"The Big Short" and the A-share insider information

table of Contents

1. "The Big Short" Introduction
2. Investment banking sources inside information is not worthwhile
3. Some "big short" in compliance explanation
4. I believe some of the painful lessons of the A-share inside information.
5. risk warning.

 

"The Big Short" Introduction

"The Big Short" is an investment banking and private banking practitioners must-see documentary.

Content is very realistic, very professional, professional to:

1. Colleagues highly recommended.
2. Non-professionals did not understand there talking about professional terms.
3. I have spoken inside the familiar terminology and professional bodies, and colleagues have done before looking again introduced, but I still did not understand the first pass, and then communicate with others and saw many critics considered answers to a lot of hearts doubt.
4. So an old movie, even a VIP paid membership in the video Tencent still have to pay again to buy the film alone, we can see that is directed at investment banking and private banking practitioners will certainly pay these people to come.
5. There is no conspiracy theory! No insider information! The people inside do not need to make money through insider information! The people inside are legal compliance make money! This is the biggest difference with other non-realistic movie!

Although the movie has condemned the subprime crisis from a moral cause people worldwide suffered heavy losses, but still acknowledged that all financial professionals have not been tried and jailed. In Western countries, the rule of law, even unethical, even if brought heavy losses to everyone, but as long as no violations of law, they will not go to jail to jail.

Investment banking sources inside information is not worthwhile

There are four movies call people to benefit from the CDS in:

1. The creation of financial products, fund manager - Michael J. Burry
   • So they get the fund company earnings of $ 489 million, he finally got my income is not necessarily more than bankers Jared Vennett 47 million bonus.
   • And he was rejected by the financial counterparts, and FBI 4 survey. That game over his career, and now can only make fresh investment goods traded.
2. Sales of financial products, investment bankers (Deutsche Bank) - Jared Vennett

   • Direct access to Deutsche Bank's 47 million bonus

   • Because so CDS positions held by Deutsche Bank Deutsche Bank so let's loss is not so heavy, so good relations and the higher its bright future career.

3. Buy financial products, fund manager - Mark Baum
   • So they get the fund company $ 1 billion in revenue, he eventually got my income is not necessarily more than bankers Jared Vennett 47 million bonus.
   • Morgan Stanley and superior relationships deteriorate, and brought heavy losses to the higher authorities. Future career is not optimistic.
4. Buy financial products, fund managers - Charlie Geller and Jamie Shipley
   • All CDS turnover is only sold $ 80 million of their personal profits is certainly lower than investment bankers Jared Vennett 47 million bonus.

Such a contrast, Jared Vennett obvious benefits of the largest investment bank, the lowest risk, because he can only charge fees, CDS eventually either make profit or loss, fees are not refunded, on safely already at hand. The CDS Once the loss, and the other three gang on losses.

For Jared Vennett and investment bankers have such a strong awareness of risk management, the 47 million bonus after his professional operations into Swiss banks and other private bank is enough to make future generations are the same as the Nobel worry-free. This 47 million bonus but his career a bonus, his career is still a long way to go, there are many opportunities, there are many fees can earn.

The film also expressed a point of view, the financial sector simply rely on the mortgage market that earn 2% transaction fee on disk full bowl full.

So for an investment bank, the fees earned can ensure future generations have a worry-free, disclose insider information such income is not high risk and very high operating is not worth very foolish.

Some "big short" in compliance explanation

Charlie Geller and Jamie Shipley for only $ 30 million in funding, far less than the threshold ISDA agreements (1.4 billion 70 million US dollars). This time to find Ben Ricker resolved. But the movie does not directly reflect how Ben Ricker is to solve this problem. Thus giving a false impression, Ben Ricker purely rely on contacts to solve the problem. It's non-compliance ah.

