We all know the story of the 2007 collapse of the housing market and how it ends, so there probably aren’t any spoilers below. Nevertheless, read at your own risk.
If the bursting housing bubble of 2007 taught us one thing, it’s that the world of finance affects each and every one of us each and every day of our lives. We might not think about it every day–and if you’re like me, you might not know jack squat about it–but our ignorance and complacency doesn’t lessen its affects. In fact, it probably increases them. This is one of the big lessons in the fantastic new movie, The Big Short. The film follows four parallel stories of people who saw the bubble that had been created and speculated its burst with the practice known as “shorting“.
The movie begins with the character Jared Vennett (Ryan Gosling: The Notebook, Drive, Gangster Squad) quickly describing in 5 minutes the rise in home finance banking that began in the 1970s. The story then introduces hedge-fund manager, Dr. Michael Burry, M.D. (Christian Bale: American Psycho, Equilibrium, 3:10 to Yuma), an eccentric numbers man who takes the time to examine each account that gets bundled into a Collateralized Debt Obligation (CDO) and sees that if even a small percentage of the individual loans default then the bond becomes virtually worthless. Burry sees a lot of potential for default so he visits several banks, setting up a credit default swap–a sort of insurance policy against the housing market. Believing the market to be stable, the banks are more than happy to take Burry’s money.
Word of Burry’s bank visits gets back to Vennett, and he starts to also invest in credit default swaps. A wrong-numbered phone call gets a hot-tempered and hyperactive hedge-fund manager, Mark Baum (Steve Carell: The Office, 40-Year-Old Virgin, Foxcatcher), into the picture. Baum has a personal beef against the banks and wants to get even by taking their money. He and his team go out and do field research and find the same as Burry–that high-risk home loans are being bundled into CDOs, creating a bubble that is perpetuated by the fraudulent practices credit-ratings companies rating the CDOs. Burry teams up with Vennett to enter the credit default swap game.
The relative late-comers to the story are Charlie Geller (John Magaro: Orange is the New Black) and Jamie Shipley (Finn Wittrock: Masters of Sex, American Horror Story), a pair of up-and-coming investors who get lucky and find information of Vennett’s actions and want in. Lacking the experience, credentials, and money to get into the game, the two contact a retired banker, Ben Rickert (Brad Pitt: Se7en, Fight Club, Troy), who provides them with all three and gets them in a position to make credit default swap deals.
The film moves very fast and jumps around quite a bit in setting up these stories, which is not a direction strategy I tend to prefer. Making things even less linear are the regular interruptions by Gosling and other non-character personalities, who look and speak directly to the viewer in order to explain the many intricate concepts of finance. I found this style by director, Adam McKay, to be annoying at first. But upon reflection, I realized he was using this device as a teaching aid for the audience, while maintaining the integrity of his character development These are people who are experienced in the field, and it wouldn’t wash to have them explain to each other the meaning of ISDA and the like so the viewer could be brought up to speed. Once I realized that, I thought the strategy was brilliant.
The film’s pace slows down quite a bit in the second half, but the story does not. As the characters–and viewers–learn just how big the bubble is, their investment strategies get more and more aggressive, which worries their investors and employers. Threats of lawsuits and firings abound and each of the characters is forced to convince others–and sometimes themselves–to hang on just a bit longer and wait for the burst they believe is inevitable. In waiting for the burst they all know should already be happening, they all learn just how corrupt the entire system really is.
I really enjoyed this film. I find the world of finance to be fascinating and one of which I am almost completely ignorant. Even if some wish to argue about the historic timeline of events or politics involved (which does not enter into the story), the movie offers quite a bit of great information to viewers interested in the topic. The writing was very well done, however there was a lot of vulgarity that I thought was needless to the story and to character development. I also thought the acting was superb and the actors really drew me in to the characters. And, while it is often billed as a comedy, and there are some humorous facets to the writing, I don’t think it’s a comedy, at all. This is a serious story about a serious topic. The movie might not be as appealing to those who know more about the field of finance, but to this ignorant viewer, it was a fascinating glimpse into a topic that has the power to shape our lives every day.
The Big Short is still playing in theaters, but this is not the type of film that demands viewing on the big screen. With that said, however you choose to watch this film, if you are at all interested in investing, finance, or the collapse of markets, you need to watch this film. This is the best movie I have seen in a while.