In Honor Of "The Big Short", Here Is Michael Burry's Historic Commencement Speech

Tyler Durden's picture

On the day after one of America's greatest for over-consumption, a few moments of quiet reflection on the state of our world seemed appropriate. With the launch of "The Big Short" movie (assuredly infuriating many Americans with its "dangerous for the establishment" expose of the greed, stupidity, hubris, and arrogance of Wall Street bankers gone wild), Dr. Michael Burry's infamous UCLA commencement speech has much to offer .

Infamous for his correct predictions of the great recession, Europe's demise, and the collapse of the US financial system (as well as profiting handsomely from being right), the painful 'truthiness' of this brief speech stunningly summarizes the ominous truth facing most of the developed (and much of the emerging) world today:

"In this age of infinite distraction... when the entitled elect themselves, the party accelerates, and the brutal hangover is inevitable."

A quarter-of-an-hour well spent from a self-described 'chicken-little' who was "just trying to figure it all out".

 

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aint no fortunate son's picture

If the movie's half as good as the book, it'll be the balls!

NoDebt's picture

How did this guy get to speak at any public university, let alone one in California?  You would think this guy would be branded as a pariah on both sides of the aisle by now.

About 5 minutes in Dean Cool Shades looks like he wants to tackle him off the stage but decides "Ah, fuck it, I got tenure, who gives a shit?"

 

Manthong's picture

He made a ton of money for himself and his investors.. that speaks volumes to the schlubs who think they know everything.

 

Dizzy Malscience's picture

What most folks don’t understand is that Burry played his hand against the objections of many of his investors because he understood that market forces were in play. And they were in 2008 and mostly afterward  until October 2011.

A logical technical and fundamental trend down was happening in August /September 2011.

What many of us did not understand is that as of October 2011 the Fed and it’s owners decided that free market forces could not be allowed to remain in effect if the totalitarian privately owned banking system was to survive.

The ECB LRO 1, LTRO 2, the $.5T Fed swaps that backed it all up and a host of subsequent additional “whatever it takes” bazooka fraud destroyed any semblance of a market and valid price discovery. Add all of the QE 3, LIBOR fraud, FOREX interest rate rigging, bullion bank rigging/fixes, COMEX paper fraud,  ETF fraud, stock market buys by Central Banks, ZIRP to enable bogus stock buy-backs and other crap, particularly the tipped off - "got your back" programmed HFT, front-running and spoof thievery and here we are. Now the the half quadrillion in notional derivatives is still hanging in on its thread.

There must be ferocious blowback…

There will be ferocious blowback.

 

Transformer's picture

Hmmm,  wonder if there is some investment out there right now, that the investment community thinks is dog shit and the whole investment community thinks could never happen?  Maybe being actively supported or suppressed by the bankers, in order to hide something?  But has an inevitability that will steam roll everything.

I've thought about this a lot since I saw the movie and can't come up with anything.

thinkmoretalkless's picture

War. The great distraction. Used to focus the masses. Channel the rage. And if a few make a buck or two? What's wrong with that? Everything. Too bad there is always a new generation to fall for it.

TheBigComic's picture

Need some help with this movie. Seems like the movie created the idea that the system as a whole is corrupt and put most of the blame on the rating agencies, and totally bypasses the US government and Federal Reserve, with only a scant mention in the credits that Burry tried to contact the White House and tell them how he figured it out ultimately leading to him being audited four times and being visted by the FBI.

The main scene that seems to dump the most blame came with Baum and his numbers guy pushing the old lady at Standards and Poor's into saying "if we don't give the banks the rating they want they go down the street to moodys". The movie makes alot of top people look like bafoons who didn't know what was going on like the Bear Sterns guy on stage with Baum as the stock is plumitting saying he would "buy moar".

All three groups that the movie follows who made a bunch of money on the "big short" are all shown as doing so because of Burry who they portrayed as an idiot savant type who can single handidly digest unlimited numbers while everyone else (Government, Federal Reserve, Freddie Mae, Banks, Investment firms, hedge funds, regulators, etc) are asleep at the wheel. I'm sorry something seems amiss here!!

Consider me totally ignorant about the finer details of banking, finance, housing, etc, but it seems almost comical that the Federal Reserve Bank whose primary function is setting the feds fund rate did not have a complete model of the impact that rate would have on mortgages in the US? A central theme in the movie is the cascadding effect of the default of sub prime mortgages.

