Jump to content

Who watched the Big Short?


rpadebet
 Share

Recommended Posts

As others will invariable line up for the Star Wars movie next week, I lined up to watch the first show of The Big Short in NYC today. ;). Luckily the line wasn't that big, in fact just a couple of guys ahead of me.

 

As is the case with such movies, I found the book more interesting, but the movie was not bad. They even managed to make it a bit funny.

 

I have special memories of this historic event because I was just starting my career and unbeknownst to me at the time, I had a very close ring side view as important events unfolded. I consider myself very fortunate to do a mini internship at the time with Greg Lippmann and his team. I observed the presentation (which is now being circulated) being put together, arguments between Lippmann and Eugene Xu - the Quant (This part is not in the book ). I remember being clueless at the desk as the lowly intern while the bosses left for the now infamous Las Vegas conference. So this book and the movie hold a special significance in my mind and it will be an experience I will never forget.

Now you know why I lined up for the movie on the first day.

 

Anyway after watching the movie, I started reading Dr. Burry's letters from the time again, here is an excerpt that I found interesting

 

While many see a commodities bubble, I see a federal mandate to inflate commodities

prices in dollar terms. The recent collapse in some commodities prices along with a

strengthening dollar does little to dampen my enthusiasm for the sector. I fully expect

such volatility along the way; that is the nature of the markets. In fact, the Funds

established direct commodity exposure through futures contracts during the recent

pullback. At recent prices, the total value of futures contracts amounted to less than 15%

of the Funds assets.

 

It is an entirely reasonable argument to note that as the world slows down, other countries

will start cutting rates, making the dollar relatively more appealing. As commodities have

been the prime beneficiaries of a weak dollar, this improving state of the dollar would

result in poor performance for commodities going forward. However, we must remember

that the United States is the largest economy by far, and it has the most leveraged

consumers by far. The primary cause of the rest of the world’s ills will be secondary

effects of the slowdown in the United States. Every other country will have some degree

of strength derived from domestic and other non-US sources. At the end of the day, the

credit crunch hurts the United States more than any other country. The sickest patient will

require the most aid, and I would expect that aid will come in the form of Federal policies

that hurt the dollar’s value over a longer time frame.

 

I just realized, he seems to have even predicted the emerging market contagion, dollar strengthening and related commodity complex collapse which we are currently seeing...he goes on to predict a follow up recession and further fed support (FWIW I didn't predict any of the above but I do believe QE4 is coming soon 8) )

 

I am now really in awe of this man's rational/logical thinking....it is a bit scary even to think, what it would be to think like him and know what he knew would be a reasonable probability back in 2008.

 

If I had a chance, I don't think I would like to talk to him. It is a bit like looking through the crystal ball and knowing your future. It takes all the fun out of living and investing!

Link to comment
Share on other sites

  • Replies 74
  • Created
  • Last Reply

Top Posters In This Topic

Guest Grey512

You are overascribing godlike qualities to Mike while doing selective reading and interpretation of his writings.

 

He wasn't God and he isn't.

 

Jurgis,

 

I'd be grateful and interested to hear more of your thoughts on MCB and specifically, your main criticisms of him.

 

Thanks in advance.

G.

 

 

Link to comment
Share on other sites

You are overascribing godlike qualities to Mike while doing selective reading and interpretation of his writings.

 

He wasn't God and he isn't.

 

Jurgis,

 

I'd be grateful and interested to hear more of your thoughts on MCB and specifically, your main criticisms of him.

 

Thanks in advance.

G.

 

I don't have any direct criticisms about Mike's investments offhand. He did great in the past and I wish him well in the future (though obviously he could just sit happily on the pile of money he made and do nothing). I just object his deification.

 

In particular, commodity pricing could be explained by cyclical (or supercyclical for hyperbole inclined) nature: China growth drove up demand, demand drove up pricing, a lot of projects to increase production are/were multiyear, then they come online when China is slowing, etc. Sure, there is also some fiscal, monetary, currency effects too, but that doesn't mean that a paragraph from Burry predicted yet another 100 year flood or something.

 

I have some objections towards some thoughts and sentiments he expressed post crash. But he is entitled to his opinions - and he paid dearly for them - so I don't see a point to return to them.  :)

 

Finally, my direct interactions with Mike are now more than 10 years ago. He was nice and smart guy, though I'd say CoBF has people who seem as smart as him or smarter. And if he'd be on CoBF, he'd probably wouldn't be treated as a prophet (if we exclude hindsight bias). ;) In the end though it's the investment results that matter and not our posts on SI or CoBF.  8)

 

Take care.

Link to comment
Share on other sites

https://www.youtube.com/watch?v=d03zpolmv7U

 

Is it just me or is that Burry himself on the phone when the two walk in?

 

It's him, though I guess he is a really bad actor cos he was told not to move a muscle......

 

According to IMDB, it must be Selena Gomez or Margot Robbie :)

 

Joking aside, he did visit the set a few times during filming so it's not surprising he made it in as an extra.

 

Also, did any else get a twinge of recognition at the book he was reading? I read the entire series probably about 10-15 years ago. One of my favorite fantasy series.

Link to comment
Share on other sites

Also, did any else get a twinge of recognition at the book he was reading? I read the entire series probably about 10-15 years ago. One of my favorite fantasy series.

 

I know the series. (IMO, his Landover series are much better though - Shannara starts like a total Tolkien ripoff, gets better a bit later...)

 

I wonder though if this is based on real info about Mike or if Hollywood threw this in as another nerd cliche...  ::)

Link to comment
Share on other sites

A friend of mine watched the movie.He remarked that the finance is heavily dumbed down in the movie and it strays to far from the story on the book

 

If the finance wasn't heavily dumbed down the movie would have been seen by like 1,000 people. I thought they did a great job of explaining very complicated matters in simplistic terms. The point of the movie was to inform the general public of some things they probably weren't familiar with surrounding the financial collapse in a fun and approachable way, not make a 100% accurate movie that bores the general public to death.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share




×
×
  • Create New...