Extractor
4 HN mentions · mentioned in 4 months, 2019–2024
8:35 · 18M views · Nov 20, 2016
A scene from The Big Short in which Jared Vennett pitches credit default swaps on mortgage bonds to a hedge fund team, using a Jenga tower to illustrate collateralized debt obligations.
Used as a quick visual explanation of how CDOs packaged risky mortgage debt.
4 comments from Hacker News
The 2018 crisis was caused by CDOs - packaged mortgage debt which is going to default, mixed and dressed up as very safe debt, then sold on to some poor sucker (including you in your pension). this video The article is saying that people are buying CLOs - packaged corporate debt which is going to default, mixed and dressed up as very safe debt, then sold on to some poor sucker (including you in your pension). TLDR: History repeats itself, first as tragedy, then as farce.
The Big Short also has an earlier explanation of a non-synthetic CDO ("we just repackage it [low-quality risky debt] along with a bunch of other shit that didn't sell and put it into a CDO"): this video
PSA: you basically have to have seen the movie "The Big Short" to understand the analogy in the article. Or at least this scene: this video
Its a great scene, but this one takes the cake: this video "That's a nice shirt, do they make it for men?" "Somehow you're like Dora the Explorer and you're the first person who has found this thing..."