A SUB PRIMER

Christian Johnson

Copyright 2008 Indelible Films

Lance Christian Johnson 4335 Van Nuys Boulevard #103
Sherman Oaks, CA 91403
818-355-0705
 FADE IN:
CUE MUSIC: "A SITUATION"

INT. ACE MORTGAGE - GLENDALE, ARIZONA - DAY

WILL SLICK sits at his desk with his back to us. From over
his shoulder, we see his client, JOHN BORDERS. Mounted on
the wall behind,
A LARGE SIGN
reads "ACE MORTGAGE. Where the American Dream Comes True!"
BORDERS
(mid sentence)
...I mean, everyone I know is
buying property. I even went to one
of those real estate wealth
seminars, but since I ain’t saved
up and I know for a fact I can’t
make the payments, I just kinda
gave up, you know? But what uh,
what do you think? Should I get
into some property now, or..?
SLICK
Well I sure think so. I mean, why
miss out on a good thing, right?
Plus, it’s easier than ever right
now.
(reaches for a printout)
See, home values always go up,
so real estate’s always gonna be a
great investment. Everyone knows
that. What they don’t know is these
days, we don’t even need stuff like
down payments anymore.
BORDERS
Oh no?
Slick reaches toward his client, offering a one-page
mortgage quote to him. Borders leans forward and takes the
paper.
Now for the close.
SLICK
(reclines)
No. See, what we do is get you a
hundred and five percent of your
(MORE)
(CONTINUED)
CONTINUED: 2.

SLICK (cont’d)
purchase price with a low interest
rate so you can ease into things
those first couple years. Follow
me? Down the line, your home value
goes up and BOOM! You got enough
equity to refinance before your
payment goes up.
Borders looks up from the quote and gives an approving nod.
SLICK
Hell, you can even pull cash out
and pay some bills or take a nice
vacation if you want! It’s up to
you!
Borders slides the quote back onto the edge of Slick’s desk
and gives him a trusting shrug.
BORDERS
Oh, jeezz! Alright! Sounds good.
Now I work for the studios, and I’m
uhhh-- kinda in between jobs right
now. I suppose that’s a deal
killer, right?
SLICK
Not at all. We set it up so you
don’t need to prove employment or
income. You pay a bit more for the
privilege, but, hey... what can you
do, right?
BORDERS
Right! Wow, that’s awesome that you
guys have that. You know I figured
if I just shopped around some I’d
eventually find somebody to help
me.
SLICK
(snorts)
Well, thanks but it’s really the
bank’s money. We just get the best
deal for you. After escrow closes,
we don’t care much what happens as
long as you get that house and we
get our commission. Did I just say
that?
They share a nervous laugh.

(CONTINUED)
CONTINUED: 3.

BORDERS
Well, so how do we get started?
CUT TO:

INT. FIRST LENDER’S BANK - OMAHA, NE - DAY

HAL SLOAN, branch manager, sits at his desk staring at a
smelly pile of newly funded home loans, none of which he
knows much about. On top of the stack,
A MANILA FILE FOLDER
reads, "BORDERS, JOHN"
A few feet away, bank patrons stare at Hal from the teller
line fanning and frowning at the stench emanating from his
desk.
SLOAN
(embarrassed)
Well I guess I better get rid of
all these crappy mortgages. They
really stink!
Sloan thumbs his Rolodex with one hand, picks up and dials
his phone with the other.
SLOAN
(under breath)
Thank God for the east coast. Those
investor cats just love this shit.
WIPE TO:

INT. RISK INVESTOR’S BANK - BOSTON, MA - DAY

A MAN answers a desk phone. All around him, file boxes full
of newly purchased sub-prime mortgages fill an entire floor
of this New England high-rise.
At the door, two investment bankers, JOEL SKATES and his
division president, PHIL ROVE stand in their bank’s loan
servicing center. Surveying their smelly loan inventory,
they grin and bear the overwhelming stench.
PILES OF FILE BOXES
are stacked floor to ceiling.
The SOUND OF HOUSE FLIES buzzes all around us.

(CONTINUED)
CONTINUED: 4.

