The Big Short Movie & Credit Default Swaps Explained

Michael Lewis wrote the book “The Big Short” that later was turned into a movie starring Christian Bale, Steve Carrell, and Ryan Gosling, Brad Pitt, and Jeremy Strong. The movie focused on 3 different investors who bet against mortgage bonds before the Great Recession and housing market collapse using credit default swaps. Want to get a primer on swaps and how they work before you watch or re-watch the movie?

What are Credit Default Swaps (CDS)?

What do bond ratings mean?

What are the annual premiums on credit default swaps?

How to convert basis points to an interest rate percentage?

What is counter party risk?

What does Michael Burry use to short housing in the Big Short Movie?

How did people bet against the housing market?

What does the spread on credit default swaps mean?

Using Credit Default Swaps to hedge or speculate

Mentioned in this Episode:

Current Credit Default Swaps Spreads on Sovereign Country Bonds https://www.cnbc.com/sovereign-credit-default-swaps/

Michael Lewis Book the Big Short https://amzn.to/2SNhUr1

The Big Short Movie https://amzn.to/31ROJrc

Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

Contact Derek www.razorwealth.com