1
00:00:37,760 --> 00:00:39,250
(BIRDS CHIRPING)

2
00:01:18,680 --> 00:01:20,091
(TELEPHONE RINGING)

3
00:01:20,760 --> 00:01:23,081
MAN: Hiya, Frank.
How are the wife and kids?

4
00:01:23,160 --> 00:01:25,288
You know, for you,
I'm considering treasury bonds

5
00:01:25,360 --> 00:01:28,170
and utility stocks. Smoke?

6
00:01:28,240 --> 00:01:30,368
JARED: <i>In the late '70s,
banking wasn't a job</i>

7
00:01:30,440 --> 00:01:32,920
<i>you went into
to make large sums of money.</i>

8
00:01:33,840 --> 00:01:35,569
<i>It was a fucking snooze.</i>

9
00:01:35,640 --> 00:01:37,449
(CHUCKLES) How about those Mets?

10
00:01:37,520 --> 00:01:40,205
JARED: <i>Filled with losers.
Like selling insurance or</i>

11
00:01:40,280 --> 00:01:41,611
accounting.

12
00:01:41,680 --> 00:01:42,841
And if banking was boring,

13
00:01:42,920 --> 00:01:45,605
then the bond department at the
bank was straight-up comatose.

14
00:01:46,440 --> 00:01:47,805
<i>We all know about bonds.</i>

15
00:01:47,920 --> 00:01:50,002
<i>You give them to your
snot-nosed kid when he turns 15.</i>

16
00:01:50,080 --> 00:01:52,082
Maybe when he's 30
he makes a hundred bucks.

17
00:01:52,160 --> 00:01:53,446
Boring.

18
00:01:53,520 --> 00:01:55,329
That is, until Lewis Ranieri
came on the scene

19
00:01:55,400 --> 00:01:56,447
at Salomon Brothers.

20
00:02:02,400 --> 00:02:04,641
You might not know who he is,
but he changed your life

21
00:02:04,720 --> 00:02:08,486
<i>more than Michael Jordan,
the iPod and YouTube put together.</i>

22
00:02:08,560 --> 00:02:10,244
- (CHUCKLING)
- (MAN LAUGHING)

23
00:02:10,320 --> 00:02:12,084
All right, gentlemen!
Let's get some money in here!

24
00:02:12,160 --> 00:02:13,889
Let's make some money!
What do you say?

25
00:02:14,000 --> 00:02:15,684
(ALL CHEERING)

26
00:02:15,760 --> 00:02:17,603
JARED: <i>You see,
Lewis didn't know it yet,</i>

27
00:02:17,680 --> 00:02:19,603
<i>but he had already
changed banking forever</i>

28
00:02:19,680 --> 00:02:20,886
<i>with one simple idea.</i>

29
00:02:21,680 --> 00:02:26,368
The mortgage-backed security.
Or private-label MBS.

30
00:02:27,200 --> 00:02:29,043
LEWIS: You've got your
average person's mortgage.

31
00:02:29,120 --> 00:02:30,531
Fixed rate, 30 years.

32
00:02:30,600 --> 00:02:33,968
Boring, safe, small payoff, right? But,

33
00:02:35,240 --> 00:02:37,971
when you have thousands
of them all bundled together,

34
00:02:38,040 --> 00:02:41,567
suddenly the yield goes up
but the risk is still small because,

35
00:02:41,680 --> 00:02:42,681
well, they're mortgages!

36
00:02:42,760 --> 00:02:44,171
And who the hell
doesn't pay their mortgage?

37
00:02:44,240 --> 00:02:46,607
What exactly is the credit
rating on this bond?

38
00:02:46,680 --> 00:02:49,524
This bond, gentlemen, is AAA-rated.

39
00:02:50,040 --> 00:02:52,771
This is exactly what the Michigan state
pension fund has been looking for.

40
00:02:53,240 --> 00:02:54,730
I'll buy $20 million.

41
00:02:54,800 --> 00:02:55,961
Oh, come on, live a little.

42
00:02:56,080 --> 00:02:57,730
- $25 million.
- (ALL LAUGHING)

43
00:02:57,800 --> 00:03:00,770
JARED: <i>The money came raining down,</i>

44
00:03:00,840 --> 00:03:02,365
<i>and for the first time,</i>

45
00:03:02,440 --> 00:03:05,250
<i>the banker went from the country club
to the strip club.</i>

46
00:03:07,840 --> 00:03:11,083
<i>Pretty soon, stocks and savings
were almost inconsequential.</i>

47
00:03:11,240 --> 00:03:13,402
<i>- They were doing $50, $100, $200 billion</i>
- Whoo!

48
00:03:13,480 --> 00:03:16,131
<i>In mortgage bonds and dozens of other
securities a year.</i>

49
00:03:16,280 --> 00:03:17,441
(MEN CHEERING)

50
00:03:25,760 --> 00:03:28,047
<i>And America barely noticed
as its number one industry</i>

51
00:03:28,120 --> 00:03:30,202
<i>became boring old banking.</i>

52
00:03:33,880 --> 00:03:37,407
<i>And then one day,
almost 30 years later, in 2008,</i>

53
00:03:38,600 --> 00:03:40,364
<i>it all came crashing down.</i>

54
00:03:43,480 --> 00:03:46,245
FEMALE REPORTER: <i>March.
Bear Stearns was in a death spiral</i>

55
00:03:46,320 --> 00:03:47,731
<i>and the Fed brokered its sale.</i>

56
00:03:47,800 --> 00:03:50,849
BRIAN WILLIAMS: <i>It's been called the
worst financial crisis in modern times.</i>

57
00:03:51,200 --> 00:03:55,444
<i>Certainly the largest financial disaster
in decades in this country,</i>

58
00:03:55,520 --> 00:03:58,205
<i>and perhaps the end of an era
in American business.</i>

59
00:03:58,640 --> 00:04:00,927
JARED: <i>In the end, Lewis Ranieri's
mortgage-backed security</i>

60
00:04:01,000 --> 00:04:02,650
<i>mutated into a monstrosity that</i>

61
00:04:02,840 --> 00:04:04,490
<i>collapsed the whole world economy.</i>

62
00:04:05,160 --> 00:04:07,083
<i>And none of the experts
or leaders or talking heads</i>

63
00:04:07,160 --> 00:04:08,446
<i>had a clue it was coming.</i>

64
00:04:09,960 --> 00:04:12,930
<i>I'm guessing most of you
still don't really know what happened.</i>

65
00:04:13,440 --> 00:04:16,205
<i>Yeah, you got a soundbite you repeat
so you don't sound dumb, but come on.</i>

66
00:04:16,280 --> 00:04:18,726
Our financial institutions are strong.

67
00:04:20,000 --> 00:04:22,446
<i>But there were some who saw it coming.</i>

68
00:04:22,520 --> 00:04:24,568
<i>While the whole world
was having a big old party,</i>

69
00:04:24,640 --> 00:04:27,883
<i>a few outsiders and weirdos
saw what no one else could.</i>

70
00:04:27,960 --> 00:04:31,567
<i>Not me. I'm not a weirdo.
I'm pretty fucking cool.</i>

71
00:04:31,640 --> 00:04:33,642
<i>But we'll meet again later.</i>

72
00:04:34,160 --> 00:04:36,925
<i>These outsiders saw the giant lie
at the heart of the economy.</i>

73
00:04:37,000 --> 00:04:38,411
<i>And they saw it by doing something</i>

74
00:04:38,480 --> 00:04:41,290
<i>the rest of the suckers
never thought to do.</i>

75
00:04:42,200 --> 00:04:43,531
<i>They looked.</i>

76
00:04:49,800 --> 00:04:51,802
(TAPPING)

77
00:04:56,400 --> 00:04:58,721
MIKE: <i>During the 1930s,</i>

78
00:05:00,320 --> 00:05:04,962
the housing market collapsed nationwide

79
00:05:06,400 --> 00:05:08,482
by roughly 80%.

80
00:05:08,560 --> 00:05:13,691
I mean, half of all mortgage debt
was in default.

81
00:05:13,760 --> 00:05:16,445
And, I mean, there were very

82
00:05:17,560 --> 00:05:21,087
specific identifiers,
extremely recognisable.

83
00:05:24,000 --> 00:05:25,081
I mean, for instance,

84
00:05:25,160 --> 00:05:28,403
(STAMMERING) one of
the hallmarks of mania

85
00:05:28,760 --> 00:05:30,091
is the rapid rise

86
00:05:30,160 --> 00:05:32,208
in complexity and the rates of fraud.

87
00:05:32,280 --> 00:05:35,762
And did you know that they're going up?

88
00:05:36,240 --> 00:05:38,561
(CHEERLEADERS CHEERING)

89
00:05:39,600 --> 00:05:40,601
MAN: Whoo!

90
00:05:45,440 --> 00:05:46,885
(INAUDIBLE)

91
00:05:55,240 --> 00:05:57,163
MIKE: <i>I've always been</i>

92
00:05:57,240 --> 00:05:59,242
<i>more comfortable alone.</i>

93
00:05:59,360 --> 00:06:00,566
(GIRLS TALKING INDISTINCTLY)

94
00:06:00,680 --> 00:06:01,920
(GIRLS LAUGHING)

95
00:06:06,520 --> 00:06:11,162
<i>I believe maybe
it's because of my glass eye.</i>

96
00:06:13,640 --> 00:06:16,371
<i>I lost the eye in a childhood illness.</i>

97
00:06:20,720 --> 00:06:23,041
<i>It separates me from people.</i>

98
00:06:27,080 --> 00:06:29,481
<i>And did you know that they are going</i>

99
00:06:29,560 --> 00:06:30,686
up?

100
00:06:30,760 --> 00:06:34,287
The highest fraud rates since the 1930s.

101
00:06:34,360 --> 00:06:36,681
MIKE'S MOM:
Hey, hey, it's okay. It's okay.

102
00:06:36,760 --> 00:06:38,250
No, I didn't know that.

103
00:06:38,360 --> 00:06:39,805
(MIKE STUTTERING)

104
00:06:40,520 --> 00:06:42,488
(MIKE CHUCKLING)

105
00:06:42,960 --> 00:06:47,170
In 1933, the fourth year
of the Great Depression.

106
00:06:47,280 --> 00:06:48,964
Let's wash it off and put it back in.

107
00:06:49,040 --> 00:06:51,008
MIKE'S DAD: You were
playing so great, son.

108
00:06:51,120 --> 00:06:53,168
I even heard the coach say it.

109
00:06:54,280 --> 00:06:56,601
Can we just go home?

110
00:06:56,680 --> 00:07:00,810
MIKE: <i>Most social interactions
are awkward for me and for the person.</i>

111
00:07:00,880 --> 00:07:04,441
<i>Even when I try to compliment someone,</i>

112
00:07:04,520 --> 00:07:05,851
<i>it comes out wrong.</i>

113
00:07:06,760 --> 00:07:10,367
You have a very nice haircut.
Did you do it yourself?

114
00:07:10,760 --> 00:07:12,444
(CHUCKLES) What?

115
00:07:12,520 --> 00:07:15,000
(STAMMERING) No. No, I...

116
00:07:16,000 --> 00:07:17,365
(SPLASHING)

117
00:07:20,400 --> 00:07:21,526
(TELEPHONE RINGING IN DISTANCE)

118
00:07:23,680 --> 00:07:25,523
I'm sorry. I'm just...

119
00:07:28,680 --> 00:07:30,045
(SIGHS)

120
00:07:31,200 --> 00:07:32,361
I'm going on and on.

121
00:07:32,480 --> 00:07:34,130
My wife told me I need to share more.

122
00:07:34,200 --> 00:07:35,201
Mmm.

123
00:07:36,200 --> 00:07:38,009
- That seems healthy.
- Yeah.

124
00:07:38,080 --> 00:07:39,081
Mmm-hmm.

125
00:07:43,440 --> 00:07:44,601
(CHUCKLES)

126
00:07:48,600 --> 00:07:49,601
Uh...

127
00:07:50,800 --> 00:07:52,245
So do I get the job?

128
00:07:52,320 --> 00:07:54,641
I really think I could help your fund.

129
00:07:56,040 --> 00:07:57,405
Yeah.

130
00:07:57,480 --> 00:07:59,130
Yeah, sure. Go on.

131
00:07:59,760 --> 00:08:00,921
(BOTH CHUCKLING)

132
00:08:01,800 --> 00:08:05,088
- You're...
- David. Great.

133
00:08:05,160 --> 00:08:07,003
I guess I'll go find a desk.

134
00:08:07,080 --> 00:08:09,651
Is there anything you want me
to work on for start...

135
00:08:10,160 --> 00:08:11,161
Uh...

136
00:08:12,760 --> 00:08:14,091
Yeah.

137
00:08:14,160 --> 00:08:15,924
DAVID: You could let me know later.
I could come back.

138
00:08:16,160 --> 00:08:18,128
(STUTTERING)

139
00:08:18,600 --> 00:08:23,162
Did you think it was strange when, um,

140
00:08:23,240 --> 00:08:25,720
the tech bubble burst in 2001

141
00:08:25,800 --> 00:08:28,610
and the housing market in San Jose,

142
00:08:28,680 --> 00:08:30,887
the tech capital of the world,

143
00:08:32,400 --> 00:08:34,209
went up?

144
00:08:34,280 --> 00:08:35,281
Wasn't that strange?

145
00:08:35,360 --> 00:08:36,361
DAVID: No.

146
00:08:36,440 --> 00:08:39,011
No, it's housing.
Housing is always stable.

147
00:08:39,120 --> 00:08:40,121
Low risk. It's solid.

148
00:08:40,200 --> 00:08:42,202
That's the idea, yeah.

149
00:08:42,280 --> 00:08:44,009
I want you to get me

150
00:08:44,120 --> 00:08:47,283
the top 20 selling mortgage bonds.

151
00:08:47,360 --> 00:08:50,204
So you want to know what
the top 20 selling mortgage bonds are?

152
00:08:50,280 --> 00:08:54,604
No, no, no, I want to know
what mortgages are in each one.

153
00:08:56,040 --> 00:08:57,644
(CHUCKLING) Okay, aren't those
mortgages made up of...

154
00:08:57,760 --> 00:08:59,000
(ROCK MUSIC PLAYING)

155
00:08:59,080 --> 00:09:00,570
Wait, aren't those bonds made up

156
00:09:00,640 --> 00:09:02,722
of thousands and thousands
of mortgages?

157
00:09:02,800 --> 00:09:04,211
Yeah.

158
00:09:08,280 --> 00:09:09,805
DAVID: Right away, Dr. Burry.

159
00:09:28,800 --> 00:09:33,169
I am a nice guy all day long.

160
00:09:33,240 --> 00:09:35,925
Ask anyone, I'm a pleasure to work with.

161
00:09:37,840 --> 00:09:42,164
But the second my son screws up, I am...

162
00:09:42,840 --> 00:09:45,320
...yelling at him
just like my dad did to me.

163
00:09:48,400 --> 00:09:50,050
I hear the words that are
coming out of my mouth and...

164
00:09:50,120 --> 00:09:51,451
(DOOR OPENS)

165
00:09:51,520 --> 00:09:54,285
- MARK: Sorry I'm late! No cabs.
- (DOOR CLOSES)

166
00:09:54,960 --> 00:09:55,961
Oh...

167
00:09:56,440 --> 00:09:58,010
So, get this.

168
00:09:58,760 --> 00:10:01,286
I met with this retail banker yesterday.

169
00:10:01,520 --> 00:10:03,921
I'm supposed to be getting him
to invest in a fund,

170
00:10:04,040 --> 00:10:05,371
but instead

171
00:10:05,440 --> 00:10:08,330
I start grilling him about
overdraft penalties

172
00:10:08,400 --> 00:10:11,404
and how his bank will let
a customer write 10-12 cheques

173
00:10:11,480 --> 00:10:12,766
before they tell them they're overdrawn.

174
00:10:12,880 --> 00:10:16,805
And this creep is making billions
off screwing over people this way.

175
00:10:16,880 --> 00:10:18,609
And I'm getting madder and madder.

176
00:10:18,720 --> 00:10:22,122
And I ask him,
I look him in the face and I say,

177
00:10:22,200 --> 00:10:24,043
"How can you sleep at night

178
00:10:24,480 --> 00:10:27,962
"knowing that you are
ripping off working people?"

179
00:10:28,040 --> 00:10:29,769
And you know what he did? He left.

180
00:10:29,840 --> 00:10:32,571
He just walks out of the lunch,
doesn't say a word.

181
00:10:32,640 --> 00:10:33,641
What the fuck is that?

182
00:10:33,720 --> 00:10:36,041
Who's fucked up in that scenario? Am I?

183
00:10:36,120 --> 00:10:38,600
Or is this douchebag,
who leaves me hanging?

184
00:10:38,680 --> 00:10:39,966
Is he the fucked up one?

185
00:10:40,040 --> 00:10:42,805
We have talked about this
numerous times.

186
00:10:42,880 --> 00:10:46,043
You can't come in late
and hijack the entire session.

187
00:10:46,120 --> 00:10:47,565
MARK: What do you mean?
I didn't hijack the meeting.

188
00:10:47,640 --> 00:10:48,721
Did I hijack the session?

189
00:10:48,880 --> 00:10:50,006
Yeah.

190
00:10:50,440 --> 00:10:51,601
What do you do?

191
00:10:51,720 --> 00:10:52,926
MAN: I'm in commodities.

192
00:10:53,000 --> 00:10:54,331
Good luck with that.

193
00:10:54,400 --> 00:10:58,007
THERAPIST: Mark, I know
you suffered a terrible loss.

194
00:10:58,080 --> 00:10:59,411
Maybe you want to talk about that.

195
00:10:59,480 --> 00:11:00,561
- I don't talk about that.
- (CELL PHONE CHIMING)

196
00:11:00,680 --> 00:11:02,091
Hold on.

197
00:11:02,160 --> 00:11:03,491
Hold on...

198
00:11:03,600 --> 00:11:06,410
Shit, I have to take this. Sorry. Sorry.

199
00:11:07,320 --> 00:11:09,482
No... (SIGHS) I don't care, Porter.

200
00:11:09,560 --> 00:11:11,164
This guy's whole business
is built on ripping people off.

201
00:11:11,240 --> 00:11:12,810
How long can that last?

202
00:11:14,240 --> 00:11:15,446
Bye, everybody!

203
00:11:16,520 --> 00:11:18,170
MIKE: (SOFTLY) 95...

204
00:11:18,440 --> 00:11:20,568
That's 30 days late... Sixty days late...

205
00:11:23,000 --> 00:11:25,526
They pay on time...

206
00:11:25,600 --> 00:11:26,601
(TYPING ON KEYBOARD)

207
00:11:28,400 --> 00:11:30,050
These FICO scores...

208
00:11:31,600 --> 00:11:32,601
(SIGHS)

209
00:11:33,920 --> 00:11:34,921
(TELEPHONE RINGING)

210
00:11:36,600 --> 00:11:38,762
<i>Late. And they caught up
on their payments...</i>

211
00:11:38,840 --> 00:11:40,365
<i>Another 30 days late...</i>

212
00:11:40,440 --> 00:11:43,728
<i>LTV,</i> 95... <i>LTV,</i> 90...
<i>They caught up on their payments...</i>

213
00:11:43,800 --> 00:11:45,290
<i>Sixty days late? Jesus!</i>

214
00:11:45,360 --> 00:11:47,488
<i>LTV, 110? I've never heard of that!</i>

215
00:11:47,600 --> 00:11:48,931
<i>Thirty days late, rate adjusts...</i>

216
00:11:49,960 --> 00:11:51,166
<i>In '07 rate adjusts...</i>

217
00:11:51,240 --> 00:11:52,480
<i>In '06 rate adjusts...</i>

218
00:11:52,560 --> 00:11:54,847
95... 90... <i>Jesus!</i>

219
00:11:54,920 --> 00:11:56,285
(WHIRRING)

220
00:11:56,560 --> 00:11:58,210
(WHISPERING) He hasn't moved all day.

221
00:11:58,320 --> 00:12:00,607
He does this every few days.

222
00:12:00,680 --> 00:12:02,409
He hasn't spoken to me
since he hired me.

223
00:12:02,480 --> 00:12:03,891
MIKE: <i>Maybe the LTV's</i> at... <i>High-risk,</i>

224
00:12:03,960 --> 00:12:06,201
<i>interest-only... I never heard
of that mortgage history,</i>

225
00:12:06,280 --> 00:12:09,045
<i>I never heard of that... How?</i>

226
00:12:09,120 --> 00:12:10,406
Michael, how are you, guy?

227
00:12:10,480 --> 00:12:13,529
MIKE: <i>Lawrence, I found
something really interesting.</i>

228
00:12:13,600 --> 00:12:15,523
Great, Michael. Whenever you
find something interesting,

229
00:12:15,600 --> 00:12:16,840
<i>we all tend to make money.</i>

230
00:12:16,920 --> 00:12:18,285
<i>What stock are you valuing?</i>

231
00:12:18,400 --> 00:12:19,731
No, no, no, no. No stocks.

232
00:12:19,840 --> 00:12:21,888
I want to short the housing market.

233
00:12:22,200 --> 00:12:23,247
(BRUSHING)

234
00:12:23,320 --> 00:12:26,005
Really? But the housing market
is rock solid.

235
00:12:26,440 --> 00:12:27,885
<i>Greenspan just said</i>

236
00:12:27,960 --> 00:12:30,531
<i>bubbles are regional, defaults are rare.</i>

237
00:12:30,640 --> 00:12:32,768
Tell them I'll be there in a minute.

238
00:12:32,840 --> 00:12:34,649
- Say again?
<i>- Look, look...</i>

239
00:12:34,720 --> 00:12:36,609
(MUFFLED) Greenspan's wrong.

240
00:12:36,680 --> 00:12:40,048
<i>I don't think you mean to do this,
but sometimes you sound very</i>

241
00:12:40,120 --> 00:12:42,441
dismissive and superior.

242
00:12:42,520 --> 00:12:43,681
It's a fact. Greenspan's wrong.

243
00:12:43,760 --> 00:12:46,081
(MUFFLED) I don't know
how else you want me to say...

244
00:12:46,200 --> 00:12:47,611
Look, Michael.

245
00:12:47,680 --> 00:12:49,284
Metro Capital backed you four years ago

246
00:12:49,360 --> 00:12:51,169
<i>when you were a doctor with a</i>

247
00:12:51,240 --> 00:12:53,561
dinky webpage
and some inheritance money.

248
00:12:53,640 --> 00:12:54,641
<i>We've all done very well.</i>

249
00:12:54,720 --> 00:12:55,846
Why don't you just stick with stocks?

250
00:12:55,960 --> 00:12:58,088
<i>Look. You know me. I, I,</i> I...

251
00:12:58,160 --> 00:13:01,926
I look for value wherever it can be found.

252
00:13:02,000 --> 00:13:03,126
And the fact is

253
00:13:03,200 --> 00:13:06,363
that these mortgage-backed
securities are filled

254
00:13:06,480 --> 00:13:09,927
<i>with extremely risky
subprime adjustable-rate loans.</i>

255
00:13:10,000 --> 00:13:12,526
<i>And when the majority
of the adjustable rates</i>

256
00:13:12,600 --> 00:13:14,887
<i>kick in, in '07,</i>

257
00:13:15,000 --> 00:13:16,161
they will begin to fail.

258
00:13:16,240 --> 00:13:19,608
And if they fail above 15%,
the whole bond is worthless.

259
00:13:19,680 --> 00:13:21,842
<i>Michael, just take a beat.</i>

260
00:13:21,920 --> 00:13:23,126
<i>We'll talk about this later, okay?</i>

261
00:13:23,200 --> 00:13:26,283
Lawrence, please,
don't patronise me. Listen...

262
00:13:26,360 --> 00:13:27,805
JARED: <i>Mortgage-backed securities.</i>

263
00:13:27,880 --> 00:13:29,211
It, it, it...

264
00:13:29,320 --> 00:13:31,129
<i>- Subprime loans. Tranches.</i>
- (QUACKING)

265
00:13:31,200 --> 00:13:32,850
<i>It's pretty confusing, right?</i>

266
00:13:32,920 --> 00:13:35,571
<i>Does it make you feel bored?
Or stupid?</i>

267
00:13:35,640 --> 00:13:37,961
<i>Well, it's supposed to.</i>

268
00:13:38,040 --> 00:13:39,610
<i>Wall Street loves to use confusing terms</i>

269
00:13:39,680 --> 00:13:42,365
<i>to make you think only they
can do what they do.</i>

270
00:13:42,720 --> 00:13:43,926
<i>Or, even better,</i>

271
00:13:44,000 --> 00:13:46,367
<i>for you to just leave them the fuck alone.</i>

272
00:13:46,440 --> 00:13:48,408
<i>So here's Margot Robbie
in a bubble bath to explain.</i>

273
00:13:48,480 --> 00:13:49,561
(POPS)

274
00:13:49,680 --> 00:13:52,684
Basically, Lewis Ranieri's
mortgage bonds

275
00:13:52,760 --> 00:13:55,047
were amazingly profitable
for the big banks.

276
00:13:55,120 --> 00:13:59,091
They made billions and billions
on their 2% fee

277
00:13:59,160 --> 00:14:01,401
they got for selling each of these bonds.

278
00:14:01,480 --> 00:14:03,244
But then they started
running out of mortgages

279
00:14:03,360 --> 00:14:04,885
to put in them.

280
00:14:04,960 --> 00:14:07,645
After all, there are only so many homes

281
00:14:07,720 --> 00:14:11,520
and so many people with
good enough jobs to buy them, right?

282
00:14:11,600 --> 00:14:13,682
So the banks started filling these bonds

283
00:14:13,760 --> 00:14:15,888
with riskier and riskier mortgages.

284
00:14:16,000 --> 00:14:17,206
Thank you, Benter.

285
00:14:17,280 --> 00:14:21,763
That way they can keep
that profit machine churning, right?

286
00:14:21,880 --> 00:14:26,249
By the way, these risky mortgages
are called subprime.

287
00:14:26,320 --> 00:14:28,721
So whenever you hear "subprime", think

288
00:14:28,800 --> 00:14:30,245
"shit".

289
00:14:30,320 --> 00:14:33,881
Our friend Michael Burry found out
that these mortgage bonds

290
00:14:33,960 --> 00:14:37,203
that were supposedly 65% AAA

291
00:14:37,280 --> 00:14:40,011
were actually just mostly full of shit.

292
00:14:40,640 --> 00:14:43,405
So now he's going to "short" the bonds.

293
00:14:43,480 --> 00:14:45,482
Which means to "bet against".

294
00:14:46,320 --> 00:14:47,321
Got it?

295
00:14:48,000 --> 00:14:49,331
Good.

296
00:14:52,360 --> 00:14:53,646
Now fuck off.

297
00:14:53,720 --> 00:14:56,087
It's only a matter of time before
someone else sees this investment.

298
00:14:56,160 --> 00:14:57,844
- We have to act now!
- (BANGING TABLE)

299
00:14:57,920 --> 00:15:00,207
How do you know
the bonds are worthless?

300
00:15:00,280 --> 00:15:02,487
Aren't they filled with fucking thousands

301
00:15:02,560 --> 00:15:03,686
<i>of pages of mortgages?</i>

302
00:15:03,760 --> 00:15:06,081
I read them.

303
00:15:06,160 --> 00:15:08,049
<i>- You read them?</i>
- I read... Yes.

304
00:15:08,120 --> 00:15:11,329
No one reads them. Only the lawyers
who put them together read them.

305
00:15:11,400 --> 00:15:16,167
Look, I don't think that they
even know what they've made.

306
00:15:16,240 --> 00:15:19,528
The housing market
is propped up on these

307
00:15:19,800 --> 00:15:22,485
bad loans, and I'm... (SIGHS)

308
00:15:22,560 --> 00:15:24,608
It's a time bomb, and I want to short it.

309
00:15:24,680 --> 00:15:26,967
Through what instrument, Michael?

310
00:15:27,040 --> 00:15:30,044
There are no insurance contracts
or options for mortgage bonds.

311
00:15:30,120 --> 00:15:31,406
The bonds are too stable.

312
00:15:31,520 --> 00:15:32,806
Lawrence...

313
00:15:33,920 --> 00:15:35,809
(STUTTERS)

314
00:15:36,160 --> 00:15:40,006
This is what I'm gonna do.
I am gonna get a bank

315
00:15:40,320 --> 00:15:42,368
to make me one.

316
00:15:43,000 --> 00:15:44,650
And then

317
00:15:45,480 --> 00:15:47,289
I'm gonna buy it.

318
00:15:47,720 --> 00:15:48,767
(CAR HONKING)

319
00:15:48,840 --> 00:15:50,365
MARK: I don't want that kind of business.

320
00:15:50,440 --> 00:15:53,125
Money is not money.
That's bad money.

321
00:15:53,800 --> 00:15:56,041
Hey! Excuse me!

