Everyone knows the impact that the economic crisis of 2008 has had in the world, but not everyone knows that four investors l had hypothesized, implementing «the big short». This scene of the film «The big short» talks about an eccentric manager, Michael Berry, who discovers that the USA Real Estate market was extremely unstable. It is formed by high-risk subprime mortgages. They are mortgages granted to people with financial problems who have often been unable to repay them. These mortgages are granted, however, because the banks apply the guarantee on them «collateral mortgage». If the debtor fails to pay the installments, the bank forecloses the house. It is good for financial institutions: Real Estate acquires value over time and can easily be sold at a higher price.
Michael begins to study the story and realizes that the number of debtors entering insolvency is increasing. This means that the banks will find themselves with thousands of foreclosed houses and with the huge offer, the value of these houses will begin to fall. Moreover, insolvencies increase, so few people will be able to buy them. He decides to bet against the Real Estate market by creating credit default swaps. Michael had offered banks a periodic insurance premium on a harmful event. In fact, the banks were only required to pay a premium if the event had actually occurred and the banks accepted certain solidity of the Real Estate market.
Taken from a true story, this film tells a chapter of contemporary history, from another
more exciting point of view in the dark part of banking systems, doubting everyone.
Lucia Scotti