Nobody's buying CDO's and
mortgage bonds anymore

1647
01:39:36,400 --> 01:39:39,980
And everybody wants swaps,
swaps are not he most popular product on the street

1648
01:39:40,080 --> 01:39:41,860
That's good for us!
- Yes, and no.

1649
01:39:41,860 --> 01:39:43,400
I heard from somebody,
who heard from somebody

1650
01:39:43,400 --> 01:39:45,720
No Alex. No..... Sorry!

1651
01:39:49,500 --> 01:39:53,120
I'm betting Kleeger over at Morgan
is taking up some heavy losses in the bond-department

1652
01:39:54,240 --> 01:39:55,860
Your shit might be taking on water

1653
01:39:56,880 --> 01:39:58,540
Time to get our life-jacket and get out.

1654
01:39:58,540 --> 01:39:59,320
Holy shit!

1655
01:39:59,460 --> 01:40:00,380
I'm jacked

1656
01:40:01,420 --> 01:40:02,600
I'm Jacked!

1657
01:40:02,600 --> 01:40:04,220
I'm jacked to the tits!

1658
01:40:04,820 --> 01:40:05,540
Good!

1659
01:40:05,800 --> 01:40:07,600
Do you feel it?
- No!

1660
01:40:14,060 --> 01:40:15,860
What'd you hear tiny?

1661
01:40:17,360 --> 01:40:18,200
It's happening

1662
01:40:18,620 --> 01:40:20,340
Everybody wants our swaps

1663
01:40:20,840 --> 01:40:22,280
Kathy's office is looking for you!

1664
01:40:23,300 --> 01:40:25,040
Singing a different tune now, aren't they?

1665
01:40:26,520 --> 01:40:27,480
That's not good.

1666
01:40:32,920 --> 01:40:33,700
Maybe later.

1667
01:40:33,700 --> 01:40:39,120
No, no this isn't a joke
- you gotta start unwinding...

1668
01:40:40,220 --> 01:40:41,060
Listening!

1669
01:40:41,780 --> 01:40:42,980
Dr. Burry?
- Yah!

1670
01:40:43,600 --> 01:40:44,980
Deev Woonsen, Goldman Sachs

1671
01:40:44,980 --> 01:40:46,400
Listen, I've been reviewing your position

1672
01:40:46,400 --> 01:40:48,640
I wanted to discuss your marks,
make sure they're fair!

1673
01:40:48,640 --> 01:40:51,380
Yeah, I, I, I thi, I think you mean..
That you've..

1674
01:40:51,940 --> 01:40:57,520
Secured a net-short position yourselves,
so you're free to mark my swaps accurately for once

1675
01:40:57,520 --> 01:40:59,620
Because it's now in your interest to do so.

1676
01:41:02,400 --> 01:41:04,660
Ehm... I'm not sure what you want me to say

1677
01:41:04,660 --> 01:41:05,620
I think that....

1678
01:41:07,660 --> 01:41:09,240
I think you've already said it.

1679
01:41:17,500 --> 01:41:21,080
You tell Jeff at Goldman that
I'm not transferring funds, this is bullshit!

1680
01:41:28,700 --> 01:41:29,880
Okay, we'll talk later.

1681
01:41:30,860 --> 01:41:31,900
Thank you...

1682
01:41:34,640 --> 01:41:37,080
Thanks for coming so quickly Mark
- Yeah

1683
01:41:37,240 --> 01:41:37,980
Ehm...

1684
01:41:38,360 --> 01:41:41,260
I know you've been hearing rumblings
about some losses Morgan has suffered.

1685
01:41:41,260 --> 01:41:43,720
- Congratulations
On what?

1686
01:41:44,060 --> 01:41:44,660
Oh!

1687
01:41:45,300 --> 01:41:46,140
Thanks.

1688
01:41:46,620 --> 01:41:48,260
Ehm..
- Having fun?

1689
01:41:49,520 --> 01:41:51,080
Yes! He he!

1690
01:41:52,260 --> 01:41:53,720
Tons!, Ehm....

1691
01:41:54,020 --> 01:41:55,580
I just wanted you to know that ehm...

1692
01:41:57,060 --> 01:42:00,260
Yes, Morgan has suffered some losses,
but our liquidity is strong,

1693
01:42:00,260 --> 01:42:02,040
And there's no cause for concern!

1694
01:42:02,640 --> 01:42:05,080
Would Benny Kleeger be concerned?