322
00:15:57,360 --> 00:16:00,284
Let me ask you this.
What company treats its customers

323
00:16:00,360 --> 00:16:02,966
that shittily and succeeds?

324
00:16:03,880 --> 00:16:05,689
- Fine. Okay, Goldman. You're right.
- (HORN HONKING)

325
00:16:05,760 --> 00:16:07,125
JARED: <i>Mark Baum had built his career</i>

326
00:16:07,200 --> 00:16:09,202
<i>on never assuming anyone
or any company</i>

327
00:16:09,320 --> 00:16:10,970
<i>was legit without proving it.</i>

328
00:16:11,040 --> 00:16:12,565
<i>When he was a kid
he excelled at studying</i>

329
00:16:12,640 --> 00:16:14,688
<i>the Talmud in Yeshiva. Whatever.</i>

330
00:16:14,760 --> 00:16:16,649
<i>But one day his rabbi told his mom why.</i>

331
00:16:16,720 --> 00:16:17,721
(HORN HONKING)

332
00:16:17,840 --> 00:16:20,889
Paul is a fine boy,
and Mark is an excellent student

333
00:16:21,000 --> 00:16:23,571
of the Torah and the Talmud.

334
00:16:23,640 --> 00:16:25,608
Then what's the problem, rabbi?

335
00:16:25,680 --> 00:16:28,889
It's the reason Mark is studying so hard.

336
00:16:29,680 --> 00:16:32,923
He's looking for inconsistencies
in the word of God!

337
00:16:35,640 --> 00:16:37,802
- So has he found any?
- (SCOFFS)

338
00:16:38,880 --> 00:16:42,168
JARED: <i>Later, Baum started
his own fund on Wall Street.</i>

339
00:16:42,240 --> 00:16:43,651
<i>He had an amazing nose for bullshit.</i>

340
00:16:43,720 --> 00:16:45,722
<i>And he wasn't afraid to let
anyone know when and where</i>

341
00:16:45,800 --> 00:16:48,451
<i>the bull had gone number two.</i>

342
00:16:48,520 --> 00:16:50,124
<i>But then a tragedy happened to Mark,</i>

343
00:16:50,240 --> 00:16:51,685
<i>and it turned his world view dark</i>

344
00:16:51,760 --> 00:16:54,081
<i>and ready to believe
the whole system was a lie.</i>

345
00:16:54,200 --> 00:16:55,725
- (PHONE CHIMES)
- Hold on.

346
00:16:55,800 --> 00:16:58,644
It's Cynthia.
I'll be in the office in 20 minutes.

347
00:16:59,600 --> 00:17:00,761
Hi, honey.

348
00:17:00,840 --> 00:17:02,171
(SIRENS WAILING)

349
00:17:02,240 --> 00:17:05,926
The therapist called. You did it again.

350
00:17:06,320 --> 00:17:09,085
There were no cabs.
What was I supposed to do?

351
00:17:09,160 --> 00:17:10,844
I worry about you, Mark.

352
00:17:10,920 --> 00:17:12,251
<i>At least I went.</i>

353
00:17:13,520 --> 00:17:15,488
You're running around
like you have to right

354
00:17:15,560 --> 00:17:17,449
- every wrong in the world.
- Okay.

355
00:17:17,520 --> 00:17:18,726
<i>You're so angry.</i>

356
00:17:18,800 --> 00:17:20,211
Fine. You know what?

357
00:17:20,280 --> 00:17:23,204
<i>I'm a mean guy and I'm pissed off.</i>

358
00:17:23,280 --> 00:17:25,203
But it is a shit storm out here, sweetie.

359
00:17:25,280 --> 00:17:28,602
You have no idea
the kind of crap people are pulling.

360
00:17:28,680 --> 00:17:31,411
And everyone's walking around like
they're in a goddamn Enya video.

361
00:17:31,480 --> 00:17:32,970
(BIRDS CHIRPING)

362
00:17:33,040 --> 00:17:34,565
They're all getting screwed, you know.

363
00:17:34,640 --> 00:17:37,211
You know what they care about?
They care about the ballgame.

364
00:17:37,280 --> 00:17:40,170
Or they care about
what actress just went into rehab.

365
00:17:40,240 --> 00:17:42,288
I think you should try medication.

366
00:17:42,360 --> 00:17:45,569
No, no. We agreed.
If it interfered with work.

367
00:17:45,640 --> 00:17:47,483
You hate Wall Street.
Maybe it's time to quit.

368
00:17:48,000 --> 00:17:49,923
- I love my job.
- You hate your job.

369
00:17:50,000 --> 00:17:51,001
I love my job.

370
00:17:51,080 --> 00:17:52,081
You're miserable.

371
00:17:52,160 --> 00:17:54,162
I love my job. I love my job, honey.

372
00:17:55,080 --> 00:17:56,366
Mark...

373
00:17:57,560 --> 00:18:00,689
I am sad every day
about what happened.

374
00:18:00,760 --> 00:18:04,082
<i>I know you must feel the same,
but you never show it.</i>

375
00:18:10,320 --> 00:18:12,846
I know how close you
were to your brother.

376
00:18:16,240 --> 00:18:17,321
MARK: <i>Paul.</i>

377
00:18:18,360 --> 00:18:19,964
<i>Where'd you go, Paul?</i>

378
00:18:25,240 --> 00:18:26,526
<i>Paul!</i>

379
00:18:32,160 --> 00:18:34,925
Every day I think you're
gonna talk about it, but you never do.

380
00:18:35,200 --> 00:18:37,441
- (TV PLAYING)
- (TYPING ON LAPTOP)

381
00:18:37,520 --> 00:18:38,521
(BEEPING)

382
00:18:38,800 --> 00:18:42,521
Will you at least think about the idea
of making a change?

383
00:18:42,640 --> 00:18:45,450
<i>Fine. Fine. Honey, you know what?
I will consider it.</i>

384
00:18:45,560 --> 00:18:48,962
But, honestly, Cynthia.
I'm okay. I really am.

385
00:18:49,040 --> 00:18:50,963
Hey, hey, hey! No, no.

386
00:18:51,040 --> 00:18:54,487
My cab. That's my cab.
That's my cab. That is my cab.

387
00:18:54,560 --> 00:18:56,085
MARK: <i>Schmuck. Fuck you.</i>
MAN: <i>Fuck you.</i>

388
00:18:56,160 --> 00:18:57,685
MARK: <i>Fuck you.</i>
MAN: <i>Fuck you.</i>

389
00:18:57,760 --> 00:18:58,761
(PHONE BEEPS)

390
00:18:58,880 --> 00:19:00,405
I'll call you later.

391
00:19:03,240 --> 00:19:04,241
(HORN HONKING)

392
00:19:07,720 --> 00:19:11,805
I want to buy swaps on mortgage bonds.

393
00:19:11,920 --> 00:19:14,241
A credit default swap that will pay off

394
00:19:15,280 --> 00:19:17,806
if the underlying bond fails.

395
00:19:18,600 --> 00:19:20,170
You want to bet against
the housing market?

396
00:19:20,240 --> 00:19:22,163
- Yes.
- Why?

397
00:19:22,240 --> 00:19:23,401
Those bonds only fail

398
00:19:23,480 --> 00:19:26,006
if millions of Americans
don't pay their mortgages.

399
00:19:26,080 --> 00:19:28,447
That's never happened in history.

400
00:19:28,560 --> 00:19:31,484
If you'll excuse me, Dr. Burry,
it seems like a foolish investment.

401
00:19:31,560 --> 00:19:34,370
Well, based on prevailing sentiment

402
00:19:34,440 --> 00:19:36,442
of the market and banks
in popular culture,

403
00:19:36,520 --> 00:19:38,807
yes, it's a foolish investment.

404
00:19:38,880 --> 00:19:41,406
But, uh... Everyone's wrong.

405
00:19:41,520 --> 00:19:42,885
(BOTH LAUGHING)

406
00:19:42,960 --> 00:19:44,485
That's a good one.

407
00:19:45,320 --> 00:19:46,321
(LAUGHS)

408
00:19:46,800 --> 00:19:48,484
This is Wall Street, Dr. Burry.

409
00:19:48,560 --> 00:19:50,528
If you offer us free money,
we are going to take it.

410
00:19:50,600 --> 00:19:55,242
My one concern is that
when the bonds fail,

411
00:19:56,360 --> 00:19:59,921
uh, I want to be certain, um, of payment

412
00:20:00,000 --> 00:20:02,765
um, in case of solvency issues
with your bank.

413
00:20:03,800 --> 00:20:06,121
I'm sorry, are you for real?

414
00:20:06,200 --> 00:20:07,884
You wanna bet against
the housing market

415
00:20:07,960 --> 00:20:09,246
and you're worried we won't pay you?

416
00:20:09,320 --> 00:20:10,924
Yes, that's correct.

417
00:20:11,640 --> 00:20:12,801
(LUCY CLEARS THROAT)

418
00:20:15,280 --> 00:20:16,691
(WHISPERING)

419
00:20:22,280 --> 00:20:24,169
LUCY: (WHISPERING)
...unless the market crashes.

420
00:20:24,280 --> 00:20:26,487
DEEB: (WHISPERS) The market
on housing's never gonna crash

421
00:20:26,560 --> 00:20:29,404
because it's so solid right now.

422
00:20:29,480 --> 00:20:32,211
I mean, who doesn't
pay their mortgages?

423
00:20:36,160 --> 00:20:37,161
Mmm-hmm.

424
00:20:39,400 --> 00:20:40,447
(CLEARS THROAT) Dr. Burry,

425
00:20:40,520 --> 00:20:42,887
we could work out
a pay-as-we-go structure

426
00:20:42,960 --> 00:20:44,962
that would pay out if the bonds fail.

427
00:20:45,040 --> 00:20:46,530
But it would also apply to your payments

428
00:20:46,640 --> 00:20:48,608
if the value of the mortgage bond
goes up.

429
00:20:48,680 --> 00:20:51,411
You'd have to pay us monthly premiums.

430
00:20:51,520 --> 00:20:54,171
LUCY: Is that acceptable, Dr. Burry?

431
00:20:56,640 --> 00:20:57,971
Yes. Yes.

432
00:20:58,840 --> 00:21:01,446
Um, I have prospectuses on six

433
00:21:01,520 --> 00:21:04,364
mortgage-backed securities
I want to short.

434
00:21:06,760 --> 00:21:08,046
(DEEB READING SOFTLY)

435
00:21:08,840 --> 00:21:10,569
LUCY: (WHISPERING)
Majority of the mortgages...

436
00:21:11,240 --> 00:21:12,526
(CHUCKLES)

437
00:21:12,680 --> 00:21:14,011
(LUCY AND DEEB WHISPERING)

438
00:21:15,080 --> 00:21:16,081
(PAGES FLIPPING)

439
00:21:21,880 --> 00:21:24,406
DEEB: (WHISPERING) I don't see us
losing any money on these at all.

440
00:21:24,480 --> 00:21:25,720
(PRINTER WHIRRING)

441
00:21:35,080 --> 00:21:36,081
(INHALES)

442
00:21:37,880 --> 00:21:40,565
Dr. Burry, these should be fine.

443
00:21:40,640 --> 00:21:42,563
Yeah. We're prepared
to sell you $5 million

444
00:21:42,640 --> 00:21:44,529
in credit default swaps
on these mortgage bonds.

445
00:21:45,720 --> 00:21:47,131
Can we make it $100 million?

446
00:21:50,000 --> 00:21:52,401
Uh, absolutely,
we can make it $100 million.

447
00:21:54,000 --> 00:21:57,209
LUCY: We'll be in touch,
send some paperwork over.

448
00:21:58,080 --> 00:21:59,081
DEEB: Um...

449
00:22:00,160 --> 00:22:01,525
(SIGHING) I like these cups.

450
00:22:01,600 --> 00:22:03,284
(STUTTERING)
Can I take one for my son?

451
00:22:03,360 --> 00:22:05,169
LUCY: Have... Yes. Yes.

452
00:22:05,240 --> 00:22:06,730
Thank you.

453
00:22:06,800 --> 00:22:08,165
LUCY: Have two.

454
00:22:13,600 --> 00:22:16,331
(INAUDIBLE)

455
00:22:16,760 --> 00:22:18,330
(HIP HOP MUSIC PLAYING)

456
00:22:28,120 --> 00:22:31,169
Is there any way to do $200 million?

457
00:22:32,600 --> 00:22:35,251
I mean, we can. But are you sure?

458
00:22:36,160 --> 00:22:39,323
Absolutely. Absolutely, we can do that.

459
00:22:53,040 --> 00:22:56,408
We do different projects.
We do gardening.

460
00:22:56,520 --> 00:22:59,808
The bonds I'd like to bet against.

461
00:22:59,960 --> 00:23:01,485
It's not bad seeing yourself
on the big screen.

462
00:23:01,560 --> 00:23:02,561
It's very cool.

463
00:23:03,600 --> 00:23:07,286
<i>I ordered the 24-ounce T-bone,
which was choice.</i>

464
00:23:07,360 --> 00:23:08,805
<i>- I went for volume...</i>
- WOMAN: <i>Yeah.</i>

465
00:23:08,880 --> 00:23:10,530
<i>...rather than prime.</i>

466
00:23:10,600 --> 00:23:13,285
I went for subprime, and the gist was...

467
00:23:18,720 --> 00:23:19,721
(HORN HONKING)

468
00:23:20,600 --> 00:23:23,171
MAN: Can I have like, lettuce,
tomato, no onions?

469
00:23:23,720 --> 00:23:27,088
WOMAN: So, no onions.
Lettuce, tomato, Thousand Island okay?

470
00:23:27,160 --> 00:23:28,161
MAN: Yeah.

471
00:23:31,960 --> 00:23:33,485
(INDISTINCT CONVERSATIONS)

472
00:23:35,160 --> 00:23:36,924
Hey, Randall! What's with the Dom?

473
00:23:37,000 --> 00:23:38,843
Bonuses aren't for three months.

474
00:23:38,920 --> 00:23:42,925
We just sold $200 million
in credit swaps for mortgage bonds.

475
00:23:43,000 --> 00:23:45,162
Some fund manager from California.

476
00:23:45,240 --> 00:23:46,605
It's fucking crazy, right?

477
00:23:46,680 --> 00:23:47,761
A whole new way to make money, Doug.

478
00:23:47,840 --> 00:23:50,081
Wait, wait. I didn't know
there were swaps on mortgages.

479
00:23:50,160 --> 00:23:52,766
(LAUGHS) There are now.
We made it for him.

480
00:23:52,840 --> 00:23:54,524
He must have gone off
his Zoloft or something.

481
00:23:54,600 --> 00:23:55,931
I don't know. (CHUCKLES)

482
00:23:56,000 --> 00:23:57,764
- Want to join? No?
- Just a second.

483
00:23:57,840 --> 00:23:58,841
Oh...

484
00:23:59,040 --> 00:24:00,451
DOUG: Hey, Jared.

485
00:24:00,520 --> 00:24:02,010
Did you hear about the deal
that Randall just did

486
00:24:02,080 --> 00:24:03,286
with some fund manager?

487
00:24:03,360 --> 00:24:05,203
JARED: Randall? Bullshit.

488
00:24:05,600 --> 00:24:07,443
He's a foot soldier.
I'm sure it's a shit deal.

489
00:24:07,520 --> 00:24:08,806
No, it's for real.

490
00:24:10,040 --> 00:24:11,405
I told you we'd meet later.

491
00:24:11,480 --> 00:24:13,960
Unfortunately, it's in a place like this
which I would never be.

492
00:24:14,040 --> 00:24:16,691
I never hung out with
these idiots after work, ever.

493
00:24:16,760 --> 00:24:18,569
I had fashion friends.

494
00:24:18,960 --> 00:24:22,282
Apparently, this guy wanted $200 mil
in credit default swaps.

495
00:24:22,360 --> 00:24:24,124
Randall made the sale.
Can you believe it?

496
00:24:24,200 --> 00:24:26,487
Somebody shorted $200 mil
on mortgage bonds?

497
00:24:26,560 --> 00:24:29,928
That was just with Deutsche.
Word is he hit half the town.

498
00:24:30,800 --> 00:24:31,926
How much in total?

499
00:24:32,000 --> 00:24:33,729
$1.3 billion.

500
00:24:33,800 --> 00:24:37,646
LAWRENCE: <i>What? That's pretty much
all of Scion's liquidity.</i>

501
00:24:37,720 --> 00:24:39,802
Michael, this is highly distressing.

502
00:24:39,880 --> 00:24:41,325
<i>Lawrence, that is not</i>

503
00:24:41,400 --> 00:24:44,006
all of our liquidity.

504
00:24:44,080 --> 00:24:45,241
And I'm not certain

505
00:24:45,320 --> 00:24:47,561
<i>that you really understand this trade.</i>

506
00:24:47,640 --> 00:24:48,687
This is a certainty.

507
00:24:48,760 --> 00:24:51,889
<i>Mike, I consider myself a mentor to you.</i>

508
00:24:51,960 --> 00:24:55,806
<i>But our company is not comfortable
with this investment. Am I being clear?</i>

509
00:24:55,880 --> 00:24:58,121
Lawrence, I have full autonomy

510
00:24:58,200 --> 00:25:01,124
when it comes to investment strategy.

511
00:25:01,200 --> 00:25:02,326
(SIGHS) You can read our agreement.

512
00:25:02,400 --> 00:25:05,768
<i>Do not throw our inception agreement
in my face, Michael.</i>

513
00:25:05,840 --> 00:25:08,241
<i>- We had an underlying understanding</i>
- (COMPUTER BEEPS)

514
00:25:08,400 --> 00:25:09,606
<i>you wouldn't act like
a goddamn crazy man.</i>

515
00:25:09,680 --> 00:25:11,284
This is not crazy.

516
00:25:11,360 --> 00:25:12,850
It's all very logical.

517
00:25:12,920 --> 00:25:15,082
<i>So, now we pay up premiums
on these swaps</i>

518
00:25:15,680 --> 00:25:18,445
against the housing market
until the mortgages fail?

519
00:25:18,520 --> 00:25:20,204
In other words, we lose millions

520
00:25:20,320 --> 00:25:23,005
<i>until something that's
never happened before happens?</i>

521
00:25:26,840 --> 00:25:27,887
That's correct.

522
00:25:32,160 --> 00:25:33,889
(TELEPHONES RINGING)

523
00:26:01,400 --> 00:26:02,640
KATHY: Hello, Mark Baum.

524
00:26:02,720 --> 00:26:04,802
Oh, hey, Kathy, you busted me.

525
00:26:04,880 --> 00:26:05,881
I had a personal thing this afternoon.

526
00:26:06,000 --> 00:26:06,967
I'm not your babysitter.

527
00:26:07,040 --> 00:26:09,646
If FrontPoint makes money
for Morgan Stanley, I'm happy.

528
00:26:09,720 --> 00:26:12,087
Okay. Hey, did I hear you're expecting?

529
00:26:12,160 --> 00:26:13,491
We're expecting to be expecting.

530
00:26:13,560 --> 00:26:15,244
IVF's are cleaning us out
but we're staying positive...

531
00:26:15,320 --> 00:26:16,845
That's exciting!

532
00:26:18,160 --> 00:26:19,161
(CHUCKLES)

533
00:26:21,000 --> 00:26:24,004
...lump on my ball.
And I go in for a scan.

534
00:26:24,080 --> 00:26:25,081
Mmm-hmm.

535
00:26:25,160 --> 00:26:28,881
Turns out that I have a very large thing
called an epididymis.

536
00:26:28,960 --> 00:26:31,531
Which is a thing
that goes around the ball

537
00:26:31,600 --> 00:26:33,329
and is like a sac underneath.

538
00:26:33,400 --> 00:26:34,447
I have an extremely

539
00:26:34,520 --> 00:26:36,363
- pronounced epididymis.
- PORTER: I'm riveted...

540
00:26:36,440 --> 00:26:38,488
I'm riveted by this.
Do you have any pictures?

541
00:26:38,560 --> 00:26:42,121
DANNY: It's almost as large
as another testicle unto itself.

542
00:26:42,200 --> 00:26:44,282
So get this. Cynthia...

543
00:26:44,360 --> 00:26:47,443
Guys. Cynthia wants me to quit
and open a B&B in Vermont.

544
00:26:47,520 --> 00:26:48,601
(VINNIE LAUGHING)

545
00:26:48,680 --> 00:26:52,127
That sounds great. I'd love to see
Mark Baum run a bed and breakfast.

546
00:26:52,200 --> 00:26:54,123
Like, "Here's your
steel-cut oatmeal, asshole."

547
00:26:54,200 --> 00:26:56,806
JARED: <i>Mark refused to kiss the ring
of the people with the chequebooks,</i>

548
00:26:56,880 --> 00:26:59,963
<i>so he had to set up his fund
under Morgan Stanley's umbrella.</i>

549
00:27:00,040 --> 00:27:01,121
(LAUGHING)

550
00:27:01,200 --> 00:27:03,726
<i>His small team reflected
his distrust of the system.</i>

551
00:27:03,800 --> 00:27:05,211
You guys are sick. You're sick.

552
00:27:05,320 --> 00:27:07,448
She says this job is making me unhappy.

553
00:27:07,560 --> 00:27:08,607
VINNIE: But you're happy
when you're unhappy.

554
00:27:08,720 --> 00:27:10,165
I am happy when I'm unhappy.

555
00:27:10,240 --> 00:27:11,241
JARED: <i>Vinnie Daniel.</i>

556
00:27:11,320 --> 00:27:12,481
You know how to make a muffin?

557
00:27:12,560 --> 00:27:14,324
<i>- Mark's numbers guy.</i>
- Do you even know how

558
00:27:14,400 --> 00:27:15,811
- to do laundry? Make a bed?
- MARK: Okay...

559
00:27:15,880 --> 00:27:18,531
<i>Vinnie lost his father to a violent crime
when he was young.</i>

560
00:27:18,600 --> 00:27:20,443
<i>Just like Mark, he didn't talk about it.</i>

561
00:27:20,520 --> 00:27:21,806
I don't talk about that.

562
00:27:21,880 --> 00:27:24,201
Cynthia's no joke. She could
actually make him move to Vermont.

563
00:27:24,280 --> 00:27:25,930
I mean, she made me
start wearing a seatbelt.

564
00:27:26,040 --> 00:27:27,724
- Hey, you want me to...
- JARED: <i>Porter Collins.</i>

565
00:27:27,840 --> 00:27:30,047
<i>Former Olympic rower
who went to Brown.</i>

566
00:27:30,120 --> 00:27:31,770
<i>He worked with Baum at a previous firm</i>

567
00:27:31,920 --> 00:27:33,809
<i>and couldn't figure out
why no one listened to Baum.</i>

568
00:27:33,920 --> 00:27:35,968
<i>The guy with all the good ideas.</i>

569
00:27:36,040 --> 00:27:37,849
Sorry. I think you have
the wrong FrontPoint.

570
00:27:37,960 --> 00:27:40,725
'Cause there is another FrontPoint
in this same building that is bonds.

571
00:27:40,800 --> 00:27:43,565
<i>And Danny Moses.
The optimist of the bunch.</i>

572
00:27:44,440 --> 00:27:45,680
<i>And a hell of a trader.</i>

573
00:27:45,760 --> 00:27:48,889
<i>Which is the only reason they put up
with his bullshit optimism.</i>

574
00:27:48,960 --> 00:27:50,200
DANNY: That was a weird call.

575
00:27:50,280 --> 00:27:53,602
You take longer with a wrong number
than anybody else.

576
00:27:53,680 --> 00:27:56,365
It was this guy from Deutsche

577
00:27:56,440 --> 00:27:58,966
who was talking about
shorting housing bonds.

578
00:28:00,360 --> 00:28:01,521
And then in the middle of the call

579
00:28:01,640 --> 00:28:02,801
I realised he had the wrong FrontPoint.

580
00:28:02,880 --> 00:28:05,281
And then... 'Cause he wanted
the one on the 8th floor.

581
00:28:05,920 --> 00:28:07,809
He wanted to short housing bonds?

582
00:28:07,880 --> 00:28:08,927
Uh-huh. That happens
like five times a day

583
00:28:09,040 --> 00:28:10,485
that somebody gets
the wrong FrontPoint.

584
00:28:10,560 --> 00:28:12,722
- We should change our name.
- VINNIE: Wait. Wait.

585
00:28:12,800 --> 00:28:14,768
He wanted to short housing bonds?

586
00:28:15,120 --> 00:28:16,884
- Who bets against housing?
- (TYPING ON COMPUTER)

587
00:28:17,840 --> 00:28:19,046
VINNIE: What's the ABX at?

588
00:28:19,160 --> 00:28:20,366
What's ABX?

589
00:28:20,440 --> 00:28:23,284
It tracks subprime mortgage bond value.
Go back to sleep.

590
00:28:23,680 --> 00:28:25,967
- The ABX is at, uh...
- (BEEPING)

591
00:28:26,080 --> 00:28:29,368
Wow, it's down! It's down
three points since last year.

592
00:28:29,440 --> 00:28:31,681
That's weird. I haven't
heard a peep about that.

593
00:28:31,760 --> 00:28:32,807
What was this guy's name?

594
00:28:32,880 --> 00:28:35,042
Jared Vennett. Vennett.

595
00:28:35,120 --> 00:28:37,361
JARED: <i>That's right.
These lucky sons of bitches</i>

596
00:28:37,440 --> 00:28:40,171
<i>caught wind of one of the best trades
in Wall Street history</i>

597
00:28:40,280 --> 00:28:41,850
<i>from a wrong number.</i>

598
00:28:41,920 --> 00:28:44,207
<i>They should have paid 10%
to my fuckstick assistant.</i>

599
00:28:44,320 --> 00:28:46,607
DANNY: His name was
Jared Vennett. Vennett.

600
00:28:46,680 --> 00:28:48,648
Jared Vennett from Deutsche.
Sounded very sketchy.

601
00:28:48,800 --> 00:28:49,801
VINNIE: Sounds like a douchebag.

602
00:28:50,480 --> 00:28:52,244
(WHISPERING) Do you smell that?

603
00:28:52,320 --> 00:28:53,651
Do you smell that?

604
00:28:53,760 --> 00:28:55,046
I smell money.

605
00:28:55,800 --> 00:28:57,245
This is your basic mortgage...

606
00:29:01,040 --> 00:29:03,202
Okay, hi. How are you?

607
00:29:03,760 --> 00:29:04,966
Have a seat.

608
00:29:05,040 --> 00:29:07,850
MARK: Okay, Mr. Vennett
from Deutsche Bank. What do we have?

609
00:29:12,320 --> 00:29:13,924
There you go.

610
00:29:17,400 --> 00:29:19,926
MARK: So, how many people
have you talked to about this trade?

611
00:29:20,000 --> 00:29:22,765
A few. There's definitely some interest.

612
00:29:22,840 --> 00:29:24,285
- No!
- My boss would have my ass...

613
00:29:24,360 --> 00:29:25,771
- N.O.!
- You crazy, Jared?

614
00:29:25,840 --> 00:29:27,410
- Get lost.
- Fuck you.

615
00:29:28,160 --> 00:29:30,925
Which is why you're here talking to us,
a wrong number.

616
00:29:31,000 --> 00:29:32,445
Sounds like there's a lot of interest.

617
00:29:32,520 --> 00:29:34,841
All right. A few people have invited us in

618
00:29:34,960 --> 00:29:37,327
just to laugh at me on this deal.
Is that you?

619
00:29:37,400 --> 00:29:38,447
Is that what this is?

620
00:29:38,520 --> 00:29:39,521
VINNIE: That's not what this is.

621
00:29:39,600 --> 00:29:41,443
That's just how Mark is.

622
00:29:41,520 --> 00:29:42,806
- Let's see what you got.
- I'm sorry.

623
00:29:42,880 --> 00:29:44,530
You smell that? What is that?

624
00:29:44,640 --> 00:29:46,085
- MARK: What?
- What's that smell?

625
00:29:46,480 --> 00:29:47,481
Your cologne?

626
00:29:47,560 --> 00:29:48,641
JARED: No.

627
00:29:50,880 --> 00:29:52,166
Opportunity.

628
00:29:52,280 --> 00:29:53,611
No. Money.

629
00:29:53,680 --> 00:29:54,966
- Oh...
- MARK: Okay.

630
00:29:55,040 --> 00:29:56,610
- I smell money.
- Okay.

631
00:29:57,080 --> 00:29:59,765
- Chris, God damn it.
- Sorry.

632
00:30:02,960 --> 00:30:05,406
JARED: This is your
basic mortgage bond.

633
00:30:05,480 --> 00:30:07,721
All right? The originals were simple.

634
00:30:07,800 --> 00:30:11,486
They were just thousands
of AAA mortgages bundled together,

635
00:30:11,560 --> 00:30:13,324
guaranteed by the U.S. government.

