Why Michael Burry Sold His Credit Default Swaps? - The Big Short Explained

In the movie Big Short, Michael Burry and other guys sell their credit default swaps back to the bank in the end. Why did Michael Burry do that? We explained this in this video.

#michaelburry #thebigshort #bigshort

[DaneRates]

Obviously applying the same strategy to the student loans, credit card and car loans should work.

[Couldthinkofabettername]

Michael Burry did keep one cds for his personal account though.

[anthonycantu]

So, if the banks knew that the government was going to pay the bank's expenses, from the bailout, then they would have let the failure occur, knowing that the government was going to pay off their debts anyway and they would not have to pay out of their own pockets.

[alvaroaguado]

Bitcoin fixes this. Bailouts are possible because gov have unlimited monetary power (printing) without having to ask citizens. So bailouts are essentially everybody chipping in to pay for the few rich drug addicts

[Brocktoon]

Burry started with Bear Stearns (remember them), not Goldman. Be that as it may, he never was properly assured that the investment banks would be a reliable counterparty because there was no adequate hedge against their position. The only reason Goldman didn't fold is because of John Corzine. It's not who you know, it's who I know (D).

[Zomgbbq]

5:29 "The banks had no idea the government would step in". Did you say that with a straight face? may i also suggest the red riding hood, 3 little pigs and other nice bedtime stories

[lenmetallica]

The real question is why you keep using a picture of Christian Bale in your thumbnails.

[marviwilson]

So once again Socialism comes to the rescue of the Capitalists.