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Big Short Digital Copy Download Code iTunes HD

Big Short Digital Copy Download Code iTunes HD

$4.50

In 2005, eccentric hedge fund manager Michael Burry (Christian Bale) discovers that the U.S. housing market is extremely unstable, being based on high risk subprime loans. Predicting that the market will collapse sometime in the second quarter of 2007 (as rates go up on many adjustable-rate mortgages), he realizes that he can profit from this situation by creating a credit default swap market, allowing him to bet against the housing market. He visits several major investment and commercial banks with this idea; these firms, believing that the housing market is secure, accept his proposal. Burry's huge, long-term bet earns the ire of his clients, who believe that he is wasting their money and demand that he stop his activities; but he refuses. As the predicted time of the collapse approaches but Burry's bet doesn't succeed (because the banks refuse to revalue his swaps, until they can dump their deteriorating collateralized debt obligation (CDO) assets then buy swaps on them), his investors lose their confidence and consider pulling out their money; but Burry halts withdrawals from the fund (since its strategy is delayed by a fraudulent market), much to his investors' anger. However, as the housing market collapses further just as he predicted, the value of his fund finally increases 489%.

Trader Jared Vennett (Ryan Gosling) hears of Burry's actions from one of the bankers Burry dealt with, and uses his quant to verify that Burry's predictions are likely true. He decides to put his own stake in the credit default swap market. A misplaced phone call alerts hedge fund manager Mark Baum (Steve Carell) to his plans, and Baum is convinced to join Vennett. Vennett explains that the impending market collapse is being further perpetuated by the packaging of poor, unsellable loans into CDOs that are given fraudulent AAA ratings due to the conflict of interest and dishonesty of the credit rating agencies. Baum sends some of his staff to investigate the housing market in Miami, and they discover that mortgage brokers make more money if they only sell risky mortgages to the Wall Street banks; and these mortgages are so easy to acquire that a speculative housing bubble has been created.

When Baum attends the American Securitization Forum in Las Vegas, he interviews CDO manager Mr. Chau (Byron Mann), who creates CDOs on behalf of an investment bank while claiming to represent the interests of investors. Chau also describes how synthetic CDOs make a chain of increasingly large bets on the faulty loans, involving 20 times as much money as the loans themselves. Baum realizes, much to his horror, that the scale of the fraud will cause a complete collapse of the global economy. Baum convinces his business partners to go through with more credit default swaps, profiting from the situation at the banks' expense.

Eager young investors Charlie Geller (John Magaro) and Jamie Shipley (Finn Wittrock) accidentally discover a prospectus by Vennett, and also decide to become involved in the credit default swaps (since it fits their strategy of buying cheap insurance with big potential payouts). Since they are below the capital threshold for an ISDA Master Agreement needed to pull off the trades necessary to profit from the situation, they enlist the aid of retired securities trader Ben Rickert (Brad Pitt). The three visit the Mortgage Securities Forum in Las Vegas, where they manage to successfully make an even higher-payout deal than the other hedge funds. Shipley and Geller are initially ecstatic, but Rickert is disgusted, since they're essentially celebrating an impending economic collapse and soon-to-be-lost lives (40,000 for each 1% rise in the unemployment rate). The two are horrified, and take a much more emotional stake in the collapse by trying to tip off the press and their families about the upcoming disaster and the rampant fraud amongst the big banks. Ultimately, they profit immensely, but are left with their faith in the system broken.

A note is given that CDOs have come back into the current market, under a different name: "bespoke tranche opportunity".

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