I watched The Big Short last weekend, the 2015 Oscar-nominated movie about four men who saw the housing market crash of 2008 coming. Here’s a very quick summary, just in case you either haven’t seen the movie1 or weren’t paying full attention nine years ago when all this was actually happening (like me): basically, big banks began selling bonds made up of mortgages that weren’t nearly as strong as the banks said they were, so when the bonds matured, the money that was supposed to be there wasn’t. People hadn’t been paying their mortgages, which meant that the banks didn’t have the cash that they said or thought they did, which then meant that the banks couldn’t pay people’s loans or their employees’ salaries. Millions of people, both in the banking sector and in other walks of life, lost their jobs and their homes and it’s only been in the last few years that the housing market has really begun to recover. Continue reading “The Long and Short of Greed and Anger”
