Subprime mortgage crisis
Sometimes referred to as the greatest trade in history, Paulson's firm made a fortune and he earned over $4 billion personally on this trade alone. Paulson worked with Goldman Sachs to provide liquidity for low-performing home loans in Arizona, California, Florida and Nevada.
While this is an impressive sum, and Burry is widely credited with being the first to predict the collapse of the red-hot housing market, Steve Eisman, upon which the Big Short character Mark Baum (played by Steve Carell) was based, made a staggering $1 billion shorting collateralized debt obligations (CDOs), a type of ...
Millions of people lost their homes, and the global economy was sent into a tailspin. The housing market collapse of 2008 was caused by a number of factors, including subprime mortgages, predatory lending practices, and securitization by lenders.
The Biggest Culprit: The Lenders
Most of the blame is on the mortgage originators or the lenders. That's because they were responsible for creating these problems. After all, the lenders were the ones who advanced loans to people with poor credit and a high risk of default.
There were many causes of the crisis, with commentators assigning different levels of blame to financial institutions, regulators, credit agencies, government housing policies, and consumers, among others. Two proximate causes were the rise in subprime lending and the increase in housing speculation.
FrontPoint Partners
In the movie adaptation of Lewis' book, The Big Short, Eisman's name was changed to Mark Baum, and he was portrayed by actor Steve Carell. He left FrontPoint Partners in 2011 amid investor withdrawals following an investigation of illegal insider trading by portfolio manager Chip Skowron.
Michael Burry, of 'Big Short' fame, just bet $1.6 billion on a stock market crash. Michael Burry, the “Big Short” investor who became famous for correctly predicting the epic collapse of the housing market in 2008, has bet more than $1.6 billion on a Wall Street crash.
Even when the collapse of the economy is imminent, Baum holds off on selling until the very last moment of the movie. In Baum's eyes, if he sold his position, then he would be no better than those other people, whom he considered “crooks.”
Mark L Baum has an estimated net worth of at least $75.4 million*, as of Jan. 8, 2025. They own 2.1 million shares of HROW stock. They have sold 0 shares of HROW stock since 2021, for an estimated $-598,775.
NET WORTH. Michael Burry's estimated net worth is around $300 million. Burry became millionaire at the age of 29, when he sold part of his Scion Capital hedge fund to investors. Michael Burry is NOT in Forbes World Billionaires list or in Bloomberg Billionaires Index.
2024. From September to October, prices went up by 0.02%. These steady inclines signal that the housing market isn't crashing anytime soon. Zillow's November Home Value and Home Sales Forecast predicts national home prices will increase by 2.5% in 2025.
Jared Vennett receives a bonus of $47 million for profits made on his credit default swaps. Mark Baum becomes more gracious from the financial fallout, and his staff continue to operate their fund.
Blackstone Group is by far the biggest buyer of single family houses with an estimated $2.5 billion totaling up to 16,000 single-family houses and they are currently in Atlanta GA, Chicago IL, Las Vegas NV, Phoenix AZ, and Inland Empire, LA, Sacremento Valley, Bay Area, Central Valley California, Miami Orlando and ...
I would say that it is fairly accurate, but does not give a complete picture. The creators very much have an opinion about what caused the crisis, and who was in the wrong. There are many key facets of the crisis that are completely ignored.
Why in the movie The Big Short, Jamie and Charlie bet 12 million on CDSs, a return of 25 to 1 and generate 300 million, but the returns didn't happen and they had to sell the CDSs for 80 million?
Baum is an alias for businessman and investor Steve Eisman. Given the focus both the book and the movie place on Eisman, he's the one with more backstory. The book details the painful loss of Eisman's son due to an accident.
Not everyone, however, lost money during the worst economic downturn in American history. Business titans such as William Boeing and Walter Chrysler actually grew their fortunes during the Great Depression.
Global recession outlook
There is now a 35% chance that the global economy will enter a recession by the end of 2024, and a 45% chance that it will do so by the end of 2025.
After regulation, the most highly rated causes of the crisis were irrational beliefs (on house prices or risk) and corrupt incentives (fraud in mortgages and credit rating agencies).
Concerns about the impact of the collapsing housing and credit markets on the larger U.S. economy caused President George W. Bush and the Chairman of the Federal Reserve Ben Bernanke to announce a limited bailout of the U.S. housing market for homeowners who were unable to pay their mortgage debts.
Deregulation of banking
Clinton signed the bipartisan Financial Services Modernization Act or GLBA in 1999. It allowed banks, insurance companies and investment houses to merge and thus repealed the Glass-Steagall Act which had been in place since 1932.
Did Anyone Go to Jail for the 2008 Financial Crisis? Kareem Serageldin was the only banker in the United States who was sentenced to jail time for his role in the 2008 financial crisis.