Wall Street Outliers There seem to be two kinds of people in this world: those who take things at face value—meaning, they accept what they're told as being true, with no thought of further verifying for themselves—and those who don’t. And it’s the ones who don’t that sometimes win big. However, defying the status quo takes guts and perseverance because often they will be ridiculed by the same people who follow conventional wisdom. About eleven years ago, there were four such fortitudinous men who defied the norm by betting against big banks, making millions on Wall Street. Starting in 2007, the U.S. went through the worst financial crises in history since the great depression. It was caused by the collapse of the subprime mortgage industry and almost brought this country to its knees. What started the mortgage crises? The movie The Big Short—based off a book written by Michal Lewis and directed by Adam McKay—aims to educate with an informative look into the complex mortgage …show more content…
Burry’s seemingly ludicrous investments make enough waves on Wall Street to attract the attention of the silky, amoral banker Jared Vennett—played by Ryan Gosling, who is also the film’s foul-mouthed narrator. The slick banker Vennett comes to the same conclusion as Dr. Burry and decides that he will not be going down with a sinking ship. Instead, he will profit from his employers impending doom. By inadvertently calling the wrong number, he goes into the credit default swap business with the outspoken, disruptive personality hedge fund manager Mark Baum—played by Steve Carrol. The substantial gains to be made also attracts the attention of the bumbling, small-time investment team Charles Geller—played by John Magro, and Jamie Shipley, who is played by Finn Wittrock. These small-potatoes investment managers enlist the help of an elusive former banker—played by Brad Pitt—to help them attain a seat at the power broker’s table so that they can potentially profit on the bank's
IMDb,. (1990). The Wolf of Wall Street (2013) - Plot Summary. Retrieved 19 May 2014, from http://www.imdb.com/title/tt0993846/plotsummary?ref_=tt_ql_6
The lives that these men live makes them cruel and separate from the world, which in return makes having an actual loving relationship nearly impossible for them. Michael Sullivan, played by Tom Hanks, was and enforcer of the Chicago mob. Michael Jr, played by Tyler Hoechlin, was a 12 years old boy who became curious about what his father did for a living after question by his younger brother Peter. Michael Jr. decides to hide in the car and find out what type of work his father does. After seeing a man be killed, by his fathers co worker Michael Jr. attempts to run away, but can’t find a escape route. Sullivan works for John Rooney, Paul Newman, who was the mob boss and focused only on how to make money and said very little words. Rooney son Conner, played by Daniel Craig, is a member of the mob and gets jealous over the relationship that Sullivan has with his father. Sullivan finds out that Conner has been stealing from his father Mr. Rooney. This is where the movie’s scene for emotional showdown begins, because Sullivan sees Rooney as a father and Rooney sees Sullivan as a son that he never had. Sullivan explained to Michael Jr. why the relationship between him and Mr. Rooney was so strong, because he gave them a place to live when they had no where and gave them money when they had
Although the crisis came to head in 2008, there were people who had realized that trouble was coming for years. The largest warning sign was the amount of credit in the market place. Many of the big companies and banks had very little capital, and the lack of capital was brought on by the housing bubble. Companies were lending too much money to people who could not pay them back. And even before people started to default on their mortgages, people could see that this was a problem. During a meeting with the Senate Committee on Banking, Housing, and Urban Affairs in January 2007 the staff of the Federal Reserve admitted “that they were aware of [the] problem in the housing issue three years earlier” (Dodd). And they were not the only ones. As far back as 2001 there were people who saw the danger that sub-prime mortgages were and who were trying to have bills passed to stop the bad lending that was going on, but no one wanted to list...
Profit, profit and more profit - the golden pillars of capitalism. In the movies 'Wall Street' and 'Boiler Room' this is the ideology that the characters uphold. While, there are many variances in the two movies, the basic aim of both lead characters i.e. Gordan Gekko (Wall Street) and Seth Davis (Boiler Room) is to make money. Both men are stockbrokers who deal in high finance in the exclusive world of Wall Street. However, with both movies are set in different decades the way they go about doing so differs.
In “The Big Short”, this movie about the economic collapse of 2008 in America highlights how Americans of all racial backgrounds were hit hard when the housing market collapsed. The film provides a very compelling argument and describes how the market crashed because banks began to give out more unstable loans out to people in order to sell more properties, which eventually led to the housing market to be built upon millions of risky loans. This practice grew until the housing market became too unstable because of all the risky loans and resulted in an economic crash. The housing market collapse led to millions of Americans to lose their homes because of foreclosures and led to massive amount of homelessness and unemployment since the Great
It can be argued that the economic hardships of the great recession began when interest rates were lowered by the Federal Reserve. This caused a bubble in the housing market. Housing prices plummeted, home prices plummeted, then thousands of borrowers could no longer afford to pay on their loans (Koba, 2011). The bubble forced banks to give out homes loans with unreasonably high risk rates. The response of the banks caused a decline in the amount of houses purchased and “a crisis involving mortgage loans and the financial securities built on them” (McConnell, 2012 p.479). The effect on the economy was catastrophic and caused a “pandemic” of foreclosures that effected tens of thousands home owners across the U.S. (Scaliger, 2013). The debt burden eventually became unsustainable and the U.S. crisis deepened as the long-term effect on bank loans would affect not only the housing market, but also the job market.
