Despite Wall Street's influence on both the US and the global economy, surprisingly few films deal with finance. Those that do, such as The Wolf of Wall Street, tend to focus on debauchery and fraud. So it's good to see a big studio like Paramount financing The Big Short, which tries to explain how the housing and mortgage-backed security (MBS) bubbles led to the 2008 crisis. The film, directed by Adam McKay of Anchorman fame, and based on the bestselling book by Michael Lewis, follows three groups of investors.
Socially awkward hedge fund manager Michael Burry (Christian Bale) is convinced the US housing market will collapse, and so "shorts" bundles of mortgages (MBS), aiming to profit as they lose value. This alerts trader Jared Vennett (Ryan Gosling) and Michael Baum(Steve Carrell), who pursue a similar strategy. Vennett in turn draws the attention of young players Jamie Shipley (Finn Whitrock) and Charlie Geller(John Magaro). Despite being mocked by the industry and investors, they stick with their convictions, making a lot of money.
The film is about more than just smart people getting rich. As the story unfolds, we learn why so many otherwise intelligent people were sucked into the bubble. It's partly greed: from subprime mortgage brokers encouraging fraudulent applications, to bankers dreaming up fictitious valuations for MBS. But the film makes the point that most of those involved genuinely believed the bubble would continue myopia, group think and denial werefar more important than outright criminality.
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That said, financiers don't get off lightly. Everyone connected to the mortgage industry or Wall Street comes across as sordid, including regulators desperate for banking jobs, fund managers accepting substandard bonds to stay on good terms with the banks, and cowardly financial journalists. Even as the "heroes" decry the moral murkiness that enabled subprime, they profit from it. As Baum's wife puts it, "saints don't live on Park Avenue".
McKay doesn't shy away from technical details, but avoids becoming too dry, deploying the contrast between the eccentric, but honest, investors and the "serious" bankers for comic effect.All of the actors are highly watchable, but Steve Carell stands out. While his fellow investors are in it for the money, his character comes acrossas someone who would willingly give it all up to see the culprits thrown in jail. His disgust when he realises the bail-outs will enable those responsible for the crisis to emerge unscathed is one of the film's most memorable scenes.
Brad Pitt, meanwhile, has a strong supporting role as a disillusioned trader who reminds Shipley and Geller that the collapse had a real impact on people's lives. This is one financial film you should definitely watch.
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