1695
01:42:05,900 --> 01:42:09,240
Because word on the street is
he took some pretty heavy losses

1696
01:42:11,420 --> 01:42:14,940
Kathy come on, we know each-other..
How, how?...

1697
01:42:16,160 --> 01:42:17,220
How bad is this?

1698
01:42:17,540 --> 01:42:18,340
Ok...

1699
01:42:19,620 --> 01:42:22,580
Two years ago, Benny Kleeger,
in Morgan's bond-department

1700
01:42:22,580 --> 01:42:24,580
also started shorting sub-prime housing.

1701
01:42:24,920 --> 01:42:27,580
Two billion in Triple-B's
- Benny is smarter than i thought!

1702
01:42:27,580 --> 01:42:28,720
No, he's not smart at all!

1703
01:42:29,140 --> 01:42:31,540
The premiums on the swaps
ate into his desks profit.

1704
01:42:31,660 --> 01:42:33,580
And to cover his Triple-B shorts,

1705
01:42:33,620 --> 01:42:37,000
he sold a lot of A- and Double-A
swaps as protection, A lot!

1706
01:42:38,120 --> 01:42:40,360
He believed that there was no way,
that they could be affected.

1707
01:42:41,820 --> 01:42:44,840
Tell me Morgan-Stanley doesn't
hold the contracts on these swaps

1708
01:42:48,240 --> 01:42:49,500
Holy shit

1709
01:42:50,500 --> 01:42:53,660
All this time I've been trying to figure out
who I'm betting against.

1710
01:42:54,240 --> 01:42:55,520
And it's Morgan-Stanley

1711
01:42:56,780 --> 01:42:57,960
Which is me....

1712
01:43:00,140 --> 01:43:01,720
What's your exposure?
Three billion?

1713
01:43:03,480 --> 01:43:05,080
Please don't tell me
it's more than four!

1714
01:43:05,320 --> 01:43:06,200
I can't answer that!

1715
01:43:06,980 --> 01:43:08,940
Yes you can answer that,
because...

1716
01:43:09,220 --> 01:43:12,580
I walk in here and people
are crying in your hallway

1717
01:43:14,080 --> 01:43:14,900
Kathy..

1718
01:43:15,560 --> 01:43:18,640
You bring me in to tell me everything is fine,
and everything is not fine!

1719
01:43:19,320 --> 01:43:21,060
What?
What is happening?

1720
01:43:23,320 --> 01:43:24,820
Long exposure is...

1721
01:43:27,460 --> 01:43:28,820
fifteen billion

1722
01:43:35,340 --> 01:43:38,740
Jesus Christ, are you fucking kidding me?! - You kept
saying defaults over eight percent were impossible!

1723
01:43:38,740 --> 01:43:41,180
- That there would be a million homeless
Oh my god!

1724
01:43:42,260 --> 01:43:45,340
Yeah, but we have nothing
to do with Morgan-Stanley

1725
01:43:47,860 --> 01:43:50,660
Yeah... Just tell the bankruptcy-court

1726
01:43:51,280 --> 01:43:54,560
Morgan fails,
all our accounts go under bow and ship

1727
01:43:54,740 --> 01:43:56,280
That's just crazy!

1728
01:43:56,800 --> 01:43:59,880
Morgan makes a sucker's bet
and we pay their fucking gambling debt?

1729
01:44:00,880 --> 01:44:03,680
Short the bank's stocks!
- Wait..

1730
01:44:07,460 --> 01:44:10,000
Or we sell our swaps,
when the market opens

1731
01:44:11,280 --> 01:44:13,500
We get our bonuses,
our investors get their profits

1732
01:44:13,820 --> 01:44:16,700
We get... thirty cents on the dollar,
Not bad!

1733
01:44:17,020 --> 01:44:18,560
We're three times up

1734
01:44:18,660 --> 01:44:20,440
Not if there's no market left to sell them in

1735
01:44:20,440 --> 01:44:22,520
Forget it, I'm not giving out any life-hooks

1736
01:44:22,520 --> 01:44:24,760
Mark, if Morgan goes under,
we end up with nothing!

1737
01:44:24,940 --> 01:44:26,140
Vinnie...

1738
01:44:27,560 --> 01:44:29,080
Jesus, come on!

1739
01:44:29,420 --> 01:44:31,380
I say, when we sell

1740
01:44:35,100 --> 01:44:36,880
Look I get that this is personal for you,

1741
01:44:37,660 --> 01:44:41,040
But we have a fiduciary responsibility
- No, no we don't!