The collapse happens in the last year of Bush's presidency with the most unpopular bill TARP being signed as he is leaving office with no hope of re-election. The bailout is presented only very briefly as Baum speaks in low key amazement that they are going to bail out the banks. Just lucky timing I guess that the largest financial bailout in history and the financial collapse happended a few months before a very unpopular president leaves office and is going to hand over the reigns to the first black president.

Sure there is the revolving door between SEC and financial firms referenced in the film with the red head in vegas who is trying to bed goldman guys, but her cluelessness is tied to the SEC not being funded when she is asked why they are not paying attention to the ratings of MBS.

Seems like the point of this movie is to leave most watching it (the massess) with the impression that the system is just a mess and made up of greedy people. This just reinforces what I think most people already think. If there is a bigger story in regards to the timing of the collapse coming at the end of the Bush presidency, with the political capital of Obama to over see the coming QEs and the overall takeover of the economy that was provided by the TARP and related legislation, that story is burried in this story of Burry the savant. (I'm not attacking Burry, don't know a thing about him other than this movie)

Hollywoods story is that one idiot savant single handely figured out some corruption in the ratings of securities and made a big bet and won a billion or so as millions lost. Seems like this story, while significant and outrageous and interesting, is designed to hide a bigger story.

TheBigComic's picture

Interesting coment, no one will read it because its too long and not sarcastically witty.

Skateboarder's picture

Friend, I understand your sentiments all too well. I don't watch movies, nor do I have the time to read the books they are based on, but I do get my truths from ZH, among other places online, and they do represent the truthful extent of the corruption and malice that goes on in this world. Perhaps one man has spoken out publicly against this accepted and malicious behavior, and his thoughts have been loosely converted into a cinematic format for public 'consumption,' but that is what it all is - 'consumption.'

If a million people really gave a shit enough, things would change overnight. Really - they would. Strength in numbers, educated and aware, amigo. That is our only hope left.

NoPension's picture

As Dr. Burry stands on a stage, and delivers a speech to the unwitting recipients of the single largest fraud currently perpetrated against the Ametican people.

Higher education and the absolute lack of standards applied to any and all who wish to apply. Both for the loan required and admissions.

How do we short this racket?

ejmoosa's picture

This level of "fraud" can be committed because there are just too many rules (which gives everyone a false sense of safety) and that generates too many loopholes.

Eliminate all the rules. 

Tell people their assets are at risk.

Do not use taxpayer money to bail out anyone.

Allow insider trading, which must be released immediately to the public.  If they are selling, let me know innedieately, and to what degree,

Eliminate all one time charges.  All expenses one time or may times are the cost of doing business.

In other words, quit keeping the rest of us in the dark until it's way too late, and then making things "right" with my tax dollars.

 

A_MacLaren's picture

Try again ejmoosa...

As your solution to market complexity that hides risks, first you say, "Eliminate all the rules." This would seemingly inclusively imply Reporting, by firms, securities analysts, regulatory agencies, etc.

But then you impose your transperancy rule, to fix the otherwise most assured chaos that would emerge from the lack of rules, "Allow insider trading, which must be released immediately to the public.  If they are selling, let me know innedieately, and to what degree,"

Either there are good cops on the beat, ready, willing and able, to enforce ALL the rules without concern for a future career amidst the shysters, criminals, fraudsters, and racketeers, or there is the "free market".

I don't know if you've ever played No Limit Texas Hold 'Em. But the Big Chip Stack dominates the table. Small stacks get smaller.

Further the supposition that players are honest, have integrity, wouldn't cheat or risk their reputations or their firms, is what Alan Greenspan admits he got wrong about his theory of "free markets" constraining risk taking and in effect creating self regulating markets.

Rabbi Chaim Cohen's picture

Look at what Burry is doing now. He is into farmland (with water) and PMs.

The picture becomes very simple for the long investor when the fraudster banks and sellout globalist politicians continue their monotonous doubling down in the face of obvious consequences and pain for the hoi polloi.

TheBigComic's picture

Interesting coment, no one will read it because its too long and not sarcastically witty.

