Real Wall Street Expert Reviews The Big Short (Jenga Scene) - Financial Edge

Watch The Big Short Movie review by an ex-investment banker, Tom Turner as he breaks down the iconic Jenga block scene. Discover how this analogy explains the housing market crash of 2008 and learn the industry jargon used on Wall Street!

00:00 - Introduction
01:04 - Credit default swaps
02:06 - Shorting home equity mezzanine tranches
03:16 - Ninja loans
04:40 - Jenga
05:15 - Explanation of the Jenga blocks
07:15 - Default rates
08:41 - Quant
10:30 - Collateralized debt obligation
11:45 - Final thoughts

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[jkgeroso]

Nice analysis, Tom. Ever since the Margin Call video I was wondering when The Big Short would be up :D
Really liked the subtle joke about diversification 9:38.
"When the market deems a bond too risky to buy, what do you think we do with it?... We just repackage it with a bunch of other stuff that didn't sell... and when the pile gets large enough(quantity aspect of diversification), the whole thing is SUDDENLY considered DIVERSIFIED, and then the credit rating agencies give it a AAA rating, no questions asked"!
The joke is that diversification is not just quantity but also CORRELATION. When you pile together bonds that didn't sell(because they're all trash), you're making a massive amalgamate of correlated assets. If one fails... It is not unreasonable to believe that the almost identical bond next to it is up for default next... And poof. Down goes the whole pile.

[ritabratabhattacharya]

How many times I had watched this movie The Big Short, I can't remember.... every time if it is telecasted in a channel and I have nowhere else to invest my valuable time.. I sit and started deciphering the underneath jargon spoken in this movie... I don't have a DVD or Blu Ray copy of this movie.. Need to collect... it is a phenomenal movie.... Looks like a Documentary Drama... All the actors portrayed the characters of Financial Pundits in this movie are so impeccable that sometimes it crossed my mind what if they are really Financial Pundits in Wall Street... I worked in the Financial Market as an Equity OPTION data analyst for a brief period... and that triggered me to learn different aspects of Finance based mathematical equations used in the Financial markets along with multiple theories to digest... as I am from a Mathematics background so digesting the formula is not a problem but the real problem I had encountered is to put the jigsaw in a right order and remember it in right fashion... otherwise.. a mayhem...

[AngloSaks]

I didn't 'smash' the like button, but lightly pressed it with my cursor.

[trenchtierstudios]

Always love the jenga fall scene. They literally couldn't comprehend what was going to happen.

[arcticredpanda]

the Quant looks so much like a Quant tho lol

[sriram]

Man I absolutely love learning about complex structured derivative and other financial instruments, it gets my brain twisted in the right places 🤯😍

[unc]

So Real Wall Street guy “re-explained” what the movie already did a pretty good job of?

[woodwyrm]

I'd personally recommend everyone to read the book before they see the movie.

[chrisholmes]

It’s around this time that Goldman started realizing and betting against MBS of their own creation

[rdive]

CDS don’t offer insurance, they are insurance

[CatroiOz]

As a non-american sorry to ask but : what the fuck is a credit level ?