The Big Short Investors Who Lost $9.4 Billion

The Big Short depicts two distinct sides of the 2008 financial crisis. Those that saw a disaster forming, such as Michael Burry and Steve Eisman and those who actively contributed to creating one of the worst financial crisis’ ever. But while we know Burry’s big short bet ultimately paid off, earning him and his clients hundreds of millions of dollars you might not have heard about what happened to those who were perpetuating the economic crisis with their greed and fraud.

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Including Wing Chau, the CDO manager who 'Mark Baum' (Steve Carrel) had dinner with in Las Vegas, Bill Miller who debated Steve Eisman as Bear Stearns stock collapsed, and Howard Hulber (Benny Kleeger in the movie) who lost Morgan Stanley $9 Billion in his subprime mortgage trade.

TIMESTAMPS
INTRO 0:00
CDO MANAGER'S FRAUD 0:30
GREEDY BEAR STEARNS INVESTOR 4:52
$9 BILLION TRADING LOSS 6:30

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Disclaimer:
The information in this video is general information only and should not be taken as constituting professional advice from Hamish Hodder.
Hamish Hodder is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances.
Hamish Hodder is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this video.

[HamishHodder]

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[jonreznick]

I was working at a webcasting company called TalkPoint Communications and we were the ones who webcast the American Subprime Lenders Association summit, and the Eisman-Miller debate definitely happened--across my desk. There were raised voices, and I had a semi-circle of colleagues standing around me asking why a guy was yelling.

BearStearns was also one of our biggest clients, as was AIG and GoldmanSachs. We webcast the end of the world, and I nearly SHIT MYSELF when I saw this scene in The Big Short because I lived it in realtime.

[Mic_Glow]

NINJA loan
I love the "sub-prime" wording too... a way to call total garbage something "just slightly below perfect".... genius.

[justinweber]

This actually makes Forensic Accounting sound like a fascinating career.

[doresearchstopwhining]

"A real engineer builds bridges, a financial engineer builds, builds dreams. And when those dreams turn out to be nightmares, other people pay for it." - Andrew Sheng

[shivambajpayee]

Beautiful thing about finance guys is that they call "poisoning the water supply" as offloading which is equivalent to terrorist attack with chemical wepon

[aggressivedesignnetwork]

I'm a big fan of the Big Short and knowing what went on, but you presented a lot of stuff I didn't know and I appreciate it because it really put some of the stuff that I understood, but didn't see the foundational pieces together.

[X-xf]

I knew something was up when, in 1998, my wife and I applied for a mortgage of $159, 000 and they said we actually qualified for a mortgage of $250, 000. They said "You could completely furnish the house or even buy a bigger house and furnish that one". We said "No Thanks" and walked away with our smaller mortgage, and I told my wife at the time that something bad is going to happen with this whole mortgage thing, but I was an unsophisticated with money at the time and didn't know how to act on my instinct.

[sixtolezcano]

Nobody ever talks about the US Congressional Banking committee politicians like Barney Frank who set the whole system up, told the banks the govt would backstop them and convinced them that they would be required to lend to subprime buyers or get shut out of the whole system. Not Michael Lewis, not the players, nobody ever brings this up.

[alienrenders]

OOOHHhhhh. This movie makes SO much more sense now. I never really understand that scene at the end.

[choncha]

It sounds like what is happening today. I have friends who have, but they have a lot of student loan debt and consumer debt. The reason they didn't feel like living paycheck to paycheck was because of the low-interest rates. It's happening all over again. A lot of people are one job lose away from their assets being seized.

[bluehorseshoe]

When I saw the title, I thought this video was going to be about Phil Falcone... now there's a fascinating Wall Street story no has really told yet... guy was one of the biggest winners on the short housing bet... guy was a legit billionaire, he even owned part of the Minnesota Wild, but 10 years later he was flat broke

[kroanosm]

A perfect case of "You can't make this sh it up."

[tjinc]

The Big Short is one of my favorite movies. Your insight and analysis has enhanced my understanding. Thank you! Entertaining and educational.

[Eunegin]

I lived in NYC back then, working in a completely different field. My neighbor was a banker, great parties, interesting (not always nice...) guests. Weird group dynamics. I usually was one of the only non-bankers. After having witnessed them (middle management) I didn't feel comfy with my investment and sold 90% of my stocks in winter 2006/2007. Best decision ever. Then bought my apartment when the prices were low.

[seanwebb]

They weren't mortgage backed assets. The bonds were the returns on the mortgages backed by an asset. The house!

[applelandry]

He said the credit agencies gave high ratings because if not the bank would go to another agency. That's not true. They gave high ratings because they had no obligation to be honest. And they still don't.

[lorenzogiubellino]

Honestly this is the best and clearest summary of the big short, really amazing

[penitent]

Make $42mil by fraud, get fined $7mil. Sounds about right.

[narcissusabcd]

I tried to understand this film watching a lot of videos. This was the clearest explanation