I finally got around to watching The Big Short.  It’s quite the film.  If markets are your thing and you haven’t seen it, you’ll likely enjoy it.

Get out from behind your desk

  • the biggest ideas are plainly evident to those who live a rich social life
  • Big trends are noticeable, very noticeable

Being right and early is being wrong, but it’s also very psychologically painful

The bigger the dislocation the greater the extreme in emotion.

Paul Tudor Jones’ famous quote ‘Nothing can prepare you for the last third of a move’ comes to mind

  • When price is dislocated from the fundamentals, the dislocation can become incredibly extreme.

Incentives make the world go ’round

  • The ratings agencies had little choice but to favorably rate bonds if they wanted to compete..
  • Greater bonuses for the mortgage brokers drove variable rate subprime mortgages.