SKATES
(choking, laughing)
Wow. This is really bad!
ROVE
(marveling)
Yeah, what a mess, eh? Well we
better get this shit out of here
before they clear the whole
building.
SKATES
Yeah but how do we do that?
ROVE
Skates, let me share an idea with
you.
(throws an arm over him)
Instead of holding all this risk
and living with this horrid smell,
imagine bundling up all these
shitty mortgages and selling them
off like securities!
SKATES
Securities? Like stocks and bonds?
I don’t get it. Who’s gonna invest
in shitty loans?
ROVE
(misty eyed)
Why everybody! Big
institutions. Investment and
mutual funds. Foreign governments.
Even tiny little pension fund
managers in Estonia!
SKATES
Estonia?
ROVE
Yep! See, the value of American
real estate always goes up. Whole
world knows that. What they don’t
know is how to get in on it without
flying over here and buying
property in person! That’s where we
come in. Once we put American real
estate up on the open market,
people are gonna jump at the chance
to get in on it! Investors love
American debt, because they know
we’re always good for a loan!

(CONTINUED)
CONTINUED: 5.

FADE TO WHITE:
A LARGE ANIMATED BOX
appears at a distance. As it is drawn and colored in, we
move TOWARDS IT. The box flaps raise up and bloom for us.
SKATES
doesn’t get it.
SKATES
I thought foreign investors just
loved our government debt.
ROVE
Same thing.
DIVING INTO THE ABYSS
The last traces of light fade and we are enveloped in total
darkness.
ROVE
Anyway, what we do is create a new
investment vehicle, a big empty box
if you will, that we can put all
our mortgage investments into.
SKATES
Okay.
AT THE BOTTOM OF THE ABYSS,
a deep, hall-sized echo trails Skates response. Apparently,
he’s been cast down with us.
ROVE
continues.
ROVE
Then we take the shitty mortgages
and pack in, say eight of them for
every one or two good mortgages.
DOWN IN THE ABYSS,
an area of light appears above us. As the aperture grows, we
realize we are being elevated out of the abyss.

(CONTINUED)
CONTINUED: 6.

ROVE (O.S.)
Right? We pack a few thousand of
those into each box and BOOM! A
whole new investment is born!
Nearing the top, we see tiny office people straddling the
edge of the box. They work in a feverish fire line, throwing
stacks of manila folders down at us that make the floor
rise.
In an instant, the box overflows with loan files, the tiny
workers seal it up and we are ejected back into the world of
light.
ROVE
greets us, looking a little possessed by his new vision.
ROVE
We ship loans out a thousand at a
time, the investor gets millions
back each month in loan payments
and in the process, WE my friend,
get this shit
(wiping hands)
off our books! Beautiful!
For SKATES,
suddenly, the smell ain’t so bad.
SKATES
But what ifff... the bad loans go
...bad? Wouldn’t that kill the
val--
ROVE
(interrupting)
Goooh bad? We’re talking red hot
American real estate here, Joel!
What’s to go bad?
SKATES
Well--
ROVE
(interrupting)
Look. Any individual loans that
don’t pan out are either paid off
with a refi or liquidated and paid
through foreclosure. Simple.
There’s always risk, but at the end
of the day, the money’s there.

(CONTINUED)
CONTINUED: 7.

SKATES
Hmmm. Okay so now, how do we market
this stuff. I mean, what in the
world do we call shitty, boxed up
loans?
ROVE
Ha! Yes! Get this.
(makes an air banner)
Mortgage. Backed. Securities. Hah?
Hahhh?!?
Skates nods politely.
ROVE
Yep! The Street’s gonna snap ’em
up!
SKATES
Great! What do we charge for it?
ROVE
(thinking)
Hmmm, yeah. Here’s what. Call up
our friends over at Broody’s and
have them take a look at it. Once
they slap a decent rating on this
crap, the market will set the
price. My guess is, by this time
next year, everyone here’ll be rock
stars.
SKATES
Think so, huh?
ROVE
Absolutely. But listen up, ’cause
there’s lots to do before the party
starts. Once Broody’s name is on
this shit, they’re on the ride
right along with us. So they’re
gonna want some insurance.
SKATES
They’re on what ride with us?
ROVE
Well, in case we do have issues
down the line, people are going to
want assurances. Back up. Just in
case.

