The Big Short (2015) - full transcript

(BIRDS CHIRPING)

(TELEPHONE RINGING)

MAN: Hiya, Frank.
How are the wife and kids?

You know, for you,
I'm considering treasury bonds

and utility stocks. Smoke?

JARED: In the late '70s,
banking wasn't a job

you went into to make large sums of money.

It was a fucking snooze.

(CHUCKLES) How about those Mets?

JARED: Filled with losers.
Like selling insurance or

accounting.



And if banking was boring,

then the bond department at the
bank was straight-up comatose.

We all know about bonds.

You give them to your
snot-nosed kid when he turns 15.

Maybe when he's 30
he makes a hundred bucks.

Boring.

That is, until Lewis Ranieri
came on the scene

at Salomon Brothers.

You might not know who he is,
but he changed your life

more than Michael Jordan,
the iPod and YouTube put together.

- (CHUCKLING)
- (MAN LAUGHING)

All right, gentlemen!
Let's get some money in here!

Let's make some money! What do you say?

(ALL CHEERING)



JARED: You see, Lewis didn't know it yet,

but he had already changed banking forever

with one simple idea.

The mortgage-backed security.
Or private-label MBS.

LEWIS: You've got your
average person's mortgage.

Fixed rate, 30 years.

Boring, safe, small payoff, right? But,

when you have thousands
of them all bundled together,

suddenly the yield goes up
but the risk is still small because,

well, they're mortgages!

And who the hell
doesn't pay their mortgage?

What exactly is the credit
rating on this bond?

This bond, gentlemen, is AAA-rated.

This is exactly what the Michigan state
pension fund has been looking for.

I'll buy $20 million.

Oh, come on, live a little.

- $25 million.
- (ALL LAUGHING)

JARED: The money came raining down,

and for the first time,

the banker went from the country club
to the strip club.

Pretty soon, stocks and savings
were almost inconsequential.

- They were doing $50, $100, $200 billion
- Whoo!

In mortgage bonds and dozens of other
securities a year.

(MEN CHEERING)

And America barely noticed
as its number one industry

became boring old banking.

And then one day,
almost 30 years later, in 2008,

it all came crashing down.

FEMALE REPORTER: March.
Bear Stearns was in a death spiral

and the Fed brokered its sale.

BRIAN WILLIAMS: It's been called the
worst financial crisis in modern times.

Certainly the largest financial disaster
in decades in this country,

and perhaps the end of an era
in American business.

JARED: In the end, Lewis Ranieri's
mortgage-backed security

mutated into a monstrosity that
collapsed the whole world economy.

And none of the experts or leaders or
talking heads had a clue it was coming.

I'm guessing most of you
still don't really know what happened.

Yeah, you got a soundbite you repeat
so you don't sound dumb, but come on.

Our financial institutions are strong.

But there were some who saw it coming.

While the whole world
was having a big old party,

a few outsiders and weirdos
saw what no one else could.

Not me. I'm not a weirdo.
I'm pretty fucking cool.

But we'll meet again later.

These outsiders saw the giant lie
at the heart of the economy.

And they saw it by doing something

the rest of the suckers
never thought to do.

They looked.

(TAPPING)

MIKE: During the 1930s,

the housing market collapsed nationwide

by roughly 80%.

I mean, half of all mortgage debt
was in default.

And, I mean, there were very

specific identifiers,
extremely recognizable.

I mean, for instance,

(STAMMERING) one of the hallmarks of mania

is the rapid rise

in complexity and the rates of fraud.

And did you know that they're going up?

(CHEERLEADERS CHEERING)

MAN: Whoo!

(INAUDIBLE)

MIKE: I've always been

more comfortable alone.

(GIRLS TALKING INDISTINCTLY)

(GIRLS LAUGHING)

I believe maybe
it's because of my glass eye.

I lost the eye in a childhood illness.

It separates me from people.

And did you know that they are going

up?

The highest fraud rates since the 1930s.

MIKE'S MOM:
Hey, hey, it's okay. It's okay.

No, I didn't know that.

(MIKE STUTTERING)

(MIKE CHUCKLING)

In 1933, the fourth year
of the Great Depression.

Let's wash it off and put it back in.

MIKE'S DAD:
You were playing so great, son.

I even heard the coach say it.

Can we just go home?

MIKE: Most social interactions
are awkward for me and for the person.

Even when I try to compliment someone,

it comes out wrong.

You have a very nice haircut.
Did you do it yourself?

(CHUCKLES) What?

(STAMMERING) No. No, I...

(SPLASHING)

(TELEPHONE RINGING IN DISTANCE)

I'm sorry. I'm just...

(SIGHS)

I'm going on and on.

My wife told me I need to share more.

Mmm.

- That seems healthy.
- Yeah.

Mmm-hmm.

(CHUCKLES)

Uh...

So do I get the job?

I really think I could help your fund.

Yeah.

Yeah, sure. Go on.

(BOTH CHUCKLING)

- You're...
- David. Great.

I guess I'll go find a desk.

Is there anything you want me
to work on for start...

Uh...

Yeah.

DAVID: You could let me know later.
I could come back.

(STUTTERING)

Did you think it was strange when, um,

the tech bubble burst in 2001

and the housing market in San Jose,

the tech capital of the world,

went up?

Wasn't that strange?

DAVID: No.

No, it's housing.
Housing is always stable.

Low risk. It's solid.

That's the idea, yeah.

I want you to get me

the top 20 selling mortgage bonds.

So you want to know what
the top 20 selling mortgage bonds are?

No, no, no, I want to know
what mortgages are in each one.

(CHUCKLING) Okay, aren't those
mortgages made up of...

(ROCK MUSIC PLAYING)

Wait, aren't those bonds made up

of thousands and thousands of mortgages?

Yeah.

DAVID: Right away, Dr. Burry.

I am a nice guy all day long.

Ask anyone, I'm a pleasure to work with.

But the second my son screws up, I am...

...yelling at him
just like my dad did to me.

I hear the words that are
coming out of my mouth and...

(DOOR OPENS)

- MARK: Sorry I'm late! No cabs.
- (DOOR CLOSES)

Oh...

So, get this.

I met with this retail banker yesterday.

I'm supposed to be getting him
to invest in a fund,

but instead

I start grilling him about
overdraft penalties

and how his bank will let
a customer write 10-12 checks

before they tell them they're overdrawn.

And this creep is making billions
off screwing over people this way.

And I'm getting madder and madder.

And I ask him,
I look him in the face and I say,

"How can you sleep at night

"knowing that you are
ripping off working people?"

And you know what he did? He left.

He just walks out of the lunch,
doesn't say a word.

What the fuck is that?

Who's fucked up in that scenario? Am I?

Or is this douchebag,
who leaves me hanging?

Is he the fucked up one?

We have talked about this numerous times.

You can't come in late
and hijack the entire session.

MARK: What do you mean?
I didn't hijack the meeting.

Did I hijack the session?

Yeah.

What do you do?

MAN: I'm in commodities.

Good luck with that.

THERAPIST:
Mark, I know you suffered a terrible loss.

Maybe you want to talk about that.

- I don't talk about that.
- (CELL PHONE CHIMING)

Hold on.

Hold on...

Shit, I have to take this. Sorry. Sorry.

No... (SIGHS) I don't care, Porter.

This guy's whole business
is built on ripping people off.

How long can that last?

Bye, everybody!

MIKE: (SOFTLY) 95...

That's 30 days late... Sixty days late...

They pay on time...

(TYPING ON KEYBOARD)

These FICO scores...

(SIGHS)

(TELEPHONE RINGING)

Late. And they caught up
on their payments...

Another 30 days late...

LTV, 95... LTV, 90...
They caught up on their payments...

Sixty days late? Jesus!

LTV, 110? I've never heard of that!

Thirty days late, rate adjusts...

In '07 rate adjusts...

In '06 rate adjusts...

95... 90... Jesus!

(WHIRRING)

(WHISPERING) He hasn't moved all day.

He does this every few days.

He hasn't spoken to me since he hired me.

MIKE: Maybe the LTV's at... High-risk,

interest-only... I never heard
of that mortgage history,

I never heard of that... How?

Michael, how are you, guy?

MIKE: Lawrence, I found
something really interesting.

Great, Michael. Whenever you
find something interesting,

we all tend to make money.

What stock are you valuing?

No, no, no, no. No stocks.

I want to short the housing market.

(BRUSHING)

Really? But the housing market
is rock solid.

Greenspan just said

bubbles are regional, defaults are rare.

Tell them I'll be there in a minute.

- Say again?
- Look, look...

(MUFFLED) Greenspan's wrong.

I don't think you mean to do this,
but sometimes you sound very

dismissive and superior.

It's a fact. Greenspan's wrong.

(MUFFLED) I don't know
how else you want me to say...

Look, Michael.

Metro Capital backed you four years ago

when you were a doctor with a

dinky webpage and some inheritance money.

We've all done very well.

Why don't you just stick with stocks?

Look. You know me. I, I, I...

I look for value wherever it can be found.

And the fact is

that these mortgage-backed
securities are filled

with extremely risky
subprime adjustable-rate loans.

And when the majority
of the adjustable rates

kick in, in '07,

they will begin to fail.

And if they fail above 15%,
the whole bond is worthless.

Michael, just take a beat.

We'll talk about this later, okay?

Lawrence, please,
don't patronize me. Listen...

JARED: Mortgage-backed securities.

It, it, it...

- Subprime loans. Tranches.
- (QUACKING)

It's pretty confusing, right?

Does it make you feel bored? Or stupid?

Well, it's supposed to.

Wall Street loves to use confusing terms

to make you think only they
can do what they do.

Or, even better,

for you to just leave them the fuck alone.

So here's Margot Robbie
in a bubble bath to explain.

(POPS)

Basically, Lewis Ranieri's mortgage bonds

were amazingly profitable
for the big banks.

They made billions and billions
on their 2% fee

they got for selling each of these bonds.

But then they started running out
of mortgages to put in them.

After all, there are only so many homes

and so many people with
good enough jobs to buy them, right?

So the banks started filling these bonds

with riskier and riskier mortgages.

Thank you, Benter.

That way they can keep
that profit machine churning, right?

By the way, these risky mortgages
are called subprime.

So whenever you hear "subprime", think

"shit".

Our friend Michael Burry found out
that these mortgage bonds

that were supposedly 65% AAA

were actually just mostly full of shit.

So now he's going to "short" the bonds.

Which means to "bet against".

Got it?

Good.

Now fuck off.

It's only a matter of time before
someone else sees this investment.

- We have to act now!
- (BANGING TABLE)

How do you know the bonds are worthless?

Aren't they filled with fucking thousands

of pages of mortgages?

I read them.

- You read them?
- I read... Yes.

No one reads them. Only the lawyers
who put them together read them.

Look, I don't think that they
even know what they've made.

The housing market is propped up on these

bad loans, and I'm... (SIGHS)

It's a time bomb, and I want to short it.

Through what instrument, Michael?

There are no insurance contracts
or options for mortgage bonds.

The bonds are too stable.

Lawrence...

(STUTTERS)

This is what I'm gonna do.
I am gonna get a bank

to make me one.

And then

I'm gonna buy it.

(CAR HONKING)

MARK: I don't want that kind of business.

Money is not money. That's bad money.

Hey! Excuse me!

Let me ask you this.
What company treats its customers

that shittily and succeeds?