KingOliver's picture

You give too much credit to risk managers. Their job(the majority) is to take money and leverage bet in a single direction no matter the construction of the risk model ala. LTCM. Those that figure out the issues with risk baskets that are incorrectly bundled together can win. They (every regulator and governing body) are still asleep at the wheel, as nothing has changed. QE infinity does stop at one point, especially when there is a cost of borrowing money with the Fed funds rate above nothing. Why is this concept difficult to understand? I thought we have all been joking for years about the audacity of it all, just waiting for opportunity. Guess the populous has changed around these parts.

tumblemore's picture

Main Point:

You appear to be looking to make this party political which at this stage - unless you're very young - makes you an idiot. The donors own ALL of them and party politics is just a punch and Judy show to distract the public.

On your specific points

the movie created the idea that the system as a whole is corrupt

Yes it is. Given enough time the banking mafia will corrupt everything. There will be some honest individuals on the inside but too few.

and put most of the blame on the rating agencies

They were the mechanism used but that begs the question

and totally bypasses the US government and Federal Reserve

who corrupted the ratings agencies?

If the rating agencies felt they were being pressured by the banks they would have gone to the Fed and/or other authorities - who told them to fuck off.

The blame belongs to the banking mafia: the banks and the Fed, both directly and indirectly by corrupting all the checks and balances - but if a country lets the banking mafia create their money then the banking mafia will always have an unlimited capacity to corrupt - all they need then is time.


BullyBearish's picture

All of you do yourselves a favor and either read The Creature from Jekyll Island or get an audible version to listen to.  It will explain how we got here and where we're going...unless more people read the book and internalize the evil that is private banking.   The Creature from Jekyll Island should be required reading for every ZHer.

aurum4040's picture

BC I understand where you are coming from and where you are going... You're right - just think in terms of 09/11, the false flaggery of terrorism, and unending wars to fund the MIC and push the police state agenda and translate that thought into the financial world - they did it for money and, more importantly, control over the financial system while eradicating the last pieces of the free market to prepare for the USD meltdown and associated, upcoming sheeple panic. If you have a 401k, get rid of it.. buy physical bullion, food, supplies etc  and or farmland and hunker down 

Bob's picture

Thanks for the thoughtful review, TBC.  I've heard three extended, intensive interviews of the writers, producers and actors plus a review from a very surprised critic (they don't expect great things from movies that cover any complicated finance topics in any kind of detail whatsoever.)  The critics consider it a miracle that the movie educates on arcane technical material while maintaining the level of consuming human interest necessary to bring audiences into the theater--something that is absolutely required for a movie to be widely watched and, of course, to make the money it has to make.

Sounds like they found a movie-making approach that was able to do both to a breathtaking degree . . . for novices. 

I'm going to break my rule of never going to another movie theater to be a$$ raped only to suffer the crowds, noise and inability to rewind when you need to or pause to get a beer or visit the loo.  If you have a proper home theater system, the entire theatre system is barbaric.  I haven't compromised for at least 10 years.  I can wait before seeing a movie when it's finally released on bluray. 

This one I don't want to wait for.

Thanks for your criticism that will additionally inform my viewing perspective. 

flysofree's picture

Great comment. And you are right, the financial crisis was an engineered coup that made many people billionaires. They all knew what was happening, but, some just thought they were smarter and would get out in time.

The one thing that I never hear being mentioned is the CHANGE IN HOW ONE COULD SHORT WITHOUT THE UPTICK RULE. The rule went to effect in 1938 and was CONVENIENTLY removed in 2007. They knew what would happen and they made it possible to short with impunity.

BandGap's picture

Lest we forget, the government pushed people pushed banks into making these loans. According to our government it is a right to own a home in the United States. Don't forget that very simple thought. One they pushed banks, and two it is your right to own a home in the United States. Simply ridiculous.

BandGap's picture

Lest we forget, the government pushed people pushed banks into making these loans. According to our government it is a right to own a home in the United States. Don't forget that very simple thought. One they pushed banks, and two it is your right to own a home in the United States. Simply ridiculous.

ejmoosa's picture

Without the insistence of government, this would have not had the chance to occur.

 

And I cannot forgive them for they knew exactly what they were doing.

tumblemore's picture

nonsense. the banks control govt. policy through political donations.

