The Big Short – “Jenga” Clip (2015) – Paramount Pictures

hi how are you hey mr. Bennet did we have let's see what you got you smell that what is that what what sets no the Cologne no opportunity no honey I smell money okay Chris this is your basic mortgage bond all right the originals were simple they were just thousands of Triple A mortgages bundled together guaranteed by the US government the modern ones are different they're private and they're made up of layers of tranches the highest level triple A's getting paid first the lowest rated B's getting paid last taking on defaults first now obviously if you're buying B's you can make more money but they're a little risky sometimes they fail Chris somewhere along the line these bees and double bees went from a little risky to dog where's the trash I'm talking rock-bottom FICO scores no income verification adjustable rates dog the default rates are already up from 1 to 4 percent fellas and if they rise to 8 percent and they will a lot of these triple B's are going to zero – and that you're to close is an opportunity okay you're saying that at 8% the bonds fail and we are already at 4% that's right if they go to 8 it's Armageddon yeah that's right how come nobody's talking about this you're completely sure of the math look at him that's Mike want your what my quantitative my math specialist look at him you notice anything different about him look at his face that's pretty racist look at his eyes I'll give you a hint his name's yang he won a national math competition in China he doesn't even speak English yeah I'm sure of the math actually my name's Jung and I do speak English Jared likes to say don't because he thinks it makes me seem more authentic and I got second in that national math competition so you're offering us a chance to short this pile of blocks how with something called a credit default swap it's like insurance on the bond and if it goes bust you can make ten to one even twenty to one return and it's already slowly going bust 10 to 121 no way and no one's paying attention no one is paying attention because the banks are too busy getting paid obscene fees to sell these bonds but wait you are the bank where you work for the bank I bet your margins are pretty nice and fat 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 aren't you the bank guy work for the bank I don't think like a bank big banks small bank I like to make money all right let me put it this way I'm standing in front of a burning house and I'm offering you fire insurance on it Heys 0b0 double b's zero triple B's zero and then that happens what is that that's America's housing market

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