- Fine. Okay, Goldman. You're right.
- (HORN HONKING)

JARED: Mark Baum had built his career
on never assuming anyone or any company

was legit without proving it.

When he was a kid he excelled at studying
the Talmud in Yeshiva. Whatever.

But one day his rabbi told his mom why.

(HORN HONKING)

Paul is a fine boy,
and Mark is an excellent student

of the Torah and the Talmud.

Then what's the problem, rabbi?

It's the reason Mark is studying so hard.

He's looking for inconsistencies
in the word of God!

- So has he found any?
- (SCOFFS)

JARED: Later, Baum started
his own fund on Wall Street.

He had an amazing nose for bullshit.

And he wasn't afraid to let
anyone know when and where

the bull had gone number two.

But then a tragedy happened to Mark,

and it turned his world view dark

and ready to believe
the whole system was a lie.

- (PHONE CHIMES)
- Hold on.

It's Cynthia.
I'll be in the office in 20 minutes.

Hi, honey.

(SIRENS WAILING)

The therapist called. You did it again.

There were no cabs.
What was I supposed to do?

I worry about you, Mark.

At least I went.

You're running around
like you have to right

- every wrong in the world.
- Okay.

You're so angry.

Fine. You know what?

I'm a mean guy and I'm pissed off.

But it is a shit storm out here, sweetie.

You have no idea
the kind of crap people are pulling.

And everyone's walking around like
they're in a goddamn Enya video.

(BIRDS CHIRPING)

They're all getting screwed, you know.

You know what they care about?
They care about the ballgame.

Or they care about
what actress just went into rehab.

I think you should try medication.

No, no. We agreed.
If it interfered with work.

You hate Wall Street.
Maybe it's time to quit.

- I love my job.
- You hate your job.

I love my job.

You're miserable.

I love my job. I love my job, honey.

Mark...

I am sad every day about what happened.

I know you must feel the same,
but you never show it.

I know how close you were to your brother.

MARK: Paul.

Where'd you go, Paul?

Paul!

Every day I think you're
gonna talk about it, but you never do.

- (TV PLAYING)
- (TYPING ON LAPTOP)

(BEEPING)

Will you at least think about the idea
of making a change?

Fine. Fine. Honey, you know what?
I will consider it.

But, honestly, Cynthia.
I'm okay. I really am.

Hey, hey, hey! No, no.

My cab. That's my cab.
That's my cab. That is my cab.

- MARK: Schmuck. Fuck you.
- MAN: Fuck you.

- MARK: Fuck you.
- MAN: Fuck you.

(PHONE BEEPS)

I'll call you later.

(HORN HONKING)

I want to buy swaps on mortgage bonds.

A credit default swap that will pay off

if the underlying bond fails.

You want to bet against
the housing market?

- Yes.
- Why?

Those bonds only fail

if millions of Americans
don't pay their mortgages.

That's never happened in history.

If you'll excuse me, Dr. Burry,
it seems like a foolish investment.

Well, based on prevailing sentiment

of the market and banks
in popular culture,

yes, it's a foolish investment.

But, uh... Everyone's wrong.

(BOTH LAUGHING)

That's a good one.

(LAUGHS)

This is Wall Street, Dr. Burry.

If you offer us free money,
we are going to take it.

My one concern is that
when the bonds fail,

uh, I want to be certain, um, of payment

um, in case of solvency issues
with your bank.

I'm sorry, are you for real?

You wanna bet against the housing market
and you're worried we won't pay you?

Yes, that's correct.

(LUCY CLEARS THROAT)

(WHISPERING)

LUCY: (WHISPERING)
...unless the market crashes.

DEEB: (WHISPERS) The market
on housing's never gonna crash

because it's so solid right now.

I mean, who doesn't pay their mortgages?

Mmm-hmm.

(CLEARS THROAT) Dr. Burry, we could
work out a pay-as-we-go structure

that would pay out if the bonds fail.

But it would also apply to your payments
if the value of the mortgage bond goes up.

You'd have to pay us monthly premiums.

LUCY: Is that acceptable, Dr. Burry?

Yes. Yes.

Um, I have prospectuses on six

mortgage-backed securities
I want to short.

(DEEB READING SOFTLY)

LUCY: (WHISPERING)
Majority of the mortgages...

(CHUCKLES)

(LUCY AND DEEB WHISPERING)

(PAGES FLIPPING)

DEEB: (WHISPERING) I don't see us
losing any money on these at all.

(PRINTER WHIRRING)

(INHALES)

Dr. Burry, these should be fine.

Yeah. We're prepared
to sell you $5 million

in credit default swaps
on these mortgage bonds.

Can we make it $100 million?

Uh, absolutely,
we can make it $100 million.

LUCY: We'll be in touch,
send some paperwork over.

DEEB: Um...

(SIGHING) I like these cups.

(STUTTERING) Can I take one for my son?

LUCY: Have... Yes. Yes.

Thank you.

LUCY: Have two.

(INAUDIBLE)

(HIP HOP MUSIC PLAYING)

Is there any way to do $200 million?

I mean, we can. But are you sure?

Absolutely. Absolutely, we can do that.

We do different projects. We do gardening.

The bonds I'd like to bet against.

It's not bad seeing yourself
on the big screen.

It's very cool.

I ordered the 24-ounce T-bone,
which was choice.

- I went for volume...
- WOMAN: Yeah.

...rather than prime.

I went for subprime, and the gist was...

(HORN HONKING)

MAN: Can I have like, lettuce,
tomato, no onions?

WOMAN: So, no onions.
Lettuce, tomato, Thousand Island okay?

MAN: Yeah.

(INDISTINCT CONVERSATIONS)

Hey, Randall! What's with the Dom?

Bonuses aren't for three months.

We just sold $200 million
in credit swaps for mortgage bonds.

Some fund manager from California.

It's fucking crazy, right?

A whole new way to make money, Doug.

Wait, wait. I didn't know
there were swaps on mortgages.

(LAUGHS) There are now.
We made it for him.

He must have gone off
his Zoloft or something.

I don't know. (CHUCKLES)

- Want to join? No?
- Just a second.

Oh...

DOUG: Hey, Jared.

Did you hear about the deal
that Randall just did

with some fund manager?

JARED: Randall? Bullshit.

He's a foot soldier.
I'm sure it's a shit deal.

No, it's for real.

I told you we'd meet later.

Unfortunately, it's in a place like this
which I would never be.

I never hung out with
these idiots after work, ever.

I had fashion friends.

Apparently, this guy wanted $200 mil
in credit default swaps.

Randall made the sale. Can you believe it?

Somebody shorted $200 mil
on mortgage bonds?

That was just with Deutsche.
Word is he hit half the town.

How much in total?

$1.3 billion.

LAWRENCE: What? That's pretty much
all of Scion's liquidity.

Michael, this is highly distressing.

Lawrence, that is not

all of our liquidity.

And I'm not certain

that you really understand this trade.

This is a certainty.

Mike, I consider myself a mentor to you.

But our company is not comfortable
with this investment. Am I being clear?

Lawrence, I have full autonomy

when it comes to investment strategy.

(SIGHS) You can read our agreement.

Do not throw our inception agreement
in my face, Michael.

- We had an underlying understanding
- (COMPUTER BEEPS)

you wouldn't act like a goddamn crazy man.

This is not crazy.

It's all very logical.

So, now we pay up premiums on these swaps

against the housing market
until the mortgages fail?

In other words, we lose millions

until something that's
never happened before happens?

That's correct.

(TELEPHONES RINGING)

KATHY: Hello, Mark Baum.

Oh, hey, Kathy, you busted me.

I had a personal thing this afternoon.

I'm not your babysitter.

If FrontPoint makes money
for Morgan Stanley, I'm happy.

Okay. Hey, did I hear you're expecting?

We're expecting to be expecting.

IVF's are cleaning us out
but we're staying positive...

That's exciting!

(CHUCKLES)

...lump on my ball.
And I go in for a scan.

Mmm-hmm.

Turns out that I have a very large thing
called an epididymis.

Which is a thing that goes around the ball

and is like a sac underneath.

I have an extremely

- pronounced epididymis.
- PORTER: I'm riveted...

I'm riveted by this.
Do you have any pictures?

DANNY: It's almost as large
as another testicle unto itself.

So get this. Cynthia...

Guys. Cynthia wants me to quit
and open a B&B in Vermont.

(VINNIE LAUGHING)

That sounds great. I'd love to see
Mark Baum run a bed and breakfast.

Like, "Here's your
steel-cut oatmeal, asshole."

JARED: Mark refused to kiss the ring
of the people with the checkbooks,

so he had to set up his fund
under Morgan Stanley's umbrella.

(LAUGHING)

His small team reflected
his distrust of the system.

You guys are sick. You're sick.

She says this job is making me unhappy.

VINNIE: But you're happy
when you're unhappy.

I am happy when I'm unhappy.

JARED: Vinnie Daniel.

You know how to make a muffin?

- Mark's numbers guy.
- Do you even know how

- to do laundry? Make a bed?
- MARK: Okay...

Vinnie lost his father to a violent crime
when he was young.

Just like Mark, he didn't talk about it.

I don't talk about that.

Cynthia's no joke. She could
actually make him move to Vermont.

I mean, she made me
start wearing a seatbelt.

- Hey, you want me to...
- JARED: Porter Collins.

Former Olympic rower who went to Brown.

He worked with Baum at a previous firm

and couldn't figure out
why no one listened to Baum.

The guy with all the good ideas.

Sorry. I think you have
the wrong FrontPoint.

'Cause there is another FrontPoint
in this same building that is bonds.

And Danny Moses.
The optimist of the bunch.

And a hell of a trader.

Which is the only reason they put up
with his bullshit optimism.

DANNY: That was a weird call.

You take longer with a wrong number
than anybody else.

It was this guy from Deutsche

who was talking about
shorting housing bonds.

And then in the middle of the call
I realized he had the wrong FrontPoint.

And then... 'Cause he wanted
the one on the 8th floor.

He wanted to short housing bonds?

Uh-huh. That happens like five times a day

that somebody gets the wrong FrontPoint.

- We should change our name.
- VINNIE: Wait. Wait.

He wanted to short housing bonds?

- Who bets against housing?
- (TYPING ON COMPUTER)

VINNIE: What's the ABX at?

What's ABX?

It tracks subprime mortgage bond value.
Go back to sleep.

- The ABX is at, uh...
- (BEEPING)

Wow, it's down! It's down
three points since last year.

That's weird. I haven't
heard a peep about that.

What was this guy's name?

Jared Vennett. Vennett.

JARED: That's right.
These lucky sons of bitches

caught wind of one of the best trades
in Wall Street history

from a wrong number.

They should have paid 10%
to my fuckstick assistant.

DANNY:
His name was Jared Vennett. Vennett.

Jared Vennett from Deutsche.
Sounded very sketchy.

VINNIE: Sounds like a douchebag.

(WHISPERING) Do you smell that?

Do you smell that?

I smell money.

This is your basic mortgage...

Okay, hi. How are you?

Have a seat.

MARK: Okay, Mr. Vennett
from Deutsche Bank. What do we have?

There you go.

MARK: So, how many people
have you talked to about this trade?

A few. There's definitely some interest.

- No!
- My boss would have my ass...

- N.O.!
- You crazy, Jared?

- Get lost.
- Fuck you.

Which is why you're here talking to us,
a wrong number.

Sounds like there's a lot of interest.

All right. A few people have invited us in

just to laugh at me on this deal.
Is that you?

