So did Bales character make $64 billion? It was written on the white board near the end as he walked out, but this whole movie was so fucking confusing I couldn't tell what was what half the time.
Redpill me on this /tv/.
it's a very simple film
>>71698498
Really? I still don't know what a bond is.
>>71698717
They had selena explain it to you, mouth breather
>>71698493
bankers got greedy and eventually got found out and fucked up, but the government bailed them out; meanwhile the employees of the banks got the sack
>>71698779
Why don't you explain it to me?
>>71698798
So did Bale's character make 64 billion? He was the one who put the most in, but at the end it makes it seem like it was something which could have been, rather than what was.
He walks out of his office, writes down something like 700%, and then, as he walks out, the number below that reads "$64 billion" followed by "profit".
>>71698493
Bale's character Michael Burry made a personal profit of $100m on the Big Short, and his investors made $700m.
The $64bn figure is just typical of the hyperbole that runs through the film. This isn't to play down the film, it's an interesting and informative take on a major event in world economic history, but it does exaggerate.
The real-life person portrayed by Bale in the movie eventually made just over $100 million for himself and profits in excess of $700 million for his investors.
A bond is you loaning money to someone else, basically - you're the bank(er) in the transaction. You give money to someone with a purchase typically (like buying Savings Bonds) and they agree to pay you back over time with a given return on investment (ROI) of a stated percentage.
Mortgage bonds which caused all the problems are made from the loans for homes and property aka mortgages. Thousands of them all grouped together make a mortgage bond which can then be used as collateral for another loan aka a mortgage backed security meaning the mortrage values provide the collateral (the security) that the loan will be paid back.
Because in the past nobody actually defaulted on their home loans in massive MASSIVE numbers it was considered the best investment one could possibly make. The problem was that banks and other financial firms took the scumbucket route by giving people loans that should never have qualified for them, then to protect themselves the banks bought insurance on the loans just in case the loan holder did default aka not pay the fucking thing off.
Insurance companies started purchasing mortgage bonds in huge quantities which is where the CDO (Credit Default Obligation) came from, and thousands of those grouped together became collateral on even more loans known as CDS (Credit Default Swaps).
The big problem? The insurance companies spent so much money on the CDO/CDS side of things they couldn't pay off when the foundational mortgage bonds collapsed - AIG being the biggest failure of them all.
We really did come within a few moments of an entire financial collapse in the US and most of the world, it was very very fucking serious even though the movie makes light of it to get the point across. People don't realize just how close the world came to a full on collapse.
>>71698876
pretty much. the man was paying millions a month in interest payments because he invested the entire hedge into it
Also, protip: read the book, it's much better and explains things in more detail but still keeps it light enough for the average Joe to comprehend it. It's just math, and loans, and scumbuckets doing everything they can to make money by fucking over anybody they can in the process.
Just one person involved in the entire fiasco went to prison over the whole thing as noted in the film.
Personally I think most every CEO in any of the big brokerages and banks that served during the time of that crisis should be in jail to this day, with every cent they own having been forfeited.
It's unbelievable how they all got off without so much as a slap on the wrist, a day in jail, or even a penny lost - most of them got paid BONUSES after all the shit was done and the US taxpayers bailed their scumbucket asses out.
A bullet in the head for all of 'em, wouldn't bother me at all.
>>71698876
He didn't write $6.4 billion, it was $2.4 billion and that was the actual gross after dumping his entire portfolio involved with the mortgage crisis - but realize he sank about $1.5 billion INTO IT which is why his investors hated him so much and wanted to pull their money out of the fund.
For nearly 2.5 years he just kept buying more insurance against the defaults (he created that insurance side of things, that much was accurate - Burry was the the first person in history to go to the big banks and mortgage companies and set up the very insurance against the defaults that ended up nearly destroying everything when other people discovered that you could actually get a bank to offer you insurance against a mortgage default in such massive numbers.
I don't blame Burry directly for what happened, certainly not, but him creating the market for the very insurance that nearly collapsed everything certainly had a lot to do with it.
$2.4 billion gross income on the investment of about $1.5 to $1.6 billion his fund spent in the 2.5 years leading up to the eventual sale of the fund's entire position in the situation.
>>71698493
>So did Bales character make $64 billion?
His *hedge fund* made $64bil, it wasn't his money, he was just the fund manager.
