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Am reading "The Big Short" for the first time ...
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Date: December 12th, 2025 10:31 PM Author: green party of the first part Very entertaining read. One thing that jumps out at me is how objectively brilliant Mike Burry is. I kind of thought he was a guy who made one good call, but he was making huge returns long before that and had Wall Street investment banks throwing money at him back when he was still a medical resident posting his views on investment message boards. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506096) |
Date: December 12th, 2025 10:39 PM Author: Exciting Bipolar Sanctuary Yes, he was an excellent deep-value small- and micro-cap investor, but he decided to unilaterally deviate from this specialty and he's since been revealed as a borderline lunatic crank who is absolutely terrible on macro, meaning he got shit lucky with his 2008 call and his investors were correct to pull all their money even after the bet worked out, which they did (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506104) |
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Date: December 12th, 2025 10:43 PM Author: Sienna drunken rigor (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506108) |
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Date: December 12th, 2025 10:43 PM Author: green party of the first part Maybe, but it also seems possible that the public has gotten so trained to "buy the dip" and that "number go up" that bubbles are far more resilient than they used to be. That the "dumb money" is so powerful that it overwhelms correct analysis of things like the depreciation costs that AI companies face long-term. But if he's right about that, then those are facts which will eventually manifest themselves and can't be papered over. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506109) |
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Date: December 12th, 2025 10:59 PM Author: Lilac ticket booth money having a different time horizon isn't "dumb", "doctor" "burry" (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506135) |
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Date: December 12th, 2025 11:41 PM Author: Sapphire Wonderful Turdskin Nursing Home Some people say they're cyclical and that each generation of MBAs has to experience one firsthand to really get it (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506185) |
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Date: December 12th, 2025 11:39 PM Author: Sapphire Wonderful Turdskin Nursing Home Efficient market hypothesis permits one outlier to exist at the tail end of the distribution. I think the bigger takehome is not that Michael Burry spotted the fraud but that no one else did (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506182) |
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Date: December 12th, 2025 11:55 PM Author: well-lubricated fishy field kitty cat Lots and lots of people spotted it just like lots of people are spotting it right freakin now -- home prices are out of wack and need to correct a solid 20-30%. Most people just had no clue how to monetize their assumption. How many people know what an ISDA is?
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Date: December 13th, 2025 5:22 PM Author: Sapphire Wonderful Turdskin Nursing Home So they weren't market participants? Wow (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49507280) |
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Date: December 13th, 2025 9:47 AM Author: marvelous plum range boistinker I wouldn’t call him deep value, he had great understanding of optionality. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506477) |
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Date: December 13th, 2025 9:49 AM Author: Bespoke institution Iirc they did this bc they found Shorting to be Gauche (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506480) |
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Date: December 12th, 2025 10:42 PM Author: Sienna drunken rigor Yes, he was doing pretty well picking stocks 2005 era from what I remember from the book. He’s proven he is a good investor, but I think he’s hurt his reputation a bit in the last few years. He’s called recession and sold everything too many times. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506107) |
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Date: December 12th, 2025 10:44 PM Author: big startling pisswyrm den Correctly predicted 12 of the last 3 recessions etc. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506110) |
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Date: December 13th, 2025 6:53 PM Author: pale mewling messiness friendly grandma (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49507440) |
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Date: December 12th, 2025 10:45 PM Author: Beady-eyed cream idea he suggested parlour it's easy to be absolutely correct as to what should happen two times and only get according results one time or no times |
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Date: December 12th, 2025 10:45 PM Author: green party of the first part Right from the start, Scion Capital was madly, almost comically, successful. By the middle of 2005, over a period in which the broad stock market index had fallen by 6.84 percent, Burry’s fund was up 242 percent and he was turning away investors.
Lewis, Michael. The Big Short: Inside the Doomsday Machine (Movie Tie-in Editions Book 0) . W. W. Norton & Company. Kindle Edition. |
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Date: December 12th, 2025 11:26 PM Author: irradiated carnelian kitchen Well if the guy who wrote an entire book fawning over Sam Bankman-Fried says it.. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506170) |
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Date: December 13th, 2025 9:49 AM Author: marvelous plum range boistinker His bet on SBF and promotion of the book during the trial really damaged my opinion of Lewis. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506479) |
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Date: December 13th, 2025 10:39 AM Author: irradiated carnelian kitchen (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506534) |
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Date: December 12th, 2025 10:46 PM Author: green party of the first part This method of attracting funds suited Mike Burry. More to the point, it worked. He’d started Scion Capital with a bit more than a million dollars—the money from his mother and brothers and his own million, after tax. In his first full year, 2001, the S&P 500 fell 11.88 percent. Scion was up 55 percent. The next year, the S&P 500 fell again, by 22.1 percent, and yet Scion was up again: 16 percent. The next year, 2003, the stock market finally turned around and rose 28.69 percent, but Mike Burry beat it again—his investments rose by 50 percent. By the end of 2004, Mike Burry was managing $600 million and turning money away. “If he’d run his fund to maximize the amount he had under management, he’d have been running many, many billions of dollars,” says a New York hedge fund manager who watched Burry’s performance with growing incredulity.