Is that what this is?

VINNIE: That's not what this is.

That's just how Mark is.

- Let's see what you got.
- I'm sorry.

You smell that? What is that?

- MARK: What?
- What's that smell?

Your cologne?

JARED: No.

Opportunity.

No. Money.

- Oh...
- MARK: Okay.

- I smell money.
- Okay.

- Chris, God damn it.
- Sorry.

JARED: This is your basic mortgage bond.

All right? The originals were simple.

They were just thousands
of AAA mortgages bundled together,

guaranteed by the U.S. government.

The modern ones are different.

They're private. And they're
made up of layers of tranches.

The highest level, AAA,
is getting paid first.

The lowest rated, B, is getting paid last,
taking on defaults first.

Now, obviously, if you're buying B's,
you could make more money.

But they're a little risky.

Sometimes they fail.

Chris?

Somewhere along the line,
these B's and BB's

went from a little risky

to dog shit. Where's the trash?

PORTER: It's right behind you.

I'm talking rock-bottom FICO scores.

(THUNKING)

No income verification.

(THUNKING)

Adjustable rates. Dog shit!

The default rates are already up
from 1% to 4%, fellas.

And if they rise to 8%, and they will,

a lot of these BBB's
are going to zero, too.

And that... You're too close.

...is an opportunity.

- (EXHALES)
- MARK: 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 my quant.

MARK: Your what?

My quantitative!

My math specialist. Look at him.

You notice anything different about him?
Look at his face.

MARK: That's pretty racist.

JARED: 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 Jiang
and I do speak English.

Jared likes to say I 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.

(CLAPS HANDS)

It's like insurance on the bond,
and if it goes bust

you can make 10-to-1, even 20-to-1 return.

And it's already slowly going bust!

10-to-1? 20-to-1? No way.

JARED: 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.
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?

(DANNY AND PORTER SNICKERING)

VINNIE: Aren't you the bank?

I work for the bank.
I don't think like a bank.

Big bank, 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.

How can these underlying bonds
be as bad as you say?

It wouldn't be legal. (CLEARS THROAT)

Nobody knows what's in them.

Nobody knows what's in the bonds.

I've seen some that are 65% AAA-rated

that I know for a fact are filled with 95%

subprime shit with FICOs below 550!

Get the fuck out of here.

You want me to really blow your mind?

When the market deems a bond too risky
to buy, what do you think we do with it?

Take a guess.

I don't know. You tell me.

All right. You think we just
warehouse it on the books? No.

We just repackage it
with a bunch of other shit

that didn't sell and put it into a CDO.

- MARK: A CDO?
- JARED: Yes. A CDO.

- What is that?
- This is where we take a bunch of B's,

BB's and BBB's that haven't sold,

- and we put them in a pile.
- (CLATTERING)

JARED: And when the pile
gets large enough,

the whole thing is suddenly
considered diversified

and the whores at the rating agency
give it a 92%-93% AAA rating,

no questions asked.

(EXHALES)

Hold it. What? Say that again.

A collateralized debt obligation.

It's important to understand
because it's what allowed

a housing crisis to become
a nationwide economic disaster.

Here's world-famous chef
Anthony Bourdain to explain.

(LAUGHS)

ANTHONY:
Okay, I'm a chef on a Sunday afternoon

setting the menu at a big restaurant.

I ordered my fish on Friday,

which is the mortgage bond
that Michael Burry shorted.

But some of the fresh fish doesn't sell.

I don't know why. Maybe it just came out
halibut has the intelligence of a dolphin.

So, what am I going to do?

Throw all this unsold fish,
which is the BBB level of the bond,

in the garbage and take the loss?

No way.

Being the crafty
and morally onerous chef that I am,

whatever crappy levels
of the bond I don't sell,

I throw into a seafood stew.

See, it's not old fish.
It's a whole new thing!

And the best part is
they're eating 3-day-old halibut.

That is a CDO.

PORTER: I just need to know,
how could these possibly be collated?

Somehow you're like Dora the Explorer

and you're the first person

- who found this thing.
- Hold on. Hold on.

So mortgage bonds are dog shit,

CDOs are dog shit wrapped in cat shit.

(BUZZING)

Yeah, that's right.

Institutions treat these CDOs
like they're as solid as treasury bonds,

and they're going to zero.

(CLATTERING)

DANNY: No. That can't be right.
There were $500 billion

in housing bonds sold last year alone.

The rating agencies, the banks,
the fucking government,

you're saying they're
all asleep at the wheel?

Yeah. My whole department's
long on this stuff.

They call me Chicken Little.
They call me Bubble Boy.

- A's, zero. B's, zero.
- (CLATTERING)

BB's, zero. BBB's, zero.

And then that happens.

What is that?

That's America's housing market.

Thank you.

Fuckin' A, Jared.

Shut your fucking mouth.

- ...hang out with you.
- MARK: Good. Okay.

JARED: Sack up, do the deal.
Let's be friends.

MARK: We will see. Thank you.

- JARED: Don't bullshit me.
- MARK: All right.

JARED: You're gonna say no, aren't you?

MIKE: No. No, I'm just
evaluating right now.

- Thank you. Thank you for coming in.
- (DOOR OPENS)

Bye, Jared.

VINNIE: I don't like it.

He's playing us.

He's playing us.
He's got too much skin in the game

and he's dumping his position.

What if he's right?

You want him to be right.

MARK: Yes, I do.

The banks have given us
25% interest rates on credit cards.

They have screwed us on student loans

that we can never get out from under.

Then this guy walks into
my office and says

those same banks got greedy,
they lost track of the market,

and I can profit off of their stupidity?

Fuck, yeah, I want him to be right!

VINNIE: How come you don't hate this guy?

He's everything
you taught us not to trust.

I can't hate him. He is so transparent

in his self-interest
that I kind of respect him.

- Would I buy a car from him? No.
- (PORTER CHUCKLES)

Is he right about the mortgage market?

- No.
- Let's find out. Let's find out.

Look. It's two very simple questions.

Is there a housing bubble?

And if there is,
how exposed are the banks?

PORTER: Yeah. Okay.

Let's get on this quickly too.

Because if he's right,

every loser with a couple million bucks
and a fund is gonna be jumping on this.

Let's go.

(ELEVATOR DINGS)

WOMAN: Just that morning...

(BREATHING DEEPLY)

JPMorgan Chase. JPMorgan Chase.

JAMIE: Okay. Stop saying "JPMorgan Chase".

I got a good feeling about this.

It's just a meeting though, you know?

It's just a meeting.
It's something like...

People have meetings
all the time. You know?

People drink their coffee,
they have a meeting.

- CHRIS: Brownfield Fund?
- JAMIE: Yes!

- Hey. Hello.
- CHARLIE: Ted.

Chris. I'm on Ted's desk.

Chris. Okay.

- I'm Charlie, Charlie Geller.
- Charlie.

- Jamie Shipley. Hi.
- Jamie.

We're so excited to get set up
on your trading platform.

Cool.

Here, have a seat a second.

All right.

So, I... Ted had asked me
to do some meeting prep.

But I couldn't find
any marketing material on you guys.

We just moved here from Boulder.

- Yeah.
- Got it.

Could we see some
of your offering documents?

Well, Brownfield is its own money.

- It's our money.
- Yeah.

Can you tell us how much you manage?

Of course. We're doing
$30 million right now.

Um, but we started

- four years ago with $110,000.
- CHRIS: Wow.

So, as you can see,
that's pretty phenomenal returns.

We want to get an ISDA agreement
with JPMorgan so we can

deal in long-term options.

- That's really cool.
- Yeah.

That is so cool.

Thank you.

But you guys are under
the capital requirements for an ISDA.

By how much?

Uh...

One billion four hundred
seventy million, so...

...a lot.

This makes us look bad, doesn't it,

that we didn't know
what the capital requirements were?

Uh...

It's not great.

But, uh,

keep up those returns and give us a call

way down the line. You know.

Okay?

- Okay.
- Thanks, Chris.

Have a good one, guys.

CHARLIE: Thank you, Chris.

(SIGHS)

Shit!

Who the fuck schedules a meeting

- at 4:50 in the afternoon?
- Oh, my, God.

That was so painful.

Dude, B of A and Bear
didn't even return our calls.

And even fucking Wachovia

- blew us off, man!
- I know.

Here's the prospectuses
of all the other losers

who didn't make it past the lobby.

JAMIE: I don't think I can
do this anymore. You know.

I'm young, yet.
I can still do something with my life.

I miss Colorado anyway. The weed's better.

Gentlemen, I need you to leave.

Yep, yep, we're going. Let's go.

Look at this. Look at this.

This guy

says that the housing market's
a giant bubble.

(INHALES)

Okay, so this part
isn't totally accurate, you know.

We didn't find Jared Vennett's
housing bubble pitch

in the lobby of a bank that rejected us.

The truth is, um,

a friend had told Charlie about it,
and I read about it

in Grant's Interest Rate Observer.

This is crazy.

This is crazy stuff.

Shit, he's saying
that there's 10-to-1 returns

on credit default swaps
for mortgage-backed securities?

And the whole housing market
is about to collapse?

JARED: For Jamie and Charlie,
the housing market

doomsday prediction
was music to their ears.

(SINGING)

They had started working
out of Jamie's garage

with $110,000 Jamie had saved

taking sailboats up and down
the East Coast.

Our investment strategy was simple.

People hate to think about
bad things happening,

so they always underestimate
their likelihood.

JARED:
Their strategy was simple and brilliant.

What he said.

Jamie and Charlie found markets
will sell options very cheaply

on things they think will never happen.

So when they were wrong,
they were wrong small,

but when they were right,
they were right big.

(IMITATING EXPLOSION)

Within a few years they had
turned $110,000 into $30 million.

But then it was time
to go to New York City.

And so far, it wasn't going very well.

So what if it does seem interesting. No...

No bank will give us our ISDA.
We're dead in the water.

These kind of trades
are totally out of the question.

We got to call Ben.

(EXHALES)

Let's call Ben!

JARED: Ben Rickert was
a former trader in Singapore

for Chase who quit
the whole game in disgust.

He happened to be Jamie's neighbor
when they were in Colorado

and they met walking dogs.

But Ben was dark.

He didn't just think
the whole system would fail.

He thought the whole world was going down.

Every one of these vegetables
is fresh from my garden.

(CHOPPING)

BEN: You guys should
start your own garden.

What you got to do is get
your soil off the petrochemicals.

JAMIE: Hmm.

I used wood ash and urine
to help restore the soil.

It creates ammonium nitrate.

Seeds are gonna be the new currency.

And not those Franken-seeds from Monsanto.

I'm talking about good,
healthy, organic seeds.

Make yourself a garden.

- Learn to live off the land.
- You're a fucking lunatic.

JARED: Ben had real
experience in a big bank.

Jamie and Charlie had never even
been in a Manhattan bank bathroom.

But Ben was done with the banking world.

He was very clear.

JAMIE: All right,
let's crunch some numbers

and then maybe
we'll talk about calling Ben.

We're always crunching numbers.

When haven't we crunched the numbers?

We're gonna crunch
the numbers like harder...

GUARD: I need you out of here.

Of course. One second.

Yes, ma'am. We're going.

PORTER: Oh, God. I hate this.
This is a total waste of time.

Oh, come on. Would you relax?

There's a housing development
45 minutes outside town.

Mark wants us to check that out first.

Well, I hope there are some
Cuban restaurants on the way there.

