Big short: the enlightenment of subprime mortgage crisis

Eight or nine years ago, as soon as the news of the subprime mortgage crisis broke out in the United States, I stayed in unknown so for a while. Subprime loans? This seems to be a distant concept.

However, with the passage of time, the subprime mortgage crisis continues to ferment, affecting more and more fields. One financial institution after another declared bankruptcy, the five major investment banks on Wall Street collectively disappeared, and the financial industries in the United States, Japan and Europe suffered heavy losses.

Gradually, the harm gradually spread from the financial sector to the real economy, and the US government rescued the market.

The losses caused by the subprime mortgage crisis, the United States alone evaporated 5 trillion dollars, more than 8 million people were unemployed, and more than 6 million people were homeless.

The subprime mortgage crisis is called the biggest economic crisis after 1933. Movies "Too Big to Fail", "Storm of Interests" and "Inside job" all reflect everyone in this financial storm from different aspects.

But when the movie "Bear" came out, I still watched it three times. I prefer this perspective. What were people doing before and after the crisis? In the face of such a big financial storm, didn't anyone notice it in advance?

As it turns out, some people do have foresight. Look at the performance of the characters in these financial institutions in this storm.

Build a warehouse and board a ship.

Michael Barry (with the same name as the prototype) is the founder of Scion Captical LLC, a famous hedge fund manager and stock investor.

In 2005, he was the first to discover the risk of American real estate market, predicted that the real estate market would collapse by 2007, and seized the opportunity to invest in it.

Persuade the bank to create an insurance (credit default swap product) for him. When real estate securities fall, he will get huge returns, but if he doesn't fall, his huge premium will be wasted.

In order to buy this insurance, he raided more than a dozen banks. After listening to his request, the account managers suppressed their inner ecstasy and made a deal immediately.

No one thinks that real estate loans will default and real estate securities will fall. Why not collect the premium for nothing?

What he did became a joke. Goldman Sachs also sent him a card to congratulate him on becoming the first person to buy this kind of insurance.

Venette, a wise man (a trader at Deutsche Bank, depressed at that time), overheard the news, thought it was an opportunity and decided to profit from it.

So I called around to sell this idea. When the default mortgage reaches 8%, the whole system will collapse.

Too many people refused him, and Mark caught it by pretending to call Mark Baum's fund company by mistake.

? Someone is shorting the real estate market.

So he made an appointment with Vinette and took his advice. He didn't blindly follow, but immediately bought it in buy buy and went to a small town in the south for an inspection.

Bubbles, there are bubbles everywhere.

The loan broker tried to give the mortgage to the person with unqualified credit score, because the commission was high, so he could drive the BMW 7 Series. Homeowners who collect rent on time every month make the mortgage overdue for more than 90 days.

On the way to the end of the inspection, Mark's fund also boarded the ship immediately.

Two young people who opened a fund company in the garage got unexpected news that someone was shorting the real estate market. Through analysis, they decided that this was an opportunity, so they invited their neighbor Ben Hockto (a retired banker) to join the game.

Their bright spot is that they have made a very clever decision, and they can bet high-grade real estate securities at a low premium. Since the collapse of the bottom will inevitably lead to the collapse of the top, whoever buys it will win. At this point, Barry and Mark are not as heartless as they are.

Everyone got on the boat, and all that was left was waiting, a long and painful wait. In expectation, in disappointment, in doubt. Waited for two whole years.

The default rate of real estate has increased a lot, but the price of securities has remained unchanged. Doubt has been accompanied, what kind of suffering it is. On the one hand, they hope to win, on the other hand, they are betting on the collapse of the American economy and how many people will suffer if they win.

Waiting to finish?

Ben and two young neighbors use their own funds, so the pressure is less. They didn't doubt their own judgment, but waited anxiously to make a profit when the ship was about to leak. (This cool and stylish chief trader was originally played by Brad Pitt. )

Mark's fund is constantly under pressure from the parent company Morgan Stanley to sell it, and there are also internal differences and disputes. Fortunately, Mark is a man who can handle it, and sticking to his own opinion is the last big order.

His sadness comes from his understanding of the nature of things, but he can't do anything about it. Haven't the risks of these financial derivatives been discovered by the upper level? Not necessarily. They just don't care. Because, in the end, ordinary taxpayers will pay for it.

From 2005 to 2007, the profit of funds in Michael Barry dropped from+18.9% when buying insurance to-19.8%, and the profit was +489% when clearing in 2007.

His journey was too painful, and investors questioned, ridiculed, threatened and sued one after another. In order to keep the core insurance part, they have to use the privilege and not allow investors to withdraw their funds.

After the subprime crisis, Barry closed the fund. In order to win the deal, he felt that he had lost too many wonderful things in his life.

His respected mentor is also his investor and only talks to him through his lawyer. He should also be deeply disappointed in human nature. Why can't you trust him more and take on more responsibilities in the tortuous course?

Facts have proved that his judgment is completely correct.

?

Don't say my eyes are bright.

I'm like that stupid old man who moved mountains.

Read every piece of data

Don't say anything about a heart of stone.

In fact, it is wrapped in gorgeous data.

Standing in front of you and me.

Driven by interests

How many people prefer gorgeous?

I saw the truth.

Don't just see the victory after the smoke.

Waiting from hand to gap

The pressure from all sides is like a tsunami.

Almost crushed me to death

Doubt doubt? Simulated threat

I must hold a firm sword to resist.

I'm just looking for opportunities from the data

Have no intention of uncovering the darkness of the system.

Expectation is contrary to reality.

Can't bring support, understanding and praise.

Under the financial ruin of collapse

I am carrying a bucket full of gold.

Walking on the brink of collapse? exhaust

This is not the world I want to see.

The greed of the upper class

But Dou pays the bill.

I was the first person to short subprime bonds.

But it was accidentally recorded in history.

-Only this article pays tribute to Dr. Michael Barry, a drunken fund manager before the subprime crisis.

There are no straight markets, such as stocks and real estate.

The reason why the risk can be saved is that she wears a gorgeous coat, with a charming smile, accompanies us, laughs with you, enjoys the high profits easily obtained, enjoys the seemingly endless feast, and gives you a fatal blow when your mind is most relaxed.

This is true of risks in the economic field, and so is the risk in nature.

The final outcome of the top five investment banks in the United States:

Lehman Brothers (the fourth largest investment bank in America) went bankrupt.

Bear Stearns (the fifth largest investment bank in the United States) was on the verge of bankruptcy and was acquired by JPMorgan Chase under the mediation of the Federal Reserve.

Merrill Lynch (the third largest investment bank in the United States) was acquired by Bank of America.

The first two investment banks, Goldman Sachs and Morgan Stanley, were transformed into bank holding companies.

American International Group (AIG), the largest insurance company in the United States, suffered serious losses and was finally funded and nationalized by the Federal Reserve.

Danger is just around the corner, and people often choose to turn a blind eye.