636
00:30:13,400 --> 00:30:15,243
The modern ones are different.

637
00:30:15,320 --> 00:30:18,244
They're private. And they're
made up of layers of tranches.

638
00:30:23,480 --> 00:30:25,926
The highest level, AAA,
is getting paid first.

639
00:30:26,000 --> 00:30:29,163
The lowest rated, B, is getting paid last,
taking on defaults first.

640
00:30:29,240 --> 00:30:31,925
Now, obviously, if you're buying B's,
you could make more money.

641
00:30:32,000 --> 00:30:33,161
But they're a little risky.

642
00:30:33,240 --> 00:30:35,402
Sometimes they fail.

643
00:30:36,680 --> 00:30:38,011
Chris?

644
00:30:41,840 --> 00:30:44,081
Somewhere along the line,
these B's and BB's

645
00:30:44,160 --> 00:30:45,650
went from a little risky

646
00:30:45,720 --> 00:30:48,121
to dog shit. Where's the trash?

647
00:30:48,240 --> 00:30:49,241
PORTER: It's right behind you.

648
00:30:49,600 --> 00:30:52,490
I'm talking rock-bottom FICO scores.

649
00:30:52,560 --> 00:30:53,561
(THUNKING)

650
00:30:53,680 --> 00:30:55,205
No income verification.

651
00:30:55,280 --> 00:30:56,327
(THUNKING)

652
00:30:56,400 --> 00:30:59,244
Adjustable rates. Dog shit!

653
00:31:00,680 --> 00:31:03,524
The default rates are already up
from 1 % to 4%, fellas.

654
00:31:03,600 --> 00:31:05,841
And if they rise to 8%, and they will,

655
00:31:06,600 --> 00:31:08,887
a lot of these BBB's
are going to zero, too.

656
00:31:08,960 --> 00:31:10,371
And that... You're too close.

657
00:31:12,120 --> 00:31:13,121
...is an opportunity.

658
00:31:13,200 --> 00:31:14,201
- (EXHALES)
- MARK: Okay.

659
00:31:14,280 --> 00:31:17,887
You're saying that at 8% the bonds fail
and we are already at 4%?

660
00:31:17,960 --> 00:31:18,961
That's right.

661
00:31:19,040 --> 00:31:20,883
If they go to 8%, it's Armageddon?

662
00:31:20,960 --> 00:31:21,961
Yeah. That's right.

663
00:31:22,040 --> 00:31:23,804
How come nobody's talking about this?

664
00:31:23,880 --> 00:31:26,042
You're completely sure of the math?

665
00:31:26,120 --> 00:31:28,691
Look at him. That's my quant.

666
00:31:28,760 --> 00:31:29,807
MARK: Your what?

667
00:31:29,880 --> 00:31:31,689
My quantitative!

668
00:31:31,760 --> 00:31:34,491
My math specialist. Look at him.

669
00:31:34,560 --> 00:31:36,881
You notice anything different about him?
Look at his face.

670
00:31:36,960 --> 00:31:38,086
MARK: That's pretty racist.

671
00:31:38,160 --> 00:31:40,606
JARED: Look at his eyes!
I'll give you a hint.

672
00:31:40,680 --> 00:31:42,250
His name's Yang!

673
00:31:43,400 --> 00:31:46,722
He won a national
math competition in China!

674
00:31:46,840 --> 00:31:49,286
He doesn't even speak English!

675
00:31:49,360 --> 00:31:51,044
Yeah, I'm sure of the math.

676
00:31:52,760 --> 00:31:56,606
Actually, my name's Jiang
and I do speak English.

677
00:31:56,680 --> 00:31:58,091
Jared likes to say I don't
because he thinks

678
00:31:58,160 --> 00:32:00,003
it makes me seem more authentic.

679
00:32:00,080 --> 00:32:02,686
And I got second in that
national math competition.

680
00:32:03,200 --> 00:32:08,081
So you're offering us a chance
to short this pile of blocks? How?

681
00:32:08,160 --> 00:32:10,640
With something called
a credit default swap.

682
00:32:10,720 --> 00:32:11,846
(CLAPS HANDS)

683
00:32:11,920 --> 00:32:14,446
It's like insurance on the bond,
and if it goes bust

684
00:32:14,520 --> 00:32:17,683
you can make 10-to-1,
even 20-to-1 return.

685
00:32:17,760 --> 00:32:19,888
And it's already slowly going bust!

686
00:32:20,200 --> 00:32:22,282
10-to-1? 20-to-1? No way.

687
00:32:22,360 --> 00:32:24,283
JARED: And no one's paying attention.

688
00:32:24,760 --> 00:32:27,206
No one is paying attention!

689
00:32:27,280 --> 00:32:30,807
Because the banks are too busy
getting paid obscene fees

690
00:32:30,880 --> 00:32:32,120
to sell these bonds.

691
00:32:32,200 --> 00:32:34,965
But wait. You are the bank.
You work for the bank.

692
00:32:35,040 --> 00:32:37,088
I bet your margins are pretty nice and fat.

693
00:32:37,160 --> 00:32:39,447
Let's not talk about
my margins, by the way.

694
00:32:39,560 --> 00:32:41,608
Being nice and fat, that's a nice shirt.
Do they make it for men?

695
00:32:41,680 --> 00:32:42,886
(DANNY AND PORTER SNICKERING)

696
00:32:42,960 --> 00:32:43,961
VINNIE: Aren't you the bank?

697
00:32:44,040 --> 00:32:46,964
I work for the bank.
I don't think like a bank.

698
00:32:47,040 --> 00:32:50,886
Big bank, small bank,
I like to make money. All right?

699
00:32:50,960 --> 00:32:53,725
Let me put it this way.
I'm standing in front of a burning house...

700
00:32:53,800 --> 00:32:56,565
And I'm offering you fire insurance on it.

701
00:32:56,640 --> 00:32:59,166
How can these underlying bonds
be as bad as you say?

702
00:32:59,280 --> 00:33:00,486
It wouldn't be legal.
(CLEARS THROAT)

703
00:33:00,560 --> 00:33:02,528
Nobody knows what's in them.

704
00:33:02,600 --> 00:33:04,170
Nobody knows what's in the bonds.

705
00:33:04,240 --> 00:33:07,289
I've seen some that are 65% AAA-rated

706
00:33:07,360 --> 00:33:10,330
that I know for a fact are filled with 95%

707
00:33:10,400 --> 00:33:13,244
subprime shit with FICOs below 550!

708
00:33:13,640 --> 00:33:14,846
Get the fuck out of here.

709
00:33:14,920 --> 00:33:16,251
You want me to really blow your mind?

710
00:33:16,320 --> 00:33:17,890
When the market deems
a bond too risky to buy,

711
00:33:17,960 --> 00:33:20,167
what do you think we do with it?

712
00:33:20,240 --> 00:33:21,366
Take a guess.

713
00:33:21,440 --> 00:33:22,885
I don't know. You tell me.

714
00:33:22,960 --> 00:33:26,885
All right. You think we just
warehouse it on the books? No.

715
00:33:26,960 --> 00:33:28,883
We just repackage it
with a bunch of other shit

716
00:33:28,960 --> 00:33:31,088
that didn't sell and put it into a CDO.

717
00:33:31,880 --> 00:33:33,928
MARK: A CDO?
JARED: Yes. A CDO.

718
00:33:34,720 --> 00:33:36,484
- What is that?
- This is where we take a bunch of B's,

719
00:33:36,560 --> 00:33:38,722
BB's and BBB's that haven't sold,

720
00:33:38,800 --> 00:33:40,484
- and we put them in a pile.
- (CLATTERING)

721
00:33:42,040 --> 00:33:44,008
JARED: And when the pile
gets large enough,

722
00:33:44,120 --> 00:33:46,691
the whole thing is suddenly
considered diversified

723
00:33:46,760 --> 00:33:51,448
and the whores at the rating agency
give it a 92%-93% AAA rating,

724
00:33:51,520 --> 00:33:53,522
no questions asked.

725
00:33:53,960 --> 00:33:54,961
(EXHALES)

726
00:33:55,200 --> 00:33:57,726
Hold it. What? Say that again.

727
00:33:58,000 --> 00:34:00,241
A collateralized debt obligation.

728
00:34:00,320 --> 00:34:01,890
It's important to understand
because it's what allowed

729
00:34:01,960 --> 00:34:06,045
a housing crisis to become
a nationwide economic disaster.

730
00:34:06,120 --> 00:34:09,329
Here's world-famous chef
Anthony Bourdain to explain.

731
00:34:09,480 --> 00:34:10,845
(LAUGHS)

732
00:34:13,920 --> 00:34:15,649
ANTHONY: Okay, I'm a chef
on a Sunday afternoon

733
00:34:15,760 --> 00:34:17,489
setting the menu at a big restaurant.

734
00:34:17,600 --> 00:34:19,011
I ordered my fish on Friday,

735
00:34:19,080 --> 00:34:21,811
which is the mortgage bond
that Michael Burry shorted.

736
00:34:22,000 --> 00:34:24,048
But some of the fresh fish doesn't sell.

737
00:34:24,120 --> 00:34:25,724
I don't know why.
Maybe it just came out

738
00:34:25,840 --> 00:34:27,490
halibut has the intelligence of a dolphin.

739
00:34:27,560 --> 00:34:29,289
So, what am I going to do?

740
00:34:29,360 --> 00:34:32,921
Throw all this unsold fish,
which is the BBB level of the bond,

741
00:34:33,000 --> 00:34:35,401
in the garbage and take the loss?

742
00:34:36,360 --> 00:34:37,361
No way.

743
00:34:37,440 --> 00:34:39,886
Being the crafty
and morally onerous chef that I am,

744
00:34:39,960 --> 00:34:42,691
whatever crappy levels
of the bond I don't sell,

745
00:34:42,760 --> 00:34:44,728
I throw into a seafood stew.

746
00:34:44,800 --> 00:34:48,247
See, it's not old fish.
It's a whole new thing!

747
00:34:48,320 --> 00:34:52,006
And the best part is
they're eating 3-day-old halibut.

748
00:34:52,080 --> 00:34:53,764
That is a CDO.

749
00:34:53,880 --> 00:34:56,724
PORTER: I just need to know,
how could these possibly be collated?

750
00:34:56,840 --> 00:34:59,241
Somehow you're like Dora the Explorer

751
00:34:59,320 --> 00:35:00,606
and you're the first person

752
00:35:00,680 --> 00:35:01,966
- who found this thing.
- Hold on. Hold on.

753
00:35:02,040 --> 00:35:03,929
So mortgage bonds are dog shit,

754
00:35:04,000 --> 00:35:06,241
CDOs are dog shit wrapped in cat shit.

755
00:35:06,320 --> 00:35:07,321
(BUZZING)

756
00:35:07,760 --> 00:35:09,603
Yeah, that's right.

757
00:35:09,680 --> 00:35:13,207
Institutions treat these CDOs
like they're as solid as treasury bonds,

758
00:35:13,280 --> 00:35:14,520
and they're going to zero.

759
00:35:14,600 --> 00:35:15,647
(CLATTERING)

760
00:35:15,720 --> 00:35:17,961
DANNY: No. That can't be right.
There were $500 billion

761
00:35:18,040 --> 00:35:20,361
in housing bonds sold last year alone.

762
00:35:20,680 --> 00:35:23,286
The rating agencies, the banks,
the fucking government,

763
00:35:23,360 --> 00:35:25,362
you're saying they're
all asleep at the wheel?

764
00:35:25,440 --> 00:35:28,922
Yeah. My whole department's
long on this stuff.

765
00:35:29,800 --> 00:35:33,725
They call me Chicken Little.
They call me Bubble Boy.

766
00:35:36,400 --> 00:35:39,768
- A's, zero. B's, zero.
- (CLATTERING)

767
00:35:40,040 --> 00:35:43,328
BB's, zero. BBB's, zero.

768
00:35:45,720 --> 00:35:47,165
And then that happens.

769
00:35:47,240 --> 00:35:48,890
What is that?

770
00:35:50,720 --> 00:35:52,449
That's America's housing market.

771
00:35:55,400 --> 00:35:56,481
Thank you.

772
00:35:56,560 --> 00:35:57,527
Fuckin' A, Jared.

773
00:35:57,600 --> 00:35:59,648
Shut your fucking mouth.

774
00:35:59,760 --> 00:36:01,888
- ...hang out with you.
- MARK: Good. Okay.

775
00:36:02,000 --> 00:36:04,128
JARED: Sack up, do the deal.
Let's be friends.

776
00:36:04,200 --> 00:36:05,406
MARK: We will see. Thank you.

777
00:36:05,480 --> 00:36:06,561
JARED: Don't bullshit me.
MARK: All right.

778
00:36:06,640 --> 00:36:07,766
JARED: You're gonna say no, aren't you?

779
00:36:07,840 --> 00:36:10,320
MIKE: No. No, I'm just
evaluating right now.

780
00:36:10,400 --> 00:36:12,084
- Thank you. Thank you for coming in.
- (DOOR OPENS)

781
00:36:13,160 --> 00:36:14,525
Bye, Jared.

782
00:36:20,560 --> 00:36:21,971
VINNIE: I don't like it.

783
00:36:22,920 --> 00:36:24,604
He's playing us.

784
00:36:25,720 --> 00:36:27,563
He's playing us.
He's got too much skin in the game

785
00:36:27,640 --> 00:36:29,324
and he's dumping his position.

786
00:36:30,280 --> 00:36:31,770
What if he's right?

787
00:36:31,840 --> 00:36:32,966
You want him to be right.

788
00:36:33,040 --> 00:36:34,610
MARK: Yes, I do.

789
00:36:35,160 --> 00:36:38,243
The banks have given us
25% interest rates on credit cards.

790
00:36:38,320 --> 00:36:40,049
They have screwed us on student loans

791
00:36:40,120 --> 00:36:41,884
that we can never get out from under.

792
00:36:41,960 --> 00:36:45,169
Then this guy walks into
my office and says

793
00:36:45,240 --> 00:36:48,210
those same banks got greedy,
they lost track of the market,

794
00:36:48,280 --> 00:36:50,328
and I can profit off of their stupidity?

795
00:36:50,400 --> 00:36:52,687
Fuck, yeah, I want him to be right!

796
00:36:52,760 --> 00:36:54,000
VINNIE: How come you
don't hate this guy?

797
00:36:54,080 --> 00:36:55,764
He's everything
you taught us not to trust.

798
00:36:55,840 --> 00:36:57,569
I can't hate him.
He is so transparent

799
00:36:57,640 --> 00:37:00,007
in his self-interest
that I kind of respect him.

800
00:37:00,080 --> 00:37:03,163
- Would I buy a car from him? No.
- (PORTER CHUCKLES)

801
00:37:03,480 --> 00:37:04,720
Is he right about the mortgage market?

802
00:37:04,800 --> 00:37:06,962
- No.
- Let's find out. Let's find out.

803
00:37:08,560 --> 00:37:10,403
Look. It's two very simple questions.

804
00:37:10,480 --> 00:37:12,005
Is there a housing bubble?

805
00:37:12,080 --> 00:37:14,651
And if there is,
how exposed are the banks?

806
00:37:14,720 --> 00:37:15,767
PORTER: Yeah. Okay.

807
00:37:15,840 --> 00:37:17,285
Let's get on this quickly too.

808
00:37:17,360 --> 00:37:18,725
Because if he's right,

809
00:37:18,840 --> 00:37:22,287
every loser with a couple million bucks
and a fund is gonna be jumping on this.

810
00:37:22,840 --> 00:37:23,841
Let's go.

811
00:37:24,840 --> 00:37:25,841
(ELEVATOR DINGS)

812
00:37:26,160 --> 00:37:27,685
WOMAN: Just that morning...

813
00:37:29,160 --> 00:37:30,924
(BREATHING DEEPLY)

814
00:37:31,800 --> 00:37:35,122
JPMorgan Chase. JPMorgan Chase.

815
00:37:37,000 --> 00:37:39,241
JAMIE: Okay. Stop saying
"JPMorgan Chase".

816
00:37:39,360 --> 00:37:40,771
I got a good feeling about this.

817
00:37:40,840 --> 00:37:41,921
It's just a meeting though, you know?

818
00:37:43,040 --> 00:37:44,610
It's just a meeting. It's something like...

819
00:37:44,680 --> 00:37:46,762
People have meetings
all the time. You know?

820
00:37:46,840 --> 00:37:48,490
People drink their coffee,
they have a meeting.

821
00:37:48,560 --> 00:37:49,891
CHRIS: Brownfield Fund?
JAMIE: Yes!

822
00:37:49,960 --> 00:37:51,849
- Hey. Hello.
- CHARLIE: Ted.

823
00:37:51,920 --> 00:37:53,285
Chris. I'm on Ted's desk.

824
00:37:53,400 --> 00:37:54,731
Chris. Okay.

825
00:37:54,800 --> 00:37:56,006
- I'm Charlie, Charlie Geller.
- Charlie.

826
00:37:56,080 --> 00:37:57,684
- Jamie Shipley. Hi.
- Jamie.

827
00:37:57,760 --> 00:38:00,730
We're so excited to get set up
on your trading platform.

828
00:38:00,840 --> 00:38:01,966
Cool.

829
00:38:02,040 --> 00:38:03,849
Here, have a seat a second.

830
00:38:04,560 --> 00:38:05,561
All right.

831
00:38:06,720 --> 00:38:09,644
So, I... Ted had asked me
to do some meeting prep.

832
00:38:09,720 --> 00:38:13,042
But I couldn't find
any marketing material on you guys.

833
00:38:13,120 --> 00:38:14,963
We just moved here from Boulder.

834
00:38:15,040 --> 00:38:16,565
- Yeah.
- Got it.

835
00:38:16,640 --> 00:38:19,007
Could we see some
of your offering documents?

836
00:38:19,080 --> 00:38:21,606
Well, Brownfield is its own money.

837
00:38:22,200 --> 00:38:23,884
- It's our money.
- Yeah.

838
00:38:23,960 --> 00:38:25,769
Can you tell us how much you manage?

839
00:38:25,840 --> 00:38:29,322
Of course. We're doing
$30 million right now.

840
00:38:29,400 --> 00:38:30,640
Um, but we started

841
00:38:30,720 --> 00:38:33,451
- four years ago with $110,000.
- CHRIS: Wow.

842
00:38:33,520 --> 00:38:38,162
So, as you can see,
that's pretty phenomenal returns.

843
00:38:38,240 --> 00:38:41,449
We want to get an ISDA agreement
with JPMorgan so we can

844
00:38:41,560 --> 00:38:44,086
deal in long-term options.

845
00:38:44,160 --> 00:38:45,491
- That's really cool.
- Yeah.

846
00:38:58,360 --> 00:39:00,169
That is so cool.

847
00:39:00,240 --> 00:39:01,321
Thank you.

848
00:39:01,440 --> 00:39:05,604
But you guys are under
the capital requirements for an ISDA.

849
00:39:05,760 --> 00:39:06,761
By how much?

850
00:39:07,400 --> 00:39:08,401
Uh...

851
00:39:08,600 --> 00:39:11,968
One billion four hundred
seventy million, so...

852
00:39:12,960 --> 00:39:14,530
...a lot.

853
00:39:15,760 --> 00:39:17,250
This makes us look bad, doesn't it,

854
00:39:17,320 --> 00:39:20,529
that we didn't know
what the capital requirements were?

855
00:39:20,600 --> 00:39:21,601
Uh...

856
00:39:22,160 --> 00:39:23,571
It's not great.

857
00:39:24,080 --> 00:39:25,366
But, uh,

858
00:39:25,440 --> 00:39:27,920
keep up those returns and give us a call

859
00:39:28,000 --> 00:39:29,809
way down the line. You know.

860
00:39:29,880 --> 00:39:30,881
Okay?

861
00:39:30,960 --> 00:39:32,291
- Okay.
- Thanks, Chris.

862
00:39:32,360 --> 00:39:33,361
Have a good one, guys.

863
00:39:33,440 --> 00:39:34,441
CHARLIE: Thank you, Chris.

864
00:39:36,960 --> 00:39:37,961
(SIGHS)

865
00:39:38,760 --> 00:39:39,761
Shit!

866
00:39:40,920 --> 00:39:42,160
Who the fuck schedules a meeting

867
00:39:42,280 --> 00:39:44,408
- at 4:50 in the afternoon?
- Oh, my, God.

868
00:39:44,480 --> 00:39:46,209
That was so painful.

869
00:39:46,320 --> 00:39:49,927
Dude, B of A and Bear
didn't even return our calls.

870
00:39:50,000 --> 00:39:52,207
And even fucking Wachovia

871
00:39:52,320 --> 00:39:53,924
- blew us off, man!
- I know.

872
00:39:54,160 --> 00:39:56,401
Here's the prospectuses
of all the other losers

873
00:39:56,480 --> 00:39:58,164
who didn't make it past the lobby.

874
00:39:58,240 --> 00:40:00,129
JAMIE: I don't think I can
do this any more. You know.

875
00:40:00,200 --> 00:40:03,090
I'm young, yet.
I can still do something with my life.

876
00:40:03,160 --> 00:40:05,208
I miss Colorado anyway.
The weed's better.

877
00:40:06,160 --> 00:40:08,162
Gentlemen, I need you to leave.

878
00:40:08,280 --> 00:40:09,645
Yep, yep, we're going. Let's go.

879
00:40:09,800 --> 00:40:10,926
Look at this. Look at this.

880
00:40:11,000 --> 00:40:12,331
This guy

881
00:40:12,400 --> 00:40:15,324
says that the housing market's
a giant bubble.

882
00:40:16,640 --> 00:40:17,641
(INHALES)

883
00:40:17,720 --> 00:40:19,882
Okay, so this part
isn't totally accurate, you know.

884
00:40:19,960 --> 00:40:22,042
We didn't find Jared Vennett's
housing bubble pitch

885
00:40:22,160 --> 00:40:24,083
in the lobby of a bank that rejected us.

886
00:40:24,160 --> 00:40:25,605
The truth is, um,

887
00:40:25,680 --> 00:40:28,570
a friend had told Charlie about it,
and I read about it

888
00:40:28,640 --> 00:40:30,051
in <i>Grant's Interest Rate Observer.</i>

889
00:40:30,120 --> 00:40:31,485
This is crazy.

890
00:40:31,560 --> 00:40:34,086
This is crazy stuff.

891
00:40:34,200 --> 00:40:36,806
Shit, he's saying
that there's 10-to-1 returns

892
00:40:36,880 --> 00:40:40,521
on credit default swaps
for mortgage-backed securities?

893
00:40:40,640 --> 00:40:43,291
And the whole housing market
is about to collapse?

894
00:40:44,040 --> 00:40:45,724
JARED: <i>For Jamie and Charlie,
the housing market</i>

895
00:40:45,800 --> 00:40:48,280
<i>doomsday prediction
was music to their ears.</i>

896
00:40:48,360 --> 00:40:50,044
(SINGING)

897
00:40:55,880 --> 00:40:57,848
<i>They had started working
out of Jamie's garage</i>

898
00:40:57,920 --> 00:40:59,843
<i>with $110,000 Jamie had saved</i>

899
00:40:59,920 --> 00:41:02,002
<i>taking sailboats up and down
the East Coast.</i>

900
00:41:03,920 --> 00:41:05,729
Our investment strategy was simple.

901
00:41:05,800 --> 00:41:07,848
People hate to think about
bad things happening,

902
00:41:07,920 --> 00:41:10,321
so they always underestimate
their likelihood.

903
00:41:10,400 --> 00:41:12,880
JARED: <i>Their strategy
was simple and brilliant.</i>

904
00:41:13,400 --> 00:41:14,481
What he said.

905
00:41:14,560 --> 00:41:17,291
<i>Jamie and Charlie found markets
will sell options very cheaply</i>

906
00:41:17,360 --> 00:41:19,567
<i>on things they think will never happen.</i>

907
00:41:19,640 --> 00:41:21,244
<i>So when they were wrong,
they were wrong small,</i>

908
00:41:21,320 --> 00:41:23,288
<i>but when they were right,
they were right big.</i>

909
00:41:23,360 --> 00:41:24,691
(IMITATING EXPLOSION)

910
00:41:30,120 --> 00:41:33,886
<i>Within a few years they had
turned $110,000 into $30 million.</i>

911
00:41:33,960 --> 00:41:35,689
<i>But then it was time
to go to New York City.</i>

912
00:41:35,760 --> 00:41:38,331
<i>And so far, it wasn't going very well.</i>

913
00:41:38,400 --> 00:41:40,164
So what if it does seem interesting. No...

914
00:41:40,240 --> 00:41:43,767
No bank will give us our ISDA.
We're dead in the water.

915
00:41:45,240 --> 00:41:47,686
These kind of trades
are totally out of the question.

916
00:41:47,760 --> 00:41:49,444
We got to call Ben.

917
00:41:50,520 --> 00:41:51,521
(EXHALES)

918
00:41:51,600 --> 00:41:53,090
Let's call Ben!

919
00:41:53,960 --> 00:41:56,042
JARED: <i>Ben Rickert was
a former trader in Singapore</i>

920
00:41:56,120 --> 00:41:58,885
<i>for Chase who quit
the whole game in disgust.</i>

921
00:41:58,960 --> 00:42:01,327
<i>He happened to be Jamie's neighbour
when they were in Colorado</i>

922
00:42:01,400 --> 00:42:03,562
<i>and they met walking dogs.</i>

923
00:42:03,640 --> 00:42:05,130
<i>But Ben was dark.</i>

924
00:42:05,240 --> 00:42:07,288
<i>He didn't just think
the whole system would fail.</i>

925
00:42:07,360 --> 00:42:09,567
<i>He thought the whole world
was going down.</i>

926
00:42:11,600 --> 00:42:13,682
Every one of these vegetables
is fresh from my garden.

927
00:42:14,760 --> 00:42:15,886
(CHOPPING)

928
00:42:16,200 --> 00:42:17,486
BEN: You guys should
start your own garden.

929
00:42:17,600 --> 00:42:19,921
What you got to do is get
your soil off the petrochemicals.

930
00:42:20,000 --> 00:42:21,047
JAMIE: Hmm.

931
00:42:21,120 --> 00:42:23,327
I used wood ash and urine
to help restore the soil.

932
00:42:23,400 --> 00:42:25,004
It creates ammonium nitrate.

933
00:42:25,080 --> 00:42:26,844
Seeds are gonna be the new currency.

934
00:42:26,960 --> 00:42:28,962
And not those Franken-seeds
from Monsanto.

935
00:42:29,040 --> 00:42:31,646
I'm talking about good,
healthy, organic seeds.

936
00:42:31,720 --> 00:42:32,846
Make yourself a garden.

937
00:42:32,920 --> 00:42:34,410
- Learn to live off the land.
- You're a fucking lunatic.

938
00:42:34,480 --> 00:42:36,687
JARED: <i>Ben had real
experience in a big bank.</i>

939
00:42:36,760 --> 00:42:40,481
<i>Jamie and Charlie had never even
been in a Manhattan bank bathroom.</i>

940
00:42:40,560 --> 00:42:42,244
<i>But Ben was done
with the banking world.</i>

941
00:42:42,320 --> 00:42:43,651
<i>He was very clear.</i>

942
00:42:43,720 --> 00:42:45,324
JAMIE: <i>All right,
let's crunch some numbers</i>

943
00:42:45,400 --> 00:42:47,767
<i>and then maybe
we'll talk about calling Ben.</i>

944
00:42:47,840 --> 00:42:48,921
We're always crunching numbers.

945
00:42:49,000 --> 00:42:50,081
When haven't we
crunched the numbers?

946
00:42:50,160 --> 00:42:51,127
We're gonna crunch
the numbers like harder...

947
00:42:51,200 --> 00:42:52,201
GUARD: I need you out of here.

948
00:42:52,280 --> 00:42:53,247
Of course. One second.

949
00:42:53,320 --> 00:42:54,321
Yes, ma'am. We're going.

950
00:42:57,320 --> 00:42:59,607
PORTER: Oh, God. I hate this.
This is a total waste of time.

951
00:42:59,840 --> 00:43:02,161
Oh, come on. Would you relax?

952
00:43:02,920 --> 00:43:06,049
There's a housing development
45 minutes outside town.

953
00:43:06,160 --> 00:43:08,003
Mark wants us to check that out first.

954
00:43:08,080 --> 00:43:10,082
Well, I hope there are some
Cuban restaurants on the way there.

955
00:43:10,160 --> 00:43:12,811
Because I heard the Cuban food
is amazing in Miami.

956
00:43:12,880 --> 00:43:15,611
Please don't be chipper
in the face of me being miserable.

957
00:43:15,680 --> 00:43:17,364
It really makes me hate you.

958
00:43:17,440 --> 00:43:19,966
How is wanting to eat good food
being chipper?

959
00:43:21,680 --> 00:43:22,841
Hello?

960
00:43:24,280 --> 00:43:25,520
Hello?

