The Big Short - Descripción, resumen y conclusión de la pelicula La Gran Apuesta. PDF

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Descripción, resumen y conclusión de la pelicula La Gran Apuesta....

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Beatriz Barceló Coderch

The Big Short The 2008 economic crisis is one of the biggest crises in history, which has gone from a housing crisis to a national and international economic disaster. The Great Bet film explains why this happened and how some Wall Street workers anticipated the collapse of the real estate market which led to the economic crisis across the United States and some international countries, such as Spain, which was hard hit by this crisis. The film shows four groups of people who foresaw this, the most important being Michael Burry, as, thanks to him, everyone else learned about the coming crisis. Michael Burry was a fund manager who noticed the increase in late mortgage payments and the increase in delinquent mortgage payments. This raised his alarm and started his plan not only not to lose money, but to make a lot more money. To put it in context, what the film explains to us is that the real estate market was a sector that everyone saw as stable and where a lot of money was made. He explains that mortgages differ according to their risk, with AAA mortgages being the safest, and B mortgages being the riskiest, that is, those that could fail. The problem comes when real estate companies start giving out B mortgages or also calls subprime (the riskiest) applicants who do not qualify for this level of mortgage, as they do not have the money, making it look like AAA mortgages, just to keep making money. No one cared about this, as they continued to make a lot of money, and relied on the argument that the real estate sector had never failed, so it would never fall. The theory was that everybody was paying the mortgage, but when they stopped paying it, the problem started. As mortgages start to fail, they start to fall in value. As their value fell, so did mortgage bonds, invented by Lewis Ranieri in the late 1970s. These bonds had been a reliable and successful investment bet thanks to the constant growth of the real estate sector. Michael, anticipating the catastrophe, wanted to sell the bonds short, and create mortgage bond swaps. His strategy was to get the banks to create these swaps, which did not exist, for him to buy many, and, in the event of the lowering of mortgage bonds, for the bank to have to pay him a lot of money. The banks would accept, as the banks thought that the real estate sector would never fall, so as long as that did not happen, Michael would have to be paying premiums on each swap purchased. And Michael was also happy with this deal with the banks, as he would pay the banks for a short time, and in the coming fall, he would take all the money. And so, it was. The companies began to fall, and the fall of Lehman Brothers Bank marks an important point, as it was one of the most important investment banks in the United States, which triggered panic on Wall Street and financial exchanges around the world over the fear that the other banks would also go bankrupt, creating the collapse of the financial system. Michael’s company did not trust his strategy at any point, no one believed in what he said or the plans he was carrying out. All his colleagues and investors took him for a fool, and tried to convince him to stop, but he continued with his strategy as he trusted what he had seen. The other Wall Street workers who saw the fall long before it happened were Mark Baum, Jared Vennett, and Charlie Geller and Jamie Shipley. Jared Vennett learns of Michael’s movements and by a wrong call to Mark Baum’s company, it is as the latter learns. Between Jared, a Deutche Bank employee, and Mark Baum, head of a venture fund, they create a plan similar to Michael’s with the same objectives. Charlie Geller and Jamie Shipley also find out a little by chance and these two investors who were working on their own at lower levels than all the others we’ve talked about, formulate a

plan similar to these with the help of Ben Rickert. In the film we see how each one is discovering and realizing the value and importance of the coming crisis, how each one interacts, how they realize that they will earn a lot, but many people will lose their whole lives, and how the situation affects each one. We see the protagonists move from euphoria, joy, to indignation, despair, and personal decline. Eight million people lost their jobs, 6 million lost their homes, and that’s just in America. This crisis was caused by the greed, naivety, and greed of bank workers, investors, and real estate workers. We must learn from this crisis so that nothing like this can happen again....