(1) I thought that at least some people at banks like Goldman were betting against the MBS's EARLIER than the movie portrays. Not so?
(2) Was AIG (which was ignored in the movie) NOT one of the major issuers of the shorts?
(3) Adding one further question: near the end of the movie, the small-timers who'd understood the risks early on and had bought shorts were forced to sell them rather than collect on them. I assume that if they'd been able to wait until the instruments matured, there would have been an even bigger payout but felt pressure to sell them because -- why? On this I wasn't entirely clear. I gathered they were concerned that the institutions they'd bought them from might go bankrupt -- i.e., they were concerned about counterpart risk –– which makes sense; but then that risk should been reflected in a discount in the price they could sell the shorts for; i.e., if it was a big risk, why would someone else pay a lot for them? Should we infer that those who bought them paid a good price because they had greater access to government-internal info that the small-timers didn't and knew that the bailout was coming, perhaps even had a good idea about which institutions would get bailed out? Maybe I lost focus toward the end of the movie, but I'm a bit unclear on these points.
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