1742
01:44:41,700 --> 01:44:43,500
Respons..?
Nobody is acting responsible!

1743
01:44:44,040 --> 01:44:46,340
Fuck responsibility!
Are you kidding me?

1744
01:44:47,480 --> 01:44:49,340
The assholes at the big banks,
are gonna take..

1745
01:44:49,380 --> 01:44:52,620
You boys want menu's now?
- We're talking!.. Please!

1746
01:44:53,000 --> 01:44:54,680
Excuse us!

1747
01:44:56,640 --> 01:44:59,520
We are going to wait,
and we are going to wait

1748
01:44:59,860 --> 01:45:04,640
We are going to wait, until they feel the pain,
until they start to bleed

1749
01:45:05,580 --> 01:45:06,520
That is what I want

1750
01:45:06,520 --> 01:45:08,860
Yeah, but what about our clients,
they've been trusting us with their savings.

1751
01:45:08,860 --> 01:45:10,200
I say when we sell!

1752
01:45:10,200 --> 01:45:11,520
This isn't about you!

1753
01:45:11,520 --> 01:45:14,980
Hey, hey, HEY!
I say when we sell!

1754
01:45:16,780 --> 01:45:17,860
Whatever you say Mark

1755
01:45:25,140 --> 01:45:26,800
Dude, did you hear the news?

1756
01:45:28,820 --> 01:45:33,100
Ok, so not only did two mortgage hedge-funds
backed by Bear-Stearns go belly-up

1757
01:45:33,100 --> 01:45:36,640
but now, there's a class-action lawsuit against Bear

1758
01:45:36,640 --> 01:45:37,620
Holy shit!

1759
01:45:37,620 --> 01:45:40,260
Let's go! Push, Push!

1760
01:45:40,300 --> 01:45:43,180
So? What? Bear could really collapse here?
- That's a risk we really shouldn't take!

1761
01:45:43,220 --> 01:45:45,720
We bought eighty percent of our swaps at Bear

1762
01:45:45,880 --> 01:45:47,140
We lose everything!

1763
01:45:47,140 --> 01:45:48,760
Hey Sir!
- One second!

1764
01:45:48,860 --> 01:45:52,540
That's my opinion! - Aw, we bought these fucking
things, and we have no clue how to sell them

1765
01:45:52,540 --> 01:45:54,060
I know, we have to get Ben to do it!

1766
01:45:54,060 --> 01:45:55,820
I've been trying to call him,
but he won't get back to me

1767
01:45:55,820 --> 01:45:59,880
No, he's out on vacation with his wife's family!
They're in England!

1768
01:46:00,340 --> 01:46:01,220
What?!

1769
01:46:09,280 --> 01:46:10,340
Hello, Ben? Hey!

1770
01:46:10,340 --> 01:46:12,400
Guys?
- Yeah, we're here, can you hear us?

1771
01:46:12,560 --> 01:46:14,880
Guys?-
We hear ya, Yeah!

1772
01:46:15,180 --> 01:46:17,500
I probably got cell-phone and WiFi-service

1773
01:46:18,240 --> 01:46:20,540
I'm trying to sell
200 million dollars worth of securities

1774
01:46:21,160 --> 01:46:22,120
In a pub...

1775
01:46:22,640 --> 01:46:23,720
smells like sheep

1776
01:46:23,920 --> 01:46:24,700
You can do this!

1777
01:46:24,800 --> 01:46:28,140
I don't want to pressure you Ben,
but if you don't pull this off, we lose everything!

1778
01:46:29,080 --> 01:46:31,620
Ok, let's see what Credit Suisse's appetite is.

1779
01:46:37,480 --> 01:46:40,560
This is Brownfield Fund,
I'm wanting to unload my credit default swaps.

1780
01:46:41,000 --> 01:46:41,920
Alright, what've you got?

1781
01:46:42,620 --> 01:46:44,440
Twenty Double-A tranches of ABS CDO's

1782
01:46:44,920 --> 01:46:47,360
Eh yes.. But these eh...
these are pretty bad

1783
01:46:47,360 --> 01:46:48,800
Absolutely, they're complete shit!

1784
01:46:49,760 --> 01:46:52,660
What's your.. What's your?
- Base-value is two-hundred and five million

1785
01:46:53,060 --> 01:46:53,760
Dollars

1786
01:46:54,300 --> 01:46:56,420
Alright, we could, we could go to forty

1787
01:46:56,940 --> 01:46:58,260
No, we want at least a hundred million

1788
01:46:58,260 --> 01:46:59,580
A hundred million?

