taking a swipe at oversimplifying this:https://www.reddit.com/r/Superstonk/comments/o0scoy/the_bigger_short_how_2008_is_repeating_at_a_much/ …
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those who bought the CDS insurance now wanted payouts. AIG predictably died. (though the executives and the insurance salesmen got their bonuses despite losing their jobs)
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rememer how goldman bought insurance? well... the guy in charge of handling the financial crisis was a former ceo of goldman and and forced aig to payout goldman before dying (goldman & michael burry basically did the same buy CDS bc they saw CDOs as crap strategy)
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the idiot banks like AIG, Bear Stearns, Lehman Bros, Fannie Mae, and Freddie Mac were basically eaten by the not-so-idiot banks (w/ some inside help) so now there are few but larger banks
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the previous crisis was at its heart handing out loans to to people who wanted to buy HOUSES but wouldn't be able to afford them some suspect that the current crisis is due to handing out loans to BUSINESSES that won't be able to return them
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covid threatened to expose this early but it was delayed in order to "get ready" the delay ends 6/30pic.twitter.com/umfj9OuUMg
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banks, due to their leveraged positions, are currently having trouble maintaining the necessary liquid cash balances hence a spike in the flash loan market
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new types of insurance are being created to benefit from a market crash thread kinda shifts direction a bit & ends up talking about gamestock and how it's impossible for the open short positions to be covered
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they can't buy the stock b/c it's a mexican standoff. the buying would trigger a mad rush driving up the price as each tried to save themselves. this gives room for the True Believers to amass positions b/c of the math, the profit is theoretically infinite the longer u hold outpic.twitter.com/A9qyRbD871
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