For generations, only certain people have achieved success - they are known as geniuses or outliers; however, they did not obtain it on high IQs and innate talents alone. In the book Outliers, author Malcolm Gladwell, #1 bestselling author of The Tipping Point and Blink, reveals the transparent secret of success behind every genius that made it big. Intertwined with that, Gladwell builds a convincing implication that the story behind the success of all geniuses is that they were born at the right place, at the right time and took advantage of it. To convey the importance of the outlier’s fortunate circumstances to his readers, he expresses a respective, colloquial tone when examining their lives.
Malcolm Gladwell’s overall purpose of Outliers: The Story of Success is that success is largely determined by an individual’s socioeconomic and sociocultural environment, and individual ambition, effort, or talent, are less significant, contrary to the societal notions associated with success. In other words, success is not something that someone randomly gained; success is earned through opportunities that develop dedication, interest, and skill over time. By doing this, will one become an outlier, or “something that is situated away or classed differently from a main or related body,” (Gladwell 3) that distinguishes great from good and best from great, as exemplified by “The striking thing about Ericsson’s study is that the and his colleagues couldn’t find any “naturals”, musicians who floated effortlessly to the top while practicing a fraction of the time their peers did.” (Gladwell 39) Gladwell also acknowledges societal norms such that “All of the fourteen men and woman on the list above had vision and talent,” (Gladwell 62-63) to assert hard work, ability, et cetera can lead to success, but a social environment that offers such opportunities immensely increases the likelihood of success.
The recession officially began when the 8 trillion dollar housing bubble burst. (State of Working America, 2012) Prior to that, institutions bundled mortgage debt into derivatives that were sold to financial investors. Derivatives were initially intended to manage risk and to protect against the downside, but the investors used them to take on more risk to maximize their profits and returns. (Zucchi, 2010). The investors bought insurance against losses that might arise from securities so that they could secure their money. Mortgage defaults unexpectedly skyrocketed, which caused securitization and the insurance structure to collapse. (McConnell, Brue, Flynn, 2012). The moral hazard problem arose. The large firm investors thought they were too big for the government to allow them to fail. They had the incentive to make even more risky investment.
In Chapter 8 and 9 of Outliers: The Story of Success, Gladwell exams some of the ways that Asian and American students learn math, arguing that some of the principles in the US education system should be reconsidered. I generally agree with Gladwell’s point of view. I believe in two ways, students ' principal spirit and the length of students’ studying, the US education system leaves much to be desired, though an overhaul is in progress.
(Murphy, 2008) The US banking sector was first hit with a crisis amongst liquidity and declining world stock markets as well. The subprime mortgage crisis was characterized by a decrease within the housing market due to excessive individuals and corporate debt along with risky lending and borrowing practices. Over time, the market apparently began displaying more weaknesses as the global financial system was being affected. With this being said, this brings into question who is actually to blame for this financial fiasco.
Keeping in mind that the main reason for the mortgage crisis is the high number of defaulted home loans, which triggered foreclosures and sell offs. The other four contributing factors include high-risk loans, the bust in the housing market, mortgage fraud, and speculation. High-risk loans are loans that are over leveraged, where the financing is done more than the suggested values to be given. (Greenspan) This can result in immediate sell off when the property falls below that loan amount and to avoid further loss the banks start raising the installment. The housing market has seen pressure as a result of the over pressure on most homeowners by increasing rates. This affects people ability to make the payments, resulting in defaults. This is the problem with the burst in the housing market. The third major factor that is causing the mortgage crisis is, mortgage fraud.
Individuals like the two young and rambunctious mortgage consultants portrayed in the film gave loans to anyone and everyone that could sign the paper, regardless of the recipient’s ability to pay the loan in full. It is doubtful that all consultants fully understood the ramifications of their actions, but undoubtedly the overall disregard for consequence was the start of the collapse. Mortgage consultants mislead and tricked people into loans they could never afford by playing on their desire to live the American dream. Distributing adjustable rate loans to individuals without jobs, without collateral is unconscionable. Unfortunately, from their perspective they were helping these individuals. In a twisted way, these consultants were acting ethically from a utilitarian point of view. The consultants won because they received utility in the form of a bonus for distributing the loans, and the loanee won because they could now afford the home of their dreams. What the consultants didn’t consider in their calculations were the long term results and utility of their actions, unethically building the flawed foundation of the housing
Major Characters in movie are Bud Fox, played by Charlie Sheen, who is a young, smart and very motivated stock broker, Gordon Gekko, played by Michael Douglas the millionaire,
This movie starts off as Jordan Belfort, the main character in the movie, losing his job as a stockbroker in Wall Street. After losing his job, he goes and gets a job in a Long Island brokerage room. In the brokerage room, he sells penny stocks. Thanks to him being aggressive in his selling skills, he was able to make a profit. With the new income, he gives his wife a bracelet and she asked him why doesn’t he go after the people that can afford to lose money, not the middle-class people or lower income people. That is when he gets the idea to get a lot of young people and train them to become the best stock brokers.