The Big Short (2015)
Overheard at a Washington, D.C. bar: "Truth is like poetry. And most people fucking hate poetry."
Mark Baum: I don't get it. Why are they confessing?
Danny Moses: They're not confessing.
Porter Collins: They're bragging.
On screen quotation from Haruki Murakami's novel "IQ84": Everyone, deep in their hearts, is waiting for the end of the world to come.
On screen quotation from Mark Twain: [On screen quote attributed to Mark Twain] It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.
Danny Moses: You're completely sure of the math?
Jared Vennett: Look at him, that's my quant.
Mark Baum: Your what?
Jared Vennett: My quantitative. My math specialist. Look at him, you notice anything different about him? Look at his face.
Mark Baum: That's pretty racist.
Jared Vennett: Look at his eyes, I'll give you a hint, his name is Yang. He won a national math competition in China he doesn't even speak English! Yeah I'm sure of the math.
Ben Rickert: If we're right, people lose homes. People lose jobs. People lose retirement savings, people lose pensions. You know what I hate about fucking banking? It reduces people to numbers. Here's a number - every 1% unemployment goes up, 40,000 people die, did you know that?
Mark Baum: We live in an era of fraud in America. Not just in banking, but in government, education, religion, food, even baseball... What bothers me ins't that fraud is not nice. Or that fraud is mean. For fifteen thousand years, fraud and short sighted thinking have never, ever worked. Not once. Eventually you get caught, things go south. When the hell did we forget all that? I thought we were better than this, I really did.
Mark Baum: I have a feeling in a few years people are going to be doing what they always do when the economy tanks. They will be blaming immigrants and poor people.
Mark Baum: [on the phone] Ok, I want you to walk back in there and very calmly, very politely tell the risk-assessors to fuck-off!
Vinnie Daniel: [Walks into the room] Gentlemen, I just spoke with Mark Baum and he says to 'fuck off'.
Jared Vennett: Tell me the difference between stupid and illegal and I'll have my wife's brother arrested.
Jared Vennett: [pulling blocks from a Jenga tower] As, zero. Bs, zero. Double Bs, zero. Trible Bs, zero...
[the tower topples]
Jared Vennett: And then that happens.
Mark Baum: What is that?
Jared Vennett: That's America's housing market.
[Baum's team stares in utter shock]
Jared Vennett: Thank you.
Jared's Assistant (Chris): [delighted] Fuckin' A, Jared.
Jared Vennett: Shut your fuckin' mouth.
[Chris' face falls in embarrassment]
Michael Burry: That's a nice haircut. Did you do it yourself?
Jamie Shipley: People hate to think about bad things happening so they always underestimate their likelihood.
Jared Vennett: [Answering call on his cell phone] Is this America's angriest hedge fund?
Mark Baum: And I'm getting madder and madder and I ask this guy how he sleeps at night knowing he's ripping off working people and he just leaves. He doesn't say a word. He just walks away from the lunch. So am I fucked up or is he?
Mark Baum: The banks have given us 25% interest rates on credit cards. They have screwed us on student loans that we can never get out from under. Then this guy walks into my office and says those same banks got greedy, they lost track of the market, and I can profit off of their stupidity? Fuck, yeah, I want him to be right!
Rabbi: Paul is a fine boy, and Mark is an excellent student of the Torah and the Talmud.
Mark Baum's Mom: Then what's the problem, rabbi?
Rabbi: It's the reason Mark is studying so hard. He's looking for inconsistencies in the word of God!
Mark Baum's Mom: So has he found any?
Mark Baum: We're going to wait and we're going to wait and we're going to wait until they feel the pain, until they start to bleed.
Casey: What am I supposed to do? Write a piece called "We're all fucked"?
Charlie Geller: Yes! That's a perfect title!
Mark Baum: I'm going to find moral redemption at the roulette table.
Vinnie Daniel: How are you f***ing us?
Jared Vennett: When you come for the payday, I'm gonna rip your eyes out. I'm gonna make a fortune. The good news is Vinnie, you're not going to care cause you're gonna make so much money. That's what I get out of it. Wanna know what you get out of it? You get the ice cream, the hot fudge, the banana and the nuts. Right now I get the sprinkles, and ya - if this goes thru, I get the cherry. But you get the sundae Vinny. You get the sundae.
Vinnie Daniel: All right. I buy that. Thank you.
Jared Vennett: [about credit default swaps] Let me put it this way: I'm standing in front of a burning house, and I'm offering you fire insurance on it.