 

QQQBall's picture

My memory from reading the book and have not seen the movie. They repckaged the worst of the worst tranches into new ports and got them rated AAA and sold. No way the trash could have been sold if accurately rated; and yet, we have the same agencies in business today. No way that happens in a legit system. You can say it is/was just an opinion, but that is bullshit.

 

One of the book's takeaways is that the buyers were idjits... almost so clueless to be unreal... these genius mofos did not understand what they were investing billion in.

 

Burry is not an idot savante. Listen to the speech... he was trying to figure it out... He is a smart tenacious guy like a dog wrestling with a bone.

 

Read the book. It is a quick easy read.

 

Rabbi Chaim Cohen's picture

Ok, here is the long and the short of it. Burry and Co. saw behind the curtain of smoke. They were willing to look at the rotten foundations of the financial bubbles that were being spawned to seduce the Banks and day-traders into greed-driven blindness. The Gubmint and Wall St-ers are not all stupid, (though many are). Often times the people we perceive as the top are often not the "deciders". They are just greedy, charismatic yes-men. They are the faces on the system organs, if you will. The people they answer to are INTENTIONALLY crashing the system. It is not ignorance; it is intentional. They cannot leave any power or wealth in the hands of the thinking, working producer, so that they can usher in a globalist Utopia as the panacea for the evil failed system that hurt so many of the little people (*sniff*). This is why after the 2008 debacle these folks spent the next few years capturing major capital markets and have major direct levers of control over the rest. Because they own the media and much of the entertainment industries, the truth is hidden from the average person, buried beneath a layer of econ jargon, contrived statistics and a whole lot of hopium. We are all but passengers on their Crazy Train for now...

steve2241's picture

Trump - "...until we find out what the hell is going on!"

Muse minus Time's picture

Let's remember that it was Clinton's former OMB Raines that helped juice  it up:

https://romanticpoet.wordpress.com/2010/05/09/in-2002-who-was-regulating...

 

Bazza McKenzie's picture

Probably thought it was safe because he was a doctor with some disabilities.  Whoops!

TruthHunter's picture

"How did this guy get to speak at any public university."

He paid to be heard?

Maybe he indulged and bought a chair in the business dept.

Whalley World's picture

Surprisingly, it is as good
Highest recommendation

BandGap's picture

Literally just watched this movie with my wife and sons. Not going to waste energy being angry. Greed wasn't that hard to figure out. And it's time for Darwin to start weeding out the stupid in society.

In the future if someone talkes something that affects my family's ability to survive they will be shot.

 

PF-9's picture

Sir: you don't want to post things like that on the internet. 

Escrava Isaura's picture

 

 

PF-9, Sir: you don't want to post things like that on the internet.

How about this one: Redefining what is about to happen.

Utopia Of The Masters.

One classic moment was at the origins of neoliberal doctrine in the early nineteenth century, with the certainty of Newton’s laws, that we only harm the poor by trying to help them.

The best gift we can offer the suffering masses is to free them from the delusion that they have a right to live.

The new science (neoliberal/free markets) proved that people had no rights beyond what they can obtain in the unregulated labor market.

But an unanticipated problem arose. The stupid masses began to draw the conclusions that if we have not right to live, then you have no right to rule.

 

http://redefineschool.com/noam-chomsky/

 

greenskeeper carl's picture

noam chomsky can solve all the worlds problems. all we have to do is put the government in charge of everything, and everything will be great. its not like the government is to blame for any of the worlds problems, right? If we had gone to a more centralised form of government sooner, these things wouldnt have ever happened.

 

I don't usually say things like this to people on here, because personal attacks are mostly counter productive, but you are a fucking idiot, and so is noam chomsky.

Escrava Isaura's picture

 

 

greenskeeper carl, you are the idiot here. Let me prove it to you.

Chomsky is a Libertarian Socialist. State Socialists and State Capitalist are the ones that love government. That can’t survive without it.

 

Libertarian socialism … rejects socialism as centralized state ownership and control of the economy, as well as the state itself. It criticizes wage labour relationships within the workplace, instead emphasizing workers' self-management of the workplace and decentralized structures of political organization, asserting that a society based on freedom and equality can be achieved through abolishing authoritarian institutions that control certain means of production and subordinate the majority to an owning class or political and economic elite.