Lewis, Michael. The Big Short: Inside the Doomsday Machine (Movie Tie-in Editions Book 0) . W. W. Norton & Company. Kindle Edition.
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Date: December 12th, 2025 11:42 PM Author: Sapphire Wonderful Turdskin Nursing Home So he was lazy? What's the takehome point? (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506186) |
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Date: December 12th, 2025 10:53 PM Author: green party of the first part It surprised him that Deutsche Bank didn’t seem to care which bonds he picked to bet against. From their point of view, so far as he could tell, all subprime mortgage bonds were the same. The price of insurance was driven not by any independent analysis but by the ratings placed on the bond by the rating agencies, Moody’s and Standard & Poor’s.* If he wanted to buy insurance on the supposedly riskless triple-A-rated tranche, he might pay 20 basis points (0.20 percent); on the riskier A-rated tranches, he might pay 50 basis points (0.50 percent); and, on the even less safe triple-B-rated tranches, 200 basis points—that is, 2 percent. (A basis point is one-hundredth of one percentage point.) The triple-B-rated tranches—the ones that would be worth zero if the underlying mortgage pool experienced a loss of just 7 percent—were what he was after. He felt this to be a very conservative bet, which he was able, through analysis, to turn into even more of a sure thing.
Anyone who even glanced at the prospectuses could see that there were many critical differences between one triple-B bond and the next—the percentage of interest-only loans contained in their underlying pool of mortgages, for example. He set out to cherry-pick the absolute worst ones, and was a bit worried that the investment banks would catch on to just how much he knew about specific mortgage bonds, and adjust their prices. Once again they shocked and delighted him: Goldman Sachs e-mailed him a great long list of crappy mortgage bonds to choose from. “This was shocking to me, actually,” he says. “They were all priced according to the lowest rating from one of the big three ratings agencies.” He could pick from the list without alerting them to the depth of his knowledge. It was as if you could buy flood insurance on the house in the valley for the same price as flood insurance on the house on the mountaintop.
Lewis, Michael. The Big Short: Inside the Doomsday Machine (Movie Tie-in Editions Book 0) . W. W. Norton & Company. Kindle Edition.
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Date: December 12th, 2025 10:55 PM Author: green party of the first part A guy who does his homework like this in a manner that made Goldman Sachs look like dumb money is not someone who should be lightly disregarded, imo. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506133) |
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Date: December 13th, 2025 9:51 AM Author: marvelous plum range boistinker It was weaponized autism (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506482) |
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Date: December 12th, 2025 10:56 PM Author: green party of the first part For weeks he hounded Bank of America until they agreed to sell him $5 million in credit default swaps. Twenty minutes after they sent their e-mail confirming the trade, they received another back from Burry: “So can we do another?” In a few weeks Mike Burry bought several hundred million dollars in credit default swaps from half a dozen banks, in chunks of $5 million. None of the sellers appeared to care very much which bonds they were insuring. He found one mortgage pool that was 100 percent floating-rate negative-amortizing mortgages—where the borrowers could choose the option of not paying any interest at all and simply accumulate a bigger and bigger debt until, presumably, they defaulted on it. Goldman Sachs not only sold him insurance on the pool but sent him a little note congratulating him on being the first person, on Wall Street or off, ever to buy insurance on that particular item. “I’m educating the experts here,” Burry crowed in an e-mail.
Lewis, Michael. The Big Short: Inside the Doomsday Machine (Movie Tie-in Editions Book 0) . W. W. Norton & Company. Kindle Edition.
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Date: December 12th, 2025 11:49 PM Author: Hyperventilating vengeful indian lodge milk I dont care for much of the big short movie, or people saying the Wall Street bros need to go to prison over the financial crisis, or people who talk about what a genius Murry is.
I think the definitive scene from the movie the Big Short is where they talk to the stripper who owns 3-4 houses.
Whether the anecdote is rue or not, Wall Street thought that mortgage loans would perform in the same way they had for 50 years - and Burry realized the retail banks were taking advantage of this and underwriting loans differently than they had the past 50 years.
