In a Nutshell

A movie adaptation from the book- The Big Shot, by Michael Lewis; an American non-fiction author & financial journalist.

Ip Man and Star Wars were still screening. But I chose to watch- The Big Short because time and energy is precious.

This movie is quite hard for me to watch. I will tell you why.

So, first. About the movie.

It is about the bursting of the housing bubble (in U.S) that eventually crumbled the entire financial institution, leading to an entire meltdown and financial crisis throughout U.S and the rest of us. Otherwise a dry subject, the movie put it as plainly as possible, explaining financial jargon in layman terms. There is no fun fare about the movie, it is as painfully plain but necessary to hear it again. We never learn. Never. Greed has no pit. Stupidity also has no pit. I don't say this in a pompous way, I say this because I am also caught in the wind of ignorance and stupidity.

The sub-prime mortgages were grouped into securities (Mortgage Bond Securities- MBS) and sold as potential assets to bond holders in the light that when they pay their monthly mortgages in full, they can get paid their bonds. However, the institutions created different tranche rates (tranche means a part of a deal, a slice of, a portion of), meaning higher tranche rates bond holders get paid first, while lower rate bond holders get paid last or not at all. This is the beginning of the entire bullshit system. When lower rate bond holders having paid their rents in full, don't get paid their bonds, coupled with living condition hardships, start defaulting on their rents, this simple structure becomes a self-fulling monster headed to failure. Instead of taming the monster (sub-prime mortgage), they went ahead to pull sub-prime mortgages from MBS, and repackaged them as yet another new product: CDO- Collateralized Debt Obligation, and sold these high risks products as profitable bonds. The shit doesn't end there, they took CDO and spun it into CDO2 (CDO square), meaning- a side bet of a main bet. And then came the side bets of the side bets, and the side bets of the side bets' side bets. You get the drift, it's synthetic CDOs cloned and sold. At the same time, the rating agencies just keep rating whatever crap shit as AAA, they have gone too deep into fake ratings, it was point of no return. 

The entire financial saga turned US$1.5 trillion into vapour, jobs lost, homes lost, lives lost. 

Despite all these, fast forward to current, the new term for the same shit is now called -  

Bespoke Tranche Opportunities. (They have totally ruined the word "Bespoke" !)

How is this hard for me to watch. Firstly, we lost money. I lost money. For sanity's sake, the only thing left to do is not to think about it.

Secondly, the Oil & Gas market is in the same shit. And we're just at the beginning of that shit hole.

Fold your knees, duck your head and get ready for a crash landing.
Tiiiiiimmmmmmmbbbbbbeeeerrrrrr!