1789
01:46:59,880 --> 01:47:02,020
What are you a drug-dealer or a banker?

1790
01:47:02,160 --> 01:47:04,360
Cause if you're a banker you can fuck right off!

1791
01:47:04,760 --> 01:47:07,060
I don't know if we can make a market,
just give me your best price!

1792
01:47:07,060 --> 01:47:09,820
Yeah, Check! A hundred million worth,
and aim higher!

1793
01:47:09,820 --> 01:47:10,900
I think we're far apart

1794
01:47:11,580 --> 01:47:13,620
Look if you don't want to deal, just hang up.

1795
01:47:16,520 --> 01:47:17,920
That's what I thought!

1796
01:47:18,800 --> 01:47:19,880
Ninety million

1797
01:47:19,940 --> 01:47:21,100
Seventy!

1798
01:47:22,160 --> 01:47:23,160
Eighty-five

1799
01:47:23,980 --> 01:47:26,100
Seventy-eight
- Eighty-four!

1800
01:47:26,840 --> 01:47:28,680
Seventy-eight
- Eighty-four!

1801
01:47:30,960 --> 01:47:32,160
It's Dr. Burry

1802
01:47:32,700 --> 01:47:35,640
Looks like the collapse
of the financial sector is imminent

1803
01:47:36,620 --> 01:47:38,280
Start to sell my position

1804
01:47:38,880 --> 01:47:40,200
2.3 billion

1805
01:47:42,120 --> 01:47:43,560
Sure, I'll hold!

1806
01:48:07,880 --> 01:48:09,320
So I was right.

1807
01:48:10,220 --> 01:48:11,980
I took a rash of shit for two years. But...

1808
01:48:13,120 --> 01:48:14,740
I was right! And...

1809
01:48:15,540 --> 01:48:16,640
Everyone was wrong!

1810
01:48:18,000 --> 01:48:19,300
And yeah i got a bonus-cheque for it

1811
01:48:20,100 --> 01:48:21,120
Sue me!

1812
01:48:21,780 --> 01:48:22,600
You know.

1813
01:48:23,480 --> 01:48:26,140
It's a lot of money!
I get it, I can feel you judging me.

1814
01:48:26,980 --> 01:48:27,940
That's palpable

1815
01:48:29,020 --> 01:48:30,060
But hey!

1816
01:48:30,860 --> 01:48:32,860
I never said I was the hero of this story

1817
01:48:33,720 --> 01:48:34,880
Hey, hey babe!

1818
01:48:35,180 --> 01:48:36,620
How are we looking?

1819
01:48:37,420 --> 01:48:38,780
...eigh... ion..

1820
01:48:39,720 --> 01:48:40,640
S-Sorry?

1821
01:48:41,140 --> 01:48:43,360
No, eighty million!
- Ok, so eighty million!

1822
01:48:43,360 --> 01:48:45,300
Eighty million, eigthy million,
that's good right?

1823
01:48:45,500 --> 01:48:49,680
Eighty is great, no eighty is great,
thank you, thank you so much!

1824
01:48:50,360 --> 01:48:51,760
Most of them went to UBS

1825
01:48:52,280 --> 01:48:53,300
You're very lucky!

1826
01:48:53,740 --> 01:48:57,400
The largest bank in France froze it's
customer's money-market accounts today

1827
01:48:57,400 --> 01:48:58,400
This thing is hitting Europe!

1828
01:48:59,040 --> 01:49:00,420
Greece and Iceland are finished

1829
01:49:01,000 --> 01:49:02,060
Spain is teetering

1830
01:49:02,340 --> 01:49:04,120
Are you serious? Fuck!

1831
01:49:04,280 --> 01:49:06,180
Ben call us when you get home!

1832
01:49:06,180 --> 01:49:09,180
But hey, before you go...
I'm just wondering...

1833
01:49:10,400 --> 01:49:11,240
Uhm..

1834
01:49:12,900 --> 01:49:14,740
Why did you do this with us?

1835
01:49:16,160 --> 01:49:20,340
You didn't have to, and eh..
You know, thank you, but, eh....

1836
01:49:21,120 --> 01:49:21,960
Why?

1837
01:49:22,680 --> 01:49:25,060
You guys said you wanted to get rich!
- Now you're rich!

1838
01:49:33,140 --> 01:49:37,860
As the housing-markets and banks
continued to hemorrhage,

1839
01:49:37,860 --> 01:49:38,260
only one of the big shorts refused to sell.