Kudos to him for doing this, but you can see why it hasn't served him well since then. He just shouts dumb stuff like "AI is overvalued" - as if a significant number of investors arent considering that. 2008 was a unique scenario where he identified an area where the banks werent actually aware of the actual risks. |
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Date: December 13th, 2025 12:00 AM Author: well-lubricated fishy field kitty cat They were very much aware just like everyone is very much aware that nVidia right now is so out of wack with the rest of the market and that no good way even exists to hedge your exposure to nVidia. I go to risk committee meetings at a place with a trillion in AUM. nVidia is its own line item in the reports to the risk committee. I have been doing this shit for 20 years. NEVER has a single ticker been a line item. We have never reported to the Board on limits on single tickers. Its never had to happen. Now its a thing. nVidia alone can sink the entire US economy.
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Date: December 13th, 2025 12:06 AM Author: irate police squad scourge upon the earth Movie tagline: He was the world’s greatest compliance officer. But how do you compliance a stock that refuses to comply? (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506211) |
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Date: December 13th, 2025 6:46 AM Author: big startling pisswyrm den (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506382) |
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Date: December 13th, 2025 10:42 AM Author: obsidian keepsake machete (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506540) |
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Date: December 13th, 2025 12:13 AM Author: soul-stirring shitlib But aren't u a new Orleans law grad? Seems even less prestigious than tmf (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506219) |
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Date: December 13th, 2025 8:37 AM Author: Diverse gaped tanning salon (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506426) |
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Date: December 13th, 2025 9:52 AM Author: marvelous plum range boistinker Just buy long dated Nvidia puts. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506484) |
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Date: December 13th, 2025 10:45 AM Author: shaky adulterous stead regret market can stay irrational longer than you can stay solvent imo (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506546) |
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Date: December 13th, 2025 12:46 PM Author: well-lubricated fishy field kitty cat Too expensive because everyone wants some. You hedge nVidia by buying Qualcomm puts which are now too expensive too. It’s all broken, bro. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506779) |
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Date: December 13th, 2025 12:03 AM Author: green party of the first part This ape who led the department at AIG insurance that was buying most of these CDOs may be more responsible than anyone for the crash. He would bully employees who questioned buying this garbage into submission:
Park put two and two together and guessed that the nature of these piles of consumer loans insured by AIG FP was changing, that they contained a lot more subprime mortgages than anyone knew, and that if U.S. homeowners began to default in sharply greater numbers, AIG didn’t have anywhere near the capital required to cover the losses. When he brought this up at a meeting, his reward was to be hauled into a separate room by Joe Cassano, who screamed at him that he didn’t know what he was talking about. That Joe Cassano, the boss of AIG FP, was the son of a police officer and had been a political science major at Brooklyn College seems, in retrospect, far less relevant than his need for obedience and total control. He’d spent most of his career, first at Drexel Burnham and then at AIG FP, not as a bond trader but working in the back office. Across AIG FP the view of the boss was remarkably consistent: Cassano was a guy with a crude feel for financial risk but a real talent for bullying people who doubted him. “AIG FP became a dictatorship,” says one London trader. “Joe would bully people around. He’d humiliate them and then try to make it up to them by giving them huge amounts of money.”
Lewis, Michael. The Big Short: Inside the Doomsday Machine (Movie Tie-in Editions Book 0) . W. W. Norton & Company. Kindle Edition. |
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Date: December 13th, 2025 12:29 AM Author: well-lubricated fishy field kitty cat I know a lot of AIG people who came in post 2008 to clean up that shit or got promoted to C suite right after 2008 when the pre-GFC folks were shown the door. AIG spent the next 20 years never retaining talent and then they spun of Corebridge and lost more folks. That they still exist at all is a testament to the whole too big to fail thing. The stock has basically done nothing for over 10 years now while paying just a 2% dividend for the pleasure. P&C is a shitty business. Chubb may finally put them out of their misery.