961
00:43:26,320 --> 00:43:27,685
PORTER: What do these go for?

962
00:43:29,320 --> 00:43:31,049
DANNY: $425,000 each?

963
00:43:31,600 --> 00:43:33,250
(DOG BARKING)

964
00:43:44,800 --> 00:43:46,040
(KNOCKING ON DOOR)

965
00:43:52,880 --> 00:43:54,484
What's up, man?
What do you want?

966
00:43:54,560 --> 00:43:57,882
Hello. I'm surveying mortgage owners
who are over 90 days delinquent.

967
00:43:57,960 --> 00:44:00,531
I'm looking for a Harvey Humpsey.

968
00:44:00,600 --> 00:44:01,761
You want my landlord's dog?

969
00:44:03,920 --> 00:44:05,410
Your landlord filled out
his mortgage application

970
00:44:05,480 --> 00:44:07,960
using his dog's name?

971
00:44:08,080 --> 00:44:09,491
I guess so.

972
00:44:09,560 --> 00:44:12,086
Wait, has that asshole
not been paying his mortgage?

973
00:44:12,160 --> 00:44:13,491
'Cause I've been paying my rent.

974
00:44:13,560 --> 00:44:15,483
Well, yeah, he is over
90 days delinquent.

975
00:44:15,920 --> 00:44:17,445
Seriously, man,

976
00:44:17,520 --> 00:44:19,329
am I gonna have to leave?

977
00:44:19,400 --> 00:44:20,970
(FOOTSTEPS APPROACHING)

978
00:44:21,880 --> 00:44:24,247
'Cause my kid just got
settled in school, man.

979
00:44:24,320 --> 00:44:26,482
Hey. How are ya?

980
00:44:27,160 --> 00:44:28,321
My name's Ken.

981
00:44:28,440 --> 00:44:29,680
You're Ken?

982
00:44:29,760 --> 00:44:31,569
Um, you should talk
to your landlord about that.

983
00:44:31,640 --> 00:44:33,165
I'm sorry, I don't have
any more information.

984
00:44:33,240 --> 00:44:34,605
But you, um...

985
00:44:35,240 --> 00:44:36,844
You have a great day.
See ya, Ken.

986
00:44:36,920 --> 00:44:38,365
KEN: There's books everywhere!

987
00:44:38,440 --> 00:44:40,681
Books everywhere?

988
00:44:40,760 --> 00:44:44,003
Seriously, man,
is everything gonna be okay?

989
00:44:44,080 --> 00:44:47,209
You should...
You should call him.

990
00:44:47,280 --> 00:44:48,327
You should give him a call.

991
00:44:48,400 --> 00:44:50,084
It's not my fault, dude.
I've been paying...

992
00:44:50,160 --> 00:44:51,685
(DOOR CREAKING)

993
00:44:53,960 --> 00:44:55,041
Hello!

994
00:44:58,960 --> 00:45:01,088
Looks like the <i>Mary Celeste.</i>

995
00:45:01,160 --> 00:45:03,970
Look. All they took was the TV.

996
00:45:04,720 --> 00:45:06,688
DANNY: It's weird.

997
00:45:06,760 --> 00:45:09,081
PORTER: They didn't even
clean out the cat litter.

998
00:45:17,640 --> 00:45:18,687
PORTER: Oh, God.

999
00:45:30,320 --> 00:45:32,243
It's like Chernobyl.

1000
00:45:32,320 --> 00:45:35,722
There's like a hundred houses.
There can't be four people living here.

1001
00:45:37,760 --> 00:45:39,967
- Oh, fuck that!
- Shit!

1002
00:45:46,280 --> 00:45:48,487
(HEAVY METAL MUSIC PLAYING)

1003
00:45:54,840 --> 00:45:55,966
MAN: He's been in there for seven hours.

1004
00:45:56,080 --> 00:45:57,684
Where does he go to the bathroom?

1005
00:45:58,280 --> 00:45:59,406
I heard he had a breakdown.

1006
00:45:59,480 --> 00:46:01,448
- He's letting the fund tank.
- (TELEPHONE RINGING)

1007
00:46:01,520 --> 00:46:03,010
My buddy in Manhattan said...

1008
00:46:03,080 --> 00:46:04,684
Dr. Burry's office.

1009
00:46:04,960 --> 00:46:06,610
No, he actually prefers
that you email him.

1010
00:46:06,680 --> 00:46:07,966
Excuse me.

1011
00:46:08,320 --> 00:46:09,321
Mr. Fields, Mr...

1012
00:46:13,440 --> 00:46:15,204
- Hi, Lawrence.
- (WHISPERING) Holy shit!

1013
00:46:16,800 --> 00:46:20,361
We have no confidence
in your ability to identify

1014
00:46:20,440 --> 00:46:22,044
macroeconomic trends.

1015
00:46:22,200 --> 00:46:23,725
(MUSIC STOPPING)

1016
00:46:24,360 --> 00:46:26,931
MIKE: You flew here
to tell me that? Why?

1017
00:46:27,000 --> 00:46:30,402
Anyone can see
that there is a real estate bubble.

1018
00:46:30,480 --> 00:46:32,323
Actually, no one can see a bubble.

1019
00:46:32,400 --> 00:46:33,640
That's what makes it a bubble.

1020
00:46:33,720 --> 00:46:36,007
That's dumb, Lawrence.

1021
00:46:36,080 --> 00:46:37,684
There's always markers.

1022
00:46:38,440 --> 00:46:40,886
Mortgage fraud has

1023
00:46:40,960 --> 00:46:42,724
quintupled since 2000

1024
00:46:42,840 --> 00:46:45,684
and the average take-home pay is flat,

1025
00:46:45,760 --> 00:46:47,250
but home prices are soaring.

1026
00:46:47,320 --> 00:46:49,402
That means the homes
are debt, not assets.

1027
00:46:49,480 --> 00:46:51,687
So Mike Burry of San Jose, a guy who

1028
00:46:52,680 --> 00:46:56,082
gets his hair cut at Supercuts
and doesn't wear shoes,

1029
00:46:56,200 --> 00:46:59,090
knows more than Alan Greenspan
and Hank Paulson.

1030
00:46:59,240 --> 00:47:00,241
Well...

1031
00:47:00,920 --> 00:47:03,526
Dr. Mike Burry,
yes, he does. (CHUCKLES)

1032
00:47:04,720 --> 00:47:06,529
That's cute. That's cute.

1033
00:47:06,600 --> 00:47:08,967
Are you being sarcastic with us, Mike?

1034
00:47:11,000 --> 00:47:12,001
(SIGHS)

1035
00:47:12,080 --> 00:47:13,491
Lawrence,

1036
00:47:13,600 --> 00:47:16,080
I don't know how to be sarcastic.

1037
00:47:16,760 --> 00:47:19,570
I don't know how to be funny.
I don't know how to

1038
00:47:20,200 --> 00:47:21,690
work people.

1039
00:47:21,760 --> 00:47:22,921
I...

1040
00:47:23,000 --> 00:47:25,367
I just know how to read numbers.

1041
00:47:25,440 --> 00:47:27,920
How big is your short position right now?

1042
00:47:28,320 --> 00:47:29,367
Um...

1043
00:47:29,440 --> 00:47:31,010
Just $1.3 billion.

1044
00:47:31,600 --> 00:47:32,965
And the premiums?

1045
00:47:33,120 --> 00:47:34,451
Well, we pay, uh,

1046
00:47:34,880 --> 00:47:38,282
- roughly $80 to 90 million
- (MARTIN LAUGHING)

1047
00:47:38,360 --> 00:47:39,850
each year, which is high,

1048
00:47:39,960 --> 00:47:42,008
but I was the first to do this trade.

1049
00:47:42,080 --> 00:47:45,527
Watch. It will pay. I may have
been early, but I'm not wrong.

1050
00:47:45,600 --> 00:47:47,967
It's the same thing.
It's the same thing, Mike!

1051
00:47:48,800 --> 00:47:52,930
You're managing a fund of,
what, $555 million?

1052
00:47:53,440 --> 00:47:56,967
In six years, it'll all be gone.

1053
00:47:57,800 --> 00:47:59,165
On one bet.

1054
00:47:59,240 --> 00:48:02,483
No, the second quarter of '07 is
when the adjustable rates kick in.

1055
00:48:02,560 --> 00:48:04,050
The defaults will skyrocket.

1056
00:48:04,120 --> 00:48:05,849
Yeah. Says you.

1057
00:48:05,920 --> 00:48:08,400
LAWRENCE: How much is eligible
for withdrawal before they do?

1058
00:48:08,480 --> 00:48:10,403
Say, in the next two quarters.

1059
00:48:11,120 --> 00:48:13,168
If your investors panic.

1060
00:48:16,640 --> 00:48:17,687
$302 million?

1061
00:48:17,760 --> 00:48:18,761
I...

1062
00:48:19,640 --> 00:48:21,290
My God, Mike.

1063
00:48:22,360 --> 00:48:23,725
(MIKE CHUCKLES)

1064
00:48:26,120 --> 00:48:28,088
No one will pull out.
That would be suicide.

1065
00:48:28,160 --> 00:48:30,527
I mean, I'm down 17% for the year.

1066
00:48:30,640 --> 00:48:32,961
But if they trust me,
and they trust me, because...

1067
00:48:33,040 --> 00:48:35,691
No one trusts you! No one!

1068
00:48:35,760 --> 00:48:38,161
I sent several emails to my investors

1069
00:48:38,280 --> 00:48:40,328
letting them know that the...

1070
00:48:40,840 --> 00:48:41,887
(EXHALES)

1071
00:48:41,960 --> 00:48:44,406
...the second quarter of '07 is when our

1072
00:48:44,520 --> 00:48:46,966
housing positions show returns and...

1073
00:48:48,360 --> 00:48:49,600
I've been very clear.

1074
00:48:50,400 --> 00:48:53,244
People will withdraw their money.

1075
00:48:53,800 --> 00:48:57,282
Lawrence, that would be so stupid.
I mean, the...

1076
00:48:57,360 --> 00:49:00,842
(STUTTERS) If the fund's capitals
drop too much,

1077
00:49:01,320 --> 00:49:04,403
then the swaps contracts are voided.

1078
00:49:04,480 --> 00:49:07,768
And then the banks get to
keep all of the collateral.

1079
00:49:07,880 --> 00:49:10,042
- MARTIN: Wait a minute. Wait.
- All of it.

1080
00:49:10,160 --> 00:49:14,165
The contracts are voided?

1081
00:49:14,880 --> 00:49:16,530
Holy shit!

1082
00:49:17,000 --> 00:49:18,047
Oh, motherfucker!

1083
00:49:18,680 --> 00:49:20,170
- Michael?
- (TAPPING)

1084
00:49:20,560 --> 00:49:22,210
Give me my money back.

1085
00:49:25,640 --> 00:49:29,042
Michael, do you hear me?
I want my money back.

1086
00:49:31,520 --> 00:49:33,841
Give me my fucking money back...

1087
00:49:34,960 --> 00:49:36,530
(LAUGHS) ...you motherfucker.

1088
00:49:37,240 --> 00:49:40,403
The market's in an itsy-bitsy
little gully right now.

1089
00:49:40,480 --> 00:49:42,721
It's like everybody said,
"Okay, that was crazy.

1090
00:49:42,800 --> 00:49:44,689
"Let's just all calm down."

1091
00:49:46,560 --> 00:49:49,723
I sold that house for $350,000
the year it was built.

1092
00:49:50,400 --> 00:49:52,562
Two years later, $480,000.

1093
00:49:52,680 --> 00:49:55,923
Then $585,000 maybe 18 months ago.

1094
00:49:56,000 --> 00:49:58,571
This couple bought it
for $650,000 last year.

1095
00:49:59,040 --> 00:50:00,883
He'd let it go for that.

1096
00:50:00,960 --> 00:50:02,689
Hi, John.

1097
00:50:02,760 --> 00:50:03,761
(MOUTHING) No, no, no.

1098
00:50:04,360 --> 00:50:05,771
It will break his heart, but he'll let it go.

1099
00:50:05,880 --> 00:50:07,644
Why is he selling?

1100
00:50:07,720 --> 00:50:09,563
MARLENE: Neither one's
working right now.

1101
00:50:10,560 --> 00:50:13,166
Marlene, you'd say
they're motivated, right?

1102
00:50:13,280 --> 00:50:16,284
As motivated as one can be
in this neighbourhood.

1103
00:50:16,360 --> 00:50:18,886
This house on the left,
I would say they're probably motivated.

1104
00:50:18,960 --> 00:50:20,928
Wow, a lot of people
seem very motivated.

1105
00:50:21,000 --> 00:50:22,126
MARLENE: Oh, it's just the gully.

1106
00:50:22,400 --> 00:50:24,164
That's all. Just...

1107
00:50:24,240 --> 00:50:25,651
Just nerves.

1108
00:50:25,720 --> 00:50:27,449
So where do we stand?

1109
00:50:28,600 --> 00:50:31,126
I need to talk to my wife. Um...

1110
00:50:31,200 --> 00:50:32,531
MAN: This market won't last.

1111
00:50:32,600 --> 00:50:34,364
MARK: Actually, could I talk
to a mortgage broker?

1112
00:50:34,440 --> 00:50:36,283
Anybody you recommend?
Anybody you like.

1113
00:50:36,360 --> 00:50:38,362
MARLENE: Yes, yes, I have
someone. Absolutely.

1114
00:50:38,440 --> 00:50:39,726
Yeah, bitch better like me.

1115
00:50:39,800 --> 00:50:41,040
Sent her ass to Cabo.

1116
00:50:41,240 --> 00:50:42,605
(ALL LAUGHING)

1117
00:50:42,680 --> 00:50:45,251
So is Morgan Stanley
recruiting us? Is that it?

1118
00:50:45,560 --> 00:50:48,564
Oh, no. No.
The bank owns our hedge fund,

1119
00:50:48,640 --> 00:50:49,641
but we're not really part of it.

1120
00:50:49,760 --> 00:50:52,206
We invest in financial service companies

1121
00:50:52,280 --> 00:50:55,284
and we're trying to understand
the residential mortgage business.

1122
00:50:55,360 --> 00:50:58,330
How many loans
do you write each month?

1123
00:50:58,400 --> 00:50:59,925
- (BLOWS AIR) About 60.
- Yeah.

1124
00:51:00,000 --> 00:51:01,490
What was it four years ago?

1125
00:51:02,480 --> 00:51:03,766
- Ten...
- (PORTER WHISTLES)

1126
00:51:03,840 --> 00:51:05,126
Maybe 15.

1127
00:51:05,200 --> 00:51:07,487
Yeah, I was a bartender.
Now I own a boat.

1128
00:51:07,560 --> 00:51:08,561
(LAUGHING) You own a...

1129
00:51:08,640 --> 00:51:11,883
So how many of these are
adjustable-rate mortgages?

1130
00:51:11,960 --> 00:51:13,610
- MAN IN BLACK: Well, most.
- Oh, yeah.

1131
00:51:13,680 --> 00:51:15,648
Yeah, I'd say about 90%.

1132
00:51:15,760 --> 00:51:18,889
The bonuses on those
skyrocketed a few years ago.

1133
00:51:18,960 --> 00:51:20,246
Adjustable's our bread and honey.

1134
00:51:20,320 --> 00:51:22,891
So do applicants ever get rejected?

1135
00:51:23,000 --> 00:51:24,365
(BOTH LAUGHING)

1136
00:51:27,200 --> 00:51:28,406
Seriously?

1137
00:51:29,320 --> 00:51:31,402
Look, if they get rejected,
I suck at my job.

1138
00:51:31,480 --> 00:51:32,970
DANNY: Even if they have no money?

1139
00:51:33,040 --> 00:51:35,930
Well, my firm offers NINJA loans.

1140
00:51:36,000 --> 00:51:38,526
- PORTER: Okay.
- "No Income, No Job."

1141
00:51:38,840 --> 00:51:41,002
I just leave the income section
blank if I want.

1142
00:51:41,080 --> 00:51:42,366
Corporate doesn't care.

1143
00:51:42,440 --> 00:51:45,762
These people just want homes.
And they go with the flow.

1144
00:51:45,840 --> 00:51:46,807
PORTER: Good for you.

1145
00:51:46,880 --> 00:51:47,927
Your companies don't verify?

1146
00:51:51,680 --> 00:51:53,648
If I write a loan on Friday afternoon,

1147
00:51:54,520 --> 00:51:56,522
a big bank will buy it by Monday lunch.

1148
00:51:57,080 --> 00:51:58,411
Yeah. Same here.

1149
00:52:00,200 --> 00:52:01,565
Could you hold on a second?

1150
00:52:01,720 --> 00:52:03,085
Yeah.

1151
00:52:08,760 --> 00:52:11,445
I don't get it.
Why are they confessing?

1152
00:52:11,520 --> 00:52:13,488
They're not confessing.

1153
00:52:13,600 --> 00:52:15,250
They're bragging.

1154
00:52:22,680 --> 00:52:23,920
(MARK CLEARS THROAT)

1155
00:52:24,000 --> 00:52:28,085
Do people have any idea
what they are buying?

1156
00:52:28,960 --> 00:52:31,247
(CHUCKLES) I focus on
the immigrants, you know.

1157
00:52:31,320 --> 00:52:32,731
Once they find out
they're getting a home,

1158
00:52:32,800 --> 00:52:34,404
they sign where you tell them to sign.

1159
00:52:34,480 --> 00:52:36,642
Don't ask questions.
Don't understand the rates.

1160
00:52:36,720 --> 00:52:38,165
- Fucking idiots.
- Yeah.

1161
00:52:38,240 --> 00:52:39,651
And you target immigrants, too?

1162
00:52:39,760 --> 00:52:42,570
Well, their credit actually
isn't bad enough for him.

1163
00:52:42,720 --> 00:52:43,721
(CHUCKLES)

1164
00:52:44,480 --> 00:52:46,164
Look, I'm a yield guy.

1165
00:52:46,680 --> 00:52:47,761
Okay...

1166
00:52:48,800 --> 00:52:52,202
I make $2,000
on a fixed-rate prime loan, right?

1167
00:52:52,280 --> 00:52:55,921
But I can make $10,000
on a subprime adjustable.

1168
00:52:56,000 --> 00:52:59,004
Trust me, I'm not driving a 7 Series
without strippers.

1169
00:52:59,080 --> 00:53:02,368
No one on the pole has good credit
and they're all cash rich.

1170
00:53:02,440 --> 00:53:04,761
I think I read Warren Buffett
say something like that.

1171
00:53:05,280 --> 00:53:07,521
What? Who's Warren Buffett?

1172
00:53:08,080 --> 00:53:10,765
Okay, so strippers.
Like exotic dancers?

1173
00:53:10,840 --> 00:53:12,080
Yeah, yeah, yeah.

1174
00:53:12,160 --> 00:53:14,128
Nude, you know, topless.

1175
00:53:14,200 --> 00:53:16,043
- Strippers.
- Yeah.

1176
00:53:19,600 --> 00:53:20,840
Can you introduce us?

1177
00:53:20,920 --> 00:53:23,366
Yes! Yes.

1178
00:53:23,440 --> 00:53:24,680
(AUDIENCE CHEERING)

1179
00:53:25,400 --> 00:53:28,324
I always get option-pay adjustables.
I'm a private contractor.

1180
00:53:28,400 --> 00:53:30,084
MARK: What? I can't hear you. I'm sorry.

1181
00:53:30,160 --> 00:53:32,003
I always get option-pay adjustables.

1182
00:53:32,080 --> 00:53:34,321
I'm a private contractor.
I need flexibility.

1183
00:53:34,440 --> 00:53:37,011
And you tell the mortgage company
what you do?

1184
00:53:37,080 --> 00:53:39,082
I write "therapist".

1185
00:53:39,160 --> 00:53:40,650
- You can touch me.
- Always?

1186
00:53:41,280 --> 00:53:42,327
Only in V.I.P.

1187
00:53:42,400 --> 00:53:45,006
No, no, no, you say
you always do adjustables.

1188
00:53:45,080 --> 00:53:46,889
And you have more than
one loan on a property?

1189
00:53:46,960 --> 00:53:49,201
Everybody does.
At least down here.

1190
00:53:49,280 --> 00:53:50,281
MARK: I'm sorry, what?

1191
00:53:50,360 --> 00:53:52,931
Everybody does.
At least down here.

1192
00:53:53,040 --> 00:53:55,202
That way you only put down, like, 5%.

1193
00:53:55,280 --> 00:53:57,089
Prices have levelled off, though, right?

1194
00:53:57,160 --> 00:53:59,003
Yeah. There's a gully.

1195
00:53:59,080 --> 00:54:02,801
Would you mind not moving any more?
I'll still pay you.

1196
00:54:06,560 --> 00:54:09,291
Sorry. We're not alone.

1197
00:54:09,360 --> 00:54:12,011
Okay, look. If home prices don't go up,

1198
00:54:12,080 --> 00:54:14,367
you are not going to be able to refinance.

1199
00:54:14,480 --> 00:54:17,609
And you'll be stuck paying
whatever your monthly payment is

1200
00:54:17,680 --> 00:54:20,411
once it jumps up
after your teaser rate expires.

1201
00:54:20,800 --> 00:54:22,848
Your monthlies could go up 200%-300%.

1202
00:54:23,280 --> 00:54:25,328
James says I can always refinance.

1203
00:54:25,400 --> 00:54:27,209
Well, he's a liar.

1204
00:54:27,280 --> 00:54:30,409
Actually, in this particular case,
James probably is wrong.

1205
00:54:30,480 --> 00:54:33,768
200 percent? On all my loans?

1206
00:54:33,840 --> 00:54:35,251
What do you mean "all" your loans?

1207
00:54:35,320 --> 00:54:37,721
We're talking about two loans
on one house, right?

1208
00:54:38,560 --> 00:54:40,528
I have five houses.

1209
00:54:40,640 --> 00:54:42,608
And a condo.

1210
00:54:44,480 --> 00:54:46,005
Hey, there's a bubble.

1211
00:54:46,080 --> 00:54:47,081
VINNIE: <i>How do you know?</i>

1212
00:54:47,160 --> 00:54:50,562
Trust me. Call Vennett,
buy $50 million in swaps on the MBS.

1213
00:54:50,680 --> 00:54:53,650
What do we got? Garibaldi IV, BBB.

1214
00:54:53,720 --> 00:54:55,165
Mark, are you sure?

1215
00:54:55,240 --> 00:54:57,129
Yeah. Yeah, it's time to call bullshit.

1216
00:54:57,200 --> 00:54:59,885
- Bullshit on what?
- Every fucking thing.

1217
00:55:05,960 --> 00:55:07,405
(TYPING)

1218
00:55:08,840 --> 00:55:10,205
(COMPUTER CHIMES)

1219
00:55:24,040 --> 00:55:25,690
FrontPoint! FrontPoint!

1220
00:55:27,520 --> 00:55:29,329
Is this America's angriest hedge fund?

1221
00:55:29,400 --> 00:55:31,562
VINNIE: <i>All right, listen.
I got one last question for you.</i>

1222
00:55:32,760 --> 00:55:34,603
How are you fucking us?

1223
00:55:36,400 --> 00:55:37,925
There's a nicer way to say that, Vinnie.

1224
00:55:38,000 --> 00:55:39,570
I'm serious.

1225
00:55:39,640 --> 00:55:42,723
We'll buy your swaps,
but only if you say how you're fucking us.

1226
00:55:42,800 --> 00:55:45,326
<i>I'm not fucking you, Vinnie.
I'm kissing you.</i>

1227
00:55:45,440 --> 00:55:48,171
I'm looking deep into your eyes
as I make love to you, Vinnie.

1228
00:55:48,280 --> 00:55:51,568
I'm handing you the deal of the century
on a fucking platter.

1229
00:55:51,640 --> 00:55:54,007
<i>What do I get out of it? Easy.</i>

1230
00:55:54,120 --> 00:55:56,521
I got a $20-million-a-month
negative carry.

1231
00:55:56,600 --> 00:55:58,011
I got bosses trying to pull the plug

1232
00:55:58,080 --> 00:56:00,526
because they think
I'm out of my fucking mind.

1233
00:56:00,600 --> 00:56:01,567
All right?

1234
00:56:01,640 --> 00:56:02,721
We make this trade,

1235
00:56:02,800 --> 00:56:05,201
those problems aren't so big any more.

1236
00:56:05,280 --> 00:56:09,046
And sure, swaps are a dark market,
so I set the price.

1237
00:56:09,120 --> 00:56:10,565
Whatever price I want.

1238
00:56:10,640 --> 00:56:12,085
And when you come for the payday,

1239
00:56:12,200 --> 00:56:14,407
I'm gonna rip your eyes out,
I'm gonna make a fortune.

1240
00:56:15,520 --> 00:56:17,045
<i>But the good news is, Vinnie,
you're not gonna care</i>

1241
00:56:17,120 --> 00:56:19,327
<i>because you're gonna make
so much fucking money.</i>

1242
00:56:19,400 --> 00:56:20,731
<i>That's what I get out of it.</i>

1243
00:56:20,800 --> 00:56:22,086
<i>Want to know what you get out of it?</i>

1244
00:56:22,160 --> 00:56:25,687
You get the ice cream, the hot fudge,
the banana, and the nuts.

1245
00:56:25,760 --> 00:56:27,569
Right now, I get the sprinkles, and, yeah,

1246
00:56:27,640 --> 00:56:30,246
if this goes through, I get the cherry.

1247
00:56:30,320 --> 00:56:32,561
But you get the sundae, Vinnie.

1248
00:56:32,640 --> 00:56:34,324
<i>You get the sundae.</i>

1249
00:56:36,720 --> 00:56:39,530
All right, I buy that. Thank you.

1250
00:56:39,600 --> 00:56:41,762
<i>So what do you say?</i>

1251
00:56:41,840 --> 00:56:43,729
<i>- You want me to make you a market?</i>
- Yeah.

1252
00:56:43,800 --> 00:56:47,327
We'll take $50 million, Garibaldi IV, BBB.

1253
00:56:48,800 --> 00:56:50,848
Sharpen your pencils.
I'll get the paperwork ready.

1254
00:56:52,320 --> 00:56:53,446
(SIGHS)

1255
00:56:53,520 --> 00:56:55,045
Fuck you, too.

1256
00:56:57,000 --> 00:56:58,490
Yes!

1257
00:57:00,680 --> 00:57:01,681
That's right.

1258
00:57:03,600 --> 00:57:05,523
- Oh, man.
- (EXHALES DEEPLY)

1259
00:57:05,600 --> 00:57:09,844
He has so many numbers,
and I always forget

1260
00:57:09,920 --> 00:57:11,570
which one he prefers,
because he's very specific.

1261
00:57:11,640 --> 00:57:12,846
Start with the first one.

1262
00:57:12,920 --> 00:57:14,126
I don't know if it's the first one.

1263
00:57:14,280 --> 00:57:15,566
Just try it.

1264
00:57:15,640 --> 00:57:17,210
Okay. I... Okay.

1265
00:57:17,960 --> 00:57:19,564
(COUNTRY MUSIC PLAYING)

1266
00:57:19,640 --> 00:57:21,130
(LINE RINGING)

1267
00:57:21,200 --> 00:57:22,804
(BIRD SCREECHING)

1268
00:57:25,960 --> 00:57:26,961
(PHONE RINGING)

1269
00:57:34,880 --> 00:57:37,565
- Ben Rickert.
<i>- Hey, Ben. It's Jamie.</i>

1270
00:57:39,120 --> 00:57:41,043
Jamie, you know you're
not supposed to use this line.

1271
00:57:41,400 --> 00:57:42,731
(DIAL TONE)

1272
00:57:43,480 --> 00:57:44,720
Told you.

1273
00:57:46,080 --> 00:57:48,765
Okay, let's try number two out of 14.

1274
00:57:52,000 --> 00:57:54,048
(LINE RINGING)

1275
00:57:54,520 --> 00:57:55,521
(PHONE RINGING)

1276
00:57:59,240 --> 00:58:00,287
(DIAL TONE)

1277
00:58:00,360 --> 00:58:01,361
Ben Rickert.

1278
00:58:01,440 --> 00:58:03,488
Ben, why do you do that, man? I mean...

1279
00:58:03,560 --> 00:58:06,006
You're a retired trader, okay?
No one is listening to your calls.

1280
00:58:06,080 --> 00:58:07,730
<i>The NSA has a $52 billion budget
and the ability</i>

1281
00:58:07,800 --> 00:58:09,211
to monitor tens of millions
of calls a second.

1282
00:58:09,280 --> 00:58:11,601
You think they're not using it?

1283
00:58:11,720 --> 00:58:14,530
Hey, I promise I will refrain from saying

1284
00:58:14,600 --> 00:58:16,807
"Ben Rickert" and "dirty bomb"
in the same sent...

