How we cite our quotes: (Chapter.Paragraph)
Quote #7
There weren't enough Americans with s***ty credit taking out loans to satisfy investors' appetite for the end product. Wall Street needed his bets in order to synthesize more of them. (6.17)
Our heroes end up playing right into Wall Street's hands because their bets against the market allow the banks to create what are essentially fake bonds. It's at this moment that Eisman fully realizes the extent of Wall Street's corruption: if there's a loophole that can be exploited for short-term profit, then that sucker is going to be exploited to high heaven.
Quote #8
"That's why the losses in the financial system are so much greater than just the subprime loans. [...] I was like, This is allowed?" (6.17)
In other words, Eisman is saying here that the creation of synthetic CDOs (which are fake mortgage bonds that contain no mortgages, but are instead bets against mortgages) is what caused the financial crisis. Want to know what's even worse? It was all legal.
Quote #9
"In Vegas it became clear to me that this huge industry was just trusting in the ratings," Eisman said. "Everyone believed in the ratings, so they didn't have to think about it." (6.46)
As much as we can blame Wall Street for taking advantage of consumers, the ratings agencies deserve an equal amount of blame. They could have stopped the subprime market at any time by taking a closer look at the mortgages in question and accurately rating them, but they were too blinded by potential profits to do the right thing.