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Date: December 13th, 2025 12:33 AM Author: learning disabled feces house its actually a great way to learn the ins and outs of double dibbley doopety drop tranches 20 year after it was ever relevant. might make a great jeopardy question some day. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506232) |
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Date: December 13th, 2025 12:44 AM Author: well-lubricated fishy field kitty cat Im sort of a history buff on the GFC. In my current role I write the usually semi-academic papers that are really marketing materials for my employer on risk, compliance and governance and I touch on GFC lessons learned a lot in the crap I publish. Anyway -- my final word on this is this -- everyone at the senior levels knew -- Lehman sent a report by Oliver Wyman the actuary and risk fucks who everybody hires to their board early in 2007 outlining how fucked they really were. They had close to 20!!!! months of lead time before shit fully exploded in their faces and they did absolutely nothing. The lessons of the GFC is that we build layers of risk and governance controls that really just paper over the fact that in practice we have dictator CEOs who run roughshod over controls functions. Every CRO is shitting his pants and putting on diapers before taking a red breach to his CEO and he first tries every trick under the sun to try and categorize it "orange." At founder led companies it is even worse because they actually believe their own BS. Inertia is vast. Knowing doesnt translate to doing. And independent directors thanks to DEI quotas have no fucking clue about finance or accounting and we are staffing our audit committees with literal retards so things will only get worse. Lehman arguably could have been saved, at least in Bear Stearns fashion with a merger, but for a very clueless audit committee chair.... (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506248) |
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Date: December 13th, 2025 8:18 AM Author: Offensive impressive gas station coffee pot You're in your element with poasts like this. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506410) |
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Date: December 13th, 2025 11:03 PM Author: green party of the first part He's definitely mailing it in with his "all Hahols will die" Russia shtik these days. Nice to see some high-effort poasts from him- he's obviously a smart guy. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49507917) |
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Date: December 13th, 2025 11:06 PM Author: irate police squad scourge upon the earth tbf, he had a low 160s LSAT. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49507920) |
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Date: December 13th, 2025 9:24 AM Author: Arousing Bisexual Station (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506460) |
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Date: December 13th, 2025 10:21 AM Author: Contagious High-end Dragon State (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506513) |
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Date: December 13th, 2025 10:48 AM Author: shaky adulterous stead regret (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506555) |
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Date: December 14th, 2025 12:06 AM Author: chest-beating lettuce (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49507974) |
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Date: December 13th, 2025 9:24 AM Author: Arousing Bisexual Station (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506459) |
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Date: December 13th, 2025 9:46 AM Author: marvelous plum range boistinker I’ve read it three times. It’s great.
Michael Lewis just did several interviews with people from the book on his podcast Against the Rules. |
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Date: December 13th, 2025 10:41 AM Author: learning disabled feces house why the fuck would you read it three times lol (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506535) |
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Date: December 13th, 2025 11:52 PM Author: marvelous plum range boistinker Both times I reread it it was because I was meeting one of the characters. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49507962) |
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Date: December 13th, 2025 9:47 AM Author: marvelous plum range boistinker Burry says healthcare is undervalued. And he thinks Palantir is scam. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49506475) |
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Date: December 13th, 2025 6:57 PM Author: Disgusting Roommate Casino boomers have all the wealth and keep getting older. not a terribly hard prediction to make about healthcare. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49507442) |
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Date: December 13th, 2025 11:53 PM Author: marvelous plum range boistinker But his point was that healthcare stocks are currently underweighted. (http://www.autoadmit.com/thread.php?thread_id=5809745&forum_id=2\u0026show=6hr#49507963) |
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Date: December 15th, 2025 4:45 PM Author: green party of the first part The CDO manager, in practice, didn’t do much of anything, which is why all sorts of unlikely people suddenly hoped to become one. “Two guys and a Bloomberg terminal in New Jersey” was Wall Street shorthand for the typical CDO manager. The less mentally alert the two guys, and the fewer the questions they asked about the triple-B-rated subprime bonds they were absorbing into their CDOs, the more likely they were to be patronized by the big Wall Street firms. The whole point of the CDO was to launder a lot of subprime mortgage market risk that the firms had been unable to place straightforwardly. The last thing you wanted was a CDO manager who asked lots of tough questions.
Lewis, Michael. The Big Short: Inside the Doomsday Machine (Movie Tie-in Editions Book 0) (p. 141). W. W. Norton & Company. Kindle Edition. |
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Date: December 15th, 2025 4:46 PM Author: green party of the first part To assure the big investors who had handed their billions to him that he had their deep interests at heart, the CDO manager kept ownership of what was called the “equity,” or “first loss” piece, of the CDO—the piece that vanished first when the subprime loans that ultimately supplied the CDO with cash defaulted. But the CDO manager was also paid a fee of 0.01 percent off the top, before any of his investors saw a dime, and another, similar fee, off the bottom, as his investor received their money back. That doesn’t sound like much, but, when you’re running tens of billions of dollars with little effort and no overhead, it adds up. Just a few years earlier, Wing Chau was making $140,000 a year managing a portfolio for the New York Life Insurance Company. In one year as a CDO manager, he’d taken home $26 million, the haul from half a dozen lifetimes of working at New York Life.
Lewis, Michael. The Big Short: Inside the Doomsday Machine (Movie Tie-in Editions Book 0) (p. 142). W. W. Norton & Company. Kindle Edition. |