1285
00:58:17,360 --> 00:58:18,361
(BEEPS)

1286
00:58:18,680 --> 00:58:20,330
- Jesus fucking Christ.
- I'm sorry, dude.

1287
00:58:20,400 --> 00:58:21,890
- (PHONE RINGING)
- (BEEPS)

1288
00:58:21,960 --> 00:58:23,086
Ben Rickert.

1289
00:58:23,160 --> 00:58:25,561
Did you get a chance to look
at what we sent you, Ben?

1290
00:58:25,640 --> 00:58:27,802
It's Charlie. I'm here, too.

1291
00:58:28,600 --> 00:58:30,921
<i>Hi, Charlie. Yeah, I did. Hold on.</i>

1292
00:58:36,880 --> 00:58:37,961
Ben, you still there?

1293
00:58:38,080 --> 00:58:39,241
<i>Yeah.</i>

1294
00:58:39,960 --> 00:58:42,008
I'll be honest, gentlemen.

1295
00:58:42,120 --> 00:58:44,043
It scared the shit out of me.

1296
00:58:44,160 --> 00:58:45,525
But that's a good thing, right?

1297
00:58:45,600 --> 00:58:48,444
That means this Vennett guy's
not wrong.

1298
00:58:49,120 --> 00:58:50,201
No, he's not.

1299
00:58:52,960 --> 00:58:53,927
Cool.

1300
00:58:54,000 --> 00:58:55,570
Tell me more about these CDOs.

1301
00:58:55,640 --> 00:58:59,440
JAMIE: <i>Yeah, yeah. Okay, so, you know,
Vennett mentions the CDOs,</i>

1302
00:58:59,520 --> 00:59:01,090
but actually, we took a look

1303
00:59:01,160 --> 00:59:02,810
and they're way worse
than even he realises.

1304
00:59:02,920 --> 00:59:04,331
These things don't make any sense!

1305
00:59:04,400 --> 00:59:05,686
JAMIE: <i>We can't even model them.</i>

1306
00:59:05,760 --> 00:59:08,491
These are 100 times bigger
than the MBS.

1307
00:59:08,560 --> 00:59:10,130
And 90% AAA-rated.

1308
00:59:10,200 --> 00:59:11,964
- Yes! Exactly!
- Over 90%.

1309
00:59:12,080 --> 00:59:13,206
<i>It's incredible.</i>

1310
00:59:13,320 --> 00:59:16,483
I took a good hard look
at the CDOs you want to short.

1311
00:59:17,160 --> 00:59:19,606
They're brilliant. Worthless. Total crap.

1312
00:59:20,320 --> 00:59:22,448
- Jamie. Very good.
- (LAUGHS)

1313
00:59:22,520 --> 00:59:26,047
What can I say?
I'm good at finding shit.

1314
00:59:26,120 --> 00:59:28,885
CHARLIE: <i>So, Ben, we shorted
the BB's and the BBB's,</i>

1315
00:59:29,000 --> 00:59:31,048
<i>and the risk is relatively low.</i>

1316
00:59:31,120 --> 00:59:33,771
<i>- Payoff is, like, 25-to-1.
- Yeah.</i>

1317
00:59:36,120 --> 00:59:38,248
Okay, so, why are you calling me?
I don't do this any more.

1318
00:59:38,320 --> 00:59:39,481
Look, Ben?

1319
00:59:40,800 --> 00:59:44,521
We need you to help us get the ISDA.

1320
00:59:44,640 --> 00:59:47,723
If we get a hunting license,
we can short this crap.

1321
00:59:47,800 --> 00:59:48,961
<i>And we know you hate Wall Street.</i>

1322
00:59:49,080 --> 00:59:50,241
<i>We're not asking you to do the trading.</i>

1323
00:59:50,320 --> 00:59:54,291
<i>We're simply asking you
to help us get a seat</i>

1324
00:59:54,400 --> 00:59:57,563
<i>at the fucking table.</i>

1325
00:59:57,640 --> 00:59:59,563
It's a pretty ugly table, guys.

1326
00:59:59,640 --> 01:00:04,646
Look, Ben, the system fucked up
in a big, big way here, okay?

1327
01:00:04,720 --> 01:00:06,802
And somehow, uh,

1328
01:00:07,160 --> 01:00:09,811
we know before anyone else.

1329
01:00:10,160 --> 01:00:13,084
You know?
This is a once-in-a-lifetime deal.

1330
01:00:15,640 --> 01:00:16,641
I'm thinking.

1331
01:00:21,760 --> 01:00:23,683
Okay. I'll call Deutsche Bank.

1332
01:00:23,760 --> 01:00:26,001
Thank you, Ben. Thank you.

1333
01:00:26,080 --> 01:00:29,687
And Bear. What about Bear?
They have some reprehensible product.

1334
01:00:30,000 --> 01:00:32,321
<i>Okay. Bear will trade with anybody.</i>

1335
01:01:20,480 --> 01:01:23,245
All right.
I'll see if I can push it through.

1336
01:01:23,320 --> 01:01:25,163
Thank you, Noah.
And thank Jared for us.

1337
01:01:27,120 --> 01:01:28,326
Couldn't we go inside?

1338
01:01:28,440 --> 01:01:29,646
Yeah, me, too.

1339
01:02:13,800 --> 01:02:16,121
Hi. It's Mark. I need to
talk to Vinnie right now.

1340
01:02:16,200 --> 01:02:19,602
We're just asking you to explain to us

1341
01:02:19,840 --> 01:02:22,241
just how it is that you are fucking us,

1342
01:02:22,320 --> 01:02:23,560
because what we are seeing...

1343
01:02:26,480 --> 01:02:27,845
Morgan Stanley building, fast.

1344
01:02:28,760 --> 01:02:31,206
Are we hooked up
to the same computer screen?

1345
01:02:31,280 --> 01:02:32,964
It doesn't make any sense.

1346
01:02:33,160 --> 01:02:34,969
(INDISTINCT CONVERSATIONS)

1347
01:02:35,840 --> 01:02:37,251
MARK: <i>Vinnie, you there?</i>

1348
01:02:37,680 --> 01:02:38,681
Mark, you there?

1349
01:02:38,760 --> 01:02:39,761
Yeah, did you hear?

1350
01:02:39,840 --> 01:02:41,604
Mortgage defaults have
gone through the roof.

1351
01:02:41,680 --> 01:02:43,091
Is anybody jumping off of buildings yet?

1352
01:02:43,160 --> 01:02:45,401
Why would they?
Subprime mortgage bond prices are up.

1353
01:02:45,480 --> 01:02:46,527
What?

1354
01:02:46,600 --> 01:02:49,922
Vennett wants $1.9 million more
in collateral by close.

1355
01:02:50,000 --> 01:02:51,286
Vennett's asking us to post collateral.

1356
01:02:51,360 --> 01:02:52,771
What the hell is going on?

1357
01:02:52,840 --> 01:02:54,808
We don't know, but Deutsche's
on the phone demanding payment.

1358
01:02:54,880 --> 01:02:56,723
<i>Call Vennett. Call that little shit.</i>

1359
01:02:56,800 --> 01:02:58,768
Call Vennett.
Tell him to get his ass down here.

1360
01:02:58,840 --> 01:03:00,649
So subprime loans go bad,

1361
01:03:00,720 --> 01:03:03,963
but subprime bonds, which are made up
of subprime loans, are more valuable?

1362
01:03:04,040 --> 01:03:06,486
I know. They want another
$1.9 million by market close.

1363
01:03:06,600 --> 01:03:08,807
What about the ratings agencies?
Moody's, S&P...

1364
01:03:08,880 --> 01:03:11,281
Are they downgrading the CDOs
and mortgage bonds?

1365
01:03:11,360 --> 01:03:12,407
Where are the ratings agencies at?

1366
01:03:12,520 --> 01:03:14,010
They're the fucking same.

1367
01:03:14,120 --> 01:03:15,610
No, they're all still AAA.

1368
01:03:15,680 --> 01:03:18,160
What the hell?
Are you fucking kidding me?

1369
01:03:18,240 --> 01:03:20,322
Those fuckers! Those motherfuckers!

1370
01:03:20,440 --> 01:03:23,410
They go public, and all they care about
is their bottom line and their shit.

1371
01:03:23,480 --> 01:03:25,209
Hey, Mark, that's not all.

1372
01:03:25,320 --> 01:03:26,651
The Morgan Stanley risk guys are here.

1373
01:03:26,720 --> 01:03:28,051
They called in Kathy Tao.

1374
01:03:28,120 --> 01:03:30,327
They're trying to convince her
to make us sell our swaps.

1375
01:03:30,400 --> 01:03:32,607
Apparently, tying up six years
of insurance payments

1376
01:03:32,680 --> 01:03:34,444
in hopes of a housing Armageddon

1377
01:03:34,520 --> 01:03:35,760
<i>is not prudent investing.</i>

1378
01:03:35,880 --> 01:03:37,166
What did Kathy say?

1379
01:03:37,240 --> 01:03:39,971
Nothing yet. She keeps asking
if this is one of your crusades.

1380
01:03:40,040 --> 01:03:42,008
Okay, I want you to walk back in there

1381
01:03:42,080 --> 01:03:43,684
and very calmly, very politely,

1382
01:03:43,760 --> 01:03:46,445
tell the risk assessors to fuck off.

1383
01:03:46,560 --> 01:03:48,244
And then meet me over
at Standard & Poor's.

1384
01:03:48,320 --> 01:03:49,845
We're gonna talk to Georgia.

1385
01:03:49,920 --> 01:03:51,001
VINNIE: <i>All right. Okay.</i>

1386
01:03:51,080 --> 01:03:52,969
Get that fuck Jared Vennett in this office.

1387
01:03:53,040 --> 01:03:54,849
<i>I'm gonna bash his fucking head in.</i>

1388
01:03:56,200 --> 01:03:58,487
(INAUDIBLE)

1389
01:03:59,840 --> 01:04:01,444
Uh, gentlemen?

1390
01:04:01,520 --> 01:04:04,603
I spoke with Mark Baum.
He says to fuck off.

1391
01:04:18,360 --> 01:04:20,681
I can't see a damn thing.

1392
01:04:22,080 --> 01:04:24,560
(SIGHS) My eye doctor's always busy.

1393
01:04:24,640 --> 01:04:26,449
I end up taking
any appointment they'll give me,

1394
01:04:26,520 --> 01:04:28,887
and then the whole morning
gets shot to hell!

1395
01:04:30,040 --> 01:04:31,530
So...

1396
01:04:32,040 --> 01:04:33,530
All righty,

1397
01:04:33,960 --> 01:04:36,440
FrontPoint Partners,

1398
01:04:36,960 --> 01:04:39,327
how can Standard & Poor's help you?

1399
01:04:39,400 --> 01:04:40,686
VINNIE: Well, we don't understand why

1400
01:04:40,760 --> 01:04:43,411
the ratings agencies haven't
downgraded subprime bonds

1401
01:04:43,480 --> 01:04:46,563
since the underlying loans
are clearly deteriorating.

1402
01:04:46,640 --> 01:04:49,041
Well, the delinquency rates
do have people worried,

1403
01:04:49,120 --> 01:04:50,884
but they're actually within our models.

1404
01:04:50,960 --> 01:04:52,928
- So...
- VINNIE: Says you.

1405
01:04:54,080 --> 01:04:56,526
...you're convinced
the underlying mortgages

1406
01:04:56,600 --> 01:04:59,046
in these bonds are solid loans.

1407
01:04:59,160 --> 01:05:01,083
GEORGIA: That is our opinion, yes.

1408
01:05:01,160 --> 01:05:03,208
Have you looked at the loan-level data?

1409
01:05:03,320 --> 01:05:05,049
I mean, they're giving these loans

1410
01:05:05,120 --> 01:05:06,360
to anybody with a credit score
and a pulse.

1411
01:05:06,440 --> 01:05:09,091
Excuse me, sir. What do you think
we do here all day?

1412
01:05:09,160 --> 01:05:10,161
VINNIE: We're not sure.
That's why we're here.

1413
01:05:10,240 --> 01:05:11,366
Here's what I don't understand...

1414
01:05:11,440 --> 01:05:13,169
We check, recheck, recheck again.

1415
01:05:13,280 --> 01:05:14,566
MARK: If these mortgage bonds
are so stable...

1416
01:05:14,680 --> 01:05:16,364
Perhaps you could check your friend.

1417
01:05:16,440 --> 01:05:18,442
MARK: ...have you ever refused to rate...

1418
01:05:18,560 --> 01:05:19,925
VINNIE: Ma'am, that's delusional.

1419
01:05:20,000 --> 01:05:21,081
GEORGIA: We stand behind them.

1420
01:05:21,160 --> 01:05:22,764
MARK: Georgia,
have you ever refused to rate

1421
01:05:22,840 --> 01:05:26,128
any of these bonds upper tranches AAA?

1422
01:05:26,200 --> 01:05:27,804
Can we see the paperwork
on those deals?

1423
01:05:27,880 --> 01:05:29,882
I am under no obligation
to share that information

1424
01:05:30,000 --> 01:05:31,047
with you, whoever you might be.

1425
01:05:31,160 --> 01:05:32,844
Just answer the question, Georgia.

1426
01:05:32,960 --> 01:05:34,928
Can you name one time in the past year

1427
01:05:35,000 --> 01:05:36,365
where you checked the tape

1428
01:05:36,440 --> 01:05:40,650
and you didn't give the banks
the AAA percentage they wanted?

1429
01:05:42,880 --> 01:05:44,086
If we don't give them the ratings,

1430
01:05:44,160 --> 01:05:46,083
they'll go to Moody's,
right down the block.

1431
01:05:47,000 --> 01:05:50,322
If we don't work with them,
they will go to our competitors.

1432
01:05:51,000 --> 01:05:54,163
Not our fault.
Simply the way the world works.

1433
01:05:58,480 --> 01:06:01,006
- VINNIE: Holy shit.
- Yes, now you see.

1434
01:06:02,040 --> 01:06:04,122
And I never said that.

1435
01:06:04,200 --> 01:06:06,601
They're selling ratings for fees.

1436
01:06:06,680 --> 01:06:07,647
A ratings shop.

1437
01:06:07,720 --> 01:06:10,564
You can afford to make less. Make less.

1438
01:06:10,640 --> 01:06:12,529
Nobody said that.

1439
01:06:12,600 --> 01:06:14,807
And it is not my decision.
I have a boss.

1440
01:06:14,880 --> 01:06:16,245
Are you kidding me?

1441
01:06:16,360 --> 01:06:17,646
No, I am not "kidding you".

1442
01:06:17,720 --> 01:06:20,007
How'd your boss do on the IPO?

1443
01:06:20,120 --> 01:06:21,326
MARK: Is that the angle you're taking?

1444
01:06:21,400 --> 01:06:25,007
So, now, anyone who has a boss
can't be held responsible

1445
01:06:25,080 --> 01:06:26,491
for doing shitty and illegal things.

1446
01:06:26,560 --> 01:06:28,130
What are you, four?

1447
01:06:28,200 --> 01:06:32,489
No, I am not four, Mr. Baum.
I am not, no.

1448
01:06:32,560 --> 01:06:35,962
And I wonder what
your incentives might be.

1449
01:06:36,080 --> 01:06:37,605
Is it maybe in your best interest

1450
01:06:37,760 --> 01:06:40,730
to have the ratings change?
Is it, perhaps?

1451
01:06:42,480 --> 01:06:45,051
How many credit default swaps
do you own? Hmm?

1452
01:06:47,080 --> 01:06:49,003
It doesn't make me wrong.

1453
01:06:49,080 --> 01:06:50,161
No.

1454
01:06:50,240 --> 01:06:52,402
It just makes you a hypocrite.

1455
01:06:59,440 --> 01:07:01,124
(HEAVY METAL MUSIC PLAYING)

1456
01:07:33,000 --> 01:07:35,002
Fuck!

1457
01:07:35,120 --> 01:07:36,201
BEN: <i>Mortgage delinquencies went up</i>

1458
01:07:36,320 --> 01:07:38,368
<i>and the CDOs got more valuable.
Unbelievable.</i>

1459
01:07:38,440 --> 01:07:40,727
<i>- Unbelievable.</i>
- We know. It's completely backwards.

1460
01:07:40,800 --> 01:07:42,370
<i>I just called an old friend at Bear.</i>

1461
01:07:42,440 --> 01:07:44,124
<i>He didn't even know what a CDO is.</i>

1462
01:07:44,200 --> 01:07:48,569
JAMIE: Yeah, I just had to wire
Bear and Deutsche $70,000.

1463
01:07:48,640 --> 01:07:51,007
It's like two plus two equals

1464
01:07:51,480 --> 01:07:52,606
fish.

1465
01:07:52,680 --> 01:07:55,365
CHARLIE: It's rigged.
We bought into a rigged game.

1466
01:07:55,480 --> 01:07:57,244
We're gonna lose everything.

1467
01:07:57,320 --> 01:07:59,800
I'm gonna have to move
back in with my mom.

1468
01:08:00,320 --> 01:08:01,765
Can't do that.

1469
01:08:01,840 --> 01:08:03,968
BEN: <i>All right.
Well, I got a colonic appointment.</i>

1470
01:08:04,040 --> 01:08:05,724
Wait a minute. Hold on, Ben.

1471
01:08:05,800 --> 01:08:07,131
Ben, look.

1472
01:08:07,200 --> 01:08:09,601
Either the banks are clueless

1473
01:08:09,680 --> 01:08:11,967
and they don't know
how to value these CDOs,

1474
01:08:12,040 --> 01:08:17,046
or they're such crooks
that the CDOs are worth shit

1475
01:08:17,200 --> 01:08:18,850
and they're hiding it.

1476
01:08:21,120 --> 01:08:22,610
I think we should buy more swaps.

1477
01:08:23,200 --> 01:08:24,201
What?

1478
01:08:24,280 --> 01:08:26,282
Suck it up and pay up, fellas.
We made a deal.

1479
01:08:26,360 --> 01:08:28,408
No way! No!

1480
01:08:28,480 --> 01:08:29,891
Are you fucking kidding me?

1481
01:08:30,000 --> 01:08:32,321
Are you serious?
You think this is a game?

1482
01:08:32,400 --> 01:08:33,686
No. No. No. No. No.

1483
01:08:33,800 --> 01:08:35,086
Yeah. Yeah.

1484
01:08:35,560 --> 01:08:37,642
(ALL SHOUTING)

1485
01:08:41,600 --> 01:08:43,284
No! No! No!

1486
01:08:43,400 --> 01:08:45,084
BEN: <i>No, seriously,
a colonic once a year.</i>

1487
01:08:45,200 --> 01:08:46,167
DANNY: Ass!

1488
01:08:46,240 --> 01:08:48,607
PORTER: And you got a matching
little butler boy, you buttfuck!

1489
01:08:48,680 --> 01:08:49,681
(SIGHS)

1490
01:08:52,920 --> 01:08:54,763
- Are you done?
- DANNY: I think so, yeah.

1491
01:08:54,840 --> 01:08:57,605
God! I pulled a muscle
in my back from yelling.

1492
01:08:58,520 --> 01:08:59,521
Ow!

1493
01:09:00,240 --> 01:09:03,562
VINNIE: Mortgage defaults
have done nothing but go up.

1494
01:09:03,880 --> 01:09:07,089
Yet you quote us
a higher price on the bonds.

1495
01:09:07,880 --> 01:09:10,042
Please explain that to me.
There's no way that makes sense.

1496
01:09:10,120 --> 01:09:13,124
There's no way you're marking
these swaps appropriately.

1497
01:09:13,760 --> 01:09:15,683
Why shouldn't we back out
of this trade right now?

1498
01:09:18,240 --> 01:09:19,890
JARED: Didn't I say when
we made this deal

1499
01:09:20,000 --> 01:09:21,650
that the ratings agencies, the SEC

1500
01:09:21,760 --> 01:09:24,206
and the big banks were clueless?
Didn't I say that?

1501
01:09:24,280 --> 01:09:25,566
- CHRIS: Yes.
- Didn't I say it?

1502
01:09:25,680 --> 01:09:27,489
Yes, you did. You did.

1503
01:09:27,640 --> 01:09:29,085
Shut up.

1504
01:09:29,160 --> 01:09:30,525
Now their foot's on fire, they think

1505
01:09:30,600 --> 01:09:32,170
their steak is done,
and you're surprised?

1506
01:09:32,240 --> 01:09:35,005
That's not stupidity. That's fraud.

1507
01:09:35,080 --> 01:09:36,844
Tell me the difference
between stupid and illegal,

1508
01:09:36,920 --> 01:09:38,888
and I'll have my wife's brother arrested.

1509
01:09:38,960 --> 01:09:40,200
(SNICKERS)

1510
01:09:40,760 --> 01:09:41,761
That was funny.

1511
01:09:41,920 --> 01:09:45,561
JARED: I guess you just don't realise
how clueless the system really is.

1512
01:09:45,640 --> 01:09:47,961
Yes, there's some
shady shit going down,

1513
01:09:48,040 --> 01:09:51,408
but trust me, it's fuelled by stupidity!

1514
01:09:52,600 --> 01:09:53,965
Look at yourselves.

1515
01:09:54,760 --> 01:09:58,207
You know,
you pass yourself off as cynical people

1516
01:09:58,280 --> 01:10:00,681
but you still have some faith
in the system, don't you?

1517
01:10:00,800 --> 01:10:02,040
I don't.

1518
01:10:02,120 --> 01:10:05,010
Well, except for Vinnie.
And who gives a shit?

1519
01:10:05,080 --> 01:10:06,844
- JAMIE: No way!
- Look...

1520
01:10:06,920 --> 01:10:10,083
Either we're right or we're wrong
in a giant, giant way.

1521
01:10:10,160 --> 01:10:12,049
And if we're wrong,
then we got to find someone

1522
01:10:12,120 --> 01:10:13,770
to help us get out of this trade.

1523
01:10:13,840 --> 01:10:16,605
I'm not feeling remotely confident
that we're right.

1524
01:10:16,680 --> 01:10:20,082
And if we're wrong,
who's gonna tell us?

1525
01:10:20,160 --> 01:10:23,642
Who understands this stuff?
It makes no sense!

1526
01:10:24,000 --> 01:10:25,001
(STATIC)

1527
01:10:26,040 --> 01:10:27,849
BEN: <i>I think we need to go to Vegas.</i>

1528
01:10:27,920 --> 01:10:30,127
- What's in Vegas?
- Vegas?

1529
01:10:30,200 --> 01:10:32,089
What the hell's in Las Vegas?

1530
01:10:33,160 --> 01:10:36,403
The American Securitization Forum
is there next week.

1531
01:10:36,480 --> 01:10:38,926
Every bond and CDO salesman,
subprime lender

1532
01:10:39,000 --> 01:10:41,082
and swap trader is gonna be there.

1533
01:10:41,160 --> 01:10:43,925
I'm telling you,
your bet is against dumb money.

1534
01:10:44,000 --> 01:10:46,810
It's about time you find out
just how dumb that money really is.

1535
01:10:46,880 --> 01:10:48,006
PORTER: God, I hate Vegas.

1536
01:10:48,160 --> 01:10:49,571
I hear the food has gotten
really good in Vegas.

1537
01:10:49,680 --> 01:10:51,125
They have a Nobu now.

1538
01:10:51,200 --> 01:10:52,804
Would you fucking stop it?

1539
01:11:15,840 --> 01:11:16,841
(INDISTINCT CHATTER)

1540
01:11:34,000 --> 01:11:35,411
(INDISTINCT CHATTER)

1541
01:11:39,200 --> 01:11:40,201
CHARLIE: Any sense?

1542
01:11:40,320 --> 01:11:41,845
BEN: And if a bond is "rich" it is...

1543
01:11:42,160 --> 01:11:45,243
- I don't know, loaded with assets?
- "Rich" just means overpriced.

1544
01:11:45,360 --> 01:11:47,328
I can't sleep on planes,
so I did my homework.

1545
01:11:47,400 --> 01:11:49,801
Okay, let's focus. What's our goal?

1546
01:11:49,880 --> 01:11:52,247
To figure out if this is a deal of a lifetime

1547
01:11:52,320 --> 01:11:54,129
or if everyone here
knows something we don't

1548
01:11:54,200 --> 01:11:56,043
and we're gonna get royally screwed.

1549
01:11:56,120 --> 01:11:58,885
Right. Remember that
when you meet with the guys from Bear.

1550
01:11:59,040 --> 01:12:00,769
I set you up with a face-to-face.

1551
01:12:00,840 --> 01:12:02,171
- Awesome.
- Where is that?

1552
01:12:02,240 --> 01:12:06,564
Holy shit. Five years ago,
Securitization was a loser convention.

1553
01:12:06,640 --> 01:12:08,768
100, maybe 200 people would show.

1554
01:12:08,880 --> 01:12:11,008
$500 billion a year later, you get this.

1555
01:12:11,080 --> 01:12:12,764
PORTER: There's a lot of
smug-looking people in here, huh?

1556
01:12:12,840 --> 01:12:16,287
It's like someone hit a piñata
filled with white people who suck at golf.

1557
01:12:16,360 --> 01:12:17,885
I mean, who are all these clowns?

1558
01:12:17,960 --> 01:12:19,325
DANNY: Oh, come on.
I think it looks fun.

1559
01:12:19,400 --> 01:12:22,882
MARK: Certainly. Vennett says these
are the people we're betting against.

1560
01:12:22,960 --> 01:12:24,849
- Yeah, here we go. Here we go.
- DANNY: There he is.

1561
01:12:24,920 --> 01:12:26,684
Chris, on my left. Chris, on my left.

1562
01:12:27,120 --> 01:12:28,281
Gentlemen.

1563
01:12:28,360 --> 01:12:31,921
When do we get a chance to face time
with some of these lovely folks?

1564
01:12:32,000 --> 01:12:33,445
Chris, give him the keycards.

1565
01:12:33,560 --> 01:12:34,766
Do you even know which keycards
you're giving out?

1566
01:12:34,840 --> 01:12:35,841
- You're just giving them out?
- Thank you.

1567
01:12:35,920 --> 01:12:38,651
First of all, how was your travel?
How are you? Uneventful?

1568
01:12:38,720 --> 01:12:39,926
- Uneventful.
- Okay.

1569
01:12:40,040 --> 01:12:41,724
I've been here for six hours.
I've already been to the gym,

1570
01:12:41,800 --> 01:12:43,165
I had two poached eggs

1571
01:12:43,240 --> 01:12:44,890
and I played blackjack
with Harry Dean Stanton.

1572
01:12:44,960 --> 01:12:46,405
MARK: Thank you for your diary.

1573
01:12:46,880 --> 01:12:48,484
Face time. I'd like some face time.

1574
01:12:48,560 --> 01:12:50,050
Just remember.
We're here to gather information.

1575
01:12:50,120 --> 01:12:51,531
We're gathering information, okay?

1576
01:12:51,600 --> 01:12:54,046
We're not advertising
our short position. All right?

1577
01:12:54,120 --> 01:12:55,724
We don't want to spook everybody.
Can you do that?

1578
01:12:55,800 --> 01:12:57,325
I know you got a big mouth,
you like to run it.

1579
01:12:57,440 --> 01:12:59,169
Can you just keep it shut for a few days?

1580
01:12:59,240 --> 01:13:00,366
Okay. Okay.

1581
01:13:00,480 --> 01:13:02,289
Yeah, don't worry. We'll play nice.

1582
01:13:02,440 --> 01:13:03,726
Ladies and gentlemen.

1583
01:13:03,800 --> 01:13:06,041
Business is good.

1584
01:13:06,120 --> 01:13:07,531
Profits are strong

1585
01:13:07,600 --> 01:13:10,570
and the mortgage continues
to be the bedrock

1586
01:13:10,640 --> 01:13:12,927
on which this economy is built.

1587
01:13:13,240 --> 01:13:14,765
(AUDIENCE APPLAUDING)

1588
01:13:17,600 --> 01:13:19,204
And, yes, we had to take some losses

1589
01:13:19,280 --> 01:13:22,568
in our subprime department last year,
but those losses

1590
01:13:22,640 --> 01:13:25,291
will be contained at only 5%.

1591
01:13:25,440 --> 01:13:27,568
Now, in our residential sector...

1592
01:13:27,640 --> 01:13:28,846
VINNIE: Mark, it's not a Q and A.

1593
01:13:28,960 --> 01:13:30,610
...our rollout of those
variable rate packages

1594
01:13:30,680 --> 01:13:32,330
were gobbled up by the consumers!

1595
01:13:32,440 --> 01:13:34,488
MARK: I have a question, please.

1596
01:13:36,280 --> 01:13:37,281
Uh...

1597
01:13:37,440 --> 01:13:39,602
Sir, the Q and A is after my statements.

1598
01:13:39,680 --> 01:13:42,081
But you know what? You seem anxious.
How can I help you?

1599
01:13:42,160 --> 01:13:44,083
- Thank you. How are you?
- Fine, thank you.