Jared Vennett: In the years that followed, hundreds of bankers and rating-agency executives went to jail. The SEC was completely overhauled, and Congress had no choice but to break up the big banks and regulate the mortgage and derivative industries. Just kidding! Banks took the money the American people gave them, and used it to pay themselves huge bonuses, and lobby the Congress to kill big reform. And then they blamed immigrants and poor people, and this time even teachers! And when all was said and done, only one single banker went to jail this poor schmuck!
Anthony Bourdain: OK, I'm a chef on a Sunday afternoon, setting the menu at a big restaurant. I ordered my fish on Friday, which is the mortgage bond that Michael Burry shorted. But some of the fresh fish doesn't sell. I don't know why. Maybe it just came out halibut has the intelligence of a dolphin. So, what am I going to do? Throw all this unsold fish, which is the BBB level of the bond, in the garbage, and take the loss? No way. Being the crafty and morally onerous chef that I am, whatever crappy levels of the bond I don't sell, I throw into a seafood stew. See, it's not old fish. It's a whole new thing! And the best part is, they're eating 3-day-old halibut. *That* is a CDO.
Vinnie Daniel: It's like someone hit a pinata full of white people who suck at golf.
Michael Burry: I want to buy swaps on mortgage bonds. A credit default swap that pays off if the underlying bond fails.
Goldman Sachs Sales Rep (Lucy): You want to bet against the housing market?
Michael Burry: Yes.
Goldman Sachs Quant (Deeb): Why? Those bonds only fail if millions of Americans don't pay their mortgages. That's never happened in history. If you'll forgive me, Dr. Burry, it seems like a foolish investment.
Michael Burry: Well, based on prevailing sentiment, the market, the banks and popular culture, yes, it's a foolish investment. But, everyone's wrong.
Goldman Sachs Sales Rep (Lucy): This is Wall Street, Dr. Burry. If you offer us free money, we ARE going to take it...
Michael Burry: [interrupts her] My one concern is that when the bonds fail I want to be certain of payment in case of solvency issues with your bank.
Goldman Sachs Sales Rep (Lucy): I'm sorry, are you for real? You want to bet against the housing market and you're worried WE won't pay YOU?
Goldman Sachs Quant (Deeb): [confers, whispering with colleage, in a lengthy sidebar] Dr. Burry, we could work out a pay-as-we-go structure that would pay out if the bonds fail. But it would also apply to your payments if the value of the mortgage bond goes up, You'd have to pay us monthly premiums.
Goldman Sachs Sales Rep (Lucy): Is that acceptable, Dr. Burry?
Michael Burry: Yes... yes. I have prospectuses on the six mortgage-backed securities I want to short.
Goldman Sachs Quant (Deeb): [Lengthy silence as the Goldman reps scan and review the thick booklets] Dr. Burry, these should be fine.
Goldman Sachs Sales Rep (Lucy): We're prepared to sell you five million in credit default swaps on these mortgage bonds.
Michael Burry: Could we make it a hundred million?
Michael Burry: I met my wife on match.com. My profile said that I'm a medical student with only one eye, an awkward social manner, and 145 thousand dollars in student loans. She wrote back, "You're just what I've been looking for!" She meant honest.
Mark Baum: [on cell phone] Hey... excuse me! Let me ask you this: What company treats its customers that shittily and succeeds?
Jared Vennett: [inaudible]
Mark Baum: [on cell phone] Fine... ok... Goldman...
Mark Baum: [of Collateralized Debt Obligation funds] So mortgage bonds are dog shit. CDOs are dog shit wrapped in cat shit.
Jared Vennett: If the mortgage bonds were the match, then the CDOs were the kerosene soaked rags, then the synthetic CDO was the atomic bomb that the drunk President holding his finger over the button, it was at that moment in that dumb restaurant, with that stupid look on his face that Mark Baum realized the whole world economy might collapse.
Lawrence Fields: Your big mortgage bet concerns us. We have no confidence in your ability to identify macroeconomic trends.
Michael Burry: You flew here to tell me that? Why? I mean, anyone can see there's a real estate bubble.
Lawrence Fields: Actually, no one can see a bubble. That's what makes it a bubble.
Michael Burry: That's dumb, Lawrence. There are always markers. Mortgage fraud - it's quadrupled since 2000. Average take home pay is flat yet home prices are soaring. That means homes are debts not assets.
