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The Big Short

SenorXm/Sirius said:
GM was a minor player, it was lunch money compared to the billions Wall Street was gambling with. I was no fan of any of the bailouts, but in the case of AIG especially it had to be done. If AIG failed the swath of destruction they would have left might have dragged on for decades.

I use to dabble abit in the market. I got totally out of stocks in June of 2008. My 401k, my portfolio, everything, I got out. Some of it was luck, some years I got out in August and Sept. because those are sometimes the worse months for the stock market. But in late 2007 we were thinking of selling our house, the kids were older, and this house is big and old. Nice, but too big. So I get an estimate. I contacted 2 realtors and got 2 estimates of about of $450.000!!! LOL. I bought this house in the mid-80's for $140k. 20 years later it should have doubled in value. But 2 estimates had it OVER TRIPLING in value. Between the ridiculously high value put on this house, and some of the things I was reading I knew right then I knew something was wrong and the housing bubble was getting out of control. So lucky me got out of the market before the **** hit the fan.

But I knew many people who weren't lucky. They lost 1/2 their 401k's. Lost their homes, jobs. While the lying frauds on WS were making millions.
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Then they get bailed out and used the taxpayer funded bailout money for bonuses. Salt on the wound stuff right there. The bailout IMO should've been to the purchaser and that money would've trickled up and their wouldn't have been this obscene foreclosure thing going on.

These big banks have got to be broken up.
 
X Factor said:
I was going to say I'd heard good things about it but reading this thread so far, I'm guessing it's pretty political and I get the impression I may not like it so much. :lol:
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Well, it's about reality...what happened when the housing market crashed, and 125 year old Lehman Brothers failed suddenly. It doesn't make any political statements at all. If you think that's political, then it's political to you. But first and foremost, it's an awesome movie.

The crash happened during a Republican administration, with the laws in effect at that time. I think that makes some conservatives uncomfortable, watching a recap of what happened. The Democrats probably would feel the same way, if it had happened under their watch (but I think Democrats are more apt to accept imperfection in their leaders and assess problems that happened under their watch. Some Democrats, anyway.)

The only thing I'll say is....don't buy anything with the word "tranche" in it!
 
poweRob said:
Great movie. Anyone else see this yet?

They do such a fantastic job explaining how it the meltdown occurred and cleaning up the confusion that Wall Street injected into the whole thing to hide their mischievous behavior.

Steve Carrell and Christian Bale really did awesome jobs with their parts.

What I thought was insane was Christian Bales character, Michael Burry, guy saw it coming in 2005 and started shorting the housing market then. Then when it was over he went to the government and asked if they wanted to know what he saw that early they never returned his call and instead audited him twice and had an FBI investigation of him.
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Watched it today. Very good movie. Brought back a lot of memories... not all good.

I moved out of California in 2005 (my point of reference for what I'm about to say) and the last couple years before I left I kept telling my friends that the housing boom was going to crash. I said it wasn't real, it was all built on hype, it was built on nothing. To a person they all dismissed my thoughts and said it was very real. Of course I didn't see all the details and I didn't know *when* all these no-doc and questionable ARMs were going to kick in, but it was obvious to me that it couldn't last forever.

Kind of infuriated me to be reminded that it was all pretty much swept under the rug.
 
cpwill said:
Vast swathes of Americans lied on our loan applications in order to get bigger houses than we could afford, because we assumed we could simply sell when our low-initial-payment adjusted, and make a nice fat profit.

That's not gullibility. That's greed.

After the 2008 crash, everyone wanted A Villain To Be Angry At. Want to know who was responsible? We were. That's a less popular answer than Them Evil Banks, or Those Darn Regulators, or Clinton Did It or Carter Did it or Bush Did It, but it has the added benefit of being more true.
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It was greed on all fronts. Greed of home buyers buying homes they had no business buying. Greed of brokers handing out mortgages like candy to people they knew had no business getting a mortgage.
 
JumpinJack said:
Well, it's about reality...what happened when the housing market crashed, and 125 year old Lehman Brothers failed suddenly. It doesn't make any political statements at all. If you think that's political, then it's political to you. But first and foremost, it's an awesome movie.

The crash happened during a Republican administration, with the laws in effect at that time. I think that makes some conservatives uncomfortable, watching a recap of what happened. The Democrats probably would feel the same way, if it had happened under their watch (but I think Democrats are more apt to accept imperfection in their leaders and assess problems that happened under their watch. Some Democrats, anyway.)