Because I heard the Cuban food
is amazing in Miami.

Please don't be chipper
in the face of me being miserable.

It really makes me hate you.

How is wanting to eat good food
being chipper?

Hello?

Hello?

PORTER: What do these go for?

DANNY: $425,000 each?

(DOG BARKING)

(KNOCKING ON DOOR)

What's up, man? What do you want?

Hello. I'm surveying mortgage owners
who are over 90 days delinquent.

I'm looking for a Harvey Humpsey.

You want my landlord's dog?

Your landlord filled out his mortgage
application using his dog's name?

I guess so.

Wait, has that asshole
not been paying his mortgage?

'Cause I've been paying my rent.

Well, yeah, he is over 90 days delinquent.

Seriously, man,

am I gonna have to leave?

(FOOTSTEPS APPROACHING)

'Cause my kid just got
settled in school, man.

Hey. How are ya?

My name's Ken.

You're Ken?

Um, you should talk
to your landlord about that.

I'm sorry, I don't have
any more information.

But you, um...

You have a great day. See ya, Ken.

KEN: There's books everywhere!

Books everywhere?

Seriously, man,
is everything gonna be okay?

You should... You should call him.

You should give him a call.

It's not my fault, dude.
I've been paying...

(DOOR CREAKING)

Hello!

Looks like the Mary Celeste.

Look. All they took was the TV.

DANNY: It's weird.

PORTER: They didn't even
clean out the cat litter.

PORTER: Oh, God.

It's like Chernobyl.

There's like a hundred houses.
There can't be four people living here.

- Oh, fuck that!
- Shit!

(HEAVY METAL MUSIC PLAYING)

MAN: He's been in there for seven hours.

Where does he go to the bathroom?

I heard he had a breakdown.

- He's letting the fund tank.
- (TELEPHONE RINGING)

My buddy in Manhattan said...

Dr. Burry's office.

No, he actually prefers
that you email him.

Excuse me.

Mr. Fields, Mr...

- Hi, Lawrence.
- (WHISPERING) Holy shit!

We have no confidence
in your ability to identify

macroeconomic trends.

(MUSIC STOPPING)

MIKE: You flew here to tell me that? Why?

Anyone can see
that there is a real estate bubble.

Actually, no one can see a bubble.

That's what makes it a bubble.

That's dumb, Lawrence.

There's always markers.

Mortgage fraud has

quintupled since 2000

and the average take-home pay is flat,

but home prices are soaring.

That means the homes are debt, not assets.

So Mike Burry of San Jose, a guy who

gets his hair cut at Supercuts
and doesn't wear shoes,

knows more than Alan Greenspan
and Hank Paulson.

Well...

Dr. Mike Burry, yes, he does. (CHUCKLES)

That's cute. That's cute.

Are you being sarcastic with us, Mike?

(SIGHS)

Lawrence,

I don't know how to be sarcastic.

I don't know how to be funny.
I don't know how to

work people.

I...

I just know how to read numbers.

How big is your short position right now?

Um...

Just $1.3 billion.

And the premiums?

Well, we pay, uh,

- roughly $80 to 90 million
- (MARTIN LAUGHING)

each year, which is high,

but I was the first to do this trade.

Watch. It will pay. I may have
been early, but I'm not wrong.

It's the same thing.
It's the same thing, Mike!

You're managing a fund of,
what, $555 million?

In six years, it'll all be gone.

On one bet.

No, the second quarter of '07 is
when the adjustable rates kick in.

The defaults will skyrocket.

Yeah. Says you.

LAWRENCE: How much is eligible
for withdrawal before they do?

Say, in the next two quarters.

If your investors panic.

$302 million?

I...

My God, Mike.

(MIKE CHUCKLES)

No one will pull out.
That would be suicide.

I mean, I'm down 17% for the year.

But if they trust me,
and they trust me, because...

No one trusts you! No one!

I sent several emails to my investors

letting them know that the...

(EXHALES)

...the second quarter of '07 is when our

housing positions show returns and...

I've been very clear.

People will withdraw their money.

Lawrence, that would be so stupid.
I mean, the...

(STUTTERS) If the fund's capitals
drop too much,

then the swaps contracts are voided.

And then the banks get to
keep all of the collateral.

- MARTIN: Wait a minute. Wait.
- All of it.

The contracts are voided?

The contracts are voided?

Holy shit!

Oh, motherfucker!

- Michael?
- (TAPPING)

Give me my money back.

Michael, do you hear me?
I want my money back.

Give me my fucking money back...

(LAUGHS)...you motherfucker.

The market's in an itsy-bitsy
little gully right now.

It's like everybody said,
"Okay, that was crazy.

"Let's just all calm down."

I sold that house for $350,000
the year it was built.

Two years later, $480,000.

Then $585,000 maybe 18 months ago.

This couple bought it
for $650,000 last year.

He'd let it go for that.

Hi, John.

(MOUTHING) No, no, no.

It will break his heart,
but he'll let it go.

Why is he selling?

MARLENE: Neither one's working right now.

Marlene, you'd say
they're motivated, right?

As motivated as one can be
in this neighborhood.

This house on the left,
I would say they're probably motivated.

Wow, a lot of people seem very motivated.

MARLENE: Oh, it's just the gully.

That's all. Just...

Just nerves.

So where do we stand?

I need to talk to my wife. Um...

MAN: This market won't last.

MARK: Actually, could I talk
to a mortgage broker?

Anybody you recommend? Anybody you like.

MARLENE: Yes, yes, I have
someone. Absolutely.

Yeah, bitch better like me.

Sent her ass to Cabo.

(ALL LAUGHING)

So is Morgan Stanley
recruiting us? Is that it?

Oh, no. No. The bank owns our hedge
fund, but we're not really part of it.

We invest in financial service companies

and we're trying to understand
the residential mortgage business.

How many loans do you write each month?

- (BLOWS AIR) About 60.
- Yeah.

What was it four years ago?

- Ten...
- (PORTER WHISTLES)

Maybe 15.

Yeah, I was a bartender. Now I own a boat.

(LAUGHING) You own a...

So how many of these are
adjustable-rate mortgages?

- MAN IN BLACK: Well, most.
- Oh, yeah.

Yeah, I'd say about 90%.

The bonuses on those
skyrocketed a few years ago.

Adjustable's our bread and honey.

So do applicants ever get rejected?

(BOTH LAUGHING)

Seriously?

Look, if they get rejected,
I suck at my job.

DANNY: Even if they have no money?

Well, my firm offers NINJA loans.

- PORTER: Okay.
- "No Income, No Job."

I just leave the income section
blank if I want.

Corporate doesn't care.

These people just want homes.
And they go with the flow.

PORTER: Good for you.

Your companies don't verify?

If I write a loan on Friday afternoon,
a big bank will buy it by Monday lunch.

Yeah. Same here.

Could you hold on a second?

Yeah.

I don't get it. Why are they confessing?

They're not confessing.

They're bragging.

(MARK CLEARS THROAT)

Do people have any idea
what they are buying?

(CHUCKLES) I focus on
the immigrants, you know.

Once they find out they're getting a home,
they sign where you tell them to sign.

Don't ask questions.
Don't understand the rates.

- Fucking idiots.
- Yeah.

And you target immigrants, too?

Well, their credit actually
isn't bad enough for him.

(CHUCKLES)

Look, I'm a yield guy.

Okay...

I make $2,000
on a fixed-rate prime loan, right?

But I can make $10,000
on a subprime adjustable.

Trust me, I'm not driving a 7 Series
without strippers.

No one on the pole has good credit
and they're all cash rich.

I think I read Warren Buffett
say something like that.

What? Who's Warren Buffett?

Okay, so strippers. Like exotic dancers?

Yeah, yeah, yeah.

Nude, you know, topless.

- Strippers.
- Yeah.

Can you introduce us?

Yes! Yes.

(AUDIENCE CHEERING)

I always get option-pay adjustables.
I'm a private contractor.

MARK: What? I can't hear you. I'm sorry.

I always get option-pay adjustables.

I'm a private contractor.
I need flexibility.

And you tell the mortgage company
what you do?

I write "therapist".

- You can touch me.
- Always?

Only in V.I.P.

No, no, no, you say
you always do adjustables.

And you have more than
one loan on a property?

Everybody does. At least down here.

MARK: I'm sorry, what?

Everybody does. At least down here.

That way you only put down, like, 5%.

Prices have leveled off, though, right?

Yeah. There's a gully.

Would you mind not moving anymore?
I'll still pay you.

Sorry. We're not alone.

Okay, look. If home prices don't go up,

you are not going to be able to refinance.

And you'll be stuck paying
whatever your monthly payment is

once it jumps up
after your teaser rate expires.

Your monthlies could go up 200%-300%.

James says I can always refinance.

Well, he's a liar.

Actually, in this particular case,
James probably is wrong.

200 percent? On all my loans?

What do you mean "all" your loans?

We're talking about two loans
on one house, right?

I have five houses.

And a condo.

Hey, there's a bubble.

VINNIE: How do you know?

Trust me. Call Vennett,
buy $50 million in swaps on the MBS.

What do we got? Garibaldi IV, BBB.

Mark, are you sure?

Yeah. Yeah, it's time to call bullshit.

- Bullshit on what?
- Every fucking thing.

(TYPING)

(COMPUTER CHIMES)

FrontPoint! FrontPoint!

Is this America's angriest hedge fund?

VINNIE: All right, listen.
I got one last question for you.

How are you fucking us?

There's a nicer way to say that, Vinnie.

I'm serious.

We'll buy your swaps,
but only if you say how you're fucking us.

I'm not fucking you, Vinnie.
I'm kissing you.

I'm looking deep into your eyes
as I make love to you, Vinnie.

I'm handing you the deal of the century
on a fucking platter.

What do I get out of it? Easy.

I got a $20-million-a-month
negative carry.

I got bosses trying to pull the plug because
they think I'm out of my fucking mind.

All right?

We make this trade,

those problems aren't so big anymore.

And sure, swaps are a dark market,
so I set the price.

Whatever price I want.

And when you come for the payday,

I'm gonna rip your eyes out,
I'm gonna make a fortune.

But the good news is, Vinnie,
you're not gonna care

because you're gonna make
so much fucking money.

That's what I get out of it.

Want to know what you get out of it?

You get the ice cream, the hot fudge,
the banana, and the nuts.

Right now, I get the sprinkles, and, yeah,

if this goes through, I get the cherry.

But you get the sundae, Vinnie.

You get the sundae.

All right, I buy that. Thank you.

So what do you say?

- You want me to make you a market?
- Yeah.

We'll take $50 million, Garibaldi IV, BBB.

Sharpen your pencils.
I'll get the paperwork ready.

(SIGHS)

Fuck you, too.

Yes!

That's right.

- Oh, man.
- (EXHALES DEEPLY)

He has so many numbers,
and I always forget

which one he prefers,
because he's very specific.

Start with the first one.

I don't know if it's the first one.

Just try it.

Okay. I... Okay.

(COUNTRY MUSIC PLAYING)

(LINE RINGING)

(BIRD SCREECHING)

(PHONE RINGING)

- Ben Rickert.
- Hey, Ben. It's Jamie.

Jamie, you know you're
not supposed to use this line.

(DIAL TONE)

Told you.

Okay, let's try number two out of 14.

(LINE RINGING)

(PHONE RINGING)

(DIAL TONE)

Ben Rickert.

Ben, why do you do that, man? I mean...