(CONTINUED)
CONTINUED: 8.

SKATES
But I thought that’s what the real
estate was for.
ROVE
(discreet)
Yesss... but. If the wheels come
all the way off, which they won’t
but let’s say it did come to that,
the underlying collateral won’t
cover it. You can’t cash a house
like a check, right?
SKATES
Right. It’s not liquid.
ROVE
That’s right! So if we wanna market
this crap, we need some extra
protection - especially if the
housing market cools off.
(ponders it)
Come to think of it, that would
leave everybody hanging.
AN ANIMATED HOUSING DEVELOPMENT
Hundreds of gleaming single family homes, each bellowing
burning green dollar bills from their chimneys, melt to the
ground in unison and flow like lava down rolling, newly
asphalted suburban hills.
SOUNDS OF GURGLING, SCREAMING AND CURSING
punctuate this vision of horror.
SKATES
is a deer in the headlights.
SKATES
Ohhhh...
ROVE
(snaps out of it)
But let’s focus on solutions,
Skates. Stay with me.
SKATES
(snaps out of it)
Right.

(CONTINUED)
CONTINUED: 9.

ROVE
Now. Before we securitize the
loans, make sure our insurance
company underwrites only the good
ones. And make sure they do that
beee-fore we box them up with the
shitty ones.
SKATES
Why’s that?
ROVE
Because we’re only insuring the
good mortgages. The bad ones are
too expensive and would kill the
whole deal. Once all the loans are
all packed up together, there’ll be
enough insurance on the good loans
to cover any shitty loans that
actually do go bad. You with me?
SKATES
(hesitant)
Yeahpp, but therrre isn’t really
enough coverage, though... right?
ROVE
Well, no. Not if they all go bad at
once, but what’s the chance of that
happening? As long housing holds up
reasonably well, everyone from
homeowners and mortgage companies
to Wall Street brokers - hell, even
that little guy out there in
Estonia - will be more than happy
to collect their twenty-percent.
Phil’s eyes glaze over with delusions of grandeur before
Skates interrupts the vision.
SKATES
Phil?
ROVE
Yes.
SKATES
One last question.
ROVE
(slightly annoyed)
Shoot.

(CONTINUED)
CONTINUED: 10.

SKATES
Even after we swap all this shi--
Rove puts a finger up, cocking an eyebrow.
ROVE
(interrupts)
Securities, Joel. Mortgage-backed
securities.
SKATES
Sorry. Even after we swap cash for
our
(chokes on it)
mortgage backed securities, don’t
they stay on our books? I mean,
we’ll still own these loans right?
ROVE
Well yes and no. Yes we still own
the little company that owns the
loans. No, we don’t keep them on
our books.
SKATES
Great! Wait. What little company?
Rove draws a mobile phone from his inside jacket pocket.
ROVE
(dialing)
The little company our CFO is
juuusst about to fire up in the
Caymans.
SKATES
Oh? Who works there?
ROVE
(down his nose)
Nobody you know.
SKATES
Oh. So ’nobody’ owns the loans.
ROVE
Exactly. And if it works for
Sarbanes-Oxley, it sure works for
me.
(into phone)
Hi, Dave Sampson, please! This is
Phil Rove.
(to Skates)
(MORE)
(CONTINUED)
CONTINUED: 11.

ROVE (cont’d)
Actually, we do this stuff all the
time, just not with such shitty
paper.
SKATES
(dazed)
Right. It’s the way of the future.
Rove is still on hold.
ROVE
(checks watch)
That’s right, so let’s not stand in
the way of progress.
Skates just stands there, not quite in the present.
ROVE
(elbowing Skates)
Ready to take out the trash, good
buddy?
Skates snaps out of it.
SKATES
Yeeap.
Rove turns and backs out the door.
ROVE
Great. Because I’m going to lunch!
(into phone)
Hey, Dave? Hey! Phil Rove here!
We stay on
SKATES
as Rove’s conversation echoes down the hallway.
SMASH CUT TO:

INT. ATTORNEY GENERAL’S OFFICE - NEW YORK, NY - DAY

JANE PUBLIC rises to her feet at a hearing room table.
Seated before her is a shrewd-looking federal MAGISTRATE
perched up on a oak bench. A state seal is mounted on the
wall behind him.