1600
01:13:44,160 --> 01:13:47,243
Would you say that it is a possibility

1601
01:13:47,360 --> 01:13:51,968
or a probability that
subprime losses stop at 5%?

1602
01:13:52,160 --> 01:13:53,286
Thank you.

1603
01:13:53,360 --> 01:13:58,161
I would say it is a very
strong probability, indeed.

1604
01:13:58,640 --> 01:14:01,211
So back to the residential sector.

1605
01:14:01,320 --> 01:14:03,448
When we rolled out the new
variable rates package...

1606
01:14:03,520 --> 01:14:06,046
- MARK: Excuse me.
- Um... (CHUCKLES)

1607
01:14:07,520 --> 01:14:08,567
Yes, sir.

1608
01:14:08,640 --> 01:14:12,042
Zero! Zero!

1609
01:14:12,160 --> 01:14:14,970
There is a 0% chance

1610
01:14:15,040 --> 01:14:18,806
that your subprime losses
will stop at 5%.

1611
01:14:18,880 --> 01:14:19,961
- Zero.
- (CELL PHONE CHIMES)

1612
01:14:20,040 --> 01:14:21,610
Excuse me.

1613
01:14:21,680 --> 01:14:22,727
I have to take this.

1614
01:14:22,800 --> 01:14:24,768
MAN: He must be from Bank of America.

1615
01:14:24,880 --> 01:14:25,881
(ALL LAUGHING)

1616
01:14:26,480 --> 01:14:29,131
- MAN: Our subprime department is fine.
- No, I'm not doing anything right now.

1617
01:14:29,200 --> 01:14:30,770
MAN: As I was saying,
our residential department...

1618
01:14:30,880 --> 01:14:32,041
How are the kids?

1619
01:14:32,120 --> 01:14:34,521
MAN: ...consumers
reacted to our packages...

1620
01:14:34,600 --> 01:14:36,284
Mark Baum really did that.

1621
01:14:36,360 --> 01:14:37,646
When we were in Vegas, he did that.

1622
01:14:37,720 --> 01:14:39,848
He said that, he took the call.

1623
01:14:40,320 --> 01:14:42,004
Now you see what I had to deal with?

1624
01:14:42,400 --> 01:14:44,243
(GUNFIRE)

1625
01:14:50,840 --> 01:14:52,365
(SHOUTING)

1626
01:14:52,920 --> 01:14:54,410
(WHOOPING)

1627
01:14:55,720 --> 01:14:57,848
Yeah, the Beretta... Meh.

1628
01:14:57,920 --> 01:15:00,161
But this Uzi is fucking awesome!

1629
01:15:00,240 --> 01:15:02,846
I need this CDO machine
to run for another two years.

1630
01:15:02,920 --> 01:15:06,163
And then I'm rich as fuck
and I got my house in Aspen.

1631
01:15:06,240 --> 01:15:09,449
But do you have any concerns
about the performance

1632
01:15:09,520 --> 01:15:11,090
of the underlying securitizations?

1633
01:15:11,160 --> 01:15:12,969
It's easy to see that delinquencies

1634
01:15:13,040 --> 01:15:15,930
and default rates
are on the rise right now.

1635
01:15:16,000 --> 01:15:18,207
Could you please stop
being such a buzzkill, dude?

1636
01:15:18,600 --> 01:15:21,126
We didn't bring you out here
to talk about work, bro.

1637
01:15:21,200 --> 01:15:22,690
Why did you bring us out here?

1638
01:15:22,760 --> 01:15:25,923
Because we need to be able
to expense the ammo to a client.

1639
01:15:26,040 --> 01:15:29,044
I'm gonna go shoot some terrorists.
Watch how it's done, boys!

1640
01:15:29,280 --> 01:15:30,486
CHARLIE: These guys are morons.

1641
01:15:30,600 --> 01:15:32,284
- Fucking tool.
- MAN: Whoo!

1642
01:15:32,560 --> 01:15:33,607
These guys are morons.

1643
01:15:34,800 --> 01:15:35,961
Fuck, yes! Boom!

1644
01:15:36,080 --> 01:15:37,206
Yeah, man!

1645
01:15:37,280 --> 01:15:39,726
We need to be buying up every swap
we can get our hands on here.

1646
01:15:39,800 --> 01:15:42,041
Just hold on, okay? Hold on.

1647
01:15:42,120 --> 01:15:44,441
My brother's ex-girlfriend
works for the SEC.

1648
01:15:44,560 --> 01:15:46,369
She just told me she's in town, okay?

1649
01:15:46,440 --> 01:15:48,647
So, if we're missing something,
maybe she can tell me.

1650
01:15:48,720 --> 01:15:50,324
You know, give me some insight.

1651
01:15:50,440 --> 01:15:52,204
In the meantime, you go to the main floor

1652
01:15:52,280 --> 01:15:53,964
<i>and price some swaps.</i>

1653
01:15:54,480 --> 01:15:55,891
JAMIE: (STAMMERS)
Well, actually, we're

1654
01:15:55,960 --> 01:15:58,440
about to invest in housing bonds, and...

1655
01:15:58,520 --> 01:16:01,205
I was wondering if the SEC
is worried about them at all.

1656
01:16:01,320 --> 01:16:04,005
I know you're not allowed
to tell me specifics, but just generally.

1657
01:16:04,120 --> 01:16:06,327
Oh, we don't
investigate mortgage bonds.

1658
01:16:06,400 --> 01:16:09,722
Truth is, since we got our budget cut,
we don't investigate much.

1659
01:16:11,800 --> 01:16:14,724
- Then why are you here? I thought...
- I'm not here for the SEC.

1660
01:16:14,840 --> 01:16:16,490
I'm here on my own dime.

1661
01:16:17,440 --> 01:16:20,683
I'm floating my resume
to some big banks.

1662
01:16:20,760 --> 01:16:22,330
How's your brother, by the way?

1663
01:16:22,400 --> 01:16:24,289
How are you floating
your resume to big banks?

1664
01:16:24,360 --> 01:16:25,771
I mean, you're supposed to be the ones,

1665
01:16:25,880 --> 01:16:27,211
you know, policing the big banks.

1666
01:16:27,280 --> 01:16:28,770
Grow up, Jamie.

1667
01:16:28,840 --> 01:16:32,606
There must be some kind of law against
working for a financial institution

1668
01:16:32,680 --> 01:16:35,843
right after you've been working
in financial regulation, right?

1669
01:16:35,920 --> 01:16:38,002
No. No.

1670
01:16:39,080 --> 01:16:41,686
(GASPS) Hey! Dougie!

1671
01:16:42,520 --> 01:16:45,444
Hey! Come over here.
What are you doing at Caesars?

1672
01:16:45,520 --> 01:16:47,010
He's at Goldman.

1673
01:16:47,680 --> 01:16:48,681
See you.

1674
01:16:48,760 --> 01:16:53,800
We can do BBB-level swaps
at 500 basis points. Maybe.

1675
01:16:53,920 --> 01:16:57,686
You're pricing the swaps
like the bond is gonna collapse

1676
01:16:57,800 --> 01:17:00,201
even though the bond value's
going up? Really?

1677
01:17:00,720 --> 01:17:01,960
Sign of the times.

1678
01:17:02,040 --> 01:17:03,041
CHARLIE: What the hell
is going on?

1679
01:18:01,760 --> 01:18:05,560
Lewis, can you come in
early tomorrow, please?

1680
01:18:05,640 --> 01:18:07,927
I need to unload the AIG
and Countrywide

1681
01:18:08,000 --> 01:18:09,525
and Freddie Mac positions

1682
01:18:09,600 --> 01:18:12,126
so that we can afford
the premiums on the...

1683
01:18:12,240 --> 01:18:13,241
(SIGHS)

1684
01:18:13,320 --> 01:18:16,244
...core mortgage shorts on the swaps.

1685
01:18:16,680 --> 01:18:18,205
No problem, Dr. Burry.

1686
01:18:20,240 --> 01:18:21,401
- Dr. Burry?
- Hmm?

1687
01:18:23,320 --> 01:18:24,321
(CLEARS THROAT)

1688
01:18:25,000 --> 01:18:26,047
If the investors withdraw,

1689
01:18:26,120 --> 01:18:28,885
what's going to happen here?
Are we done?

1690
01:18:29,000 --> 01:18:30,923
Honestly, I don't know.

1691
01:18:35,160 --> 01:18:36,889
(STAMMERS)

1692
01:18:38,600 --> 01:18:40,841
The bonds aren't going down.

1693
01:18:42,080 --> 01:18:44,765
They won't move. It's possible

1694
01:18:45,160 --> 01:18:49,768
that we are in a completely
fraudulent system.

1695
01:18:51,200 --> 01:18:53,851
Or... (STAMMERS) You're wrong.

1696
01:18:58,600 --> 01:18:59,681
Sure.

1697
01:19:00,480 --> 01:19:04,485
It's possible I'm wrong.
I just don't know how.

1698
01:19:09,160 --> 01:19:13,324
I guess when someone's wrong,
they never...

1699
01:19:13,720 --> 01:19:15,961
They never know how.

1700
01:19:20,240 --> 01:19:21,287
LEWIS: See you in the morning.

1701
01:19:21,440 --> 01:19:22,487
Yeah.

1702
01:19:24,280 --> 01:19:26,282
Even Bear upped their prices.

1703
01:19:26,840 --> 01:19:29,366
And they keep calling us Brownhole.

1704
01:19:29,440 --> 01:19:31,044
You just don't have the money
or the reputation.

1705
01:19:31,160 --> 01:19:32,525
Don't take it personally.

1706
01:19:32,600 --> 01:19:33,931
I don't think I have
the strip club in me tonight.

1707
01:19:34,000 --> 01:19:37,641
I'm just gonna get some ginger ale
and watch some pay-per-view.

1708
01:19:37,720 --> 01:19:40,121
I'll book us some flights out
for the morning.

1709
01:19:41,520 --> 01:19:44,171
CHARLIE: (STAMMERS) A deal.
We need a deal, right? A deal.

1710
01:19:44,240 --> 01:19:46,049
We need a deal we can afford.

1711
01:19:46,160 --> 01:19:48,447
We need a deal
that they're not gonna refuse.

1712
01:19:48,520 --> 01:19:51,888
So... What can we do? We can...

1713
01:19:53,160 --> 01:19:56,084
The AA tranches. What if we
bet against the AA tranches?

1714
01:19:56,160 --> 01:19:57,571
Who's not gonna take that bet?

1715
01:19:58,200 --> 01:20:01,124
We know they say
they're 95% AAA-rated,

1716
01:20:01,200 --> 01:20:03,202
but in reality they're more like 25%.

1717
01:20:03,280 --> 01:20:05,726
Some of them are 0%!

1718
01:20:05,800 --> 01:20:08,485
We also know that if
the bottom tranches fail at over 8%,

1719
01:20:08,560 --> 01:20:09,686
the upper tranches are affected.

1720
01:20:09,760 --> 01:20:10,966
They go to zero.

1721
01:20:11,240 --> 01:20:14,210
I'll bet you right now
that those AA's are actually like B's.

1722
01:20:14,640 --> 01:20:17,723
I rarely ever say these words,
but I think Charlie's right.

1723
01:20:18,080 --> 01:20:19,730
Look, Ben.

1724
01:20:21,400 --> 01:20:22,811
The payoff

1725
01:20:23,320 --> 01:20:24,731
is 200 to 1.

1726
01:20:24,840 --> 01:20:26,922
But they're all taking
the ratings at face value.

1727
01:20:27,000 --> 01:20:30,402
So they're charging pennies
on the dollar a bet against the AA's.

1728
01:20:32,000 --> 01:20:34,844
Just when I start thinking
you guys are clowns...

1729
01:20:34,920 --> 01:20:37,400
No one on the planet's
betting against AA's.

1730
01:20:37,520 --> 01:20:40,410
The banks will think we're either high
or having a stroke.

1731
01:20:40,520 --> 01:20:42,841
They'll take every dime we have to offer.

1732
01:20:45,440 --> 01:20:46,771
Kinda brilliant.

1733
01:20:48,600 --> 01:20:50,648
This is what we did
that no one else thought of.

1734
01:20:50,720 --> 01:20:53,690
Not even Baum or Burry
thought to short the AA's.

1735
01:20:53,760 --> 01:20:55,125
But we did.

1736
01:20:55,200 --> 01:20:56,929
Little Brownhole Capital.

1737
01:20:57,280 --> 01:21:02,002
We're interested in shorting
some of the AA tranche of CDOs.

1738
01:21:02,080 --> 01:21:03,844
Come on, guys, what's the angle?

1739
01:21:03,960 --> 01:21:06,281
Oh, got no angle.
We're new to this. We're just excited.

1740
01:21:06,360 --> 01:21:10,126
We want to do $15 million
in swaps on the AA tranche.

1741
01:21:10,520 --> 01:21:11,601
I don't understand.

1742
01:21:11,720 --> 01:21:14,326
You can buy as much
AA tranche as you want.

1743
01:21:16,520 --> 01:21:18,682
$40 million against the AA.

1744
01:21:18,760 --> 01:21:20,967
Brother, I will sell you
as much as you want.

1745
01:21:21,240 --> 01:21:23,481
You understand perfectly, Bob.
You want the deal?

1746
01:21:24,560 --> 01:21:25,561
(MEN LAUGHING)

1747
01:21:25,640 --> 01:21:27,642
That's cool. That's all right with me.

1748
01:21:29,840 --> 01:21:31,046
Pleasure.

1749
01:21:35,880 --> 01:21:37,769
Oh! (VOCALISING)

1750
01:21:39,320 --> 01:21:41,209
- Don't do that. Stop. Stop.
- (CONTINUES VOCALISING)

1751
01:21:41,880 --> 01:21:43,120
- Stop that.
- Charlie.

1752
01:21:43,800 --> 01:21:45,290
Stop it! Stop.

1753
01:21:47,680 --> 01:21:48,841
What?

1754
01:21:50,200 --> 01:21:51,565
Do you have any idea what you just did?

1755
01:21:52,000 --> 01:21:53,650
Come on. We just made
the deal of our lifetimes!

1756
01:21:53,760 --> 01:21:54,921
We should celebrate.

1757
01:21:55,000 --> 01:21:56,923
You just bet against
the American economy.

1758
01:21:57,000 --> 01:21:58,490
Fuck, yeah, we did!

1759
01:21:58,600 --> 01:22:00,568
- Fuck, yeah!
- Which means...

1760
01:22:00,640 --> 01:22:03,291
Which means if we're right...

1761
01:22:04,320 --> 01:22:07,722
If we're right, people lose homes.
People lose jobs.

1762
01:22:07,800 --> 01:22:11,009
People lose retirement savings.
People lose pensions.

1763
01:22:11,080 --> 01:22:12,286
You know what I hate
about fucking banking?

1764
01:22:12,360 --> 01:22:13,930
It reduces people to numbers.
Here's a number.

1765
01:22:14,000 --> 01:22:16,810
Every 1 % unemployment goes up,
40,000 people die. Did you know that?

1766
01:22:16,880 --> 01:22:18,450
- No.
- Did you know that?

1767
01:22:18,520 --> 01:22:20,090
No, I didn't know that.

1768
01:22:21,520 --> 01:22:23,204
We were just excited.

1769
01:22:25,600 --> 01:22:27,602
Just don't fucking dance.

1770
01:22:28,280 --> 01:22:30,123
CHARLIE: All right.
JAMIE: Where are you going?

1771
01:22:34,480 --> 01:22:36,687
Whoa, I just got really scared.

1772
01:22:38,200 --> 01:22:40,123
First of all, great show today.

1773
01:22:40,200 --> 01:22:41,690
- You were terrific.
- Thank you.

1774
01:22:41,760 --> 01:22:43,364
Your big mouth was a revelation.

1775
01:22:43,440 --> 01:22:45,204
I appreciate that.

1776
01:22:45,280 --> 01:22:47,044
You worried you and your swaps
are getting played?

1777
01:22:47,120 --> 01:22:50,283
Well, this is an opportunity for you
to meet who you're betting against.

1778
01:22:50,400 --> 01:22:52,129
Try not to get too righteous
and listen a little.

1779
01:22:52,200 --> 01:22:53,611
Okay, fine. Who is this guy?

1780
01:22:53,720 --> 01:22:55,404
JAMIE: <i>A real solid-gold asshole.</i>

1781
01:22:55,560 --> 01:22:56,641
I'm a CDO manager.

1782
01:22:56,760 --> 01:22:57,807
A "CDO manager"?

1783
01:22:57,880 --> 01:22:59,325
Yeah, at Harding Advisors.

1784
01:22:59,880 --> 01:23:03,043
I didn't realise that there was
anything to manage with CDOs.

1785
01:23:03,960 --> 01:23:05,007
MR. CHAU: Oh.

1786
01:23:05,720 --> 01:23:08,291
We select the securities
that go into the CDO portfolio

1787
01:23:08,360 --> 01:23:09,725
and monitor the assets.

1788
01:23:09,800 --> 01:23:11,643
I do most of Merrill Lynch's CDOs.

1789
01:23:11,720 --> 01:23:14,644
Do you represent the investors
or Merrill Lynch?

1790
01:23:14,760 --> 01:23:15,807
The investors.

1791
01:23:15,880 --> 01:23:16,927
You do.

1792
01:23:17,000 --> 01:23:18,331
- Yeah.
- But...

1793
01:23:18,520 --> 01:23:20,409
Merrill Lynch isn't gonna
send you any customers

1794
01:23:20,480 --> 01:23:24,041
unless you put Merrill Lynch's bonds
in your CDO.

1795
01:23:25,160 --> 01:23:27,891
Good question. Let's just say
Merrill and I have, um...

1796
01:23:28,520 --> 01:23:30,602
We have a good relationship.

1797
01:23:30,760 --> 01:23:32,922
You have a good relationship
with Merrill Lynch.

1798
01:23:33,000 --> 01:23:34,684
We've been doing business
together for a long time.

1799
01:23:34,760 --> 01:23:37,286
And so the CDOs that you create

1800
01:23:37,360 --> 01:23:41,285
are of the highest quality
and the highest value.

1801
01:23:41,360 --> 01:23:43,283
- Absolutely. Yep.
- Absolutely.

1802
01:23:43,360 --> 01:23:46,887
Are you at all concerned
about the rising default rates?

1803
01:23:48,840 --> 01:23:52,049
I assume no risk for these
products myself, Mark.

1804
01:23:54,680 --> 01:23:55,886
Okay.

1805
01:23:57,440 --> 01:24:00,603
So let me get this straight.
The bank calls you up.

1806
01:24:01,200 --> 01:24:02,770
They give you the bonds
they want to sell.

1807
01:24:02,840 --> 01:24:04,171
They give you clients,

1808
01:24:04,240 --> 01:24:06,641
they give you money
to run your business.

1809
01:24:06,720 --> 01:24:08,404
Give you fat fees for doing so.

1810
01:24:08,520 --> 01:24:10,522
But you represent the investors?

1811
01:24:10,800 --> 01:24:11,801
(CHUCKLES)

1812
01:24:12,040 --> 01:24:13,087
Is that right?

1813
01:24:13,200 --> 01:24:14,247
Yeah.

1814
01:24:14,360 --> 01:24:15,805
But we're not
in the Merrill Lynch building.

1815
01:24:15,880 --> 01:24:17,484
- Okay. Where are you?
- We're in New Jersey.

1816
01:24:17,560 --> 01:24:19,642
You're 20 minutes away.

1817
01:24:19,720 --> 01:24:21,643
Well, five if you use a helicopter.

1818
01:24:23,520 --> 01:24:24,646
That's funny, huh?

1819
01:24:24,800 --> 01:24:25,926
That's hilarious.

1820
01:24:26,080 --> 01:24:28,208
(INDISTINCT CHATTER)

1821
01:24:29,160 --> 01:24:30,207
Oh, boy.

1822
01:24:30,560 --> 01:24:32,767
Your boss is about to explode.

1823
01:24:32,880 --> 01:24:34,484
No, he's too curious to explode.

1824
01:24:34,560 --> 01:24:36,085
Hold on. Say that again.

1825
01:24:36,160 --> 01:24:38,242
CDO "A" has parts of CDO "B".

1826
01:24:38,320 --> 01:24:40,243
And CDO "B" has parts of CDO "A".

1827
01:24:40,320 --> 01:24:42,561
But then they both
get put inside CDO "C".

1828
01:24:42,680 --> 01:24:44,409
Yeah, that one's called CDO squared.

1829
01:24:44,480 --> 01:24:46,608
A CDO of a CDO.

1830
01:24:47,000 --> 01:24:48,001
All right?

1831
01:24:48,160 --> 01:24:50,128
And then there's CDOs
made up of the opposite side

1832
01:24:50,200 --> 01:24:51,770
of the bet you made with your swaps.

1833
01:24:52,000 --> 01:24:54,287
We call them synthetic CDOs.

1834
01:24:54,440 --> 01:24:56,602
What did you say? Synthetic CDOs.

1835
01:24:56,680 --> 01:24:58,409
That is fucking crazy.

1836
01:24:58,520 --> 01:25:00,170
It's not. It's awesome.

1837
01:25:01,600 --> 01:25:05,127
His face is starting to boil.
He looks like the bad guy from <i>Dune.</i>

1838
01:25:08,040 --> 01:25:09,121
(INDISTINCT CHATTER)

1839
01:25:09,200 --> 01:25:11,123
All right, let's say

1840
01:25:11,600 --> 01:25:14,968
you have a pool of $50 million
in subprime loans.

1841
01:25:15,280 --> 01:25:17,886
How much money could be
out there betting on it,

1842
01:25:17,960 --> 01:25:20,804
in your synthetic CDOs and swaps

1843
01:25:20,880 --> 01:25:22,450
right now, tonight?

1844
01:25:22,520 --> 01:25:25,126
Let's see, $50 million... Hmm...

1845
01:25:26,120 --> 01:25:27,121
A billion dollars.

1846
01:25:27,200 --> 01:25:28,201
What?

1847
01:25:29,280 --> 01:25:31,203
JARED: <i>If the mortgage bonds
that Michael Burry discovered</i>

1848
01:25:31,280 --> 01:25:32,645
<i>were the match...</i>

1849
01:25:34,040 --> 01:25:36,486
How much bigger is the market
for insuring mortgage bonds

1850
01:25:36,560 --> 01:25:38,005
than actual mortgages?

1851
01:25:39,200 --> 01:25:40,406
About 20 times.

1852
01:25:40,520 --> 01:25:42,602
JARED: <i>If the mortgage bonds
were the match</i>

1853
01:25:42,680 --> 01:25:45,411
<i>and the CDOs were
the kerosene-soaked rags,</i>

1854
01:25:45,480 --> 01:25:47,528
<i>then the synthetic CDO
was the atomic bomb</i>

1855
01:25:47,600 --> 01:25:50,570
<i>with the drunk President
holding his finger over the button.</i>

1856
01:25:50,640 --> 01:25:52,881
<i>It was at that moment
in that dumb restaurant</i>

1857
01:25:53,000 --> 01:25:56,163
<i>with that stupid look on his face
that Mark Baum realised</i>

1858
01:25:56,240 --> 01:25:58,641
<i>that the whole world economy
might collapse.</i>

1859
01:26:02,280 --> 01:26:04,203
<i>And I know what you're thinking.</i>

1860
01:26:04,280 --> 01:26:06,647
<i>"What the fuck is a synthetic CDO?"</i>

1861
01:26:06,760 --> 01:26:07,761
(CROWD CHEERING)

1862
01:26:09,000 --> 01:26:12,686
<i>Well, here's Dr. Richard Thaler,
father of behavioural economics</i>

1863
01:26:12,760 --> 01:26:15,331
<i>and Selena Gomez to explain.</i>

1864
01:26:15,680 --> 01:26:18,843
Okay. So here's how
a synthetic CDO works.

1865
01:26:18,920 --> 01:26:21,844
Let's say I bet $10 million
on a blackjack hand.

1866
01:26:21,920 --> 01:26:24,400
$10 million because this hand
is meant to represent

1867
01:26:24,760 --> 01:26:27,001
a single mortgage bond.

1868
01:26:29,960 --> 01:26:33,442
Okay, Selena has a pretty good
hand here, showing 18.

1869
01:26:33,520 --> 01:26:34,521
Dealer showing seven.

1870
01:26:34,600 --> 01:26:36,682
That's a really good hand for Selena.

1871
01:26:36,760 --> 01:26:38,171
Good odds. In fact,
her chances of winning

1872
01:26:38,240 --> 01:26:40,607
<i>this hand are 87%.</i>

1873
01:26:40,680 --> 01:26:44,082
So, my odds are good.
I'm on a winning streak.

1874
01:26:44,160 --> 01:26:46,845
Everybody in this place
wants to get in on the action.

1875
01:26:46,920 --> 01:26:48,285
How could I lose, right?

1876
01:26:48,360 --> 01:26:49,885
Now, this is a classic error.

1877
01:26:49,960 --> 01:26:52,930
In basketball it's called
the Hot Hand Fallacy.

1878
01:26:53,000 --> 01:26:55,571
A player makes a bunch
of shots in a row.

1879
01:26:55,640 --> 01:26:57,927
People are sure they're
gonna make the next one.

1880
01:26:58,000 --> 01:26:59,968
<i>People think that whatever's
happening now</i>

1881
01:27:00,040 --> 01:27:02,805
<i>is gonna continue to
happen into the future.</i>

1882
01:27:02,880 --> 01:27:06,248
<i>During the real estate boom,
markets were going up and up</i>

1883
01:27:06,320 --> 01:27:07,970
and people thought
they would never go down.

1884
01:27:08,040 --> 01:27:10,611
So people who are watching
and think that I won't lose

1885
01:27:10,680 --> 01:27:12,170
will make a side bet.

1886
01:27:12,240 --> 01:27:14,481
Now, this is the first synthetic CDO.

1887
01:27:14,560 --> 01:27:16,164
I love Selena Gomez.

1888
01:27:16,240 --> 01:27:17,730
I bet you $50 million she wins.

1889
01:27:17,800 --> 01:27:19,928
And I'll give you 3-to-1 odds.

1890
01:27:20,000 --> 01:27:23,846
3-to-1 odds? Okay, I'll take that bet.

1891
01:27:23,920 --> 01:27:27,242
RICHARD: Now, somebody else
is gonna want to make a bet

1892
01:27:27,320 --> 01:27:28,481
on the outcome of their bet.

1893
01:27:28,600 --> 01:27:29,761
Bet you 50 million she wins.

1894
01:27:29,840 --> 01:27:32,810
That will lead to synthetic
CDO number two.

1895
01:27:32,880 --> 01:27:36,043
Hey, I bet you $200 million
that lady in the glasses

1896
01:27:36,200 --> 01:27:37,725
wins that bet.

1897
01:27:37,880 --> 01:27:40,963
She probably will win.
So I want a great payoff.

1898
01:27:41,120 --> 01:27:42,201
How about 20-to-1?

1899
01:27:42,360 --> 01:27:43,486
Deal.

1900
01:27:43,800 --> 01:27:48,089
And this will go on and on with more
and more synthetic CDOs.

1901
01:27:48,200 --> 01:27:52,250
And we can transform an original
$10 million investment

1902
01:27:52,400 --> 01:27:54,323
into billions of dollars.

1903
01:27:55,240 --> 01:27:56,571
You okay?

1904
01:27:58,000 --> 01:27:59,001
No.

1905
01:28:00,360 --> 01:28:02,203
I actually feel pretty sick.

1906
01:28:02,880 --> 01:28:04,370
(ALL GROAN)

1907
01:28:05,520 --> 01:28:06,885
(GROANING CONTINUES)

1908
01:28:07,400 --> 01:28:09,323
So I'm going to leave.

1909
01:28:10,920 --> 01:28:13,161
You think I'm a parasite,
don't you, Mr. Baum?

1910
01:28:13,880 --> 01:28:17,805
But, apparently,
society values me very much.

1911
01:28:18,840 --> 01:28:20,604
In fact, let's do this.

1912
01:28:22,640 --> 01:28:25,644
I'll tell you how much I'm worth.

1913
01:28:26,200 --> 01:28:27,690
You tell me how much you're worth.

1914
01:28:28,880 --> 01:28:33,966
God, you are an incredibly
big piece of shit.

1915
01:28:39,720 --> 01:28:41,609
Short everything that guy has touched.

1916
01:28:41,680 --> 01:28:43,330
I want half a billion more in swaps.

1917
01:28:43,880 --> 01:28:46,087
You sure about that?
The collateral calls could bankrupt you.

1918
01:28:46,160 --> 01:28:47,161
MARK: Yeah. Yeah.

1919
01:28:47,240 --> 01:28:48,207
Where are you going?

1920
01:28:48,280 --> 01:28:51,329
I am going to try to find
moral redemption

1921
01:28:51,400 --> 01:28:53,209
at the roulette table.