You're a retired trader, okay?
No one is listening to your calls.

The NSA has a $52 billion budget
and the ability

to monitor tens of millions
of calls a second.

You think they're not using it?

Hey, I promise I will refrain from saying

"Ben Rickert" and "dirty bomb"
in the same sent...

(BEEPS)

- Jesus fucking Christ.
- I'm sorry, dude.

- (PHONE RINGING)
- (BEEPS)

Ben Rickert.

Did you get a chance to look
at what we sent you, Ben?

It's Charlie. I'm here, too.

Hi, Charlie. Yeah, I did. Hold on.

Ben, you still there?

Yeah.

I'll be honest, gentlemen.

It scared the shit out of me.

But that's a good thing, right?

That means this Vennett guy's not wrong.

No, he's not.

Cool.

Tell me more about these CDOs.

JAMIE: Yeah, yeah. Okay, so, you know,
Vennett mentions the CDOs,

but actually, we took a look and they're
way worse than even he realizes.

These things don't make any sense!

JAMIE: We can't even model them.

These are 100 times bigger than the MBS.

And 90% AAA-rated.

- Yes! Exactly!
- Over 90%.

It's incredible.

I took a good hard look
at the CDOs you want to short.

They're brilliant. Worthless. Total crap.

- Jamie. Very good.
- (LAUGHS)

What can I say? I'm good at finding shit.

CHARLIE: So, Ben, we shorted
the BB's and the BBB's,

and the risk is relatively low.

- Payoff is, like, 25-to-1.
- Yeah.

Okay, so, why are you calling me?
I don't do this anymore.

Look, Ben?

We need you to help us get the ISDA.

If we get a hunting license,
we can short this crap.

And we know you hate Wall Street.

We're not asking you to do the trading.

We're simply asking you
to help us get a seat

at the fucking table.

It's a pretty ugly table, guys.

Look, Ben, the system fucked up
in a big, big way here, okay?

And somehow, uh,

we know before anyone else.

You know?
This is a once-in-a-lifetime deal.

I'm thinking.

Okay. I'll call Deutsche Bank.

Thank you, Ben. Thank you.

And Bear. What about Bear?
They have some reprehensible product.

Okay. Bear will trade with anybody.

All right.
I'll see if I can push it through.

Thank you, Noah. And thank Jared for us.

Couldn't we go inside?

Yeah, me, too.

Hi. It's Mark. I need to
talk to Vinnie right now.

We're just asking you to explain to us

just how it is that you are fucking us,

because what we are seeing...

Morgan Stanley building, fast.

Are we hooked up
to the same computer screen?

It doesn't make any sense.

(INDISTINCT CONVERSATIONS)

MARK: Vinnie, you there?

Mark, you there?

Yeah, did you hear?

Mortgage defaults have
gone through the roof.

Is anybody jumping off of buildings yet?

Why would they?
Subprime mortgage bond prices are up.

What?

Vennett wants $1.9 million more
in collateral by close.

Vennett's asking us to post collateral.

What the hell is going on?

We don't know, but Deutsche's
on the phone demanding payment.

Call Vennett. Call that little shit.

Call Vennett.
Tell him to get his ass down here.

So subprime loans go bad,

but subprime bonds, which are made up
of subprime loans, are more valuable?

I know. They want another
$1.9 million by market close.

What about the ratings agencies?
Moody's, S&P...

Are they downgrading the CDOs
and mortgage bonds?

Where are the ratings agencies at?

They're the fucking same.

No, they're all still AAA.

What the hell? Are you fucking kidding me?

Those fuckers! Those motherfuckers!

They go public, and all they care about
is their bottom line and their shit.

Hey, Mark, that's not all.

The Morgan Stanley risk guys are here.

They called in Kathy Tao.

They're trying to convince her
to make us sell our swaps.

Apparently, tying up six years
of insurance payments

in hopes of a housing Armageddon

is not prudent investing.

What did Kathy say?

Nothing yet. She keeps asking
if this is one of your crusades.

Okay, I want you to walk back in there

and very calmly, very politely,

tell the risk assessors to fuck off.

And then meet me over
at Standard & Poor's.

We're gonna talk to Georgia.

VINNIE: All right. Okay.

Get that fuck Jared Vennett
in this office.

I'm gonna bash his fucking head in.

(INAUDIBLE)

Uh, gentlemen?

I spoke with Mark Baum.
He says to fuck off.

I can't see a damn thing.

(SIGHS) My eye doctor's always busy.

I end up taking
any appointment they'll give me,

and then the whole morning
gets shot to hell!

So...

All righty,

FrontPoint Partners,

how can Standard & Poor's help you?

VINNIE: Well, we don't understand why

the ratings agencies haven't
downgraded subprime bonds

since the underlying loans
are clearly deteriorating.

Well, the delinquency rates
do have people worried,

but they're actually within our models.

- So...
- VINNIE: Says you.

...you're convinced
the underlying mortgages

in these bonds are solid loans.

GEORGIA: That is our opinion, yes.

Have you looked at the loan-level data?

I mean, they're giving these loans

to anybody with a credit score
and a pulse.

Excuse me, sir. What do you think
we do here all day?

VINNIE: We're not sure.
That's why we're here.

Here's what I don't understand...

We check, recheck, recheck again.

MARK: If these mortgage bonds
are so stable...

Perhaps you could check your friend.

MARK:...have you ever refused to rate...

- VINNIE: Ma'am, that's delusional.
- GEORGIA: We stand behind them.

MARK: Georgia,
have you ever refused to rate

any of these bonds upper tranches AAA?

Can we see the paperwork on those deals?

I am under no obligation
to share that information

with you, whoever you might be.

Just answer the question, Georgia.

Can you name one time in the past year
where you checked the tape

and you didn't give the banks
the AAA percentage they wanted?

If we don't give them the ratings,

they'll go to Moody's,
right down the block.

If we don't work with them,
they will go to our competitors.

Not our fault.
Simply the way the world works.

- VINNIE: Holy shit.
- Yes, now you see.

And I never said that.

They're selling ratings for fees.

A ratings shop.

You can afford to make less. Make less.

Nobody said that.

And it is not my decision. I have a boss.

Are you kidding me?

No, I am not "kidding you".

How'd your boss do on the IPO?

MARK: Is that the angle you're taking?

So, now, anyone who has a boss
can't be held responsible

for doing shitty and illegal things.

What are you, four?

No, I am not four, Mr. Baum. I am not, no.

And I wonder what
your incentives might be.

Is it maybe in your best interest

to have the ratings change?
Is it, perhaps?

How many credit default swaps
do you own? Hmm?

It doesn't make me wrong.

No.

It just makes you a hypocrite.

(HEAVY METAL MUSIC PLAYING)

Fuck!

BEN: Mortgage delinquencies went up

and the CDOs got more valuable.
Unbelievable.

- Unbelievable.
- We know. It's completely backwards.

I just called an old friend at Bear.

He didn't even know what a CDO is.

JAMIE: Yeah, I just had to wire
Bear and Deutsche $70,000.

It's like two plus two equals

fish.

CHARLIE: It's rigged.
We bought into a rigged game.

We're gonna lose everything.

I'm gonna have to move
back in with my mom.

Can't do that.

BEN: All right.
Well, I got a colonic appointment.

Wait a minute. Hold on, Ben.

Ben, look.

Either the banks are clueless

and they don't know
how to value these CDOs,

or they're such crooks
that the CDOs are worth shit

and they're hiding it.

I think we should buy more swaps.

What?

Suck it up and pay up, fellas.
We made a deal.

No way! No!

Are you fucking kidding me?

Are you serious? You think this is a game?

No. No. No. No. No.

Yeah. Yeah.

(ALL SHOUTING)

No! No! No!

BEN: No, seriously, a colonic once a year.

DANNY: Ass!

PORTER: And you got a matching
little butler boy, you buttfuck!

(SIGHS)

- Are you done?
- DANNY: I think so, yeah.

God! I pulled a muscle
in my back from yelling.

Ow!

VINNIE: Mortgage defaults
have done nothing but go up.

Yet you quote us
a higher price on the bonds.

Please explain that to me.
There's no way that makes sense.

There's no way you're marking
these swaps appropriately.

Why shouldn't we back out
of this trade right now?

JARED: Didn't I say when we made this deal
that the ratings agencies, the SEC

and the big banks were clueless?
Didn't I say that?

- CHRIS: Yes.
- Didn't I say it?

Yes, you did. You did.

Shut up.

Now their foot's on fire, they think
their steak is done, and you're surprised?

That's not stupidity. That's fraud.

Tell me the difference
between stupid and illegal,

and I'll have my wife's brother arrested.

(SNICKERS)

That was funny.

JARED: I guess you just don't realize
how clueless the system really is.

Yes, there's some shady shit going down,

but trust me, it's fueled by stupidity!

Look at yourselves.

You know,
you pass yourself off as cynical people

but you still have some faith
in the system, don't you?

I don't.

Well, except for Vinnie.
And who gives a shit?

- JAMIE: No way!
- Look...

Either we're right or we're wrong
in a giant, giant way.

And if we're wrong,
then we got to find someone

to help us get out of this trade.

I'm not feeling remotely confident
that we're right.

And if we're wrong, who's gonna tell us?

Who understands this stuff?
It makes no sense!

(STATIC)

BEN: I think we need to go to Vegas.

- What's in Vegas?
- Vegas?

What the hell's in Las Vegas?

The American Securitization Forum
is there next week.

Every bond and CDO salesman,
subprime lender

and swap trader is gonna be there.

I'm telling you,
your bet is against dumb money.

It's about time you find out
just how dumb that money really is.

PORTER: God, I hate Vegas.

I hear the food has gotten
really good in Vegas.

They have a Nobu now.

Would you fucking stop it?

(INDISTINCT CHATTER)

(INDISTINCT CHATTER)

CHARLIE: Any sense?

BEN: And if a bond is "rich" it is...

- I don't know, loaded with assets?
- "Rich" just means overpriced.

I can't sleep on planes,
so I did my homework.

Okay, let's focus. What's our goal?

To figure out if this is a deal of a lifetime

or if everyone here
knows something we don't

and we're gonna get royally screwed.

Right. Remember that
when you meet with the guys from Bear.

I set you up with a face-to-face.

- Awesome.
- Where is that?

Holy shit. Five years ago,
Securitization was a loser convention.

100, maybe 200 people would show.

$500 billion a year later, you get this.

PORTER: There's a lot of
smug-looking people in here, huh?

It's like someone hit a piñata
filled with white people who suck at golf.

I mean, who are all these clowns?

DANNY: Oh, come on. I think it looks fun.

MARK: Certainly. Vennett says these
are the people we're betting against.

- Yeah, here we go. Here we go.
- DANNY: There he is.

Chris, on my left. Chris, on my left.

Gentlemen.

When do we get a chance to face time
with some of these lovely folks?

Chris, give him the keycards.

Do you even know which keycards
you're giving out?

- You're just giving them out?
- Thank you.

First of all, how was your travel?
How are you? Uneventful?

- Uneventful.
- Okay.

I've been here for six hours.
I've already been to the gym,

I had two poached eggs

and I played blackjack
with Harry Dean Stanton.

MARK: Thank you for your diary.

Face time. I'd like some face time.

Just remember.
We're here to gather information.

We're gathering information, okay?

We're not advertising
our short position. All right?

We don't want to spook everybody.
Can you do that?

I know you got a big mouth,
you like to run it.

