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Hi, how are you?
Hey, Mr Bennet. Here we have.
- Let's see what you got. - You smell that? What is that?
- What? - What's that smell?
- Your cologne? - No.
- Opportunity. - No. Money.
- Oh... Okay. - I smell money.
- Okay.
- Chris... - Damn it. Sorry.
This is your basic mortgage bond.
All right? The originals were simple.
They were just thousands of triple A 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.
Highest level, triple A, 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 double B's went from a little risky
-to dog shit. Where's the trash? - Behind you.
I'm talking rock-bottom FICO scores.
No income verification.
Adjustable rates. Dog shit!
The default rates are already up from one to four percent, fellas.
And if they rise to eight percent, and they will,
a lot of these triple B's are going to zero, too.
And that...You're too close. ...is an opportunity.
Okay, you're saying that at eight percent the bonds fail
and we are already at four percent?
- That's right. - If they go to eight, 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.
- Your what? - My quantitative!
My math specialist. Look at him.
You notice anything different about him? Look at his face.
That's pretty racist.
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.
It's like insurance on the bond, and if it goes bust
you can make ten-to-one, even twenty-to-one return.
And it's already slowly going bust!
Ten-to-one? Twenty-to-one? No way.
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.
Well, 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?
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.
A's, zero. B's, zero. Double B's, zero. Triple B's, zero.
And then that happens.
What is that?
That's America's housing market.
verification - verificação
triple - triplo
thousands - milhares
thinks - acha
think - pensar
these - estes
talking - falando
standing - parado
government - governo
english - inglês
bennet - bennet
double - duplo
defaults - padrões
level - nível
default - padrão
competition - concorrência
getting - obtendo
front - frente
mortgage - hipoteca
mortgages - hipotecas
happens - acontece
chance - chance
eight - oito
banks - bancos
quantitative - quantitativo
obscene - obsceno
could - poderia
offering - oferta
taking - levando
authentic - autêntico
tranches - tranches
credit - crédito
right - certo
buying - comprando
somewhere - algum lugar
anything - qualquer coisa
money - dinheiro
chris - chris
specialist - especialista
about - sobre
close - fechar
along - ao longo
cologne - Colônia
called - chamado
going - indo
guaranteed - garantido
actually - na realidade
already - já
attention - atenção
bonds - títulos
notice - aviso prévio
armageddon - armageddon
basic - básico
blocks - blocos
highest - mais alto
layers - camadas
bottom - inferior
adjustable - ajustável
modern - moderno
different - diferente
racist - racista
simple - simples
burning - queimando
house - casa
housing - habitação
little - pequeno
because - porque
lowest - menor
private - privado
insurance - seguro
likes - gosta
behind - atrás
makes - faz com que
scores - pontuações
margins - margens
income - renda
opportunity - oportunidade
national - nacional
smell - cheiro
obviously - obviamente
together - juntos
bundled - empacotado
originals - originais
completely - completamente
rates - taxas
sorry - desculpa
china - China
paying - pagando
small - pequeno
percent - por cento
first - primeiro
pretty - bonita
quant - quant
rated - avaliado
jared - Jared
return - retorna
risky - arriscado
twenty - vinte
saying - dizendo
shirt - camisa
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