1840
01:49:38,260 --> 01:49:39,180
Mark Baum

1841
01:49:42,840 --> 01:49:46,800
So it was beyond perfect, when he was asked
to speak at a conference opposite Bruce Miller

1842
01:49:46,800 --> 01:49:48,660
Famous bull-ish investor

1843
01:49:49,680 --> 01:49:51,120
After he and Mark had their debate

1844
01:49:51,120 --> 01:49:55,300
Alan Greenspan, one of the architects of
the whole crisis, was scheduled to speak

1845
01:49:55,720 --> 01:49:58,720
Everyone in Mark's office showed up,
even invited friends!

1846
01:49:59,740 --> 01:50:03,460
This... was the Ali versus Foreman
of the financial world

1847
01:50:03,460 --> 01:50:05,300
Realists versus the fools

1848
01:50:05,920 --> 01:50:08,180
And if it seems almost too perfect...
trust me!

1849
01:50:08,460 --> 01:50:09,420
This happened!

1850
01:50:11,540 --> 01:50:13,180
Welcome everyone!

1851
01:50:14,000 --> 01:50:17,240
Please... Give a generous welcome to...

1852
01:50:18,400 --> 01:50:21,140
Mister Bruce Miller.... and Mark Baum

1853
01:50:38,920 --> 01:50:40,560
Strap yourself in!

1854
01:50:41,700 --> 01:50:46,600
So as some of you may know, Bear-Stearns
has just received a loan from J.P. Morgan

1855
01:50:46,600 --> 01:50:49,520
Of course we're gonna have to wait
and see just how the markets react

1856
01:50:49,520 --> 01:50:53,060
But that should lay to rest
any concerns about the bank self!

1857
01:50:53,360 --> 01:50:57,480
No, I take it, you have no plans to sell your
two-hundred million in Bear-stock

1858
01:50:58,420 --> 01:51:01,700
No, as a matter of fact, when we're done here,
I'll probably go out and buy some more!

1859
01:51:03,380 --> 01:51:06,820
For the opposing view...
Mister Baum

1860
01:51:09,340 --> 01:51:11,260
I gotta stand for this

1861
01:51:14,200 --> 01:51:15,320
Okay, Hi!

1862
01:51:16,060 --> 01:51:18,220
My firms thesis is pretty simple

1863
01:51:18,900 --> 01:51:22,460
Wall-street took a good idea:
Lewis Raneiri's mortgage-bonds

1864
01:51:22,740 --> 01:51:26,960
And turned it into an atomic bomb
of fraud and stupidity

1865
01:51:27,380 --> 01:51:30,060
That's on it's way to
decimating the world economy

1866
01:51:30,100 --> 01:51:31,080
How do you really feel?

1867
01:51:32,800 --> 01:51:36,620
I'm glad you still have a sense of humor!
I wouldn't if I were you!

1868
01:51:37,160 --> 01:51:40,340
Now, Anyone who knows me, knows..

1869
01:51:40,940 --> 01:51:43,980
That I have no problem
telling someone they're wrong.

1870
01:51:43,980 --> 01:51:47,220
It's a disaster, it just says here,
They got a liquidity-BRAVO

1871
01:51:47,220 --> 01:51:49,460
But for the first time.. In my life..
- Holy fuck!

1872
01:51:49,840 --> 01:51:51,660
It's not so enjoyable

1873
01:51:52,480 --> 01:51:54,600
We live in an era of fraud in America

1874
01:51:55,160 --> 01:51:57,460
Not just in banking, but in government

1875
01:51:58,060 --> 01:51:59,800
Education, religion

1876
01:52:00,420 --> 01:52:02,300
Food, even baseball

1877
01:52:03,360 --> 01:52:04,860
What bothers me...

1878
01:52:05,220 --> 01:52:07,980
Isn't that .. Fraud is not nice

1879
01:52:08,060 --> 01:52:10,240
Or that fraud... is mean

1880
01:52:10,360 --> 01:52:12,840
It's that .. For fifteen thousand years

1881
01:52:13,280 --> 01:52:17,200
Fraud and short-sighted thinking
have never ever worked

1882
01:52:17,640 --> 01:52:20,300
Not once, eventually
- Jesus

1883
01:52:20,300 --> 01:52:22,020
You'll get caught
- We're at thirty-seven

1884
01:52:22,760 --> 01:52:25,260
Things go south!
- It's fucking plummeting man, it's fucking plummeting!