(CONTINUED)
CONTINUED: 12.

JANE PUBLIC
Thank you. As an American consumer,
taxpayer, homeowner, investor and
concerned citizen, I respectfully
submit that our banking
institutions may be conducting
business in ways that threaten our
overall economy.
THE MAGISTRATE
cocks his head and stares down his nose at her suspiciously.
His eyes narrow a bit as he listens intently.
JANE PUBLIC
Given their well documented history
of greed and short-sightedness, I
would ask that, on behalf of all
Americans, our banks be strongly
encouraged to adhere to greater
standards of disclosure,
responsibility and transparency in
their accounting and financial
practices. Thank you again.
Jane sits and pulls her chair in. Other concerned patrons
shuffle a bit in the hearing room in preparation for the
important words to come.
MAGISTRATE
(politely)
Thank you, Ms. Public for bringing
this matter to our attention and
for filing this worthy petition on
behalf of us all. In the wake of
Black Tuesday, the disastrous
savings and loan crisis, the tech
wreck of 2000 and the Enron and
Worldcom debacles, I’m sure
everyone in America shares
your deep concerns about avoiding
another costly financial meltdown.
Now please stand.
Caught off guard, Jane Public rises once again, straightens
her suit coat and looks to the magistrate.
MAGISTRATE
As to compelling our financial
institutions to be more accountable
to those who would ultimately pay
the price for any reckless conduct
they may or may not be found liable
(MORE)
(CONTINUED)
CONTINUED: 13.

MAGISTRATE (cont’d)
for in the future, I believe I
speak for everyone in this nation’s
powerful business lobby and the
deeply entrenched, self-serving
government establishment this court
represents when I say...
(leans forward)
BLOW ME.
The hearing room fills with muted gasps.
MAGISTRATE
(gavels)
Case dismissed.
FADE TO BLACK:

INT. ARCHITECTS’ UNION - TALLINN, ESTONIA - SIX MONTHS LATER

A perturbed looking European businessman is seated at his
desk holding a phone to his ear with one hand and a
smoldering cigarette butt in the other. ANDRUS KOPPEL speaks
decent English with a Russo-Scandinavian accent.
KOPPEL
So what eez going on out there wis
you guys, eh? Two of dohze mortgage
funds of yours are naht peeying
ouuut! I reng you lest week ent
nobody called me beck! Vaht is
happening over dherre, Dehniel!?!
SPLIT SCREEN:

INT. LINEMAN BROTHERS BROKERAGE - WALL STREET - SAME TIME

On the other end of the line is DANIEL ZOOK of
Lineman Brothers securities brokerage.
ZOOK
Hey Andre, I been meaning to call
ya buddy, but this place has been
an absolute war zone.
As Daniel fidgets with a pen on his desktop, he jerks his
hand back instinctively and shoots a threatening look at the
figure standing over him.
A STACK OF FILE FOLDERS

(CONTINUED)
CONTINUED: 14.

slams down where his hand just was, each stamped in red with
the words, "DEFAULT BUYBACK".
KOPPEL
It’s Anndroos, and as I said, I hev
been calling you for over a veek.
Vaht’s going on?
ZOOK
(shitty smell)
Well, sorry about that, but uhh, it
looks like a bunch of the asshole
borrowers who took out mortgages
last year ain’t been making their
payments.
KOPPEL
(escalating)
Well, so what are we doing? Thees
are tripple A bonds we bought from
you, so vee shoot still be
receeving zohs peeyments, righhht?
ZOOK
Well yes and no. There’s a little
more to it than that.
KOPPEL
Well I’m sure of zat at zees point,
baht, yah anyvey every dollar vee
invested vis you is cohhverred wis
pllenty of zee best investment
grade insurance, so--
ZOOK
(over him)
Well yes bu--
KOPPEL
(over him)
Ha-haaa-I-meeen, don’t, don’t
tehhlll me zee American insurance
companies arre ouut uff money,
because I won’t believe it,
Dehniel!!
ZOOK
(wincing)
Wellllll okay, but that’s the
thing. See, as of today, we are
officially up to our ass cracks in
bum loans. Our biggest clients are
too, which means they’re not doing
(MORE)
(CONTINUED)
CONTINUED: 15.

