as a very distant topic to my college education, banks, how they operate, bonds and mortgage, i saw The Big Short yesterday. based on a true story, it turns out that the mortgage crisis that struck the us out of nowhere was not a sudden meteorite observed in skies.
the ambitious duo from their parents garage ended up learning about this huge system crack started to ac on it while getting help from an ex-very accomplished-banker who worked for Bear Stanley, one the biggest investment banks which ended up filing for bankruptcy. the point was this guy, normally a recluse and suspects that intelligence always watchs him, was the neighbor of that duo where they met and became friends while walking their dogs. again provided advantage from the parents.
Lewis Ranieri who started the system of getting profit from mortgages and in time it turns out in a way that even though the buyer has no income whatsoever the bond was approved meaning maybe the level of the bond is BBB or C or D. there is A, AA, and AAA too. that kind of risky mortgages are called subprime and all these bonds are getting "shorted" meaning betted againist are the cause for mortgage crisis. the bond level basically the rate is given by the rating agencies like Standard and poors and the others which are called Big Three, so the regulatory part which were supposed to check whether it is really level AAA or C, used to sell the rates for money which created this housing bubble.
CDO, colleteralized debt obligation meaning if some of the bonds like BBB or BB levels didnt sell, these are combined and given a different name. housing or mortgage bonds were treated like solid since there is government support for it, but it wasnt the case. there is synthetic CDO where Richard Thaler explains it based on basketballs "hot hand fallacy" where people place their bet depending on the result of another bet placed by other people or played in case of basketball.
"and Ceasar wept, for there no more worlds to conquer." Ambitious dou tried to sue rating agencies
but laughed off and taxpayers bailed the bankers who sold these bonds and get profıt where they blamed immigrants and poor people and Kareem Serageldin from Credit Suisse as this movie comes to an end.
i wonder why there is only one reference article on wikipedia to his name, at least with a title that does a little justice to this crisis and millions of people affected:
https://www.nytimes.com/2014/05/04/magazine/only-one-top-banker-jail-financial-crisis.html
the ambitious duo from their parents garage ended up learning about this huge system crack started to ac on it while getting help from an ex-very accomplished-banker who worked for Bear Stanley, one the biggest investment banks which ended up filing for bankruptcy. the point was this guy, normally a recluse and suspects that intelligence always watchs him, was the neighbor of that duo where they met and became friends while walking their dogs. again provided advantage from the parents.
Lewis Ranieri who started the system of getting profit from mortgages and in time it turns out in a way that even though the buyer has no income whatsoever the bond was approved meaning maybe the level of the bond is BBB or C or D. there is A, AA, and AAA too. that kind of risky mortgages are called subprime and all these bonds are getting "shorted" meaning betted againist are the cause for mortgage crisis. the bond level basically the rate is given by the rating agencies like Standard and poors and the others which are called Big Three, so the regulatory part which were supposed to check whether it is really level AAA or C, used to sell the rates for money which created this housing bubble.CDO, colleteralized debt obligation meaning if some of the bonds like BBB or BB levels didnt sell, these are combined and given a different name. housing or mortgage bonds were treated like solid since there is government support for it, but it wasnt the case. there is synthetic CDO where Richard Thaler explains it based on basketballs "hot hand fallacy" where people place their bet depending on the result of another bet placed by other people or played in case of basketball.
"and Ceasar wept, for there no more worlds to conquer." Ambitious dou tried to sue rating agencies
but laughed off and taxpayers bailed the bankers who sold these bonds and get profıt where they blamed immigrants and poor people and Kareem Serageldin from Credit Suisse as this movie comes to an end.
i wonder why there is only one reference article on wikipedia to his name, at least with a title that does a little justice to this crisis and millions of people affected:
https://www.nytimes.com/2014/05/04/magazine/only-one-top-banker-jail-financial-crisis.html
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