1885
01:52:25,260 --> 01:52:26,960
When the hell did we forget all that?

1886
01:52:31,740 --> 01:52:33,960
I thought we were
better than this, I really did

1887
01:52:34,460 --> 01:52:35,260
And..

1888
01:52:35,520 --> 01:52:39,520
The fact that we're not,
doesn't make me feel all right and superior!

1889
01:52:39,520 --> 01:52:42,120
It makes me feel... Sad.

1890
01:52:42,280 --> 01:52:46,440
Everytime i fucking hit refresh it's dropping man
- And hope it does goes down!

1891
01:52:46,460 --> 01:52:48,020
And as fun as it is to watch..

1892
01:52:48,420 --> 01:52:50,840
Pompous dumb Wall-streeters be wildly wrong

1893
01:52:50,840 --> 01:52:52,780
And you are wrong sir!

1894
01:52:54,080 --> 01:52:56,300
I just know that at the end of the day

1895
01:52:57,560 --> 01:53:02,380
Average people are going to be the ones,
that are going to have to pay for all of this.

1896
01:53:03,200 --> 01:53:05,520
Because they always, always do!
- Thirty-two?

1897
01:53:05,520 --> 01:53:07,880
Shit! It's thirty-two
- Yeah it's fucking tanked man

1898
01:53:08,220 --> 01:53:09,700
That's my two cents, thank you!

1899
01:53:11,340 --> 01:53:12,840
I'm gonna drop a deuce at Deutsche

1900
01:53:12,920 --> 01:53:14,500
Does our bull have a response?

1901
01:53:15,980 --> 01:53:18,500
Only that in the entire history of Wall-street,

1902
01:53:19,740 --> 01:53:23,800
No investment-bank has ever failed,
unless caught in criminal activities.

1903
01:53:24,380 --> 01:53:27,720
So, yes!
I stand by my Bear-Stearns optimism.

1904
01:53:28,400 --> 01:53:30,060
Mister Miller, I'm sorry!
Quick question!

1905
01:53:30,960 --> 01:53:35,040
From the time you guys started talking, Bear-Stearns'
stock is falling more than thirty-eight percent

1906
01:53:36,000 --> 01:53:36,980
Would you still buy more?

1907
01:53:37,140 --> 01:53:38,900
Yeah, sure!

1908
01:53:39,500 --> 01:53:40,880
Ofcourse i'd buy more, why not?

1909
01:53:41,820 --> 01:53:42,640
Boom!

1910
01:53:46,200 --> 01:53:51,080
Jesus Christ! - Oh no!
That comcludes the first part of our presentation

1911
01:53:52,900 --> 01:53:59,220
Up next, we have the legendary, former,
chairman of the FED, Alan Greenspan!

1912
01:53:59,940 --> 01:54:01,780
Folks!

1913
01:54:18,280 --> 01:54:23,820
...employees of Lehman Brothers today,
- as the Wall-street giant's stock went to zero!

1914
01:54:23,820 --> 01:54:26,180
The collapse of the venerable New York Bank

1915
01:54:26,180 --> 01:54:32,260
Follows a tumultuous few months of market volatility,
and fear for the world economy...

1916
01:54:32,880 --> 01:54:34,480
I gotta see inside

1917
01:54:35,380 --> 01:54:36,020
How?

1918
01:54:37,660 --> 01:54:38,100
Come on

1919
01:54:39,340 --> 01:54:42,400
I left my phone in the office,
I threw my pass out already,

1920
01:54:42,400 --> 01:54:46,480
Do you mind if i take your pass? Borrow it?
I don't give a shit anymore, you can do what you want!

1921
01:54:54,140 --> 01:54:59,000
Go directly to your transportation, do not talk to
the press! - So that's it? After eighteen years!

1922
01:54:59,000 --> 01:55:04,840
Go directly to your transportation, do not talk
to the press! - I just leave? That's just fucking
great, I can talk to whomever the hell I want!

1923
01:55:04,860 --> 01:55:07,180
Do not talk to the press!

1924
01:55:07,180 --> 01:55:11,160
Go directly to your transportation, do not talk to the

1925
01:55:12,980 --> 01:55:15,140
Hey look, you want to get a bite tonight?
There's this ehm...

1926
01:55:15,580 --> 01:55:18,840
This new Cuban place just opened
on the Lower East Side, so I suppose we could..

1927
01:55:18,840 --> 01:55:20,180
Ah really?
- Yeah!