ZOOK (cont’d)
any more deals with guys like us
until they sort through what they
have on hand and figure out what
it’s worth. It’s a big jo--
"CLUNCKK!! KAH-KEEERRRR!!!"
Zook recoils as his door flies open once again with more
foot traffic. The figure of a woman moves TOWARDS US
carrying a file box. We see only her waist.
"SLAM"
The woman drops another box on his desk top.
The file on top reads "BORDERS, JOHN".
WOMAN (O.S.)
(very New York)
Accounts payable says there’s like
six more palates of this shit
downstairs. Whatdya want me to do
with i-
ZOOK
(eyeballing the intruder)
DAMNIT! I AM ON A VERY IMPORTANT
PHONE CALL HERE!!
WOMAN (O.S.)
Sooorrreeeee!!
ZOOK
(to her)
THANK YOU!
(into phone)
Excuse me, Andre. You still with
me?
KOPPEL
Yessss.
ZOOK
Okay, where were we?
KOPPEL
Vee were talking insurance.
ZOOK
Right! Right, so, in the last ten
days a couple huge funds have gone
up in flames. Ahhight?

(CONTINUED)
CONTINUED: 16.

A TOWERING PILLAR OF BOXES,

seethes with thick black smoke. Soon, angry flames lick up
the house of cardboard that Dick Rove and Joel Skates built.
ZOOK (CONTINUES)
Since then, investors have
basically made a run on the bond
insurers, so now those guys are
swimming in loss claims. Insurance
companies cried broke last week and
and filed claims with their own
insurers! Well once Wall Street got
wind of that, pshhhhtt! Forget it!
They were dumping insurance stocks
like it was Armageddon. Then, get
this! With everybody getting hosed,
the credit analysts figure we’re
all up shit creek so last Friday
they went and cut everybody’s
credit rating! Insurance companies
too!
THE FLAMING BOX TOWER
cracks, buckles, breaks up and collapses in upon itself,
crashing down on the lab-coated floor traders below who
scream and dash from flaming file folder debris as if
running from the Hindenburg.
ZOOK (CONTINUES)
Well they shouldn’t have done that
’cause now, with no way to do
deals, the ’for sale’ signs are
stacking up from here to Honolulu
and home prices are sinkin’ like
the the friggin’ Titanic! And
obviously, since no bank will get
anywhere near that scenario, nobody
can buy, nobody can sell and now
BOOM!! NOBODY can raise the cash or
credit we need to save the assets
we tied all this shit to in the
first place! I mean, seriously, the
whole thing is seized up like the
goddamn Great Depression, Andre!
I’m telling you! It’s horrible out
here!
There is a long, deadly silence.
"SSSHHRRRRRRR!" the faint line noise of 3,000 miles of
undersea cable reaches a crescendo. Andrus’ silence is
deafening.

(CONTINUED)
CONTINUED: 17.