Martin Blaine: [sarcastically] So Mike Burry of San Jose, a guy who gets his hair cut at SuperCuts, and doesn't wear shoes, knows more than Alan Greenspan and Hank Paulson?
Michael Burry: Dr. Mike Burry. And yes... he does.
Mortgage Broker: So, is Morgan Stanley recruiting us? Is that...
Porter Collins: Oh, no. No. The bank owns our hedge fund but we're not really a part of it. We invest in financial service companies and we're trying to understand the residential mortgage business.
Mark Baum: How many loans do you write each month?
Mortgage Broker: Pffft! About sixty.
Mark Baum: What was it four years ago?
Mortgage Broker: Ten... maybe fifteen.
Mortgage Broker: Yeah, I was a bartender. Now I own a boat.
Danny Moses: You own a boat? So how many of these are, uh, adjustable rate mortgages?
Mortgage Broker: Well, most. Yeah, I'd say about ninety percent. The bonuses on those skyrocketed a few years ago. Adjustables are our bread and honey.
Danny Moses: So do applicants ever get rejected?
Mortgage Broker: [laughs] Seriously? Look, if they get rejected, I suck at my job.
Danny Moses: Even if they have no money?
Mortgage Broker: Well, my firm offers NINJA loans - no income, no job. I just leave the income section blank if I want. Corporate doesn't care. These people just want homes, you know, and they just go with the flow.
Danny Moses: Good for you.
Mark Baum: Your companies don't verify?
Mortgage Broker: If I write a loan on Friday afternoon, big bank will buy it by Monday lunch.
Vinnie Daniel: But wait, you *are* the bank, I mean, you work for the bank. I bet your margins are pretty nice and fat.
Jared Vennett: Let's not talk about my margins by the way. Being nice and fat... That's a nice shirt, do they make it for men?
Mark Baum: It's time to call bullshit.
Vinnie Daniel: Bullshit on what?
Mark Baum: Every fucking thing.
Lawrence Fields: Are you being sarcastic with us, Mike?
Michael Burry: Lawrence, I don't know how to be sarcastic.
Michael Burry: Lawrence, I found something really interesting.
Lawrence Fields: Great, Michael. Whenever you find something interesting, we all tend to make money. What stock are you valuing?
Michael Burry: No stocks. I want to short the housing market.
Lawrence Fields: How big is your short position right now?
Michael Burry: Uhh... 1.3 billion.
Lawrence Fields: And the premiums?
Michael Burry: Well, we pay roughly 80 to 90 million each year, which is high but I was the first to do this trade. Watch, it will pay. I may have been early, but I'm not wrong.
Mortgage Broker: Trust me, I'm not driving a 7-series without strippers. No one on the pole has good credit, and they're ALL cash-rich.
Porter Collins: Yeah, I think I read Warren Buffett say something like that in an article.
Mortgage Broker: Who's Warren Buffett?
Michael Burry: It's only a matter of time before someone else sees this investment. We have to act now.
Lawrence Fields: And how do you know these bonds are built on subprime crap? Aren't they filled with hundreds of pages of mortgages?
Michael Burry: I read them.
Lawrence Fields: You read them? No one reads them. Only the lawyers who put them together read them.
Michael Burry: I don't think they even know what they made. The whole housing market is propped up on these bad loans. It's a time bomb, and I want to short it.
Lawrence Fields: Through what instrument, Michael? There are no insurance contracts or options for mortgage bonds! The bonds are too stable. No one would buy them.
Michael Burry: I'm going to get a bank to make me one. Then I'm going to buy a ton of them.
Mark Baum: Jared? It's chaos down here! Where are we at?
Jared Vennett: [Walking into his bank's employee bathroom] "And Caesar wept, for there were no more worlds to conquer."
[Sees another employee, turns to him]
Jared Vennett: Shane? SHANE?
Jared Vennett: Well, nobody's buying CDOs and mortgage bonds anymore, and everybody wants swaps. Swaps are now the hottest thing on the street.
Mark Baum: Well, that's good for us.
Jared Vennett: Yes and no. I heard from somebody who heard from somebody-
[Sees another employee walk]
Jared Vennett: No, Alex, no. Sorry.
Jared Vennett: Benny Cleaver over at Morgan's taking some heavy losses. Your ship might be taking on water. Might be time to get our lifejacket and get out. Oh, I'm jacked. I'm JACKED! I'M JACKED TO THE *TITS*!
Mark Baum: Okay, good.
Jared Vennett: You feel it?
Mark Baum: No.
