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The questions Michael Burry asked to see the subprime crisis coming:
Why are home prices diverging from household income? Answer: leverage.
What are the incentives for lenders to make mortgages only to sell them to Wall St? Answer: volume at the expense of credit standards.
Why are home prices diverging from household income? Answer: leverage.
What are the incentives for lenders to make mortgages only to sell them to Wall St? Answer: volume at the expense of credit standards.
How much of consumer spending is dependent on cash-out refinancings?
What percentage of jobs are dependent on the assumption of rising home prices?
Won’t AIG have to post massive cash collateral for the first time if it were downgraded?
What percentage of jobs are dependent on the assumption of rising home prices?
Won’t AIG have to post massive cash collateral for the first time if it were downgraded?
Isn’t it worrisome that Fannie Mae cannot find term sheets that describe perfect hedges against its massive mortgage portfolio?
Are the rating agencies so conflicted that they could be this blind?
Are the rating agencies so conflicted that they could be this blind?
When interest rates bottom, how far could lenders push mortgage terms in order to keep refinancings, home prices and volumes rising?
“The answer would be a ticking time bomb to the boom and a date on the crash.”
And that’s how Burry thinks...
“The answer would be a ticking time bomb to the boom and a date on the crash.”
And that’s how Burry thinks...
If you haven’t watched this speech yet just do it already. So good
Burry basically lays out exactly how he thinks. He thinks in questions...
