I told you I was going to be digging into audio books during quarantine, and I did not lie. I just started my ninth audio book this week.
Among the beginning books I listened to, I chose a book which had been on my Amazon list for quite some time since I first saw the movie of the same name: The Big Short. Expecting it to be a difficult read, I thought it was a perfect audio book choice.
In 2015, when the film was released, I was fascinated by it. Not because I know anything about the ins and outs of Wall Street, no, absolutely no. Even after watching the movie three times, listening to the audio book, and having many in depth conversations with Lance about the entire thing, I would probably sound very childish speaking about the subject*.
*Or at least the way I sound when I’m trying to form a difficult sentence in Italian.
But I found the way the movie presented the information to be brilliant. The book, which obviously came first, is written in a similar manner; in a way meant to inform the lay person about what happened, while also relating it to the businessman who may or may not have worked with some of the companies and/or individuals mentioned*.
*As I listened to the audio book in the kitchen, from his ‘office’ in the dining room Lance called out at one point, “Hey, I know that person! We’ve done work with that person.”
The book follows four people who shorted the housing market (bet against it instead of for it) when they realized the catastrophe which was sure to take place after recognizing investment banks and securities trading and brokerage firms were essentially positioning themselves to profit from lower- and middle-class Americans who would soon find themselves unable to pay their debts.
Just in case I’ve messed that up somehow, here’s how Wikipedia words it: “The Big Short describes several of the main players in the creation of the credit default swap market that sought to bet against the collateralized debt obligation (CDO) bubble and thus ended up profiting from the financial crisis of 2007–08.”
What made this an especially interesting topic for me was that we bought our house during all this. The company we got our mortgage through is mentioned in the book. Today it is no longer in existence, and it is no small wonder why.
When we were applying for our mortgage, Lance was finishing college. He hadn’t even interviewed for his future job yet. I was working as an associate manager at American Eagle making no where near enough to support a mortgage, but it was going to be in my name and based mainly on my salary. When on the phone with the mortgage loan officer, he asked what I made at American Eagle and then said he would write down a number of roughly $30,000 more a year.
I was twenty-two. I wanted a house. But I also knew Lance was going to get a job and that we would actually be making, hopefully, more than the number the mortgage loan officer had written down for me.
Move in day, 2007
Others during this time were not so fortunate. The bulk of these mortgages that were shorted consisted of something called subprime mortgages, mortgages given to people who would have great difficulty paying them back. They started with low mortgage rates which made them look appealing, but when that adjustable rate changed, that was when millions of Americans found themselves unable to pay their mortgage any longer.
If things had gone differently, I could have been one of them.
It’s a subject which is eerie, fascinating, and sad all at once for me.
After finishing the audio book, I bought the book. Then we watched the movie, along with two other movies on the same subject but from different viewpoints*. The Big Short is still the best of all to me. It provides a great way to understand something so grand and confounding by honing in on the individuals who possessed the foresight to prepare for what was to come.
*Too Big to Fail and Margin Call.
One of many quotes I like from the movie is said by a man, Ben Rickert, who guides two young guys who have stumbled upon this idea of shorting the housing market. The young guys are celebrating, realizing they are about to become millionaires and Rickert is silent, until they ask him what’s up.
“If we’re right, people lose homes. People lose jobs! People lose retirement savings, people lose pensions. You know what I hate about f**king banking? It reduces people to numbers. Here’s a number, every one percent unemployment goes up, forty thousand people die, did you know that?”
It seems as though this isn’t just a statement haphazardly used to dramatize a film.
It’s also pretty relevant right now.
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