The Big Short (2015) - Jared Vennett's Pitch to Front Point Partners (Jenga Blocks Scene) [HD 1080p]

okay hi how are you have a seat hey mr. Bennett do it your bank we have so how many people have you talked to about this trade a few there's definitely some interest oh my boss would have my ass you know crazy Jim oh sorry you which is why you're here talking to us wrong number sounds like there's a lot of interest all right a few people have invited a saying just to laugh at me on this deal is that you is that what this is that's not what this is that's just how mark is let's see what you got I'm sorry do you smell that what is that what what's its new Cologne no opportunity no one knee okay there's no money okay Chris this is your basic mortgage bond all right the originals were simple they were just thousands of Triple A mortgages bundled together guaranteed by the US government the modern ones are different they're private and they're made up of layers of tranches the highest level triple A's getting paid first the lowest rated B's getting paid last taking on defaults first now obviously if you're buying B's you can make more money but they're a little risky sometimes they fail Chris somewhere along the line these B's and BB he's went from a little risky to [ __ ] where's the trash I'm talking rock-bottom FICO scores no income verification adjustable rates [ __ ] the default rates are already up from 1 to 4 percent fellas and if they rise to 8 percent and they will a lot of these triple B's are going to 0 2 and that you're too close is an opportunity okay you're saying that at 8% the bonds fail and we are already at 4% that's right if they go to 8 it's Armageddon yeah that's right how come nobody's talking about this you're completely sure of the math look at him that's Mike want your what my quantitative my math specialist look at him you notice anything different about him look at his face look his eyes I'll give you a hint his name is yang he won a national math competition in China he doesn't even speak English yeah I'm sure of the math actually my name's Jung and I do speak English Jared likes to say don't because he thinks that makes me seem more authentic and I got second in that national math competition so you're offering us a chance to short this pile of blocks how with something called a credit default swap it's like insurance on the bond and if it goes bust you can make ten to one even twenty to one return and it's already slowly going bust ten to one twenty one no way and no one's paying attention no one is paying attention because the banks are too busy getting paid obscene fees to sell these bonds but wait you are the bank where you work for the bank I bet your margins are pretty nice and fat let's not talk about my margins by the way being nice and fat that's a nice shirt do they make it for men aren't you the bank guy work for the bank I don't think like a bank big banks small bank I like to make money all right let me put it this way I'm standing in front of a burning house and I'm offering you fire insurance on it how can these underlying bonds be as bad as you say it wouldn't be legal mmm nobody knows what's in them nobody knows what's in the bonds I've seen some that are 65% triple-a rated that I know for a fact are filled with 95% subprime [ __ ] with FICO's below 550 get the [ __ ] out of here you want me to really blow your mind when the market deems a bond too risky to buy what do you think we do with it think I guess I don't know you tell me all right you think we just warehouse it on the books no we just repackage it with a bunch of other [ __ ] that didn't sell and put it into a CEO a CDO yes a CDO what is that this is where we take a bunch of bees double bees and triple bees that haven't sold when we put them in a file I mean the pile gets large enough the whole thing is suddenly considered diversified and then the [ __ ] at the rating agency give it a 92 93 % triple-a rating no questions asked let's say that again collateralized debt obligation it's important to understand because it's what allowed a housing crisis to become a nationwide economic disaster here's world-famous chef Anthony Bourdain to explain okay I'm a chef on a Sunday afternoon setting the menu the big restaurant I ordered my fish on Friday which is the mortgage bond that Michael burry shorted but some of the fresh fish doesn't sell I don't know why maybe it just came out how of it has the intelligence of a dolphin so what am I gonna do throw all this unsold fish which is the triple B level of the bond in the garbage and take the loss no way being the crafty and morally onerous chef that I am whatever crappy levels of the bond I don't sell I throw into a seafood stew see it's not old fish it's a whole new thing the best part is they're eating sweet a old halibut that it's a CDO well I just need to know how this could possibly be collated so mortgage bonds are dog [ __ ] CDOs are dog [ __ ] wrapped in cat [ __ ] yeah that's right institutions treat these CDOs like there is solid as Treasury bonds and they're going 2-0 500 billion in housing bust so last year alone the ratings agencies the banks the [ __ ] government you're saying they're all asleep at the wheel yeah my whole departments long on this stuff they call me Chicken Little they call me Bubble Boy haze 0 B 0 double B's zero triple B's zero and then that happens what is that that's America's housing market thank you [ __ ] hey Jared shut you [ __ ] him out I don't like it he's playing us he's playing us he's got too much skin in the game and he's dumping his position what if he's right you want it to be right yes I do the banks have given us 25 percent interest rates on credit cards they have screwed us on student loans that we can never get out from under then this guy walks into my office and says those same banks got greedy they lost track of the market and I can profit off of their stupidity [ __ ] yeah I want him to be right I mean how come you don't hate this guy he's everything you taught us not to trust I can't hate him he is so transparent his self-interest so I kind of respect him would I buy a car from him now is he right about the mortgage market let's find out let's find out look it's two very simple questions is there a housing bubble and if there is how exposed to the banks okay let's get on this quickly too because if he's right every loser with a couple million bucks in a fund is gonna be jumping on this let's go

Channel: Extractor

Views: 6,689,149

Rating: 4.8637719 out of 5

Keywords: The Big Short, 2008 Financial Market, Jared Vennett, Greg Lippmann, Mark Baum, Danny Moses, Vinny Daniel, Porter Collins, Ryan Gosling, Steve Carell, Front Point, Morgan Stanley, Deustche Bank, Credit Default Swaps, CDSs, Collateralized Debt Obligations, CDOs, MBS, Tranches, Rating Agencies, Moody's, Standard & Poor's, S&P, Jenga Blocks, Sales, Pitch, Office

Id: xbiDrzTd8fE

Length: 8min 34sec (514 seconds)

Published: Sat Nov 19 2016

Reddit Comments

[u/mexinator]

This movie is informative, hilarious and too relevant right now. I hope Netflix or someone else puts it up to be watched so people can remember how dirty these institutions did us in 08. GME to the 🌕🌕🌕🚀🚀🚀🚀🚀🚀🚀🚀🚀🚀

[u/Xphil6aileyX]

Such a good movie that explained exactly what happened.

[u/[deleted]]

Love this movie

[u/Stock-Driver226]

Nobody asking the important questions: who set the new policy bundling mortgages accepting low FICO scores and no income verification into mortgage bonds, creating this crisis to begin with? Are they in jail for almost collapsing the world's economy? Who let them influence policy to begin with? How did this Trojan horse enter the system? What happened to the old guard and who is running this insane show right now into the next crisis: a massive social gap where one group of people has enough money to live till they're 3 million years old while a much larger group of people doesn't know how they'll pay rent next month?

[u/wigg1es]

Just watched this last night (Crackle is a terrible app, btw).

It's so good.

[u/kummis]

On this same subject, I recommend watching the documentary "Inside Job".

[u/Prestigious-Ad-1113]

Just realized I haven’t watched this since Anthony Bourdain passed. RIP to that legend

[u/GotanaRetz]

At 4:43 the Jenga tower is knocked over then at 6:50 it's back up and Gosling knocks it back down.

[u/Outrageous_Fishing]

Read the book. It is great