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If The Big Short didn't show you Wall Street was full of functionally retarded Ivy League
Posted on 1/27/21 at 5:01 pm
Posted on 1/27/21 at 5:01 pm
Legacy mouth breathers then....I mean the entire system was a house of cards
8
Posted on 1/27/21 at 5:02 pm to Strannix
Yep. Just a bunch of Coke head frat bros
Posted on 1/27/21 at 5:02 pm to Strannix
Rather random thought. Want to give us any context?
Posted on 1/27/21 at 5:02 pm to Strannix
that's not what the Big Short showed
the Ivy League types were assholes but competent. they created assets and trading systems that were too complicated for almost anyone to understand. i'd hardly call that "mouth breather" behavior
the mental degenerates were the mortgage brokers from Florida
any system built on debt is, by default, a house of cards
the Ivy League types were assholes but competent. they created assets and trading systems that were too complicated for almost anyone to understand. i'd hardly call that "mouth breather" behavior
the mental degenerates were the mortgage brokers from Florida
quote:
I mean the entire system was a house of cards
any system built on debt is, by default, a house of cards
Posted on 1/27/21 at 5:04 pm to SlowFlowPro
quote:
the mental degenerates were the mortgage brokers from Florida
And to a lesser extent, the ratings agencies....
Posted on 1/27/21 at 5:04 pm to member12
no they were just corrupt. to the core
Posted on 1/27/21 at 5:05 pm to Lawyered
Wall Street Jungle and Liar's Poker are also good exposes
Posted on 1/27/21 at 5:06 pm to member12
Yep and If I remember correctly the rating agencies were criminally lazy - they just didn’t do their jobs.
Posted on 1/27/21 at 5:07 pm to member12
quote:
Rather random thought. Want to give us any context?
Posted on 1/27/21 at 5:07 pm to SlowFlowPro
quote:
that's not what the Big Short showed
the Ivy League types were assholes but competent.
Lol wut? The rating agencies were compentent? The banks selling billions in swaps on junk paper were competent????
There was AA rated paper where like 60% of the mortgages in the tranche never made their first payment
Stick to chasing ambulances
This post was edited on 1/27/21 at 5:10 pm
Posted on 1/27/21 at 5:09 pm to member12
Read the book or watch the movie, it was the insane speculation and fake rated mortgage back securities that caused the global financial crisis, just idiots.
Posted on 1/27/21 at 5:40 pm to Strannix
I know a guy from around these parts, best friends with my B-I-L..both went to grad school at U of Chicago(Booth) so the friend goes to Wall St..raises about $750M..loses about half that, folds the fund..but the best part..none of it his and he took 10% off the top. Oh yes, he's still up there doing the same hustle...some of down here at the beach.
Posted on 1/27/21 at 5:42 pm to SalE
quote:
raises about $750M..loses about half that, folds the fund..but the best part..none of it his and he took 10% off the top. Oh yes, he's still up there doing the same hustle...some of down here at the beach.
How did he take 10% off the top?
Posted on 1/27/21 at 5:49 pm to SlowFlowPro
quote:
the Ivy League types were a-holes but competent. they created assets and trading systems that were too complicated for almost anyone to understand. i'd hardly call that "mouth breather" behavior
the mental degenerates were the mortgage brokers from Florida
The Ivy Leaguers bought those mortgages.
The mortgage brokers, or "mental degenerates" as you call them, make their money up front.
There was no need to bail out the big banks during the credit crisis. There was a free market solution. The Big Banks could have been forced into bankruptcy, and their assets (mortgages, auto loans, etc.) sold for pennies, nickels, and dimes on the dollar by responsible banks. Buy a $200k mortgages for $150k and then go to the homeowner not making the payments and rework the loan. Good bank keeps a chunk of the purchase discount plus makes the interest.
Bad bank goes away.
Free market.
Posted on 1/27/21 at 5:54 pm to BiteMe2020
quote:
The Ivy Leaguers bought those mortgages.
no, to be accurate they sold the mortgages
their issue was insuring them
quote:
The mortgage brokers, or "mental degenerates" as you call them, make their money up front.
in the movie they end up unemployed and at a job fair
quote:
There was a free market solution. The Big Banks could have been forced into bankruptcy, and their assets (mortgages, auto loans, etc.) sold for pennies, nickels, and dimes on the dollar by responsible banks. Buy a $200k mortgages for $150k and then go to the homeowner not making the payments and rework the loan. Good bank keeps a chunk of the purchase discount plus makes the interest.
Bad bank goes away.
i agree and we argued about this on this board in 2008
but, there is also the reality where we don't give them temporary relief (which, admittedly, they did pay back with interest) and the entire world economy collapses. this was more than just some big US banks having issues. big companies couldn't buy paper for their day-to-day expenses and fear was about to completely paralyze the international monetary economy
we are a world built on creating, issuing, and trading debt. this system requires (1) more debt and (2) constant velocity of assets. when i say "this system" i mean EVERYthing requires this to keep the charade going.
Posted on 1/27/21 at 5:56 pm to SlowFlowPro
quote:
that's not what the Big Short showed
the Ivy League types were a-holes but competent. they created assets and trading systems that were too complicated for almost anyone to understand. i'd hardly call that "mouth breather" behavior
the mental degenerates were the mortgage brokers from Florida
Sometimes it’s better to avoid being the subject matter expert on everything because you will eventually be exposed for no understanding what happened. The mortgage brokers were blamed because Henry Paulson gave tens of millions to the consumer groups to blame mortgage brokers to create a PR campaign to take them down while he shorted the banks and non-bank lenders. He made billions blaming the collapse on mortgage brokers and then made billions more investing in the big banks after the competition was temporarily eradicated. Paulson by the way was one of the biggest proponents of subprime and again used the consumer advocacy groups to advocate for the rise of those products to help low income borrowers get loans.
Mortgage Brokers also didn’t create MBS where you could buy a house on a credit card that was Visa and MasterCard who also happened to white label these credit cards through the major Wall Street brokerage houses. Those credit card loans had a 100% default rate within eight months btw.
This post was edited on 1/27/21 at 5:59 pm
Posted on 1/27/21 at 5:56 pm to Strannix
quote:
The rating agencies were compentent?
they were competent, but corrupt. big difference
quote:
The banks selling billions in swaps on junk paper were competent
they were aggressive and backed by the corrupt ratings agencies. they created these markets, for better or worse. that takes major smarts. their problem was rationality, or more specifically, irrational aggression.
quote:
There was AA rated paper where like 60% of the mortgages in the tranche never made their first payment
again, corruption. the ratings agencies were the biggest bad guys in the entire system. i've said that since, oh, 2008 on here
they committed fraud to keep their revenue going. the system never gets as big if they aren't corrupt
Posted on 1/27/21 at 5:58 pm to ihometiger
quote:
The mortgage brokers were blamed because Henry Paulson
not in the Big Short
now if you want to get into Too Big to Fail, then we can discuss what movies showed us about ole Hank
Posted on 1/27/21 at 5:58 pm to SlowFlowPro
quote:
no, to be accurate they sold the mortgages
their issue was insuring them
Well, they bought them, packaged them and then sold them.
The issue wasn't just in insuring it, either. They were well beyond "insurance" with the volume of the CDS they issued, lol. They were basically taking side bets with bank capital.
Agreed there might have had to have been some injection of capital to grease the transition, but there's really no way Citi, for example, should have survived that mess.
Posted on 1/27/21 at 6:01 pm to SlowFlowPro
The Paulsons should have been highlighted in the big short for their role in the collapse.
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