1922
01:29:32,800 --> 01:29:34,404
(INAUDIBLE)

1923
01:29:57,400 --> 01:29:58,811
Hey, hey, hey!

1924
01:30:02,840 --> 01:30:04,330
Things are worse than I thought.

1925
01:30:06,440 --> 01:30:08,363
I honestly think
the economy might collapse.

1926
01:30:08,760 --> 01:30:09,921
But you've been saying

1927
01:30:10,000 --> 01:30:13,083
that the system's broken
for years, Mark. So...

1928
01:30:13,520 --> 01:30:15,443
Why are you so shocked?

1929
01:30:17,960 --> 01:30:21,407
It's more twisted
than I could have imagined.

1930
01:30:21,520 --> 01:30:23,329
You love to be the virtuous one.

1931
01:30:23,800 --> 01:30:25,370
I'm a banker. I'm a part of it.

1932
01:30:25,480 --> 01:30:27,767
You always have, Mark.
Like you're untainted.

1933
01:30:27,840 --> 01:30:31,322
It changed me.
It changed me into a person

1934
01:30:31,880 --> 01:30:33,769
who is not able to
reach out to someone...

1935
01:30:33,840 --> 01:30:35,729
He was in pain.
My brother was in real pain.

1936
01:30:36,320 --> 01:30:38,687
There's no perfect way to help.

1937
01:30:41,680 --> 01:30:44,126
It's sad. It's scary.

1938
01:30:44,240 --> 01:30:47,403
So stop trying to fix the world.

1939
01:30:47,520 --> 01:30:48,567
He told me...

1940
01:30:48,640 --> 01:30:50,005
You're not a saint.

1941
01:30:50,080 --> 01:30:51,889
Saints don't live on Park Avenue.

1942
01:30:52,040 --> 01:30:53,644
...that he was having bad thoughts.

1943
01:30:53,760 --> 01:30:56,525
CYNTHIA: Just feel the feelings
like the rest of us.

1944
01:30:56,880 --> 01:31:01,044
MARK: <i>My first response
was to offer him some money.</i>

1945
01:31:01,360 --> 01:31:03,886
<i>I offered him fucking money!</i>

1946
01:31:04,280 --> 01:31:05,930
(INAUDIBLE)

1947
01:31:09,560 --> 01:31:12,166
His face was so smashed.

1948
01:31:23,560 --> 01:31:25,369
(SOBBING)

1949
01:31:31,240 --> 01:31:32,571
That's right.

1950
01:31:44,080 --> 01:31:45,320
(ROCK MUSIC PLAYING)

1951
01:31:45,440 --> 01:31:46,726
(MOANING)

1952
01:32:29,720 --> 01:32:32,007
(SCREAMING)

1953
01:32:39,320 --> 01:32:40,606
MIKE'S WIFE: Michael?

1954
01:32:40,680 --> 01:32:42,045
- Michael?
- Yes. Yes.

1955
01:32:42,160 --> 01:32:44,242
- Is everything okay?
- Yes, honey.

1956
01:32:44,320 --> 01:32:46,402
- You sure?
- Yeah, baby.

1957
01:32:48,200 --> 01:32:49,486
I'm fine. (LAUGHS)

1958
01:32:58,480 --> 01:33:00,130
MIKE: <i>To all investors.</i>

1959
01:33:00,200 --> 01:33:01,326
<i>As you may know,</i>

1960
01:33:02,320 --> 01:33:05,881
<i>our agreement allows me
to take extraordinary measures</i>

1961
01:33:06,320 --> 01:33:09,244
<i>when markets
aren't functioning properly.</i>

1962
01:33:09,320 --> 01:33:13,041
<i>I currently have reason to
believe the mortgage bond market</i>

1963
01:33:13,720 --> 01:33:15,529
<i>is fraudulent.</i>

1964
01:33:17,680 --> 01:33:22,447
<i>So, in order to protect investors
from this fraudulent market,</i>

1965
01:33:22,520 --> 01:33:25,729
<i>I've decided to restrict
investors' withdrawals</i>

1966
01:33:25,800 --> 01:33:27,484
<i>until further notice.</i>

1967
01:33:27,840 --> 01:33:31,526
<i>Sincerely, Dr. Michael J. Burry.</i>

1968
01:33:40,920 --> 01:33:42,729
(HEAVY METAL MUSIC PLAYING)

1969
01:33:43,480 --> 01:33:44,811
(COMPUTER CHIMES)

1970
01:33:51,280 --> 01:33:55,126
(PHONES RINGING)

1971
01:34:06,480 --> 01:34:07,606
(SNIFFLES)

1972
01:34:39,040 --> 01:34:40,644
LAUREN CONRAD: (ON TV)
<i>I never would have guessed my life</i>

1973
01:34:40,720 --> 01:34:43,200
<i>could change as much
as it has since I moved to L.A.</i>

1974
01:34:43,320 --> 01:34:45,687
JASON WAHLER: <i>It's not just, like,
that easy to, like, not see you.</i>

1975
01:34:45,760 --> 01:34:48,843
REPORTER: <i>He lashed out at rumours
he used performance enhancing drugs.</i>

1976
01:34:49,120 --> 01:34:50,485
This record is not tainted.

1977
01:34:50,600 --> 01:34:51,726
Oh, my God, dude.

1978
01:34:51,800 --> 01:34:53,529
Will you please stop
changing the channels?

1979
01:34:53,600 --> 01:34:55,250
- You're driving me crazy.
- All right.

1980
01:34:55,320 --> 01:34:57,288
- Fine.
- Just put the business news on.

1981
01:34:58,240 --> 01:34:59,401
REPORTER: <i>...and the S&P
picked up three points.</i>

1982
01:34:59,480 --> 01:35:00,481
Jesus!

1983
01:35:00,560 --> 01:35:02,369
<i>Mortgage meltdown continued today.</i>

1984
01:35:02,440 --> 01:35:05,125
<i>Subprime mortgage lender
New Century Financial,</i>

1985
01:35:05,240 --> 01:35:07,891
<i>once the industry leader, by the way,
filed for bankruptcy.</i>

1986
01:35:07,960 --> 01:35:09,041
<i>- The company immediately...</i>
- Whoa, whoa, whoa.

1987
01:35:09,120 --> 01:35:10,326
(REPORTER CLEARS THROAT)

1988
01:35:10,480 --> 01:35:11,686
<i>Good time for my voice to</i> go...

1989
01:35:11,760 --> 01:35:14,047
<i>Fired 3,200 workers.</i>

1990
01:35:14,120 --> 01:35:16,407
<i>The manufacturing index also
fell in the month of March...</i>

1991
01:35:16,520 --> 01:35:17,601
It's starting.

1992
01:35:17,680 --> 01:35:19,250
...a <i>warning that</i>
<i>economic growth could slow.</i>

1993
01:35:19,320 --> 01:35:20,810
<i>The Institute of Supply Management</i>

1994
01:35:20,960 --> 01:35:22,405
<i>also reported a rise in prices...</i>

1995
01:35:22,480 --> 01:35:24,050
I'm gonna call my mom.

1996
01:35:26,320 --> 01:35:29,210
<i>The principal source
of the slowdown in economic growth...</i>

1997
01:35:29,280 --> 01:35:31,328
Time and time and time again,

1998
01:35:31,440 --> 01:35:33,568
I have gone to bat for you, Mark!

1999
01:35:33,640 --> 01:35:34,926
We've known each other
for seven years...

2000
01:35:35,040 --> 01:35:37,361
She's got some lungs on her.
I'm impressed.

2001
01:35:38,520 --> 01:35:40,363
I can't help but enjoy it.

2002
01:35:41,280 --> 01:35:42,930
PORTER: There's no fucking way.
There's no fucking way

2003
01:35:43,000 --> 01:35:44,490
that the big banks are that stupid.

2004
01:35:45,480 --> 01:35:47,323
Bye, Kathy!

2005
01:35:52,000 --> 01:35:53,001
VINNIE: Well?

2006
01:35:54,160 --> 01:35:56,162
MARK: (SIGHS) Kathy thinks
that it would be a good idea

2007
01:35:56,240 --> 01:35:57,810
if we sold our shorts.

2008
01:35:57,880 --> 01:35:58,881
PORTER: What else is new?

2009
01:35:58,960 --> 01:36:00,849
And she said that
Morgan Stanley will buy them.

2010
01:36:00,920 --> 01:36:01,921
DANNY: Holy shit!

2011
01:36:02,680 --> 01:36:03,920
What did you say?

2012
01:36:04,000 --> 01:36:05,650
I told her we're not selling shit.

2013
01:36:07,680 --> 01:36:08,966
(WHISTLES)

2014
01:36:11,840 --> 01:36:15,686
Uh, if you need the files for 2005...

2015
01:36:15,800 --> 01:36:18,849
Mr. Fields' suit is very specific
to files from the past year.

2016
01:36:19,560 --> 01:36:22,325
Good. Then get out.
Say hi to Lawrence for me.

2017
01:36:22,400 --> 01:36:23,561
Will do.

2018
01:36:23,760 --> 01:36:25,524
(CELL PHONE RINGING)

2019
01:36:26,600 --> 01:36:28,284
You can't call me back for a week?

2020
01:36:28,360 --> 01:36:30,203
LUCY: <i>I am so sorry, Mike.</i>

2021
01:36:30,560 --> 01:36:33,803
<i>Goldman had a systems failure.
I lost a ton of messages.</i>

2022
01:36:33,880 --> 01:36:35,882
Yeah, B of A said
they had a power outage,

2023
01:36:36,000 --> 01:36:39,209
and Morgan Stanley
said their server crashed.

2024
01:36:39,280 --> 01:36:40,486
<i>Huh. That's weird.</i>

2025
01:36:40,560 --> 01:36:43,040
Well, I would call it improbable.

2026
01:36:43,120 --> 01:36:46,727
So where do you have
our position marked?

2027
01:36:47,560 --> 01:36:49,289
<i>I think it's the same, Mike.</i>

2028
01:36:49,400 --> 01:36:51,243
What? Can you explain
that to me, please,

2029
01:36:51,320 --> 01:36:54,642
because how can the value
of an insurance contract

2030
01:36:54,720 --> 01:36:58,884
not be affected by the demise
of the very thing it insures?

2031
01:36:59,000 --> 01:37:01,810
<i>They're independent markets.
They're not always correlated.</i>

2032
01:37:01,920 --> 01:37:02,842
<i>I know it sounds odd,</i>

2033
01:37:02,960 --> 01:37:05,406
<i>but these are very complicated products.</i>

2034
01:37:06,240 --> 01:37:08,163
They are correlated.

2035
01:37:08,240 --> 01:37:10,208
They're gonna lose their houses,
they're gonna lose their jobs,

2036
01:37:10,280 --> 01:37:11,281
they're gonna lose their...

2037
01:37:14,160 --> 01:37:16,003
Will you listen to me?

2038
01:37:16,240 --> 01:37:18,846
This is like the end of capitalism.

2039
01:37:18,960 --> 01:37:22,282
This is like the Dark Ages all over again.

2040
01:37:23,320 --> 01:37:24,481
I don't want to talk to Dad.

2041
01:37:24,600 --> 01:37:27,080
Okay, I love you, too.
Save your money.

2042
01:37:27,800 --> 01:37:31,805
She says I need to be on Xanax
and double my dose of Zoloft.

2043
01:37:31,960 --> 01:37:33,928
I asked Bear Stearns to price our shorts.

2044
01:37:34,000 --> 01:37:35,604
They tell me the CDOs
still haven't moved.

2045
01:37:35,680 --> 01:37:37,489
CHARLIE: This is fucking insane!

2046
01:37:37,560 --> 01:37:39,085
You realise that?
These people are crooks

2047
01:37:39,160 --> 01:37:41,208
and they should be in prison.

2048
01:37:41,360 --> 01:37:42,486
Look at the TABX.

2049
01:37:42,600 --> 01:37:44,409
You can see that the CDOs
are worth zero!

2050
01:37:44,480 --> 01:37:45,481
So you know what they're doing, huh?

2051
01:37:45,600 --> 01:37:46,647
You know what they're doing, right?

2052
01:37:46,760 --> 01:37:48,444
Yeah. They're unloading them.

2053
01:37:48,520 --> 01:37:51,842
They're selling their dog shit CDOs,
then they go to another bank

2054
01:37:51,960 --> 01:37:53,962
and short the shit they just fucking sold!

2055
01:37:54,120 --> 01:37:55,724
Let's go to the press, man!

2056
01:37:55,800 --> 01:37:59,088
This is a massive story.
Who wouldn't publish it?

2057
01:38:00,040 --> 01:38:01,371
Robert Redford!

2058
01:38:01,800 --> 01:38:03,245
No, you don't understand!

2059
01:38:03,320 --> 01:38:04,890
CASEY: I got it, guys. I got it.

2060
01:38:06,640 --> 01:38:08,210
What am I supposed to do?

2061
01:38:08,280 --> 01:38:09,964
Do you want me to write a piece called
"We're All Fucked"?

2062
01:38:10,080 --> 01:38:11,969
Yes! That's a perfect title!

2063
01:38:12,040 --> 01:38:16,250
Casey, right now every bank in town
is unloading these shit bonds

2064
01:38:16,400 --> 01:38:18,129
onto unsuspecting customers.

2065
01:38:18,200 --> 01:38:21,249
And they won't devalue them
until they get them off their books.

2066
01:38:21,320 --> 01:38:23,721
This level of criminality
is unprecedented,

2067
01:38:23,800 --> 01:38:26,087
even on fucking Wall Street.

2068
01:38:27,200 --> 01:38:30,044
Jamie... And this is me
being honest here, okay?

2069
01:38:30,320 --> 01:38:32,926
It took me years to build
my relationships on Wall Street.

2070
01:38:33,000 --> 01:38:37,130
No bank or ratings agency is going
to confirm a story like this

2071
01:38:37,200 --> 01:38:39,726
just because it comes
from two guys in a...

2072
01:38:39,840 --> 01:38:43,083
Sorry, garage band hedge fund
that thinks it's the apocalypse.

2073
01:38:43,240 --> 01:38:44,241
(SIGHS)

2074
01:38:44,760 --> 01:38:45,761
Wow.

2075
01:38:45,920 --> 01:38:47,160
I thought you were for real, Casey.

2076
01:38:47,320 --> 01:38:48,606
You know, I'll have to say I really did.

2077
01:38:48,840 --> 01:38:49,841
CASEY: Really?

2078
01:38:50,080 --> 01:38:52,162
Yeah, Jamie, you try being for real
with a three-year-old

2079
01:38:52,280 --> 01:38:54,089
and a wife getting her master's degree.

2080
01:38:54,360 --> 01:38:57,682
I'm not gonna burn my reputation
on your wild hunch.

2081
01:38:58,520 --> 01:38:59,681
Wow.

2082
01:38:59,840 --> 01:39:01,001
- Wow.
- (CASEY SIGHS)

2083
01:39:01,200 --> 01:39:02,247
Thanks for coming, guys.

2084
01:39:02,360 --> 01:39:03,486
Totally fucking awesome to see you.

2085
01:39:03,560 --> 01:39:05,562
Yeah, Casey. I've always hated you,

2086
01:39:05,680 --> 01:39:07,682
because you were a prick in college

2087
01:39:07,760 --> 01:39:10,127
and you are a prick today!

2088
01:39:10,560 --> 01:39:13,086
Thanks, Charlie.
Still living with your mom?

2089
01:39:13,600 --> 01:39:15,125
JAMIE: Charlie, come on!

2090
01:39:15,200 --> 01:39:17,089
MARK: Mark Baum again. Call me.

2091
01:39:17,720 --> 01:39:19,290
Subprime bonds fell off a cliff.

2092
01:39:19,360 --> 01:39:21,328
Rumour has it
the default numbers are huge.

2093
01:39:21,400 --> 01:39:24,210
Who got the remittance data early?
I bet it's Goldman.

2094
01:39:24,280 --> 01:39:25,645
VINNIE: Yeah, fuck you very much.

2095
01:39:25,720 --> 01:39:28,564
Jared, it's chaos down here.
Where are we?

2096
01:39:28,960 --> 01:39:32,203
"And Caesar wept, for there
were no more worlds to conquer."

2097
01:39:33,760 --> 01:39:35,046
Shane?

2098
01:39:35,400 --> 01:39:36,640
Shane?

2099
01:39:38,240 --> 01:39:40,925
Well, nobody's buying CDO
or mortgage bonds any more

2100
01:39:41,000 --> 01:39:42,331
and everybody wants swaps.

2101
01:39:42,640 --> 01:39:44,961
<i>Swaps are now the most
popular product on the street.</i>

2102
01:39:45,080 --> 01:39:46,889
- That's good for us.
<i>- Yes and no.</i>

2103
01:39:47,000 --> 01:39:48,411
I heard from somebody
who heard from somebody...

2104
01:39:48,480 --> 01:39:51,245
No, Alex, no. Sorry.

2105
01:39:54,400 --> 01:39:56,209
Bennie Cleager
over at Morgan is taking on

2106
01:39:56,280 --> 01:39:57,930
<i>some heavy losses
in the bond department.</i>

2107
01:39:59,400 --> 01:40:00,925
<i>Your ship might be taking on water.</i>

2108
01:40:01,400 --> 01:40:03,767
<i>It might be time to get
our lifejacket and get out.</i>

2109
01:40:04,480 --> 01:40:06,005
<i>I'm jacked.</i>

2110
01:40:06,600 --> 01:40:09,046
I'm jacked! I'm jacked to the tits!

2111
01:40:09,680 --> 01:40:10,727
Good.

2112
01:40:10,800 --> 01:40:12,882
<i>- Do you feel it?</i>
- No.

2113
01:40:14,440 --> 01:40:16,283
(TOILET FLUSHING)

2114
01:40:19,080 --> 01:40:20,525
What'd you hear, Tommy?

2115
01:40:22,680 --> 01:40:23,681
It's happening.

2116
01:40:23,760 --> 01:40:25,603
PORTER: Everybody wants our swaps.

2117
01:40:25,800 --> 01:40:27,802
Kathy's office is looking for you.

2118
01:40:28,160 --> 01:40:30,606
DANNY: They're singing
a different tune now, aren't they?

2119
01:40:31,960 --> 01:40:33,450
That's not good.

2120
01:40:38,280 --> 01:40:39,611
Maybe later. Not now.

2121
01:40:39,720 --> 01:40:42,121
This is a joke. Never.

2122
01:40:42,240 --> 01:40:43,321
(CELL PHONE RINGING)

2123
01:40:45,640 --> 01:40:46,687
Listening.

2124
01:40:47,120 --> 01:40:48,724
- DEEB: <i>Dr. Burry?</i>
- Yeah.

2125
01:40:48,800 --> 01:40:50,165
<i>Deeb Winston, Goldman Sachs.</i>

2126
01:40:50,280 --> 01:40:51,770
<i>Listen, I've been reviewing your position.</i>

2127
01:40:51,840 --> 01:40:54,081
<i>I wanted to discuss your marks
and make sure they're fair.</i>

2128
01:40:54,160 --> 01:40:57,004
(STAMMERS) Yeah,
I think you mean that you've

2129
01:40:57,080 --> 01:40:59,845
secured a net short position yourselves.

2130
01:41:00,000 --> 01:41:02,810
So you're free to mark my swaps
accurately for once

2131
01:41:02,960 --> 01:41:05,645
because it's now
in your interest to do so.

2132
01:41:07,800 --> 01:41:09,848
<i>I'm not sure what you want me to say.</i>

2133
01:41:10,040 --> 01:41:11,530
I think that...

2134
01:41:13,040 --> 01:41:15,168
I think that you've already said it.

2135
01:41:23,000 --> 01:41:25,082
You tell Jeff at Goldman
that I'm not transferring funds.

2136
01:41:25,160 --> 01:41:26,844
This is bullshit!

2137
01:41:31,360 --> 01:41:32,600
(KNOCKS)

2138
01:41:34,000 --> 01:41:35,729
Okay, we'll talk later.

2139
01:41:36,200 --> 01:41:37,690
Thank you.

2140
01:41:39,040 --> 01:41:40,087
(SIGHS)

2141
01:41:40,160 --> 01:41:42,003
Thanks for coming so quickly, Mark.

2142
01:41:42,080 --> 01:41:43,445
- Yeah.
- Um...

2143
01:41:43,720 --> 01:41:44,960
I know you've been hearing rumblings

2144
01:41:45,040 --> 01:41:46,565
about some losses Morgan has suffered.

2145
01:41:46,680 --> 01:41:48,603
- Congratulations.
- On what?

2146
01:41:49,240 --> 01:41:50,287
Oh.

2147
01:41:51,040 --> 01:41:52,485
Thanks. Um...

2148
01:41:52,560 --> 01:41:53,925
Having fun?

2149
01:41:54,960 --> 01:41:56,291
Yes. (LAUGHS)

2150
01:41:57,520 --> 01:41:58,885
Tons. Um...

2151
01:41:59,360 --> 01:42:01,681
I just wanted you to know that, um...

2152
01:42:02,240 --> 01:42:03,969
That, yes,
Morgan has suffered some losses,

2153
01:42:04,040 --> 01:42:07,806
but our liquidity is strong
and there's no cause for concern.

2154
01:42:08,040 --> 01:42:10,884
Would Bennie Cleager be concerned?

2155
01:42:11,200 --> 01:42:12,531
Because word on the street

2156
01:42:12,600 --> 01:42:15,444
is that he took some pretty heavy losses.

2157
01:42:16,760 --> 01:42:18,569
Kathy, come on.
We know each other.

2158
01:42:18,640 --> 01:42:20,881
- (SIGHS)
- What's going on?

2159
01:42:21,280 --> 01:42:22,770
How bad is this?

2160
01:42:22,920 --> 01:42:24,081
Okay.

2161
01:42:24,880 --> 01:42:27,963
Two years ago, Bennie Cleager
in Morgan's bond department

2162
01:42:28,040 --> 01:42:31,567
also started shorting subprime housing,
$2 billion in BBBs.

2163
01:42:31,640 --> 01:42:32,880
Bennie is smarter than I thought.

2164
01:42:33,000 --> 01:42:34,411
No, he's not smart at all.

2165
01:42:34,480 --> 01:42:36,847
The premiums on the swap
ate into his desk's profit.

2166
01:42:36,960 --> 01:42:38,928
To cover his BBB shorts,

2167
01:42:39,000 --> 01:42:41,480
he sold a lot of A and AA swaps
as protection.

2168
01:42:41,560 --> 01:42:42,561
A lot.

2169
01:42:43,280 --> 01:42:46,443
He believed that there was no way
that they could be affected.

2170
01:42:47,080 --> 01:42:50,402
Tell me Morgan Stanley doesn't hold
the contracts on these swaps.

2171
01:42:53,760 --> 01:42:55,250
Holy shit.

2172
01:42:55,920 --> 01:42:59,288
All this time I've been trying to figure
out who I'm betting against,

2173
01:42:59,600 --> 01:43:01,443
and it's Morgan Stanley.

2174
01:43:02,360 --> 01:43:03,691
Which is me.

2175
01:43:05,440 --> 01:43:07,761
What's your exposure? $3 billion?

2176
01:43:08,640 --> 01:43:10,483
Please, don't tell me it's more than four.

2177
01:43:10,640 --> 01:43:12,290
I can't answer that.
I can't answer that.

2178
01:43:12,360 --> 01:43:15,523
Yes, you can answer that,
because I walk in here

2179
01:43:15,600 --> 01:43:18,683
and people are crying in your hallway.

2180
01:43:19,120 --> 01:43:20,281
Kathy,

2181
01:43:20,760 --> 01:43:22,808
you bring me in to tell me
everything's fine,

2182
01:43:22,880 --> 01:43:24,120
and everything's not fine.

2183
01:43:24,760 --> 01:43:26,603
What, what is happening?

2184
01:43:28,840 --> 01:43:31,002
The long exposure is...

2185
01:43:32,960 --> 01:43:34,450
...$15 billion.

2186
01:43:40,400 --> 01:43:41,526
Jesus!

2187
01:43:41,640 --> 01:43:43,961
He kept saying defaults
over 8% were impossible.

2188
01:43:44,040 --> 01:43:45,041
MARK: Oh, my God.

2189
01:43:45,120 --> 01:43:46,360
That there would be a million homeless!

2190
01:43:47,800 --> 01:43:50,041
Yeah, but we have nothing
to do with Morgan Stanley.

2191
01:43:52,960 --> 01:43:54,166
Yeah...

2192
01:43:54,480 --> 01:43:56,323
Tell the bankruptcy court.

2193
01:43:56,520 --> 01:43:59,649
Morgan fails, all our accounts
go on their balance sheet.

2194
01:44:00,320 --> 01:44:01,924
DANNY: It's just crazy.

2195
01:44:02,120 --> 01:44:03,451
Morgan makes the sucker's bet

2196
01:44:03,520 --> 01:44:05,887
and we pay their fucking gambling debt?

2197
01:44:06,360 --> 01:44:08,886
Short the bank stocks. Then we wait.

2198
01:44:12,840 --> 01:44:14,842
Or we sell our swaps
when the market opens.

2199
01:44:16,560 --> 01:44:19,609
We get our bonuses,
our investors get their profits, we get...

2200
01:44:19,680 --> 01:44:22,160
What, 30 cents on the dollar?
It's not bad.

2201
01:44:22,520 --> 01:44:23,965
We're three times that.

2202
01:44:24,040 --> 01:44:25,769
Not if there's
no market left to sell them in.

2203
01:44:25,840 --> 01:44:27,763
Forget it.
We're not giving out any lifeboats.

2204
01:44:27,840 --> 01:44:30,241
VINNIE: If Morgan goes under,
we end up with nothing.

2205
01:44:30,320 --> 01:44:31,321
Vinnie.

2206
01:44:33,040 --> 01:44:36,249
Jesus, come on.
I say when we sell.

2207
01:44:40,360 --> 01:44:42,761
Look, I get that this is personal for you,

2208
01:44:42,880 --> 01:44:45,121
but we have a fiduciary responsibility.

2209
01:44:45,200 --> 01:44:46,690
No. No, we don't.

2210
01:44:47,000 --> 01:44:49,162
Nobody's acting responsible.

2211
01:44:49,360 --> 01:44:52,091
Fuck responsibility. Are you kidding me?

2212
01:44:52,560 --> 01:44:54,688
The assholes at the big banks will take...

2213
01:44:54,760 --> 01:44:55,807
WOMAN: You boys want any appetisers?

2214
01:44:55,880 --> 01:44:57,644
MARK: We're talking, please!

2215
01:44:58,360 --> 01:44:59,885
- Excuse us.
- Sorry.

2216
01:45:02,040 --> 01:45:04,805
We are going to wait,
and we are going to wait,

2217
01:45:04,920 --> 01:45:06,445
and we are going to wait

2218
01:45:06,600 --> 01:45:10,400
until they feel the pain,
until they start to bleed.

2219
01:45:10,720 --> 01:45:12,802
- That is what I want.
- But what about our clients

2220
01:45:12,880 --> 01:45:14,211
who've entrusted us with their savings...

2221
01:45:14,280 --> 01:45:15,486
I say when we sell.

2222
01:45:15,560 --> 01:45:16,561
This isn't about you.

2223
01:45:16,640 --> 01:45:17,880
This isn't about you
and your Upper East Side

2224
01:45:17,960 --> 01:45:19,086
- mahogany soapbox.
- Hey! Hey!

2225
01:45:19,240 --> 01:45:20,571
I say when we sell!

2226
01:45:22,120 --> 01:45:23,929
DANNY: Whatever you say, Mark.

2227
01:45:30,640 --> 01:45:32,369
Dude, did you hear the news?

2228
01:45:34,240 --> 01:45:36,527
Okay. So, not only do
two mortgage hedge funds

2229
01:45:36,640 --> 01:45:38,404
<i>backed by Bear Stearns go belly up,</i>

2230
01:45:38,480 --> 01:45:41,643
but now there's
a class-action lawsuit against Bear.

2231
01:45:41,720 --> 01:45:42,881
CHARLIE: Holy shit!

2232
01:45:42,960 --> 01:45:45,531
Let's go! Push! Push!

2233
01:45:45,600 --> 01:45:47,011
So, what?
Bear could really collapse here.

2234
01:45:47,080 --> 01:45:48,844
- This is a risk we really shouldn't take.
<i>- Then what?</i>

2235
01:45:48,920 --> 01:45:50,922
JAMIE: <i>We bought 80%
of our swaps at Bear.</i>

2236
01:45:51,000 --> 01:45:52,604
<i>- We'd lose everything.</i>
- So what?

2237
01:45:52,680 --> 01:45:54,091
- Hey, sir?
- One second!

2238
01:45:54,240 --> 01:45:55,207
That's my opinion.

2239
01:45:55,280 --> 01:45:56,520
We bought these fucking things.

2240
01:45:56,600 --> 01:45:57,726
We have no clue how to sell them.

