By Pam Martens and Russ Martens: October 20, 2020 ~ It’s time to revisit that scene from the movie, The Big Short, where Steve Carell, playing Mark Baum, is sitting in the audience at the American Securitization Forum and interrupts the speaker on stage who has just stated that he expects subprime losses “will be contained at 5 percent.” Baum loudly asks: “Would you say that it is a possibility or a probability that subprime losses stop at 5 percent?” The speaker says: “I would say that it is a very strong probability, indeed.” Baum sits down but then begins to waive his arm in the air, forming a zero with his fingers. Baum then shouts out: “Zero! Zero! There is a zero percent chance that your subprime losses will stop at 5 percent.” You can view the scene from the movie below. That scene came to mind when we … Continue reading Loan Loss Reserves at Mega Banks Are Far from Where They Need to Be