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"The Big Short" Movie Summary: Based on Real Events

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Jared Vennett, which was portrayed by the actor Ryan Gosling in The Big Short movie, found out about what his colleague Burry knows and his goal to be profitable. Jared Vennett is a bond trader in a bank called the Deutsche Bank, upon discovering their plan of Burry, he thoroughly made researched it and found that what Burry believes is true. With this knowledge, he decided that he will encourage investors to buy credit default swaps. There is a scene in the movie where Vennett came to visit Frontpoint Partners. Mark Baum is also a fund manager who leads Frontpoint. The scene is when Vennett speaks in front of Frontpoint employees including Mark Baum about the information he has learned about the housing market. He even explained it to them thoroughly using Jenga blocks so that he could show them visually what will happen if things would happen the way he thinks they would. At first, Baum and his colleagues think that Vennett is getting crazy because of what he said since it seems to be impossible to happen. But later on, Baum and the other employees of Frontpoint investigated to know if what Vennett said was all true. They started visiting houses and discovered that the mortgage for these houses are not being paid by the owners.

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The banks provide mortgage loans to ordinary people, especially immigrants and those people who are working, introduced them to a low-interest rate loan, and then later on, after a few years, the credit that has to be paid has become bigger to the point that the people who purchased their homes through a mortgage loan were not able to pay their loans anymore. Some of them are leaving their houses like the one scene shown in the movie when the workers of Mark Baum investigated by going to different homes of people who have subprime mortgage loans.  

The mortgage loans or subprime mortgage loans as mentioned in the movie are, according to an academic journal from EBSCO Host, a loan that seems to attract clients or ordinary people because of the initial low low-interest or sometimes banks provide a no interest at the beginning. So, because of this strategy made by banks, people are enticed or attracted to purchase this mortgage loan but what they do not know is after how many years, the value and interest will increase and rise to a higher amount of payment which may result to their inability to pay anymore because of the high credit. This is what has happened in The Big Short movie. 

 

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