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81 " attention deficit disorder in his own son. “I had worked in an ADHD clinic during my residency, and had strong feelings that this was overdiagnosed,” he said. “That it was a ‘savior’ diagnosis for too many kids whose parents wanted a medical reason to drug their children, or to explain their kids’ bad behavior. "
― Michael Lewis , The Big Short: Inside the Doomsday Machine
82 " Goldman Sachs did not leave the house before it began to burn; it was merely the first to dash through the exit—and then it closed the door behind it. "
83 " He didn’t worry about how screwed-up the market for some security became because he knew that eventually it would be disciplined by logic: Businesses either thrived or failed. Loans either were paid off or were defaulted upon. "
84 " Back in the 1980s, the original stated purpose of the mortgage-backed bond had been to redistribute the risk associated with home mortgage lending. Home mortgage loans could find their way to the bond market investors willing to pay the most for them. The interest rate paid by the homeowner would thus fall. The goal of the innovation, in short, was to make the financial markets more efficient. Now, somehow, the same innovative spirit was being put to the opposite purpose: to hide the risk by complicating it. The market was paying Goldman Sachs bond traders to make the market less efficient. "
85 " Burry did not think investing could be reduced to a formula or learned from any one role model. The more he studied Buffett, the less he thought Buffett could be copied; indeed, the lesson of Buffett was: To succeed in a spectacular fashion you had to be spectacularly unusual. “If you are going to be a great investor, you have to fit the style to who you are,” Burry said. “At one point I recognized "
86 " By May 2007, however, there was a growing dispute between Howie Hubler and Morgan Stanley. Amazingly, it had nothing to do with the wisdom of owning $16 billion in complex securities whose value ultimately turned on the ability of a Las Vegas stripper with five investment properties, or a Mexican strawberry picker with a single $750,000 home, to make rapidly rising interest payments. "
87 " There was a lot of angst about it. It was sort of viewed as, These folks don’t know what they’re talking about. If losses go to ten percent there will be, like, a million homeless people.” (Losses in the pools Hubler’s group had bet on would eventually reach 40 percent.) As a senior Morgan Stanley executive outside Hubler’s group put it, “They didn’t want to show you the results. They kept saying, That state of the world can’t happen.” It "
88 " We fought with those cocksuckers all the way down,” says one Deutsche Bank trader. And, all the way down, the debt collectors at Deutsche Bank sensed the bond traders at Morgan Stanley misunderstood their own trade. They weren’t lying; they genuinely failed to understand the nature of the subprime CDO. "
89 " Which Wall Street big shots Eisman had insulted was a matter of which Wall Street big shots’ presence Eisman was allowed into. "
90 " $16 billion in complex securities whose value ultimately turned on the ability of a Las Vegas stripper with five investment properties, or a Mexican strawberry picker with a single $750,000 home, to make rapidly rising interest payments. "
91 " Back in 1996, 65 percent of subprime loans had been fixed-rate, meaning that typical subprime borrowers might be getting screwed, but at least they knew for sure how much they owed each month until they paid off the loan. By 2005, 75 percent of subprime loans were some form of floating-rate, usually fixed for the first two years. "
92 " Mike Burry didn’t own any triple-B-rated subprime mortgage bonds, or anything like them. He had no property to “insure”; it was as if he had bought fire insurance on some slum with a history of burning down. "
93 " Looking for bad bonds inside a CDO was like fishing for crap in a Port-O-Let: The question wasn’t whether you’d catch some but how quickly you’d be satisfied you’d caught enough. "
94 " As a former gas station attendant, parking lot attendant, medical resident and current Goldman Sachs screwee, I am offended. "
95 " It's not easy to stand apart from mass hysteria - to believe that most of what's in the financial news is wrong, to believe that most important financial people are either lying or deluded - without being insane. "
96 " The longer-term the option, the sillier the results generated by the Black-Scholes option pricing model, and the greater the opportunity for people who didn't use it. "
97 " Subprime borrowers tended to be one broken refrigerator away from default. Few, "
98 " Time is a variable continuum. "
99 " Wall Street bond trading desks, staffed by people making seven figures a year, set out o coax from the brain-dead guys making high five figures the highest possible ratings for the worst possible loans. They performed the task with Ivy League thoroughness and efficiency. "
100 " Wing Chau didn’t know he’d been handpicked by Greg Lippmann to persuade Steve Eisman that the people on the other end of his credit default swaps were either crooks or morons, but he played the role anyway. "