2241
01:45:57,800 --> 01:45:59,245
I know. We have to get Ben to do it.

2242
01:45:59,320 --> 01:46:01,322
I've been trying to call him
and he won't get back to me.

2243
01:46:01,400 --> 01:46:03,641
No. He's on vacation
with his wife's family.

2244
01:46:03,760 --> 01:46:04,966
They're in England.

2245
01:46:05,880 --> 01:46:06,881
What?

2246
01:46:07,000 --> 01:46:08,240
(BELL RINGING SOFTLY)

2247
01:46:08,360 --> 01:46:09,566
(TYPING ON COMPUTER)

2248
01:46:11,400 --> 01:46:13,482
(MEN TALKING INDISTINCTLY)

2249
01:46:14,600 --> 01:46:16,204
JAMIE: <i>Hello, Ben. Hey.</i>
BEN: Guys?

2250
01:46:16,280 --> 01:46:17,884
<i>Yeah, we're here.
Can you hear us?</i>

2251
01:46:17,960 --> 01:46:19,450
- Guys?
- CHARLIE: <i>Yeah, we got you.</i>

2252
01:46:19,640 --> 01:46:22,405
BEN: <i>Yeah. I hardly got
cell phone or Wi-Fi service.</i>

2253
01:46:23,560 --> 01:46:26,131
I'm trying to sell $200 million
worth of securities.

2254
01:46:26,480 --> 01:46:28,801
In a pub. It smells like sheep.

2255
01:46:29,120 --> 01:46:30,121
You can do this.

2256
01:46:30,200 --> 01:46:31,361
CHARLIE: <i>I don't want
to pressure you, Ben</i>

2257
01:46:31,440 --> 01:46:34,011
<i>but if you don't pull this off,
we lose everything.</i>

2258
01:46:34,320 --> 01:46:37,563
All right. Let's see what
Credit Suisse's appetite is.

2259
01:46:42,720 --> 01:46:43,881
This is Brownfield Fund.

2260
01:46:44,000 --> 01:46:45,923
I want to unload my credit default swaps.

2261
01:46:46,240 --> 01:46:47,810
MAN: <i>All right. What you got?</i>

2262
01:46:48,000 --> 01:46:49,650
Twenty AA tranches of A.B.S. CDOs.

2263
01:46:50,240 --> 01:46:52,641
MAN: <i>A.B.S.? Are these...
These are pretty bad?</i>

2264
01:46:52,840 --> 01:46:54,842
Absolutely. They're complete shit.

2265
01:46:55,080 --> 01:46:56,570
<i>What's your notional value?</i>

2266
01:46:56,680 --> 01:46:59,331
Face value is 205 million. Dollars.

2267
01:46:59,680 --> 01:47:02,206
<i>All right, we could, we could go to forty.</i>

2268
01:47:02,280 --> 01:47:03,611
No. We want at least 100 million.

2269
01:47:03,680 --> 01:47:07,321
100 million? Who are you,
a drug dealer or a banker?

2270
01:47:07,520 --> 01:47:09,966
'Cause if you're a banker,
you can fuck right off!

2271
01:47:10,040 --> 01:47:11,246
<i>I don't know if we can make a market.</i>

2272
01:47:11,360 --> 01:47:12,441
BEN: Just give me your best price?

2273
01:47:12,520 --> 01:47:15,091
Yeah. Chuck 100 million in for me, mate.

2274
01:47:15,160 --> 01:47:16,400
<i>I think we're far apart.</i>

2275
01:47:16,880 --> 01:47:19,360
Look, if you don't want the deal,
you can just hang up.

2276
01:47:21,760 --> 01:47:23,364
That's what I thought.

2277
01:47:24,120 --> 01:47:26,122
- 90 million.
<i>- 70.</i>

2278
01:47:27,120 --> 01:47:28,963
(SIGHS) 85.

2279
01:47:29,200 --> 01:47:31,123
<i>- 78.</i>
- 84.

2280
01:47:32,360 --> 01:47:34,362
<i>- 78.</i>
- BEN: 84.

2281
01:47:36,160 --> 01:47:37,446
MIKE: It's Dr. Burry.

2282
01:47:38,040 --> 01:47:40,884
Looks like the collapse
of the financial sector is imminent.

2283
01:47:41,880 --> 01:47:43,848
Let's start to sell my position.

2284
01:47:44,200 --> 01:47:46,043
It's $1.3 billion.

2285
01:47:47,560 --> 01:47:49,403
Sure, I'll hold.

2286
01:47:50,760 --> 01:47:52,569
(TYPING ON COMPUTER)

2287
01:47:59,440 --> 01:48:00,885
(BEEPING)

2288
01:48:13,240 --> 01:48:14,730
So, I was right.

2289
01:48:15,560 --> 01:48:18,086
I took a rash of shit for two years, but

2290
01:48:18,440 --> 01:48:20,408
I was right.

2291
01:48:20,760 --> 01:48:22,444
And everyone was wrong.

2292
01:48:23,400 --> 01:48:26,609
And, yeah,
I got a bonus cheque for it. Sue me.

2293
01:48:27,240 --> 01:48:28,287
You know?

2294
01:48:28,760 --> 01:48:32,321
It's a lot of money. I get it.
I can feel you judging me.

2295
01:48:32,440 --> 01:48:33,771
That's palpable.

2296
01:48:34,440 --> 01:48:38,445
But, hey, I never said
I was the hero of this story.

2297
01:48:39,040 --> 01:48:41,611
JAMIE: Hey, Ben. How are we looking?

2298
01:48:42,800 --> 01:48:44,165
BEN: (CUTTING OUT) <i>Eight... on...</i>

2299
01:48:44,880 --> 01:48:46,245
Sorry?

2300
01:48:46,600 --> 01:48:48,762
No. Eighty million.

2301
01:48:48,920 --> 01:48:50,570
$80 million, $80 million,
that's good, right?

2302
01:48:50,640 --> 01:48:51,721
- Eighty is great.
- Is that good?

2303
01:48:51,800 --> 01:48:53,006
- Eighty is great, Ben.
- Okay.

2304
01:48:53,120 --> 01:48:55,441
Thank you. Thank you so much.

2305
01:48:55,760 --> 01:48:57,603
<i>Most of it went to UBS.</i>

2306
01:48:57,760 --> 01:48:59,285
<i>You're very lucky. The largest bank</i>

2307
01:48:59,360 --> 01:49:02,569
in France froze customer's money
market accounts today.

2308
01:49:02,720 --> 01:49:04,245
This thing's hitting Europe.

2309
01:49:04,320 --> 01:49:06,163
Greece and Iceland are finished.

2310
01:49:06,240 --> 01:49:07,605
Spain is teetering.

2311
01:49:07,680 --> 01:49:09,284
Are you serious? Fuck.

2312
01:49:09,680 --> 01:49:11,523
CHARLIE: <i>Ben, call us
when you get home.</i>

2313
01:49:11,600 --> 01:49:12,886
<i>But, hey, before you go,</i>

2314
01:49:12,960 --> 01:49:15,008
uh, I'm just wondering...

2315
01:49:15,680 --> 01:49:16,966
Um...

2316
01:49:18,080 --> 01:49:20,128
Why did you do this with us?

2317
01:49:21,120 --> 01:49:23,168
<i>You didn't have to.</i> Uh...

2318
01:49:23,480 --> 01:49:27,166
<i>Thank you. But, uh, why?</i>

2319
01:49:28,040 --> 01:49:31,010
You guys said you wanted to get rich.
Now you're rich.

2320
01:49:31,480 --> 01:49:32,561
COMMENTATOR: <i>Goal!</i>

2321
01:49:32,640 --> 01:49:34,483
<i>Pamplona puts themselves
on the scoreboard.</i>

2322
01:49:38,480 --> 01:49:41,006
JARED: <i>As the housing markets
and banks continued to haemorrhage,</i>

2323
01:49:41,080 --> 01:49:43,481
<i>only one of the big shorts refused to sell.</i>

2324
01:49:43,560 --> 01:49:44,800
<i>Mark Baum.</i>

2325
01:49:48,160 --> 01:49:50,208
<i>So it was beyond perfect
when he was asked to speak</i>

2326
01:49:50,280 --> 01:49:52,123
<i>at a conference opposite Bruce Miller,</i>

2327
01:49:52,200 --> 01:49:54,680
<i>the famous bullish investor.</i>

2328
01:49:55,040 --> 01:49:57,247
<i>After he and Mark had their debate,
Alan Greenspan,</i>

2329
01:49:57,360 --> 01:50:00,842
<i>one of the architects of the whole crisis
was scheduled to speak.</i>

2330
01:50:01,040 --> 01:50:03,691
<i>Everyone in Mark's office showed up,
he even invited friends.</i>

2331
01:50:04,040 --> 01:50:05,087
(CELL PHONE VIBRATING)

2332
01:50:05,200 --> 01:50:08,443
<i>This was the Ali vs. Foreman
of the financial world.</i>

2333
01:50:08,800 --> 01:50:10,848
<i>The realist versus the fools.</i>

2334
01:50:11,280 --> 01:50:14,841
<i>And if it seems almost too perfect,
trust me, this happened.</i>

2335
01:50:15,640 --> 01:50:16,801
(CELL PHONE
CONTINUES VIBRATING)

2336
01:50:17,000 --> 01:50:23,201
Welcome, everyone.
Please give a generous welcome to

2337
01:50:23,520 --> 01:50:27,081
Mr. Bruce Miller and Mark Baum.

2338
01:50:27,440 --> 01:50:29,568
(AUDIENCE APPLAUDING)

2339
01:50:43,000 --> 01:50:44,161
(CELL PHONE VIBRATING)

2340
01:50:44,280 --> 01:50:45,770
- Strap yourself in.
- (WOMAN COUGHS)

2341
01:50:47,040 --> 01:50:49,202
So as some of you may know,
Bear Stearns

2342
01:50:49,280 --> 01:50:51,851
has just received a loan from JP Morgan.

2343
01:50:51,920 --> 01:50:54,810
Of course, we're gonna have to
wait and see how the markets react,

2344
01:50:54,880 --> 01:50:58,566
but that should lay to rest any
concerns about the bank's health.

2345
01:50:58,640 --> 01:51:03,407
Now, I take it you have no plans to sell
your $200 million in Bear stock?

2346
01:51:03,760 --> 01:51:05,330
No. As a matter of fact,
when we're done here,

2347
01:51:05,400 --> 01:51:07,243
I'll probably go out and buy some more.

2348
01:51:07,320 --> 01:51:08,685
- (SCATTERED LAUGHTER)
- (CELL PHONES VIBRATING)

2349
01:51:08,760 --> 01:51:12,242
For the opposing view, Mr. Baum.

2350
01:51:14,640 --> 01:51:16,768
I got to stand for this.

2351
01:51:19,480 --> 01:51:21,050
Okay, hi.

2352
01:51:21,480 --> 01:51:23,926
My firm's thesis is pretty simple.

2353
01:51:24,280 --> 01:51:26,044
Wall Street took a good idea,

2354
01:51:26,120 --> 01:51:27,645
Lewis Ranieri's mortgage bond,

2355
01:51:27,920 --> 01:51:30,161
and turned it into an atomic bomb

2356
01:51:30,280 --> 01:51:32,442
of fraud and stupidity

2357
01:51:32,760 --> 01:51:35,411
that's on its way to decimating
the world economy.

2358
01:51:35,480 --> 01:51:36,686
How do you really feel?

2359
01:51:36,800 --> 01:51:38,040
(AUDIENCE CHUCKLING)

2360
01:51:38,160 --> 01:51:40,083
MARK: I'm glad you still
have a sense of humour.

2361
01:51:40,160 --> 01:51:42,208
I wouldn't if I were you.

2362
01:51:42,600 --> 01:51:46,605
Now, anyone who knows me knows that

2363
01:51:46,720 --> 01:51:49,200
I have no problem telling
someone they're wrong.

2364
01:51:49,280 --> 01:51:53,365
PORTER: (WHISPERING) Bear Stearns
is denying rumours of liquidity problems.

2365
01:51:53,440 --> 01:51:55,727
(WHISPERING) Holy fuck, it's 39 now!

2366
01:51:57,880 --> 01:52:00,451
We live in an era of fraud in America.

2367
01:52:00,520 --> 01:52:02,887
Not just in banking, but in government,

2368
01:52:03,360 --> 01:52:06,330
education, religion, food,

2369
01:52:06,400 --> 01:52:08,050
even baseball.

2370
01:52:08,560 --> 01:52:09,800
(VIBRATING)

2371
01:52:09,920 --> 01:52:11,160
What bothers me isn't that

2372
01:52:11,800 --> 01:52:15,646
fraud is not nice or that fraud is mean.

2373
01:52:15,880 --> 01:52:17,803
It's that for 15,000 years

2374
01:52:18,600 --> 01:52:20,170
fraud and short-sighted thinking

2375
01:52:20,240 --> 01:52:22,641
have never, ever worked.

2376
01:52:22,720 --> 01:52:25,644
- PORTER: Jesus, Bear at 37...
- Not once.

2377
01:52:25,720 --> 01:52:29,008
Eventually, people get caught,
things go south.

2378
01:52:29,080 --> 01:52:30,491
DANNY: It's fucking plummeting, man.

2379
01:52:30,680 --> 01:52:32,921
When the hell did we forget all that?

2380
01:52:37,080 --> 01:52:39,606
I thought we were
better than this. I really did.

2381
01:52:39,920 --> 01:52:42,002
And the fact that we're not

2382
01:52:42,080 --> 01:52:44,811
doesn't make me feel
all right and superior.

2383
01:52:44,880 --> 01:52:47,406
It makes me feel... Sad.

2384
01:52:47,840 --> 01:52:50,207
Every time I fucking hit
"refresh" it's dropping, man.

2385
01:52:51,840 --> 01:52:53,524
And as fun as it is to watch

2386
01:52:53,760 --> 01:52:56,127
pompous, dumb Wall Streeters
be wildly wrong,

2387
01:52:56,200 --> 01:52:58,441
and you are wrong, sir,

2388
01:52:59,280 --> 01:53:02,284
I just know, that at the end of the day

2389
01:53:02,960 --> 01:53:05,691
average people are going to be the ones

2390
01:53:05,760 --> 01:53:07,967
that are gonna have to pay for all this.

2391
01:53:08,600 --> 01:53:10,807
Because they always, always do.

2392
01:53:10,880 --> 01:53:11,881
DANNY: It's 32.

2393
01:53:11,960 --> 01:53:13,371
VINNIE: It's fucking tanked, man.

2394
01:53:13,440 --> 01:53:15,442
That's my two cents. Thank you.

2395
01:53:16,800 --> 01:53:18,131
DANNY: Let me drop
a deuce at Deutsche.

2396
01:53:18,280 --> 01:53:20,282
WOMAN: Does our bull
have a response?

2397
01:53:21,280 --> 01:53:24,807
Only that, in the entire history
of Wall Street,

2398
01:53:24,920 --> 01:53:27,207
no investment bank has ever failed

2399
01:53:27,320 --> 01:53:29,322
unless caught in criminal activities.

2400
01:53:29,800 --> 01:53:33,327
So, yes, I stand by
my Bear Stearns optimism.

2401
01:53:33,640 --> 01:53:35,642
MAN: Mr. Miller, I'm sorry.
Quick question.

2402
01:53:36,160 --> 01:53:37,810
From the time you guys started talking,

2403
01:53:37,960 --> 01:53:40,850
Bear Stearns stock has
fallen more than 38%.

2404
01:53:40,920 --> 01:53:42,331
Would you still buy more?

2405
01:53:42,560 --> 01:53:46,645
Yeah, sure, of course
I'd buy more. Why not?

2406
01:53:47,120 --> 01:53:48,121
Boom.

2407
01:53:48,240 --> 01:53:49,969
(ALL TALKING INDISTINCTLY)

2408
01:53:51,360 --> 01:53:52,725
DANNY: Jesus Christ!

2409
01:53:54,160 --> 01:53:57,323
WOMAN: That concludes
the first part of our presentation.

2410
01:53:58,320 --> 01:54:03,008
Up next, we have the legendary
former chairman of the Fed,

2411
01:54:03,080 --> 01:54:04,844
Alan Greenspan.

2412
01:54:04,920 --> 01:54:06,251
Folks?

2413
01:54:24,400 --> 01:54:25,765
MALE REPORTER: <i>...employees
of Lehman Brothers today,</i>

2414
01:54:25,840 --> 01:54:29,208
<i>as the Wall Street giant's stock
went to zero.</i>

2415
01:54:29,520 --> 01:54:31,443
<i>The collapse of the venerable
New York bank</i>

2416
01:54:31,520 --> 01:54:35,206
<i>follows a tumultuous few months
of market volatility</i>

2417
01:54:35,280 --> 01:54:37,886
<i>and fear in the world economy.</i>

2418
01:54:38,200 --> 01:54:39,964
I got to see inside.

2419
01:54:40,720 --> 01:54:42,051
How?

2420
01:54:42,800 --> 01:54:43,801
Come on.

2421
01:54:44,600 --> 01:54:47,729
I left my phone in the office.
I threw my pass out already.

2422
01:54:47,800 --> 01:54:49,165
<i>Do you mind if I take your pass?</i>

2423
01:54:49,240 --> 01:54:51,846
I don't give a shit any more.
You can do what you want.

2424
01:54:59,720 --> 01:55:01,449
Go directly to your transportation.

2425
01:55:01,520 --> 01:55:03,249
Do not talk to the press.

2426
01:55:03,400 --> 01:55:06,722
After 18 years, I just leave?
That's just fucking great!

2427
01:55:07,000 --> 01:55:09,844
I'll talk to whoever the hell I want!

2428
01:55:09,920 --> 01:55:12,241
MAN: Do not talk to the press.

2429
01:55:12,560 --> 01:55:14,528
Go directly to your transportation.

2430
01:55:14,600 --> 01:55:15,840
Do not talk to...

2431
01:55:18,320 --> 01:55:19,481
PORTER: Hey, look,
you wanna get a bite tonight?

2432
01:55:19,600 --> 01:55:22,001
There's this, uh, new Cuban place

2433
01:55:22,080 --> 01:55:24,082
just opened on the Lower East Side.
It's supposed to be good.

2434
01:55:24,400 --> 01:55:26,084
- Oh, really?
- Yeah.

2435
01:55:26,600 --> 01:55:27,931
You and I?

2436
01:55:28,160 --> 01:55:29,764
- Yeah, or other people.
- (CELL PHONE VIBRATING)

2437
01:55:29,840 --> 01:55:31,604
- That sounds nice. I would like that.
- Yeah.

2438
01:55:31,680 --> 01:55:32,920
Finally.

2439
01:55:33,360 --> 01:55:34,691
Mark, hey.

2440
01:55:34,920 --> 01:55:36,285
VINNIE: <i>It's a bloodbath up here.</i>

2441
01:55:36,360 --> 01:55:37,805
<i>Morgan stock has lost half its value.</i>

2442
01:55:37,880 --> 01:55:40,201
<i>It's down to 23. 10. It's in freefall.</i>

2443
01:55:40,280 --> 01:55:43,284
<i>Clients want to talk to you
about pulling their money.</i>

2444
01:55:43,480 --> 01:55:47,007
<i>It's now or never, Mark.
We got to sell.</i>

2445
01:55:50,280 --> 01:55:51,441
<i>Mark.</i>

2446
01:55:52,880 --> 01:55:54,006
<i>Mark, you hear me?</i>

2447
01:55:54,360 --> 01:55:55,805
MALE AUTOMATED VOICE:
<i>Mailbox one.</i>

2448
01:55:55,960 --> 01:55:58,725
<i>You have 15 messages.</i>

2449
01:55:59,040 --> 01:56:00,041
(BEEPING)

2450
01:56:00,120 --> 01:56:01,770
WOMAN: <i>Mike, I can't seem
to get a hold of you.</i>

2451
01:56:01,840 --> 01:56:04,286
<i>Will you please call me
at your earliest convenience.</i>

2452
01:56:05,640 --> 01:56:08,484
<i>It's Jack. You're buying stocks?</i>

2453
01:56:08,720 --> 01:56:11,644
<i>The market's at an all-time low.
This is crazy!</i>

2454
01:56:11,880 --> 01:56:14,201
MIKE: <i>I met my wife on Match.com.</i>

2455
01:56:14,640 --> 01:56:15,971
<i>My profile said,</i>

2456
01:56:16,160 --> 01:56:18,527
<i>"I am a medical student
with only one eye,</i>

2457
01:56:18,600 --> 01:56:20,523
<i>"an awkward social manner,</i>

2458
01:56:20,600 --> 01:56:24,207
<i>"and $145,000 in student loans."</i>

2459
01:56:24,840 --> 01:56:26,330
<i>She wrote back,</i>

2460
01:56:26,600 --> 01:56:28,204
<i>"You're just what I've been looking for."</i>

2461
01:56:29,160 --> 01:56:30,810
<i>She meant honest.</i>

2462
01:56:31,040 --> 01:56:32,690
<i>So let me be honest.</i>

2463
01:56:32,920 --> 01:56:37,164
The housing crisis represents
the greatest financial opportunity of...

2464
01:56:37,240 --> 01:56:40,005
MIKE: <i>Making money is not
like I thought it would be.</i>

2465
01:56:40,320 --> 01:56:44,928
<i>This business kills
the part of life that is essential.</i>

2466
01:56:45,000 --> 01:56:48,083
<i>The part that has nothing
to do with business.</i>

2467
01:56:48,160 --> 01:56:49,889
- (APPLAUDING)
- (MAN TALKING INDISTINCTLY)

2468
01:56:50,320 --> 01:56:52,402
<i>For the past two years, my insides...</i>

2469
01:56:52,480 --> 01:56:53,481
(SQUEALS)

2470
01:56:53,560 --> 01:56:55,927
<i>...have felt like
they're eating themselves.</i>

2471
01:56:56,080 --> 01:56:58,367
<i>All the people I respected</i>

2472
01:56:58,840 --> 01:57:01,366
<i>won't talk to me any more</i>

2473
01:57:01,600 --> 01:57:03,443
<i>except through lawyers.</i>

2474
01:57:07,200 --> 01:57:08,611
- (BABY CRYING)
<i>- People</i>

2475
01:57:09,360 --> 01:57:13,046
<i>want an authority to tell them
how to value things...</i>

2476
01:57:13,440 --> 01:57:18,480
<i>...but they choose this authority not
based on facts or results.</i>

2477
01:57:18,960 --> 01:57:23,648
<i>They choose it because it
seems authoritative and familiar.</i>

2478
01:57:23,720 --> 01:57:26,166
<i>And I am not</i>

2479
01:57:26,240 --> 01:57:29,289
<i>and never have been "familiar".</i>

2480
01:57:31,240 --> 01:57:32,241
So...

2481
01:57:33,120 --> 01:57:36,249
<i>So, I've come to the sullen realisation</i>

2482
01:57:36,360 --> 01:57:39,125
<i>that I must close down the fund.</i>

2483
01:57:39,200 --> 01:57:42,329
<i>Sincerely, Michael J. Burry, M.D.</i>

2484
01:58:42,040 --> 01:58:44,122
CHARLIE: This isn't how I pictured it.

2485
01:58:46,120 --> 01:58:47,281
JAMIE: What did you think we'd find?

2486
01:58:47,360 --> 01:58:48,407
I don't know.

2487
01:58:50,280 --> 01:58:51,805
Grownups.

2488
01:58:55,720 --> 01:58:57,210
Mark, you there?

2489
01:58:59,880 --> 01:59:01,120
VINNIE: <i>Mark?</i>

2490
01:59:01,400 --> 01:59:04,324
Paulson and Bernanke
just left the White House.

2491
01:59:09,640 --> 01:59:11,802
There's going to be a bailout.

2492
01:59:13,400 --> 01:59:16,802
<i>Well, they had to. Right?</i>

2493
01:59:17,160 --> 01:59:18,321
<i>Paper markets would've collapsed.</i>

2494
01:59:18,400 --> 01:59:19,561
They knew.

2495
01:59:19,840 --> 01:59:21,330
<i>Cash would've stopped
coming out of ATMs.</i>

2496
01:59:21,400 --> 01:59:22,970
<i>They had to backstop this.</i>

2497
01:59:23,240 --> 01:59:25,561
They knew the taxpayers
would bail them out.

2498
01:59:25,640 --> 01:59:28,086
They weren't being stupid.
They just didn't care.

2499
01:59:28,240 --> 01:59:30,402
<i>Yeah. 'Cause they're fucking crooks.</i>

2500
01:59:32,320 --> 01:59:34,926
But at least we're going to
see some of them go to jail.

2501
01:59:36,080 --> 01:59:39,323
Right? I mean, they're gonna
have to break up the banks.

2502
01:59:40,440 --> 01:59:41,771
<i>I mean, the party's over.</i>

2503
01:59:41,840 --> 01:59:44,525
I don't know. I don't know, Vinnie.

2504
01:59:47,280 --> 01:59:48,770
I have a feeling

2505
01:59:48,840 --> 01:59:50,729
that in a few years
people are gonna be doing

2506
01:59:50,800 --> 01:59:53,804
what they always do
when the economy tanks.

2507
01:59:54,280 --> 01:59:57,489
They will be blaming
immigrants and poor people.

2508
01:59:57,760 --> 01:59:59,125
JARED: <i>But Mark was wrong.</i>

2509
02:00:00,280 --> 02:00:02,203
<i>In the years that followed,
hundreds of bankers</i>

2510
02:00:02,280 --> 02:00:04,965
<i>and rating agencies executives
went to jail.</i>

2511
02:00:05,120 --> 02:00:07,122
<i>The SEC was completely overhauled.</i>

2512
02:00:07,280 --> 02:00:10,011
<i>And Congress had no choice
but to break up the big banks</i>

2513
02:00:10,400 --> 02:00:12,880
<i>and regulate the mortgage
and derivatives industries.</i>

2514
02:00:14,280 --> 02:00:16,044
(GLASS SHATTERING)

2515
02:00:17,680 --> 02:00:19,011
<i>Just kidding.</i>

2516
02:00:19,280 --> 02:00:21,487
<i>The banks took the money
the American people gave them</i>

2517
02:00:21,560 --> 02:00:23,847
<i>and used it to pay themselves
huge bonuses</i>

2518
02:00:23,920 --> 02:00:26,161
<i>and lobby Congress to kill big reform.</i>

2519
02:00:26,360 --> 02:00:28,601
<i>And then they blamed
immigrants and poor people.</i>

2520
02:00:28,680 --> 02:00:30,842
<i>And this time, even teachers.</i>

2521
02:00:32,240 --> 02:00:33,446
<i>And when all was said and done,</i>

2522
02:00:33,520 --> 02:00:35,284
<i>only one single banker went to jail.</i>

2523
02:00:36,200 --> 02:00:37,326
<i>This poor schmuck.</i>

2524
02:00:37,400 --> 02:00:39,846
<i>Kareem Serageldin from Credit Suisse.</i>

2525
02:00:40,200 --> 02:00:42,521
<i>He hid a few billion
in mortgage bond losses,</i>

2526
02:00:42,600 --> 02:00:45,888
<i>something most of the big banks did
on a good day during the crisis.</i>

2527
02:00:47,480 --> 02:00:49,482
Mark, can we sell now?

2528
02:00:51,320 --> 02:00:53,800
<i>The fund will make almost $1 billion.</i>

2529
02:00:53,880 --> 02:00:55,484
<i>You'll clear $200 mil, Mark.</i>

2530
02:00:56,680 --> 02:00:58,921
You know, once we sell,

2531
02:00:59,680 --> 02:01:01,569
we'll be just like the rest of them.

2532
02:01:01,680 --> 02:01:02,761
You know that.

2533
02:01:03,080 --> 02:01:04,684
<i>No, we're not.
We're not the bad guys here.</i>

2534
02:01:04,760 --> 02:01:08,287
<i>We didn't defraud the American people
and prey on their dreams</i>

2535
02:01:08,360 --> 02:01:09,930
<i>of owning a home. All right?</i>

2536
02:01:10,000 --> 02:01:11,286
<i>They did.</i>

2537
02:01:11,360 --> 02:01:12,361
(HORN HONKING)

2538
02:01:12,440 --> 02:01:14,283
And now we get to
kick them in the teeth.

2539
02:01:19,680 --> 02:01:21,682
A billion dollars.

2540
02:01:23,360 --> 02:01:24,600
<i>That's right.</i>

2541
02:01:24,680 --> 02:01:27,524
<i>But we got to close out our position
or it could be zero.</i>

2542
02:01:28,040 --> 02:01:30,884
<i>I mean, it's now or never, Mark.</i>

2543
02:01:40,040 --> 02:01:41,485
Okay.

2544
02:01:45,200 --> 02:01:46,645
Sell it all.

2545
02:03:45,360 --> 02:03:47,442
(ROCK MUSIC PLAYING)