1928
01:55:21,080 --> 01:55:21,860
You and I?

1929
01:55:22,660 --> 01:55:25,380
Yeah and eh.. Other people
- That sounds nice!

1930
01:55:25,540 --> 01:55:27,500
Yeah, I would like that, thank you very much!
- Finally!

1931
01:55:28,000 --> 01:55:29,020
Mark, Hey!

1932
01:55:29,780 --> 01:55:30,700
It's a bloodbath up here

1933
01:55:31,080 --> 01:55:33,700
Morgan's stock has lost half its value,
it's down to 23,10

1934
01:55:33,700 --> 01:55:37,060
It's in a free-fall decline,
so I wanted to talk to you about pulling their money

1935
01:55:37,500 --> 01:55:39,600
I mean... It's now or never Mark!

1936
01:55:40,440 --> 01:55:41,500
We gotta sell!

1937
01:55:44,940 --> 01:55:45,720
Mark!

1938
01:55:47,820 --> 01:55:49,020
Mark, do you hear me?

1939
01:55:49,020 --> 01:55:53,220
Mailbox #1, You have fifteen messages.

1940
01:55:54,920 --> 01:55:58,240
Mike I can't seem to get a hold of you,
could you please call me at your earliest convenience?

1941
01:56:00,440 --> 01:56:03,160
It's Jeff, I.. Eh.. You're buying stocks?

1942
01:56:03,160 --> 01:56:05,720
The market is at an all-time low, this is crazy!

1943
01:56:06,600 --> 01:56:08,720
I met my wife on Match.com

1944
01:56:09,400 --> 01:56:13,060
My profile said that I'm a medical student
with only one eye

1945
01:56:13,400 --> 01:56:14,740
An awkward social manner,

1946
01:56:15,340 --> 01:56:18,520
and 145 thousand dollars in student loans

1947
01:56:19,600 --> 01:56:20,500
She wrote back...

1948
01:56:21,240 --> 01:56:23,000
You're just what I've been looking for!

1949
01:56:23,820 --> 01:56:27,280
She meant honest.
So let me be honest...

1950
01:56:27,560 --> 01:56:31,920
The housing-crisis represents
the greatest financial opportunity

1951
01:56:31,920 --> 01:56:34,200
Making money is not like I thought it would be.

1952
01:56:35,160 --> 01:56:41,920
This business... Kills the part of life that is essential!
The part, that has nothing to do with business

1953
01:56:45,080 --> 01:56:50,220
For the past two years, my insides,
have felt like they're eating themselves.

1954
01:56:50,860 --> 01:56:52,520
All the people I respected,

1955
01:56:53,480 --> 01:56:55,900
won't talk to me anymore

1956
01:56:56,240 --> 01:56:57,640
Except through lawyers.

1957
01:57:01,940 --> 01:57:02,800
People...

1958
01:57:04,000 --> 01:57:07,800
Want an authority to tell them
how to value things, but they choose this authority

1959
01:57:08,680 --> 01:57:12,080
not based on facts or... results

1960
01:57:13,540 --> 01:57:18,420
They chose it because it seems
authoritative... and familiar!

1961
01:57:18,480 --> 01:57:19,440
And...

1962
01:57:20,260 --> 01:57:23,580
I'm not, and never have been.... familiar

1963
01:57:26,080 --> 01:57:26,700
So..

1964
01:57:28,100 --> 01:57:33,060
So I've come to the solemn realization
that I must close down the fund

1965
01:57:33,960 --> 01:57:36,340
Sincerely, Michael J. Burry MD.

1966
01:58:36,940 --> 01:58:38,760
This isn't how I pictured it

1967
01:58:40,920 --> 01:58:42,940
What do you think you'd find?
- I don't know

1968
01:58:45,020 --> 01:58:46,060
Grown-ups

1969
01:58:50,420 --> 01:58:51,580
Mark, are you there?

1970
01:58:54,800 --> 01:58:55,360
Mark?

1971
01:58:55,920 --> 01:58:59,580
Paulsson and Bernanke
just left the White House.

1972
01:59:04,400 --> 01:59:06,180
There's going to be a bail-out

1973
01:59:08,200 --> 01:59:09,320
Well, they had to!

1974
01:59:10,540 --> 01:59:11,000
Right?

1975
01:59:12,080 --> 01:59:14,080
We paid for mortgages with collaterals
- They knew!

