🎥 Watched The Big Short.
This is a surprisingly gripping film about a few renegade bankers back in 2007 who realised that the housing boom in the US is built on a set of extremely risky “subprime” mortgage to consumers - and that the derived products the banks were creating and trading on the back of those same loans were in fact very risky, contrary to the common “wisdom” of every bank and ratings agency.
People familiar with the 2008 financial crisis - in many cases because they lived through it - will be very aware of what happened next. Whilst the bankers who identified this issue were generally laughed out of the room by their peers they were proven correct.
The aforementioned bankers themselves bet on the crisis induced by these irresponsible loans and derived products and made vast profits for themselves and their institutions. But, as the film highlights towards the end, at great, often tragic, cost to the many of the vast swathe of the population who were not rich and privileged bankers.
It’s based on the book “The Big Short - Inside the Doomsday Machine” by Michael Lewis. Based on others of his I’ve read I’m sure that’s equally as comprehendable and engaging.
The film itself is also rather educational to anyone who would like to understand certain financial concepts but doesn’t feel like picking up a dry textbook. I’ve never seen a more engaging explanation of “what is a synthetic collateralized debt obligation” - one of the financial product instrumental to the crisis - than the one from the film, featured below.