Wall Street has always been the place where legends are born. Desire, lies and money are intertwined, creating countless wonderful stories.

During the subprime mortgage crisis that shocked the world, there were just a few people who sensed loopholes in the entire financial system, took the lead in planning, and ultimately made a lot of money in the midst of the tragedy.

Michael Lewis, who used to work on Wall Street, used them as the protagonists in "The Big Short", recreating the ups and downs of various characters and major financial institutions in the subprime mortgage crisis. It makes people feel the weakness of human nature and also understand the consequences of the crisis.

These maverick shorts have a new perspective.

When talking about the root cause of the subprime mortgage crisis, the word "greed" cannot be separated.

In the United States, credit loans are very common, in which high-quality borrowers have good credit and can ensure repayment.

In addition, there are many low-income people whose credit does not meet the standards of prime borrowers, and the loans lent to them are called subprime loans.

During the economic boom, banks vigorously developed subprime loans in order to expand their income.

The major investment banks on Wall Street saw the benefits and invented innovative financial products such as Collateralized Debt Obligation (CDO), which packaged credit card receivables, car loans, mortgages and other debts into securitized products for sale.

, which enables lending institutions to obtain cash in a timely manner and improve liquidity; on the other hand, it transfers risks.

Institutions or individuals who buy CDOs receive interest on the loan at a lower price.

In order to generate income, investment banks and lending institutions began to expand the scope of loans, of which housing loans accounted for a large part.

In order to attract loans, they use low fixed interest rates in the early stage to attract home buyers, and never mention the risks brought by high floating interest rates later. Anyway, housing prices have been rising, and you can borrow more money after you have a house.

Few people can even buy a house directly with a loan without paying a down payment.

When the market was at its craziest, a Mexican who picked strawberries with an annual income of $14,000 took out a loan to buy a house worth $724,000 without any money; while a nanny from Jamaica benefited from housing prices

As a result, I bought 6 houses in Queens through serial borrowing.

In order to make these loans look risk-free, investment banks cooperated with rating agencies such as Moody's and Standard & Poor's to package the risky debt into AAA-rated bonds (the same rating as U.S. Treasury bonds) and sell them to investors who did not know the truth.

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When everyone was immersed in the good times when housing prices continued to rise, someone saw the bubble and tried to find a way to short CDOs. This person was still an outsider on Wall Street. He was a lonely investor: Michael Barry.

During the subprime mortgage crisis, a few short sellers became famous, especially the hedge fund manager John Paulson, who became famous in one battle. He made about 20 billion U.S. dollars for his investment in one fell swoop, and he also made nearly

$4 billion.

He got the tip from Deutsche Bank's Greg Lippmann, who was inspired by Michael Barry.

Michael Barry, a medical graduate, has an extremely withdrawn personality, and at the same time has amazing concentration and learning ability, which allows him to always devote himself to the investment career he loves, even if he is alone.

He did not have a financial background and had never worked on Wall Street, but the company he founded, Sons Capital, achieved far better performance than the market in its first few years.

It was this man who, far from Wall Street, saw the rapidly expanding bubble in the market and prepared to bet on the subprime mortgage bond market in early 2005.

He expects a wave of cutoffs in two years' time, when interest rates on loans rise from a fixed rate of 7 per cent to a variable rate of 11 per cent.

To this end, he carefully studied the history of U.S. bonds and finally persuaded investment banks to sell CDO credit default swaps (CDS, Credit default swap).

CDS can be seen as insurance sold to CDOs. Investors holding CDOs need to pay regular premiums. If the CDO loans can be repaid successfully, investors will lose the premiums invested. If the CDO loans cannot be repaid, these investors will lose

You will be able to get the entire loan reimbursed.

This is how Michael Barry found a way to short CDOs, with controllable losses and huge gains. He made crazy bets in 2005 and carefully selected high-risk bonds. By October, he already owned $1 billion in CDS.

Investment banks and insurance companies also want to make a lot of money using CDS. Investment banks like Goldman Sachs act as middlemen, transferring risks while earning profits.

This is a veritable zero-sum bet, and it's a big bet. As Michael Barry said: "I'm not betting on a bond, I'm betting on a system." So, who is the fool?

Steve Eisman, who worked as an analyst at Oppenheimer & Co. in his early years, was exposed to subprime loan bonds very early and has always been a discordant voice on Wall Street.

"The lies these guys are telling are boundless. What Wall Street sells is nothing." He once criticized those lenders.