ZOOK (CONTINUES)
Horrible! Just horrible... you
there, buddy?
KOPPEL
Zees is a very big problem, Zook.
Vee spent a whole lot of money vis
Lineman. Half of our our
assets are tied up wiss you ent
our pension fund ees drying up!
Ehhh, I am getting calls from
everyone including my own
gahh-vernment so you can’t just
feed me zeez lines abou--
ZOOK
Whoa, whoa, Andre, man. Look, I’m
not feeding you anything. I’m just
as hurt as you are on this one,
trust me.
KOPPEL
(cracking up)
Baht, Dehniel. You gice told us zet
zis stuff was TRRRIIPPLE AYYEE
insurrred. I mean zis, ziss is zeh
BESST YOU HEVE, mehn!
ZOOK
It was--I mean it is the best we
have but Andrus, my man, listen!
Everyone’s hands are completely
tied right now and we can’t do a
thing about it. Not today anyway.
Okay? I’m sorry, my friend. I’m
really, really sorry. We fucked up.
KOPPEL
Heh? You fahcked up?
ZOOK
Yes. We fucked up.
KOPPEL
(nuclear)
VAHT ZEE HELLL ARE YEUUW TALKING
ABOUTT, ZOOOK???
Zook squints, moving the phone to a safe distance from his
eardrum.

(CONTINUED)
CONTINUED: 18.

KOPPEL
VHAT EEM I SEWPOSED TO DO WIT ZIIS
INFORMEHSHEN? HEEHHH?? VAHT
HEHPENED TO OUR EENVESTMENT??? VAHT
HEHPENED TO ALL ZAT REAL ESTATE?!
WHAT ABOUUUUT ZEH INSURANCE????
ZEEE GUARANTEEEESS!!! ENT WHERE IS
YOUR GAUVERNMENT ON ZEESS?!
This angrier, more murderous Andrus Koppel isn’t so deft
with the English.
ZOOK
Well they fucked up too.
KOPPEL
VEHL ZATS JUST GURREEEATT,
ESSHOLLLE! VAHT ABOUT ZEE UNION??
PEEPOLE HEF FEHMELIES OUT HERE!!
WHAT DO I TELL ZEM, HEH?? VAHT DO I
SAY?
ZOOK
Tell them you fucked up.
KOPPEL
TELL ZEM I FAHKED UP?? IIIEEE
FACHKED UP???? FAHHHKK YOUUUU
ZOOOK!!!!
ZOOK
(to himself)
Yep. Fuck me.
(no hard feelings)
Hey and uhh, fuck you too,
Andre-err-Andrus.
"KAAHLAAAK!!" Koppel is heard slamming the phone down over
the line.
ZOOK
Hello?
"CRRRAKKKKK!" Zook follows suit.
FADE TO BLACK:
CUE MUSIC: "TROUBLE AT PARTY TIME LAKE"

MONTAGE OF SHOTS detailing the fates of our main characters.

A freeze frame of
JOHN BORDERS

(CONTINUED)
CONTINUED: 19.

reads, "JOHN BORDERS defaulted on his mortgage and went back

to renting. When his apartment complex went into
foreclosure, John moved back in with mom."
A freeze frame of
WILL SLICK
reads, "WILL SLICK earned an online degree in Criminal
Justice and is now a rookie with the Maricopa County
Sheriff’s Office."
A freeze frame of
HAL SLOAN
reads, "HAL SLOAN’s branch closed. He transferred to the
marketing department and relocated to his
company’s headquarters in Houston."
A freeze frame of
JOEL SKATES
reads, "JOEL SKATES passed the New England state bar and
quickly entered politics. He is currently engaged in a
heated run-off election for City Controller."
A freeze frame of
PHIL ROVE
reads, "PHIL ROVE was grilled before a Senate sub-committee
for his bank’s role in the Housing Crisis. He is currently
the CFO of a U.S. automaker where his creative accounting
skills are helping engineer a rapid turnaround."
A freeze frame of,
DANIEL ZOOK
reads, "DANIEL ZOOK is now a stock analyst with a popular
cable news network. He hosts a wildly popular investor show
called ’BAD MONEY’"
A freeze frame of
ANDRUS KOPPEL
reads, "ANDRUS KOPPEL now spends time as a tour guide for a
sea ferry in Helsinki, Finland."
A freeze frame of

(CONTINUED)
CONTINUED: 20.

JANE PUBLIC
reads, "JANE PUBLIC was right. In August 2007, years of
reckless lending led to a surge of mortgage defaults,
paralyzing global credit markets and dragging the American
economy into recession. In 2008, Jane received her first
multi-billion dollar invoice from Uncle Sam, which she and
Mr. Public will spend the next three decades working off."
THE END.