Can you just keep it shut for a few days?

Okay. Okay.

Yeah, don't worry. We'll play nice.

Ladies and gentlemen.

Business is good.

Profits are strong

and the mortgage continues
to be the bedrock

on which this economy is built.

(AUDIENCE APPLAUDING)

And, yes, we had to take some losses

in our subprime department last year,
but those losses

will be contained at only 5%.

Now, in our residential sector...

VINNIE: Mark, it's not a Q and A.

...our rollout of those
variable rate packages

were gobbled up by the consumers!

MARK: I have a question, please.

Uh...

Sir, the Q and A is after my statements.

But you know what? You seem anxious.
How can I help you?

- Thank you. How are you?
- Fine, thank you.

Would you say that it is a possibility

or a probability that
subprime losses stop at 5%?

Thank you.

I would say it is a very
strong probability, indeed.

So back to the residential sector.

When we rolled out the new
variable rates package...

- MARK: Excuse me.
- Um... (CHUCKLES)

Yes, sir.

Zero! Zero!

There is a 0% chance

that your subprime losses will stop at 5%.

- Zero.
- (CELL PHONE CHIMES)

Excuse me.

I have to take this.

MAN: He must be from Bank of America.

(ALL LAUGHING)

- MAN: Our subprime department is fine.
- No, I'm not doing anything right now.

MAN: As I was saying,
our residential department...

How are the kids?

MAN:...consumers
reacted to our packages...

Mark Baum really did that.

When we were in Vegas, he did that.

He said that, he took the call.

Now you see what I had to deal with?

(GUNFIRE)

(SHOUTING)

(WHOOPING)

Yeah, the Beretta... Meh.

But this Uzi is fucking awesome!

I need this CDO machine
to run for another two years.

And then I'm rich as fuck
and I got my house in Aspen.

But do you have any concerns
about the performance

of the underlying securitizations?

It's easy to see that delinquencies

and default rates
are on the rise right now.

Could you please stop
being such a buzzkill, dude?

We didn't bring you out here
to talk about work, bro.

Why did you bring us out here?

Because we need to be able
to expense the ammo to a client.

I'm gonna go shoot some terrorists.
Watch how it's done, boys!

CHARLIE: These guys are morons.

- Fucking tool.
- MAN: Whoo!

These guys are morons.

Fuck, yes! Boom!

Yeah, man!

We need to be buying up every swap
we can get our hands on here.

Just hold on, okay? Hold on.

My brother's ex-girlfriend
works for the SEC.

She just told me she's in town, okay?

So, if we're missing something,
maybe she can tell me.

You know, give me some insight.

In the meantime, you go to the main floor

and price some swaps.

JAMIE: (STAMMERS) Well, actually, we're
about to invest in housing bonds, and...

I was wondering if the SEC
is worried about them at all.

I know you're not allowed
to tell me specifics, but just generally.

Oh, we don't investigate mortgage bonds.

Truth is, since we got our budget cut,
we don't investigate much.

- Then why are you here? I thought...
- I'm not here for the SEC.

I'm here on my own dime.

I'm floating my resume to some big banks.

How's your brother, by the way?

How are you floating
your resume to big banks?

I mean, you're supposed to be the ones,
you know, policing the big banks.

Grow up, Jamie.

There must be some kind of law against
working for a financial institution

right after you've been working
in financial regulation, right?

No. No.

(GASPS) Hey! Dougie!

Hey! Come over here.
What are you doing at Caesars?

He's at Goldman.

See you.

We can do BBB-level swaps
at 500 basis points. Maybe.

You're pricing the swaps
like the bond is gonna collapse

even though the bond value's
going up? Really?

Sign of the times.

CHARLIE: What the hell is going on?

Lewis, can you come in
early tomorrow, please?

I need to unload the AIG and Countrywide

and Freddie Mac positions

so that we can afford
the premiums on the...

(SIGHS)

...core mortgage shorts on the swaps.

No problem, Dr. Burry.

- Dr. Burry?
- Hmm?

(CLEARS THROAT)

If the investors withdraw,
what's going to happen here? Are we done?

Honestly, I don't know.

(STAMMERS)

The bonds aren't going down.

They won't move. It's possible

that we are in a completely
fraudulent system.

Or... (STAMMERS) You're wrong.

Sure.

It's possible I'm wrong.
I just don't know how.

I guess when someone's wrong,
they never...

They never know how.

LEWIS: See you in the morning.

Yeah.

Even Bear upped their prices.

And they keep calling us Brownhole.

You just don't have the money
or the reputation.

Don't take it personally.

I don't think I have
the strip club in me tonight.

I'm just gonna get some ginger ale
and watch some pay-per-view.

I'll book us some flights out
for the morning.

CHARLIE: (STAMMERS) A deal.
We need a deal, right? A deal.

We need a deal we can afford.

We need a deal
that they're not gonna refuse.

So... What can we do? We can...

The AA tranches. What if we
bet against the AA tranches?

Who's not gonna take that bet?

We know they say they're 95% AAA-rated,

but in reality they're more like 25%.

Some of them are 0%!

We also know that if
the bottom tranches fail at over 8%,

the upper tranches are affected.

They go to zero.

I'll bet you right now
that those AA's are actually like B's.

I rarely ever say these words,
but I think Charlie's right.

Look, Ben.

The payoff

is 200 to 1.

But they're all taking
the ratings at face value.

So they're charging pennies
on the dollar a bet against the AA's.

Just when I start thinking
you guys are clowns...

No one on the planet's
betting against AA's.

The banks will think we're either high
or having a stroke.

They'll take every dime we have to offer.

Kinda brilliant.

This is what we did
that no one else thought of.

Not even Baum or Burry
thought to short the AA's.

But we did.

Little Brownhole Capital.

We're interested in shorting
some of the AA tranche of CDOs.

Come on, guys, what's the angle?

Oh, got no angle.
We're new to this. We're just excited.

We want to do $15 million
in swaps on the AA tranche.

I don't understand.

You can buy as much
AA tranche as you want.

$40 million against the AA.

Brother, I will sell you
as much as you want.

You understand perfectly, Bob.
You want the deal?

(MEN LAUGHING)

That's cool. That's all right with me.

Pleasure.

Oh! (VOCALIZING)

- Don't do that. Stop. Stop.
- (CONTINUES VOCALIZING)

- Stop that.
- Charlie.

Stop it! Stop.

What?

Do you have any idea what you just did?

Come on. We just made
the deal of our lifetimes!

We should celebrate.

You just bet against the American economy.

Fuck, yeah, we did!

- Fuck, yeah!
- Which means...

Which means if we're right...

If we're right, people lose homes.
People lose jobs.

People lose retirement savings.
People lose pensions.

You know what I hate
about fucking banking?

It reduces people to numbers.
Here's a number.

Every 1% unemployment goes up,
40,000 people die. Did you know that?

- No.
- Did you know that?

No, I didn't know that.

We were just excited.

Just don't fucking dance.

- CHARLIE: All right.
- JAMIE: Where are you going?

Whoa, I just got really scared.

First of all, great show today.

- You were terrific.
- Thank you.

Your big mouth was a revelation.

I appreciate that.

You worried you and your swaps
are getting played?

Well, this is an opportunity for you
to meet who you're betting against.

Try not to get too righteous
and listen a little.

Okay, fine. Who is this guy?

JAMIE: A real solid-gold asshole.

I'm a CDO manager.

A "CDO manager"?

Yeah, at Harding Advisors.

I didn't realize that there was
anything to manage with CDOs.

MR. CHAU: Oh.

We select the securities
that go into the CDO portfolio

and monitor the assets.

I do most of Merrill Lynch's CDOs.

Do you represent the investors
or Merrill Lynch?

The investors.

You do.

- Yeah.
- But...

Merrill Lynch isn't gonna
send you any customers

unless you put Merrill Lynch's bonds
in your CDO.

Good question. Let's just say
Merrill and I have, um...

We have a good relationship.

You have a good relationship
with Merrill Lynch.

We've been doing business
together for a long time.

And so the CDOs that you create

are of the highest quality
and the highest value.

- Absolutely. Yep.
- Absolutely.

Are you at all concerned
about the rising default rates?

I assume no risk for these
products myself, Mark.

Okay.

So let me get this straight.
The bank calls you up.

They give you the bonds they want to sell.

They give you clients,

they give you money to run your business.

Give you fat fees for doing so.

But you represent the investors?

(CHUCKLES)

Is that right?

Yeah.

But we're not
in the Merrill Lynch building.

- Okay. Where are you?
- We're in New Jersey.

You're 20 minutes away.

Well, five if you use a helicopter.

That's funny, huh?

That's hilarious.

(INDISTINCT CHATTER)

Oh, boy.

Your boss is about to explode.

No, he's too curious to explode.

Hold on. Say that again.

CDO "A" has parts of CDO "B".

And CDO "B" has parts of CDO "A".

But then they both get put inside CDO "C".

Yeah, that one's called CDO squared.

A CDO of a CDO.

All right?

And then there's CDOs
made up of the opposite side

of the bet you made with your swaps.

We call them synthetic CDOs.

What did you say? Synthetic CDOs.

That is fucking crazy.

It's not. It's awesome.

His face is starting to boil.
He looks like the bad guy from Dune.

(INDISTINCT CHATTER)

All right, let's say

you have a pool of $50 million
in subprime loans.

How much money could be
out there betting on it,

in your synthetic CDOs and swaps

right now, tonight?

Let's see, $50 million... Hmm...

A billion dollars.

What?

JARED: If the mortgage bonds that
Michael Burry discovered were the match...

How much bigger is the market
for insuring mortgage bonds

than actual mortgages?

About 20 times.

JARED: If the mortgage bonds
were the match

and the CDOs were
the kerosene-soaked rags,

then the synthetic CDO was the atomic bomb

with the drunk President
holding his finger over the button.

It was at that moment
in that dumb restaurant

with that stupid look on his face
that Mark Baum realized

that the whole world economy
might collapse.

And I know what you're thinking.

"What the fuck is a synthetic CDO?"

(CROWD CHEERING)

Well, here's Dr. Richard Thaler,
father of behavioral economics

and Selena Gomez to explain.

Okay. So here's how a synthetic CDO works.

Let's say I bet $10 million
on a blackjack hand.

$10 million because this hand
is meant to represent

a single mortgage bond.

Okay, Selena has a pretty good
hand here, showing 18.

Dealer showing seven.

That's a really good hand for Selena.

Good odds. In fact, her chances
of winning this hand are 87%.

So, my odds are good.
I'm on a winning streak.

Everybody in this place
wants to get in on the action.

How could I lose, right?

Now, this is a classic error.

In basketball it's called
the Hot Hand Fallacy.

A player makes a bunch of shots in a row.

People are sure they're
gonna make the next one.

People think that whatever's happening now

is gonna continue to
happen into the future.

During the real estate boom,
markets were going up and up

and people thought
they would never go down.

So people who are watching
and think that I won't lose

will make a side bet.

Now, this is the first synthetic CDO.

I love Selena Gomez.

I bet you $50 million she wins.

And I'll give you 3-to-1 odds.

3-to-1 odds? Okay, I'll take that bet.

RICHARD: Now, somebody else
is gonna want to make a bet

on the outcome of their bet.

Bet you 50 million she wins.

That will lead to synthetic
CDO number two.

Hey, I bet you $200 million
that lady in the glasses

wins that bet.

She probably will win.
So I want a great payoff.

