Michael Burry Quotes

If nobody can sell mortgage-backed securities based on trillions of dollars of unpayable instruments, there's a lot less risk in the overall system.

What the mortgage bubble was all about was big banks like Goldman Sachs taking big bundles of subprime mortgages that were lent out largely to low-income, highly risky borrowers, and applying this kind of magic-pixie-dust math to these bundles of securities and slapping AAA ratings on them.

If there had been a Financial Product Safety Commission in place 10 years ago, the current financial crisis would have been averted.

Securitization was one of the most brilliant financial innovations of the 20th century. It freed up a lot of capital. If it had been done responsibly, it would have been a wondrous thing because nothing is more stable, there’s nothing safer, than the American mortgage market.... It worked for years. But then people realized they could scam it.

I view the [credit] ratings agencies as one of the key culprits. They were the party that performed the alchemy that converted the securities from F-rated to A-rated. The banks could not have done what they did without the complicity of the ratings agencies.

Much of the blame for the Great Recession lies with abuses in the housing market - namely the creation of risky and unsustainable home loans that were packaged and sold as quality investments around the globe.

The CDO was, in effect, a credit laundering service for the residents of Lower Middle Class America. For Wall Street it was a machine that turned lead into gold.

Like many other banks and finance companies, Green Tree used a process called securitization to resell its home loans to outside investors. Green Tree grouped thousands of these small loans into a pool worth hundreds of millions of dollars.

The financial crisis of 2008 was not caused by investment banks betting against the housing market in 2007. It was caused by the fact that too few investors - including all of the big investment banks - bet too heavily on the housing market in the years before 2007.

If we are really serious about preventing another crisis like the 2008 meltdown, we should simply ban complex financial instruments unless they can be unambiguously shown to benefit society in the long run.

The subprime disaster was a result of financial bombs - derivatives - exploding in financial institutions such as AIG and Lehman Brothers, as well as banks and financial institutions throughout the world.

It's not a stretch to say the whole financial industry revolves around the compass point of the absolutely safe AAA rating. But the financial crisis happened because AAA ratings stopped being something that had to be earned and turned into something that could be paid for.

The people who generated great personal wealth in the process of creating this mess [the Great Recession]—bankers and financiers who invented products like mortgage-backed securities and credit default swaps—are now actively eschewing any responsibility for that problem by blaming the state for their mistakes.

You can't explain collateralized debt obligation in a novel - it's too draggy.

The crash of 2008 was driven in no small part by unfair practices in the mortgage industry which led to many consumers being trapped in loans they didn't understand and couldn't afford.

Minnesotans lost their jobs because the credit rating agencies didn't do the only job they're supposed to have, the only job they had, which is to give accurate, objective ratings to financial products.

Derivatives are financial weapons of mass destruction.

Cause and effect, the riddle of all history, is a particular devil in financial history; and never more so than today, where entire classes of security are collapsing not on public exchanges and stock-tickers but because there are no markets to establish prices this side of nothing.

Over and over again, financial experts and wonkish talking heads endeavor to explain these mysterious, 'toxic' financial instruments to us lay folk. Over and over, they ignobly fail, because we all know that no one understands credit default obligations and derivatives, except perhaps Mr. Buffett and the computers who created them.

Ratings agencies are the glue that ostensibly holds the entire financial industry together.

Let us not forget, the financial crisis had its roots in the decision by Congress to embark on a course of social justice to get everyone that wanted a home into one, regardless of whether or not they could afford it.

Imperceptibly, the developed world's manufacturing base was gradually eroding and being replaced by securitized finance that destroyed itself and nearly its economies in 2008.

We need to hold Wall Street accountable for issuing the kinds of deceptive loans that nearly brought our economy to its knees in 2008.

Investigating some of the largest subprime lenders - Wells Fargo, Countrywide, Ameriquest, Household Finance - I've seen how their terrible, toxic loans were closed by any means necessary and eventually packaged, sold as securities, and bet upon until they exploded and decimated our economy.

We do not have a crisis at Freddie Mac, and particularly Fannie Mae, under the outstanding leadership of Frank Raines.