When watching, because the subtitles are too fast and there are actually a lot of technical terms, I have to pause from time to time to understand the lines. Of course I learned a lot. The plot line is very clear:
a few big bears (fund venture capitalists) are bearish on the real estate market, how can they be bearish from it? To put it simply - the bank sells mortgage bonds in an integrated manner. Mortgage credit evaluation from high to low is 3A-level 2A-level A-level 3B-level 2B-B level. Class A mortgage bonds are of the best quality, and Class B junk bonds are like shit because of their low credit evaluation values. How can banks sell them? So Wall Street launched a CDO, which is a bundle of junk mortgage bonds, packaged, packaged and integrated for sale (the bank’s fraudulent assessment is A-level sale). The consequence of this irresponsible capitalist pursuit of profit is the root cause of the subprime mortgage crisis.
There was a big short who did a market survey. The film listed a few examples. Most of them were overdue loan repayments or inability to repay the loan. Some even borrowed a few houses and refinanced them (delayed loan repayments) but had to pay 200% or even 300%. Liquidated damages, if the repayer is unable to repay the loan, he must pay the liquidated damages. If there are several houses, the consequences can be calculated. Of course, there are illegal and fraudulent operations by banks.
After the bearish real estate bubble, the big bears buy CDS from banks. The so-called CDS is a kind of mortgage securities insurance? If the mortgage market is rising steadily, CDS holders will need to pay monthly premiums. Conversely, if the mortgage market collapses, banks will lose money to CDS holders.
In the end, after the real estate market collapsed across the board, the big shorts threw out the CDS they held! Can CDS holders hold CDS as holding stocks, but stocks sell after bullishness, and CDS sells after bearishness? It should be understood this way! Finally throw it to the bank, and the bank holding these junk CDS will have an ending: bankruptcy (such as Lehman Brothers, or the banker of Credit Suisse Bank in the end of the film) shows how sad the end of holding junk bonds is. In the end, how many trillions did the bank lose? 5 trillion? Who pays! Of course, it is the taxpayers of the whole people who pay the bill! The end result is that 8 million people are unemployed, 6 million people are displaced (loans can't afford the house, and the bank will take it back), and the bank goes bankrupt, driving the global economic crisis. . .
In the end, I googled again, China is about to launch CDS, what? That is to say, the Chinese people have to follow the path of the American people exactly as they are! Well, hehe! I believe it now, there really is an American agent in China! The real estate bubble is not far away! The rhythm of national payment is not far away! Hold on!
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