However, there may actually be something like this:

1. Not at all the movie Ben Ricker evaluation of this behavior, this behavior is actually visible compliance.
2. Deutsche Bank such as regular large bank of 140,000 yuan have compliance audits, can not be without compliance audit of the $ 1.4 billion such a big amount, and Ben Ricker has retreated into the shadows, and Renzouchaliang, no one will be back so much of the risk of noncompliance go and have retreated into the shadows of a person to do illegal things.
3. So the truth is: Ben Ricker himself took out 1.4 billion 70 million US dollars Endorse the two young men, then Deutsche Bank Ben Ricker and two young men seen as an Entity, so that compliance friends! After crossing this threshold, Ben Ricker back his 1.4 billion dollars, the two young men continue to trade with their own thirty million dollars, which is not illegal.
4. Ben Ricker has retreated into the shadows as a former investment bank traders, that is, Jared Vennett future, he is likely to have 1.4 billion 70 million dollars. Another evidence is that he does not require reservations in advance, you can immediately call the Swiss bank to sell CDS in the bar, and then direct UBS traded on the eight million transactions bargain! Then the other side of the phone may be the only explanation he can get past the Swiss bank account manager. This is a reasonable explanation of why Ben directly at a bar called the transaction which 80 million has been next to people's ridicule, because eighty million for Ben is really the equivalent of eight thousand, in the bar for him to call the transaction is normal ah.
5. This is not a major plot in the movie, the movie two hours long, and therefore omits some investment banks and private bankers default should understand the plot, omitted this is normal.

Similar experience actually find many, I encountered a lot of work and life, some people seem to do some illegal things, the result of a bottom, really is no violation.

In fact, the violation is a high-risk operation, you need to have a very very high returns in order to wash away the risk, a professional financiers any point, as long as there is awareness of risk management will not do such a high-risk operation.

I believe some of the painful lessons of the A-share inside information

Finally we talked about the familiar A-share market up.

A shares have ten or twenty years ago this profitable means of inside information.

However, modern social progress so quickly, things have to do the compliance of the continuous upgrading to keep up with the trend of the times in order to get things done, and to do illegal things because even pay extra energy to think about how to escape the continuous progress of the audit, greater need for constant upgrading to keep up with the trend of the times in order to obtain high-yield corresponding. So insider information that such a simple means of profit actually experienced more than two decades but also to take effect, you feel very strange?

Although the A-share market is not mature abroad, but there are several decades old, to profit by the illegal of course exist, but so low that inside information or by the means unlikely. Now believe that inside information of people not only can not cut chives others, but the others did was cut chives. Now let us speak with the facts:

1. Play insider trading, lose more than 4000 Jiangsu Securities Regulatory Bureau also fined sixty thousand administrative penalty typical case of exposure, warning investors not to enter the market "minefield" http://jsnews2.jschina.com.cn/system/2014/12 /19/022994387.shtml
2. Forfeited 500 million cattle scattered Zhu Kangjun: Last year, huge loss of 100 million insider trading play http://finance.youth.cn/finance_jsxw/201705/t20170504_9664393.htm
3. "Cattle scattered" stock market manipulation huge loss of 3.3 billion 434 million fined 3 million http://www.chinanews.com/cj/2019/12-15/9034046.shtml
4. Price manipulation also fined 178 million deficit hype over Tellus A Wu Warren has planted http://finance.sina.com.cn/stock/marketresearch/2017-12-05/doc-ifypnqvn0300541.shtml
5. After the market value management into insider trading, manipulation of pre-eminent group of new energy treasure huge loss was fined http://www.bjnews.com.cn/finance/2019/09/27/630402.html
6. The worst insider trading! Turnover of 3 million loss of 1.3 million also fined 300,000 http://www.bjnews.com.cn/finance/2019/10/16/637051.html
7. Chairman niece on insider stock: 350,000 loss, eating 400,000 tickets http://m.toutiao.hebtv.com/caijing/bftt866660.html
8. My husband overheard phone to buy shares, she fell to 2.27 million loss also fined 500,000 https://news.hexun.com/2019-06-01/197391560.html
9. More than 100 million insider trading huge loss of 20%, the lowest annual sale also fined | insider trading penalties http://m.toutiao.hebtv.com/caijing/bftt866662.html

risk warning

This article is purely a walk after dinner I was thinking income quickly write essays, did not like the paper through the same rigorous thinking, reasoning and audit, and on behalf of me at this moment (2020 February 23) one-sided idea, does not constitute any Suggest. Please refer to this article the reader to take risks to make decisions on their own.