In who predicted the appalling mortgages set by banks,

In 2007-08, the world encountered a monetary retreat that
prompted a money related emergency influencing numerous nations, individuals’
lives, and made a tremendous shortage of employments accessible to the general
population. The
financial crisis was the worst economic recession since the Great Depression of
1929. The financial crisis simply means that when liquidity immediately disappears
due to the fact that accessible cash is withdrawn from banks, forcing banks
either to sell different investments to compensate for the deficit or to
collapse. This report will discuss a film called
“The Big Short” in view of a true story which discusses how a group
of individuals working in a hedge fund in The United States who
predicted the appalling mortgages set by banks, were soon to collapse and figured
out how to buy out insurance against the likelihood that the housing market will
collapse.

 

The
movie begins with a strange hedge fund manager Michael Burry who seems to be a
little different from an average hedge fund manager realizing that the US housing
market set by exceedingly inflated risk loans were soon to collapse. Burry was
one of the main characters in the movie where he would come to the office in a
shirt and shorts and would wear no shoes as that made him comfortable in his
workspace. He used to meditate and work out in his office which his other colleagues
found to be very unnatural and weird. After Burry made a scrutinizing discovery
about the housing market collapsing, he soon started investing into credit
default swaps that essentially implied that he could buy out insurance in the
looming housing market betting against the fact that the system will fail. He
was going to numerous investment banks that were handing out mortgages to
almost everybody including people with bad credit scores and betting on them to
soon collapse by paying out a monthly fee. . Meanwhile, Jared Vennett, a low
ranking sales man at Deutsche Bank inadvertently was able to understand Burry’s
strategy and reaches out to another hedge fund manager Mark Baum, and convinces
him to join Burry strategy in investing in these credit default swap. Mark Baum
had his confusions at first because it was known to be that the housing market
in The United States was very stable and no one expected it to fall out. After
questioning the innovation and finding out that the market was run by massive
risks, Baum was convinced to join Burry and bet big stating that the housing
bubble will eventually collapse.  Finally
two investors, Charlie Geller and Jamie Shipley, accidentally discover a paper
written by Jared Vennett about the soon to collapse housing bubble and
immediately became curious and started to research more about the situation and
reached out to a retired banker Ben Rickert, to seek investment advice

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now