1976
01:59:14,560 --> 01:59:17,220
Cash would have stopped coming out the ATM,
they had to back-stop this

1977
01:59:18,080 --> 01:59:22,840
They knew the tax-payers would bail them out,
they weren't stupid, they just didn't care!

1978
01:59:23,040 --> 01:59:24,760
Yeah, 'cause they're fucking crooks!

1979
01:59:26,360 --> 01:59:28,620
But, at lest we're gonna see some of them go to jail.

1980
01:59:30,820 --> 01:59:31,800
Right?

1981
01:59:32,200 --> 01:59:33,920
We need to gonna have to break up the banks

1982
01:59:35,600 --> 01:59:38,740
The party is over!
- I don't know, I don't know...

1983
01:59:41,920 --> 01:59:45,500
I have a feeling, that in a few years,
people are gonna be doing,

1984
01:59:45,540 --> 01:59:47,740
what they always do when the economy tanks.

1985
01:59:48,980 --> 01:59:52,040
They will be blaming
immigrants and poor people.

1986
01:59:52,400 --> 01:59:53,540
But Mark was wrong!

1987
01:59:54,900 --> 01:59:56,080
In the years that followed,

1988
01:59:56,180 --> 01:59:59,480
hundreds of bankers and
rating-agency's executives went to jail.

1989
01:59:59,580 --> 02:00:01,760
The SEC was completely overhauled

1990
02:00:02,080 --> 02:00:04,900
and congress had no choice,
but to break up the big banks

1991
02:00:04,900 --> 02:00:07,520
and regulate the mortgage
and derivative industries

1992
02:00:12,320 --> 02:00:13,720
Just kidding!

1993
02:00:14,000 --> 02:00:16,280
Banks took the money
the American people gave them

1994
02:00:16,340 --> 02:00:18,620
and used it to
pay themselves huge bonuses

1995
02:00:18,620 --> 02:00:20,780
and lobby the congress to kill big reform

1996
02:00:21,140 --> 02:00:23,360
and then they blamed
immigrants and poor people

1997
02:00:23,580 --> 02:00:24,920
and this time even teachers!

1998
02:00:26,840 --> 02:00:29,960
And when all was said and done,
only one single banker went to jail

1999
02:00:30,780 --> 02:00:31,720
This poor schmuck!

2000
02:00:31,980 --> 02:00:34,920
Kareem Serageldin from Credit Suisse

2001
02:00:34,920 --> 02:00:37,040
He hit a few billion
in mortgage-bond losses

2002
02:00:37,180 --> 02:00:40,340
Something most of the big banks
did on a good day during the crisis

2003
02:00:42,200 --> 02:00:43,580
Mark, can we sell now?

2004
02:00:45,480 --> 02:00:47,420
I mean the fund will make
almost a billion dollars

2005
02:00:48,600 --> 02:00:50,320
You'll clear two-hundred mill Mark!

2006
02:00:51,460 --> 02:00:53,200
You know... once we sell..

2007
02:00:54,300 --> 02:00:55,760
We'll be just like the rest of them

2008
02:00:56,520 --> 02:00:57,460
You know that!

2009
02:00:57,860 --> 02:00:59,360
No we're not, we're not the bad guys here!

2010
02:00:59,740 --> 02:01:04,200
We didn't defraud the American people
and prey on their dreams of owning a home

2011
02:01:04,340 --> 02:01:05,280
Like they did!

2012
02:01:06,880 --> 02:01:08,300
Now we get to kick em in the teeth!

2013
02:01:14,520 --> 02:01:15,840
A billion dollars

2014
02:01:18,160 --> 02:01:18,940
That's right!

2015
02:01:19,380 --> 02:01:21,760
But we gotta close out our position,
or it could be zero

2016
02:01:22,640 --> 02:01:25,300
I- I- It's now or never, Mark

2017
02:01:34,800 --> 02:01:35,900
Okay.

2018
02:01:39,860 --> 02:01:40,880
Sell it all!

2019
02:05:49,100 --> 02:05:52,000
AnnaGram

2020
02:05:52,620 --> 02:05:55,220
Like what I did with the subtitles?

2021
02:05:55,220 --> 02:05:57,220
Want to do another movie?

2022
02:05:57,440 --> 02:05:59,560
Contact me at AnnaGram.subtitles@gmail.com

2023
02:05:59,560 --> 02:06:01,560
Makes it a little less tedious....:)

2024
02:06:01,860 --> 02:06:04,180
Bye now!

2025
02:06:04,180 --> 02:06:06,180
Hope you enjoyed the movie!