What did you just say? "Synthetic CDOs?" That is fucking crazy.
WING CHAU
It's not, it's awesome!
MARK BAUM
Alright, let's say you have 50 million in subprime loans. How much money could be out there betting on it through these synthetic CDOs and swaps? Right now, tonight?
WING CHAU
50 million? A billion dollars.
MARK BAUM
What?
JARED VENNETT(V.O.)
If the mortgage bonds that Michael Burry discovered were the match...
MARK BAUM
How much bigger is the market for insuring mortgage bonds than actual mortgages?
WING CHAU
About twenty times
JARED VENNETT(V.O.)
If the mortgage bonds were the match, and the CDOs were the kerosene-soaked rags, then the synthetic CDO was the atomic bomb with a 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 the whole world economy might collapse.
We’re about to find out how many completely unregulated derivatives are out there on this shit :ancap-good:
MARK BAUMWhat did you just say? "Synthetic CDOs?" That is fucking crazy.WING CHAUIt's not, it's awesome!MARK BAUMAlright, let's say you have 50 million in subprime loans. How much money could be out there betting on it through these synthetic CDOs and swaps? Right now, tonight?WING CHAU50 million? A billion dollars.MARK BAUMWhat?JARED VENNETT (V.O.)If the mortgage bonds that Michael Burry discovered were the match...MARK BAUMHow much bigger is the market for insuring mortgage bonds than actual mortgages?WING CHAUAbout twenty timesJARED VENNETT (V.O.)If the mortgage bonds were the match, and the CDOs were the kerosene-soaked rags, then the synthetic CDO was the atomic bomb with a 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 the whole world economy might collapse.