Quotes About Finance

How do you explain to an innocent citizen of the free world the importance of a credit default swap on a double-A tranche of a subprime-backed collateralized debt obligation? He tried, but his English in-laws just looked at him strangely. They understood that someone else had just lost a great deal of money and Ben had just made a great deal of money, but never got much past that. I can't really talk to them about it, he says. They're English.

The role had been spawned by the widespread belief that traders didn't know how to talk to computer geeks and that computer geeks did not respond rationally to big, hairy traders hollering at them.

That was Eisman's logic: the logic of Wall Street's pecking order. Goldman Sachs was the big kid who ran the games in this neighborhood. Merrill Lynch was the little fat kid assigned the least pleasant roles, just happy to be a part of things. The game, as Eisman saw it, was crack the whip. He assumed Merrill Lynch had taken its assigned place at the end of the chain. On

What do you tell your mother when she asks you where to put her money?" I asked. "Guns and gold

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.

Which Wall Street big shots Eisman had insulted was a matter of which Wall Street big shots' presence Eisman was allowed into.

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.

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.

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.

we're helping the consumer. Because we're taking him out of his high interest rate credit card debt and putting him into lower interest rate mortgage debt.

Liquidity. When an executive said his bank had plenty of liquidity it always meant that it didn't. At

unpleasant odor wafting from the subprime mortgage industry that Eisman had detected. These companies disclosed their ever-growing earnings, but not much else. One of the many items they failed to disclose was the delinquency rate of the home loans they were making.

The fact that it is such an opaque industry should be alarming," Brad said. "The fact that the people who make the most money want the least clarity possible—that should be alarming, too.

His experience with Household Finance had disabused him of any hope that the government would intercede to prevent rich corporations from doing bad things to poor people.

When Steve Eisman stumbled into this new, rapidly growing industry of specialty finance, the mortgage bond was about to be put to a new use: making loans that did not qualify for government guarantees. The purpose was to extend credit to less and less creditworthy homeowners, not so that they might buy a house but so that they could cash out whatever equity they had in the house they already owned.

Inside a dark pool, no one but the broker who ran it had any idea what was happening.

But the more we looked at what a CDO really was, the more we were like, Holy shit, that's just fucking crazy. That's fraud. Maybe you can't prove it in a court of law. But it's fraud." It

Aldinger, collected his $100 million, Eisman was on his way to becoming the financial market's first socialist. "When you're a conservative Republican, you never think people are making money by ripping other people off," he said. His mind was now fully

And he explained that they avoided free checking because it was really a tax on poor people—in the form of fines for overdrawing their checking accounts.

It was a measure of how much money people were making in the bond market that the magazine Institutional Investor was about to create a hot list of people who worked in it, called The 20 Rising Stars of Fixed Income. It was a measure of how much money people

Long Beach Savings was the first existing bank to adopt what was called the "originate and sell" model. This proved such a hit—Wall Street would buy your loans, even if you would not!—that a new company, called B&C mortgage, was founded to do nothing but originate and sell.

The long-shot bet, in some strange way, was a young man's game. Charlie Ledley and Jamie Mai no longer felt, or acted, quite so young.

Pope Benedict XVI was the first to predict the crisis in the global financial system…Italian Finance Minister Giulio Tremonti said.

What are the odds that people will make smart decisions about money if they don't need to make smart decisions—if they can get rich making dumb decisions? The incentives on Wall Street were all wrong; they're still all wrong.