The only thing I'll say is....don't buy anything with the word "tranche" in it!
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I found nothing political about it whatsoever.
 
radcen said:
It was greed on all fronts. Greed of home buyers buying homes they had no business buying. Greed of brokers handing out mortgages like candy to people they knew had no business getting a mortgage.
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The buyers were flat out lied to about home values. Prices in Phoenix seemed like they were doubling every couple years. It was clearly unsustainable but people were wanting to turn a buck flipping houses.
 
poweRob said:
The buyers were flat out lied to about home values. Prices in Phoenix seemed like they were doubling every couple years. It was clearly unsustainable but people were wanting to turn a buck flipping houses.
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Oh, absolutely. I felt, and still feel, though, that many people knew it lacked common sense, but chose to bury their heads in the sand and ignore what most of them knew deep down.

Financial self-discipline is NOT my strong suit, but that whole era was too glaringly obvious to me. When I left California and moved to the midwest in 2005 I bought a house. I made it crystal clear to the broker that I would not accept an ARM. I got a good broker who found me a good fixed-rate mortgage. Over 10 years later and I still have the same house.
 
radcen said:
Oh, absolutely. I felt, and still feel, though, that many people knew it lacked common sense, but chose to bury their heads in the sand and ignore what most of them knew deep down.

Financial self-discipline is NOT my strong suit, but that whole era was too glaringly obvious to me. When I left California and moved to the midwest in 2005 I bought a house. I made it crystal clear to the broker that I would not accept an ARM. I got a good broker who found me a good fixed-rate mortgage. Over 10 years later and I still have the same house.
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I'm shopping right now and no way in hell would I accept an ARM. I also was in the market for a refi back then and this guy was trying to sell me an ARM and I looked into it and said hell no. You buy a house basically and almost can never own it.

Fortunately I can pull a VA loan for my purchase.
 
poweRob said:
I'm shopping right now and no way in hell would I accept an ARM. I also was in the market for a refi back then and this guy was trying to sell me an ARM and I looked into it and said hell no. You buy a house basically and almost can never own it.

Fortunately I can pull a VA loan for my purchase.
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Back in the day ARMs were a legitimate option in limited circumstances. And still can be... in limited circumstances. Unfortunately, greedy people found a way to bastardize the concept and we all paid a price for it.

I still have my VA loan benefit fully available, but have always been able to find a better deal without it. At least so far.
 
radcen said:
Back in the day ARMs were a legitimate option in limited circumstances. And still can be... in limited circumstances. Unfortunately, greedy people found a way to bastardize the concept and we all paid a price for it.

I still have my VA loan benefit fully available, but have always been able to find a better deal without it. At least so far.
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I've just got pre-approved for zero down, no PMI and at anywhere between 3.25% and 3.5%.
 
Fearandloathing said:
Seen enough to know that it's Hollywood. Whenever I hear "based on a true story" I become immediately skeptical.

To the film, though. It seems it cannotg decide whether to be a drama, a comedy or a mocumentary, and it fails at all three. I loved the scene "and now here's Margot Robbie in a sudsy bathtub to explain it to you" as if any male could maintain 100% attention.

It does clarify the terminology, we do not know where the plot veers from reality, as is the case with any "based on a true story".

If you want a really go look at what happened have a look at the unbiased documentary "Inside Job". It is the best documentary I have ever seen
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Wasn't Margin Call a movie about the same subject?

Loved that movie.
 
poweRob said:
I'm shopping right now and no way in hell would I accept an ARM. I also was in the market for a refi back then and this guy was trying to sell me an ARM and I looked into it and said hell no. You buy a house basically and almost can never own it.

Fortunately I can pull a VA loan for my purchase.
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ARMs are not useful when interest rates are low.

They are very useful when rates are high, and extremely useful when you anticipate rates dropping in the future, or when you expect to sell the home before the rate rises (as was the case with people flipping houses).
 
poweRob said:
The buyers were flat out lied to about home values. Prices in Phoenix seemed like they were doubling every couple years. It was clearly unsustainable but people were wanting to turn a buck flipping houses.
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Not only that, some buyers weren't told they were buying ARMs. It was in the documents they signed (which we normal people never read and wouldn't understand, even if we did). A lot of buyers are unsophisticated and don't know what an ARM is and other things.

Just last year a reasonably intelligent young man asked me if he should buy his first house with an ARM, that an agent was telling him he could afford more house, and there was a cap on the max, and it would rise along with his income. I was shocked at the question. I told him NO, under no circumstances should he consider buying a house with an adjustable rate, because the only way it can go is UP, he has no control over how much, and his income may not go up by that much OR he may have other expenses at that time. You only get ARMs when rates are high, for the avg person. If then. (Personally, I like to know my expenses, so wouldn't get an ARM, anyway. I'd refinance if rates dropped.)

Most buyers rely on their agents and the banks to tell them the details of the loan.
 
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