Mark Baum: Okay, look. If home prices don't go up, you are not going to be able to refinance. And you'll be stuck paying whatever your monthly payment is once it jumps up after your teaser rate expires. Your monthlies could go up two-, three-hundred percent.
Florida Strip Club Dancer: James says I can always refinance.
Mark Baum: Well, he's a liar. Actually, in this particular case, James probably is wrong.
Florida Strip Club Dancer: 200 percent? On all my loans?
Mark Baum: What do you mean "all" your loans? We're talking about two loans on one house, right?
Florida Strip Club Dancer: I have five houses... and a condo.
JP Morgan Employee: Ted had asked me to do some meeting prep but I couldn't find any marketing material on you guys.
Charlie Geller: Oh, we just moved here from Boulder.
JP Morgan Employee: Yeah. Well, can we see your offering documents
Charlie Geller: Well, Brownfield is its own money.
Jamie Shipley: It's our money.
JP Morgan Employee: Well, can you tell us how much you manage?
Charlie Geller: Of course. We're doing 30 million right now, uh, but we started four years ago with 110 thousand. So, as you can see, that's pretty phenomenal returns.
Jamie Shipley: We want to get an ISDA agreement so we can deal in long-term options.
[subtitled: ISDA Agreement: An agreement that lets an investor sit at the 'big boy table' and make high level trades not available to stupid amateurs.Trying to be a high stakes trader without an ISDA is like trying to win the Indy 500 riding a llama]
JP Morgan Employee: [in a slightly condescending tone] That's really cool. That is SO cool.
Charlie Geller: Thank you.
JP Morgan Employee: But, uh... you guys are under the capital requirements for an ISDA.
JP Morgan Employee: By how much?
JP Morgan Employee: [thinking] Uh... how much? One billion, four hundred seventy million. So... a lot.
Charlie Geller: This makes us look bad, doesn't it? That we didn't know what the capital requirements were?
JP Morgan Employee: Uh... it's not great. But keep up those returns and give us a call way down the line, you know. Okay?
Charlie Geller: Our investment-strategy was simple. People hate to think about bad things happening so they always underestimate their likelihood.
Vinnie Daniel: How come you don't hate this guy? He is everything you taught us not to trust.
Mark Baum: I can't hate him. He is so transparent in his self interest that I kind of respect him.
Lawrence Fields: Michael, give me my money back. Michael, do you hear me? I want my money back. Give me my fucking money back, you motherfucker.
Margot Robbie: Basically, Lewis Ranieri's mortgage bonds were amazingly profitable for the big banks. They made billions and billions on their 2% fee they got for selling each of these bonds. But then, they started running out of mortgages to put in them. After all, there are only so many homes and so many people with good enough jobs to buy them, right? So, the banks started filling these bonds with riskier and riskier mortgages. That way, they can keep that profit machine churning, alright? By the way, these risky mortgages are called subprime. So, whenever you hear the word subprime, think shit. Our friend, Michael Burry, found out that these mortgage bonds that were supposedly 65% AAA, were actually just, mostly, full of shit, so now, he's going to short the bonds, which means to bet against. Got it? Good... Now, fuck off.
Lawrence Fields: [barging in] We have no confidence in your ability to identify macro-economic trends.
Michael Burry: You flew here to tell me that? Why? Every, e-e-anyone can see there's a real-estate bubble.
Lawrence Fields: Actually, no one can see a bubble, that's what makes it a bubble.
Michael Burry: That's dumb, Lawrence. There's always markers.
Pub Goer: [to Ben sitting with his laptop doing deals] Who are you a drug-dealer or a banker? Cause if you're a banker you can fuck right off!
Jared Vennett: Now their foot's on fire and they think their steak is done, and you're surprised?
Mark Baum: That's not stupidity, that's fraud.
Jared Vennett: Tell me the difference between stupid and illegal, and I'll have my wife's brother arrested.
Casey: Thanks for coming guys, totally fucking awesome to see you.
Charlie Geller: Yeah. Casey, I've always hated you because you were a prick in college and you are a prick today!
Casey: Thanks Charlie! Still living with your mom?
Jared Vennett: You smell that? What is that?
Mark Baum: What?
Jared Vennett: What's that smell?
Vinnie Daniel: Your cologne?
Jared Vennett: No.
[pause and looks to his assistant]
Jared's Assistant (Chris): Opportunity.
Jared Vennett: No. Money.
Porter Collins: Ooh...
Jared Vennett: I smell money.