The Big Short Chapter 8

Burry admitted that "he was lucky that his certain obsession happened to be in the financial markets." This special interest helped him to dive deep into the prospectuses of CDOs, something that most investors "would never think of doing."

When Michael's son Nicholas was having issues in school, a child psychologist diagnosed him with Aspberger's Syndrome. When Michael began to look into what this syndrome entails, he recognized that he himself displayed many of the symptoms.

Burry had an interesting technique in relaxation techniques---Metallica really cooled him off.

This percentage began to add up--- paying this premium for five years will result in paying out 40% in premiums!

Gotham Capital, whose CEO was Joel Greenblatt, threatened to sue Scion Capital for this move. This crushed Mike Burry, as Joel Greenblatt was an incredible influence on his life.

Michael Burry founded Scion Capital in the year 2000.

Many rumors floated around when Burry's investors became more restless throughout early 2007.

Gotham Capital is the correct answer because they were the founding banker that threatened to sue after Burry side-pocketed their investment.

Scion had realized 186% in returns on their investments over the six years Burry had managed the fund, compared to the 10.13% returns in the S&P 500 (this guy was goooooood.)

Side-pocketing was the tactic that Burry used to ensure that his investors were unable to withdraw their funds from his firm.

The default rises had not yet seemed to tear the market down like he had thought. (Oh boy was he in for a surprise.)

Even though his portfolio was only worth $555 million, due to the nature of CDSs he was able to put on a staggering $1.9 billion in bets against the subprime mortgage market.

This was a clause within the agreement that Burry's investors signed when agreeing to invest in Scion.

Burry thought that this was a ridiculous amount and was enraged at his salesperson.

The Center for Responsible Learning predicted that 1/5 or 20% of the subprime mortgages issued in 2005 & 2006 would default.

This was the name of the pool of subprime mortgage bonds that began to experience high default rates in 2007. Burry had bet against this pool of bonds and began to realize high returns when the bonds went bad.

Burry sent his CDSs to Goldman Sachs, Bank of America, and Morgan Stanley in order to gain a better understanding of the market. These banks were known for their expertise and involvement in the financial industry, making them reliable sources for market information. By analyzing the data and insights provided by these banks, Burry was able to make informed investment decisions.

When things began to take a turn for the worse, the big investment banks stopped returning Burry's calls, presumably to try to understand the crisis at hand. Goldman claimed systems failure, BoA "power outage."

Even though subprime loans began to default in large numbers throughout 2007, the big investment banks found reasons to skew the data in their favor so that Burry's portfolio was unprofitable.

The correct answer is Kim Jung Il. This comparison is made because of the emails that Burry sent out. Kim Jung Il was a political dictator known for his authoritarian rule in North Korea. The comparison suggests that the content or tone of the emails sent by Burry resembled the actions or behavior of Kim Jung Il.

The period referred to as the "Long Quiet" is from February through June. This suggests that during this time, there is a relatively calm and peaceful atmosphere, possibly characterized by less activity or events.

This was a superficial description of loans, so even though subprime mortgages were technically classified as mortgages lent to individuals with FICO scores below 680, these Alt-A mortgages were not backed by legitimate income research. This basically misclassified individuals with high credit scores, even though this rating was unwarranted.

This fund, "Global Alpha," was Burry's first sign that the immense losses on subprime mortgages were finally beginning to be felt in the market.