Libertarian socialists generally place their hopes in decentralized means of direct democracy and federal or confederal associations such as libertarian municipalism, citizens' assemblies, trade unions, and workers' councils.

All of this is generally done within a general call for libertarian and voluntary human relationships through the identification, criticism, and practical dismantling of illegitimate authority in all aspects of human life.

https://en.wikipedia.org/wiki/Libertarian_socialism

 

 

greenskeeper carl's picture

no, you are the idiot. there is no such thing as a "libertarian socialist". One is either libertarian or authoritarian. that is all. chonmky is an authoritarian, and so are you, every time you defend him. He, and you, seek nearly total control over peoples lives. I don't want you, or him, making my decisions for me. central planning is what you advocate, taking away the ability of the individual to make his own choices. We live in a world where the failures of central planning manifest themselves each and every day, yet you push for more of the same.

 

You are a fucking idiot, and so is noam chomsky

Escrava Isaura's picture

 

 

You’re an American neocon so your biases, and many here, if a may add, cannot grasp the word Socialism. And even less what it means.

 

In libertarian socialism there wouldn’t being an economic divergence. There wouldn’t be an structure power. Americans libertarians are a superficial view of libertarianism.

 

https://www.youtube.com/watch?v=vq9irdLcZmU

 

greenskeeper carl's picture

I tried reading that link, couldn't do it. The author lost me when he claimed that "the spooks" were reading his paper as he was writting it and then the spooks changed chomskys wikipedia entry because the author found another reference to the number '33' on chamskys page because there were 33 footnotes. The author claimed that once he found that conection and wrote it, "the spooks" went and removed one so there were only 32. This happened because "the spooks" were so concerned about what this guy was writing about chomsky that they hacked his computer and read his paper as he was typing it...

 

I love reading about a good conspiracy as much as the next guy, but come on....

greenskeeper carl's picture

Im a neocon becuase I think you and chomsky are fucking idiots? Nice false equivellency. I couldn't be further from a neocon. If you have ever read any of my comments you would know I condemn all this bloodshed.

 

"In libertarian socialism there wouldn’t being an economic divergence"

 

How the fuck is that going to occur without a government FORCING people to give up their property? Socialism is government force, at gun point, to achieve the desired outcome. Its hard to picture a more UNlibertarian idea than socialism. Libertarianism is adherence to the non-aggression principle. As usual, it is you who doesn't understand libertarianism. WHat you are essentially arguing for is "equality" enforced by govt at gunpoint. So even though central planning has gotten us to this point, you and chomsky want more of it. Still can't figure out why I waste time arguing with a troll and an idiot like you.

malek's picture

You really are dumb as a bag of rocks.

There is no middle ground in socialism. Once you agree the government or some other authority has the right to decide how much of your money you have to give to them to support the poor (and many other examples), there is no means of stopping them from taking more and more until you are poor as well.
"A government big enough to give you everything you want, is a government big enough to take away everything that you have." –attributed to Thomas Jefferson

And that always reminds me of the book title "A Farewell to Alms" (still on my to-read list).
It took even me more than a decade to grasp that is actually neither a statement, nor a promise, but a veiled threat: you will not decide anymore how much you give for alms, others will do it for you.

You EI however will likely never grasp it.

macroeconomist's picture

Whoops, moron anarcho-capitalists are attacking an anarcho-socialist. 

There is no middle ground in socialism because these morons say so, but you can have an anarchistic capitalism because idiots like Von Mises say so.

Simply priceless.

Escrava Isaura's picture

 

 

Chomsky is not a moron. Chomsky is also a mathematician that most people are unaware.

 

Anyway, you have a valid point there. Chomsky approach comes from him to be a better human being that I could possibly be. Chomsky emphasizes the good about humanity. I personally don’t think he believes that. But, he fights for that —for equality. So kudos to him.

 

I am a Classical Liberal but I don’t believe it can be implemented, either.

Classical Liberalism Oversimplified: Limited forms of dissent and incremental change possible. The liberal class posits itself as the conscience of the nation. It permits us, through its appeal to public virtues and the public good, to define ourselves as a good and noble people.

http://www.amazon.com/Death-Liberal-Class-Chris-Hedges/dp/1568586795

 

malek's picture

Seems you could really give a contribution to the ZH forum, if you wouldn't write the vast majority of your posts in troll-mode.