How about 20-to-1?

Deal.

And this will go on and on with more
and more synthetic CDOs.

And we can transform an original
$10 million investment

into billions of dollars.

You okay?

No.

I actually feel pretty sick.

(ALL GROAN)

(GROANING CONTINUES)

So I'm going to leave.

You think I'm a parasite,
don't you, Mr. Baum?

But, apparently,
society values me very much.

In fact, let's do this.

I'll tell you how much I'm worth.

You tell me how much you're worth.

God, you are an incredibly
big piece of shit.

Short everything that guy has touched.

I want half a billion more in swaps.

You sure about that?
The collateral calls could bankrupt you.

MARK: Yeah. Yeah.

Where are you going?

I am going to try to find moral redemption

at the roulette table.

(INAUDIBLE)

Hey, hey, hey!

Things are worse than I thought.

I honestly think
the economy might collapse.

But you've been saying

that the system's broken
for years, Mark. So...

Why are you so shocked?

It's more twisted
than I could have imagined.

You love to be the virtuous one.

I'm a banker. I'm a part of it.

You always have, Mark.
Like you're untainted.

It changed me. It changed me into a person

who is not able to reach out to someone...

He was in pain.
My brother was in real pain.

There's no perfect way to help.

It's sad. It's scary.

So stop trying to fix the world.

He told me...

You're not a saint.

Saints don't live on Park Avenue.

...that he was having bad thoughts.

CYNTHIA: Just feel the feelings
like the rest of us.

MARK: My first response
was to offer him some money.

I offered him fucking money!

(INAUDIBLE)

His face was so smashed.

(SOBBING)

That's right.

(ROCK MUSIC PLAYING)

(MOANING)

(SCREAMING)

MIKE'S WIFE: Michael?

- Michael?
- Yes. Yes.

- Is everything okay?
- Yes, honey.

- You sure?
- Yeah, baby.

I'm fine. (LAUGHS)

MIKE: To all investors.

As you may know,

our agreement allows me
to take extraordinary measures

when markets aren't functioning properly.

I currently have reason to
believe the mortgage bond market

is fraudulent.

So, in order to protect investors
from this fraudulent market,

I've decided to restrict
investors' withdrawals

until further notice.

Sincerely, Dr. Michael J. Burry.

(HEAVY METAL MUSIC PLAYING)

(COMPUTER CHIMES)

(PHONES RINGING)

(SNIFFLES)

LAUREN CONRAD: (ON TV)
I never would have guessed my life

could change as much
as it has since I moved to L.A.

JASON WAHLER: It's not just, like,
that easy to, like, not see you.

REPORTER: He lashed out at rumors
he used performance enhancing drugs.

This record is not tainted.

Oh, my God, dude.

Will you please stop
changing the channels?

- You're driving me crazy.
- All right.

- Fine.
- Just put the business news on.

REPORTER:...and the S&P
picked up three points.

Jesus!

Mortgage meltdown continued today.

Subprime mortgage lender
New Century Financial,

once the industry leader, by the way,
filed for bankruptcy.

- The company immediately...
- Whoa, whoa, whoa.

(REPORTER CLEARS THROAT)

Good time for my voice to go...

Fired 3,200 workers.

The manufacturing index also
fell in the month of March...

It's starting.

...a warning that
economic growth could slow.

The Institute of Supply Management

also reported a rise in prices...

I'm gonna call my mom.

The principal source
of the slowdown in economic growth...

Time and time and time again,

I have gone to bat for you, Mark!

We've known each other for seven years...

She's got some lungs on her.
I'm impressed.

I can't help but enjoy it.

PORTER: There's no fucking way.
There's no fucking way

that the big banks are that stupid.

Bye, Kathy!

VINNIE: Well?

MARK: (SIGHS) Kathy thinks
that it would be a good idea

if we sold our shorts.

PORTER: What else is new?

And she said that
Morgan Stanley will buy them.

DANNY: Holy shit!

What did you say?

I told her we're not selling shit.

(WHISTLES)

Uh, if you need the files for 2005...

Mr. Fields' suit is very specific
to files from the past year.

Good. Then get out.
Say hi to Lawrence for me.

Will do.

(CELL PHONE RINGING)

You can't call me back for a week?

LUCY: I am so sorry, Mike.

Goldman had a systems failure.
I lost a ton of messages.

Yeah, B of A said they had a power outage,

and Morgan Stanley
said their server crashed.

Huh. That's weird.

Well, I would call it improbable.

So where do you have our position marked?

I think it's the same, Mike.

What? Can you explain that to me, please,

because how can the value
of an insurance contract

not be affected by the demise
of the very thing it insures?

They're independent markets.
They're not always correlated.

I know it sounds odd,

but these are very complicated products.

They are correlated.

They're gonna lose their houses,
they're gonna lose their jobs,

they're gonna lose their...

Will you listen to me?

This is like the end of capitalism.

This is like the Dark Ages all over again.

I don't want to talk to Dad.

Okay, I love you, too. Save your money.

She says I need to be on Xanax
and double my dose of Zoloft.

I asked Bear Stearns to price our shorts.

They tell me the CDOs still haven't moved.

CHARLIE: This is fucking insane!

You realize that? These people are
crooks and they should be in prison.

Look at the TABX.

You can see that the CDOs are worth zero!

So you know what they're doing, huh?

You know what they're doing, right?

Yeah. They're unloading them.

They're selling their dog shit CDOs,
then they go to another bank

and short the shit they just fucking sold!

Let's go to the press, man!

This is a massive story.
Who wouldn't publish it?

Robert Redford!

No, you don't understand!

CASEY: I got it, guys. I got it.

What am I supposed to do?

Do you want me to write a piece called
"We're All Fucked"?

Yes! That's a perfect title!

Casey, right now every bank in town
is unloading these shit bonds

onto unsuspecting customers.

And they won't devalue them
until they get them off their books.

This level of criminality
is unprecedented,

even on fucking Wall Street.

Jamie... And this is me
being honest here, okay?

It took me years to build
my relationships on Wall Street.

No bank or ratings agency is going
to confirm a story like this

just because it comes
from two guys in a...

Sorry, garage band hedge fund
that thinks it's the apocalypse.

(SIGHS)

Wow.

I thought you were for real, Casey.

You know, I'll have to say I really did.

CASEY: Really?

Yeah, Jamie, you try being for real
with a three-year-old

and a wife getting her master's degree.

I'm not gonna burn my reputation
on your wild hunch.

Wow.

- Wow.
- (CASEY SIGHS)

Thanks for coming, guys.

Totally fucking awesome to see you.

Yeah, Casey. I've always hated you,

because you were a prick in college

and you are a prick today!

Thanks, Charlie.
Still living with your mom?

JAMIE: Charlie, come on!

MARK: Mark Baum again. Call me.

Subprime bonds fell off a cliff.

Rumor has it the default numbers are huge.

Who got the remittance data early?
I bet it's Goldman.

VINNIE: Yeah, fuck you very much.

Jared, it's chaos down here. Where are we?

"And Caesar wept, for there
were no more worlds to conquer."

Shane?

Shane?

Well, nobody's buying CDO
or mortgage bonds anymore

and everybody wants swaps.

Swaps are now the most
popular product on the street.

- That's good for us.
- Yes and no.

I heard from somebody
who heard from somebody...

No, Alex, no. Sorry.

Bennie Cleager over at Morgan is taking on

some heavy losses in the bond department.

Your ship might be taking on water.

It might be time to get
our lifejacket and get out.

I'm jacked.

I'm jacked! I'm jacked to the tits!

Good.

- Do you feel it?
- No.

(TOILET FLUSHING)

What'd you hear, Tommy?

It's happening.

PORTER: Everybody wants our swaps.

Kathy's office is looking for you.

DANNY: They're singing
a different tune now, aren't they?

That's not good.

Maybe later. Not now.

This is a joke. Never.

(CELL PHONE RINGING)

Listening.

- DEEB: Dr. Burry?
- Yeah.

Deeb Winston, Goldman Sachs.

Listen, I've been reviewing your position.

I wanted to discuss your marks
and make sure they're fair.

(STAMMERS) Yeah,
I think you mean that you've

secured a net short position yourselves.

So you're free to mark my swaps
accurately for once

because it's now
in your interest to do so.

I'm not sure what you want me to say.

I think that...

I think that you've already said it.

You tell Jeff at Goldman
that I'm not transferring funds.

This is bullshit!

(KNOCKS)

Okay, we'll talk later.

Thank you.

(SIGHS)

Thanks for coming so quickly, Mark.

- Yeah.
- Um...

I know you've been hearing rumblings

about some losses Morgan has suffered.

- Congratulations.
- On what?

Oh.

Thanks. Um...

Having fun?

Yes. (LAUGHS)

Tons. Um...

I just wanted you to know that, um...

That, yes,
Morgan has suffered some losses,

but our liquidity is strong
and there's no cause for concern.

Would Bennie Cleager be concerned?

Because word on the street

is that he took some pretty heavy losses.

Kathy, come on. We know each other.

- (SIGHS)
- What's going on?

How bad is this?

Okay.

Two years ago, Bennie Cleager
in Morgan's bond department

also started shorting subprime housing,
$2 billion in BBBs.

Bennie is smarter than I thought.

No, he's not smart at all.

The premiums on the swap
ate into his desk's profit.

To cover his BBB shorts,

he sold a lot of A and AA swaps
as protection.

A lot.

He believed that there was no way
that they could be affected.

Tell me Morgan Stanley doesn't hold
the contracts on these swaps.

Holy shit.

All this time I've been trying to figure
out who I'm betting against,

and it's Morgan Stanley.

Which is me.

What's your exposure? $3 billion?

Please, don't tell me it's more than four.

I can't answer that. I can't answer that.

Yes, you can answer that,
because I walk in here

and people are crying in your hallway.

Kathy,

you bring me in to tell me
everything's fine,

and everything's not fine.

What, what is happening?

The long exposure is...

...$15 billion.

Jesus!

He kept saying defaults
over 8% were impossible.

MARK: Oh, my God.

That there would be a million homeless!

Yeah, but we have nothing
to do with Morgan Stanley.

Yeah...

Tell the bankruptcy court.

Morgan fails, all our accounts
go on their balance sheet.

DANNY: It's just crazy.

Morgan makes the sucker's bet

and we pay their fucking gambling debt?

Short the bank stocks. Then we wait.

Or we sell our swaps
when the market opens.

We get our bonuses,
our investors get their profits, we get...

What, 30 cents on the dollar?
It's not bad.

We're three times that.

Not if there's
no market left to sell them in.

Forget it.
We're not giving out any lifeboats.

VINNIE: If Morgan goes under,
we end up with nothing.

Vinnie.

Jesus, come on. I say when we sell.

Look, I get that this is personal for you,

but we have a fiduciary responsibility.

No. No, we don't.

Nobody's acting responsible.

Fuck responsibility. Are you kidding me?

The assholes at the big banks will take...

WOMAN: You boys want any appetizers?

MARK: We're talking, please!

- Excuse us.
- Sorry.

We are going to wait,
and we are going to wait,

and we are going to wait

until they feel the pain,
until they start to bleed.

- That is what I want.
- But what about our clients

who've entrusted us with their savings...

I say when we sell.

This isn't about you.

This isn't about you
and your Upper East Side

- mahogany soapbox.
- Hey! Hey!

I say when we sell!

DANNY: Whatever you say, Mark.

Dude, did you hear the news?

Okay. So, not only do
two mortgage hedge funds

backed by Bear Stearns go belly up,

but now there's
a class-action lawsuit against Bear.

CHARLIE: Holy shit!

Let's go! Push! Push!

So, what? Bear could really collapse here.

- This is a risk we really shouldn't take.
- Then what?

JAMIE: We bought 80% of our swaps at Bear.

- We'd lose everything.
- So what?

- Hey, sir?
- One second!

That's my opinion.

We bought these fucking things.

We have no clue how to sell them.

I know. We have to get Ben to do it.

I've been trying to call him
and he won't get back to me.

No. He's on vacation
with his wife's family.

They're in England.

What?

(BELL RINGING SOFTLY)

(TYPING ON COMPUTER)

(MEN TALKING INDISTINCTLY)

- JAMIE: Hello, Ben. Hey.
- BEN: Guys?

Yeah, we're here. Can you hear us?

- Guys?
- CHARLIE: Yeah, we got you.

BEN: Yeah. I hardly got
cell phone or Wi-Fi service.

I'm trying to sell $200 million
worth of securities.

In a pub. It smells like sheep.

You can do this.

CHARLIE: I don't want to pressure you, Ben

but if you don't pull this off,
we lose everything.

All right. Let's see what
Credit Suisse's appetite is.

This is Brownfield Fund.

I want to unload my credit default swaps.

MAN: All right. What you got?

Twenty AA tranches of A.B.S. CDOs.

MAN: A.B.S.? Are these...
These are pretty bad?

Absolutely. They're complete shit.

What's your notional value?

Face value is 205 million. Dollars.

All right, we could, we could go to forty.

No. We want at least 100 million.

100 million? Who are you,
a drug dealer or a banker?

'Cause if you're a banker,
you can fuck right off!

I don't know if we can make a market.

BEN: Just give me your best price?

Yeah. Chuck 100 million in for me, mate.

I think we're far apart.

Look, if you don't want the deal,
you can just hang up.

That's what I thought.

- 90 million.
- 70.

(SIGHS) 85.

- 78.
- 84.

- 78.
- BEN: 84.

MIKE: It's Dr. Burry.

Looks like the collapse
of the financial sector is imminent.

Let's start to sell my position.

It's $1.3 billion.

Sure, I'll hold.

(TYPING ON COMPUTER)

(BEEPING)

So, I was right.

I took a rash of shit for two years, but

I was right.

And everyone was wrong.

And, yeah,
I got a bonus check for it. Sue me.

You know?

It's a lot of money. I get it.
I can feel you judging me.

That's palpable.

But, hey, I never said
I was the hero of this story.

JAMIE: Hey, Ben. How are we looking?

BEN: (CUTTING OUT) Eight... on...

Sorry?

No. Eighty million.

$80 million, $80 million,
that's good, right?

- Eighty is great.
- Is that good?

- Eighty is great, Ben.
- Okay.

Thank you. Thank you so much.

Most of it went to UBS.

You're very lucky. The largest bank

in France froze customer's money
market accounts today.

This thing's hitting Europe.

Greece and Iceland are finished.

Spain is teetering.

Are you serious? Fuck.

CHARLIE: Ben, call us when you get home.

But, hey, before you go,

uh, I'm just wondering...

Um...

Why did you do this with us?

You didn't have to. Uh...

Thank you. But, uh, why?

You guys said you wanted to get rich.
Now you're rich.

COMMENTATOR: Goal!

Pamplona puts themselves
on the scoreboard.

JARED: As the housing markets
and banks continued to hemorrhage,

only one of the big shorts
refused to sell.

Mark Baum.

So it was beyond perfect
when he was asked to speak

at a conference opposite Bruce Miller,

the famous bullish investor.

After he and Mark had their debate,
Alan Greenspan,

one of the architects of the whole crisis
was scheduled to speak.

Everyone in Mark's office showed up,
he even invited friends.

(CELL PHONE VIBRATING)

This was the Ali vs. Foreman
of the financial world.

The realist versus the fools.

And if it seems almost too perfect,
trust me, this happened.

(CELL PHONE CONTINUES VIBRATING)

Welcome, everyone.
Please give a generous welcome to

Mr. Bruce Miller and Mark Baum.

(AUDIENCE APPLAUDING)

(CELL PHONE VIBRATING)

- Strap yourself in.
- (WOMAN COUGHS)

So as some of you may know, Bear Stearns

has just received a loan from JP Morgan.

Of course, we're gonna have to
wait and see how the markets react,

but that should lay to rest any
concerns about the bank's health.

Now, I take it you have no plans to sell
your $200 million in Bear stock?

No. As a matter of fact,
when we're done here,

I'll probably go out and buy some more.

- (SCATTERED LAUGHTER)
- (CELL PHONES VIBRATING)

For the opposing view, Mr. Baum.

I got to stand for this.

Okay, hi.

My firm's thesis is pretty simple.

Wall Street took a good idea,
Lewis Ranieri's mortgage bond,

and turned it into an atomic bomb

of fraud and stupidity

that's on its way to decimating
the world economy.

How do you really feel?

(AUDIENCE CHUCKLING)

MARK: I'm glad you still
have a sense of humor.

I wouldn't if I were you.

Now, anyone who knows me knows that

I have no problem telling
someone they're wrong.

PORTER: (WHISPERING) Bear Stearns
is denying rumors of liquidity problems.

(WHISPERING) Holy fuck, it's 39 now!

We live in an era of fraud in America.

Not just in banking, but in government,

education, religion, food,

even baseball.

(VIBRATING)

What bothers me isn't that

fraud is not nice or that fraud is mean.

It's that for 15,000 years

fraud and short-sighted thinking

have never, ever worked.

- PORTER: Jesus, Bear at 37...
- Not once.

Eventually, people get caught,
things go south.

DANNY: It's fucking plummeting, man.

When the hell did we forget all that?

I thought we were
better than this. I really did.

And the fact that we're not

doesn't make me feel
all right and superior.

It makes me feel... Sad.

Every time I fucking hit
"refresh" it's dropping, man.

And as fun as it is to watch

pompous, dumb Wall Streeters
be wildly wrong,

and you are wrong, sir,

I just know, that at the end of the day

average people are going to be the ones

that are gonna have to pay for all this.

Because they always, always do.

DANNY: It's 32.

VINNIE: It's fucking tanked, man.

That's my two cents. Thank you.

DANNY: Let me drop a deuce at Deutsche.

WOMAN: Does our bull have a response?

Only that, in the entire history
of Wall Street,

no investment bank has ever failed

unless caught in criminal activities.

So, yes, I stand by
my Bear Stearns optimism.

MAN: Mr. Miller, I'm sorry.
Quick question.

From the time you guys started talking,

Bear Stearns stock has
fallen more than 38%.

Would you still buy more?

Yeah, sure, of course
I'd buy more. Why not?

Boom.

(ALL TALKING INDISTINCTLY)

DANNY: Jesus Christ!

WOMAN: That concludes
the first part of our presentation.

Up next, we have the legendary
former chairman of the Fed,

Alan Greenspan.

Folks?

MALE REPORTER:...employees
of Lehman Brothers today,

as the Wall Street giant's stock
went to zero.

The collapse of the venerable
New York bank

follows a tumultuous few months
of market volatility

and fear in the world economy.

I got to see inside.

How?

Come on.

I left my phone in the office.
I threw my pass out already.

Do you mind if I take your pass?

I don't give a shit anymore.
You can do what you want.

Go directly to your transportation.

Do not talk to the press.

After 18 years, I just leave?
That's just fucking great!

I'll talk to whoever the hell I want!

MAN: Do not talk to the press.

Go directly to your transportation.

Do not talk to...

PORTER: Hey, look,
you wanna get a bite tonight?

There's this, uh, new Cuban place

just opened on the Lower East Side.
It's supposed to be good.

- Oh, really?
- Yeah.

You and I?

- Yeah, or other people.
- (CELL PHONE VIBRATING)

- That sounds nice. I would like that.
- Yeah.

Finally.

Mark, hey.

VINNIE: It's a bloodbath up here.

Morgan stock has lost half its value.

It's down to 23. 10. It's in freefall.

Clients want to talk to you
about pulling their money.

It's now or never, Mark. We got to sell.

Mark.

Mark, you hear me?

MALE AUTOMATED VOICE: Mailbox one.

You have 15 messages.

(BEEPING)

WOMAN: Mike, I can't seem
to get ahold of you.

Will you please call me
at your earliest convenience.

It's Jack. You're buying stocks?

The market's at an all-time low.
This is crazy!

My profile said,

"I am a medical student with only one eye,

"an awkward social manner,

"and $145,000 in student loans."

She wrote back,

"You're just what I've been looking for."

She meant honest.

So let me be honest.

The housing crisis represents
the greatest financial opportunity of...

MIKE: Making money is not
like I thought it would be.

This business kills
the part of life that is essential.

The part that has nothing
to do with business.

- (APPLAUDING)
- (MAN TALKING INDISTINCTLY)

For the past two years, my insides...

(SQUEALS)

...have felt like
they're eating themselves.

All the people I respected

won't talk to me anymore

except through lawyers.

- (BABY CRYING)
- People

want an authority to tell them
how to value things...

...but they choose this authority not
based on facts or results.

They choose it because it
seems authoritative and familiar.

And I am not

and never have been "familiar".

So...

So, I've come to the sullen realization

that I must close down the fund.

Sincerely, Michael J. Burry, M.D.

CHARLIE: This isn't how I pictured it.

JAMIE: What did you think we'd find?

I don't know.

Grownups.

Mark, you there?

VINNIE: Mark?

Paulson and Bernanke
just left the White House.

There's going to be a bailout.

Well, they had to. Right?

Paper markets would've collapsed.

They knew.

Cash would've stopped coming out of ATMs.

They had to backstop this.

They knew the taxpayers
would bail them out.

They weren't being stupid.
They just didn't care.

Yeah. 'Cause they're fucking crooks.

But at least we're going to
see some of them go to jail.

Right? I mean, they're gonna
have to break up the banks.

I mean, the party's over.

I don't know. I don't know, Vinnie.

I have a feeling

that in a few years
people are gonna be doing

what they always do
when the economy tanks.

They will be blaming
immigrants and poor people.

JARED: But Mark was wrong.

In the years that followed,
hundreds of bankers

and rating agencies executives
went to jail.

The SEC was completely overhauled.

And Congress had no choice
but to break up the big banks

and regulate the mortgage
and derivatives industries.

(GLASS SHATTERING)

Just kidding.

The banks took the money
the American people gave them

and used it to pay themselves huge bonuses

and lobby Congress to kill big reform.

And then they blamed
immigrants and poor people.

And this time, even teachers.

And when all was said and done,
only one single banker went to jail.

This poor schmuck.

Kareem Serageldin from Credit Suisse.

He hid a few billion
in mortgage bond losses,

something most of the big banks did
on a good day during the crisis.

Mark, can we sell now?

The fund will make almost $1 billion.

You'll clear $200 mil, Mark.

You know, once we sell,

we'll be just like the rest of them.

You know that.

No, we're not.
We're not the bad guys here.

We didn't defraud the American people
and prey on their dreams

of owning a home. All right?

They did.

(HORN HONKING)

And now we get to kick them in the teeth.

A billion dollars.

That's right.

But we got to close out our position
or it could be zero.

I mean, it's now or never, Mark.

Okay.

Sell it all.

(ROCK MUSIC PLAYING)