The Big Short, a superb movie based on the Michael Lewis book, is not to be missed. It is an angry movie whose heart is in the right place. Adam McKay, director and writer, together with the producers, notably Brad Pitt, have used the “magic” of movie making to create a tutorial–repeat, a tutorial (as opposed to a typical Hollywood drama)–on the Great Recession that exploded last decade when the rampant mortgage-based securities, a phenomenon eventually deserving the descriptors greed, fraud and stupidity (to include gullibility), brought about a financial collapse in which millions of people, here and abroad, collectively lost trillions.
Everything in this movie, the large and small decisions of craft, is subordinated to Making The Audience Understand. The fourth wall is breached several times and the so-called “mysteries” of credit default swaps (CDSs), collateralized debt obligations (CDOs), quants, Lew Raineiri, mezzanine CDO bank front men, adjustable rate mortgages, tranches, synthetic CDOs, AAA, AA, BBB, BB, ratings agency fee-based appraisals, NINJA (no income, no job, no assets) mortgage approvals–its all there, just what you need to know, explained across the footlights in breaks in the action on stage, albeit in a style of Hollywood’s hard-earned cynicism about its audience: one professor of finance who peers out from stage at you in your theater seats is a lovely young woman in a bubble bath sipping champagne and telling you what you need to know about credit default swaps. (Don’t be dissuaded–it’s consistent with the undertone of dark humor.)
Aside from the tutorials, it is a movie whose dramatic method is Discovery. The principals are several canny analysts who saw Der Tag coming because they actually looked into the lousy mortgages increasingly comprising the mortgage-based securities. That is to say, they actually examined hundreds of mortgages and saw first-hand how overrated too many were, followed by field trips to talk to real estate agents and the local “originators” of all those forlorn adjustable-rate mortgages the Wall Street banks demanded with which to stuff CDOs, namely utterly amoral mortgage brokers in places like Florida, and as well to visit financial sector conventions to sample the increasingly delusional mass confidence in the mortgage-securities market. That self-delusion is displayed in The Big Short in the willingness of banks to create credit default swaps for the principals, the very means by which those shrewd cynics could short the mortgage market–bet on its collapse–and make millions on their skeptical wagers.
Clues abound in The Big Short. Their placement and literary cleverness dazzle. As just one example, note the Standard and Poor’s manager wearing dark glasses from an eye exam (caution, large symbols falling) who finally admits the enormous (but hardly comprehensive) culpability of the ratings agencies in the Great Recession, agencies which routinely gave AAA and AA ratings to risky CDO-packaged mortgages in order to keep favor with banks and reap large fees.
The best performances are by Christian Bale as the brilliant professorial analyst who saw the approaching debacle; and Brad Pitt as the reclusive former player on The Street who could not resist leaving retirement for the Big Short.
No movie can address the whole disaster of the Great Recession. The bought-and-sold politicians are scarcely mentioned. The saga of deregulation is not included. But the essence of the few books and other commentary about that catastrophe that count–notably McLean and Nocera’s All the Devils Are Here, Senator Byron Dorgan’s Reckless, Lewis’s books, Matt Taibbi’s columns in Rolling Stone, Robert Kaiser’s Act of Congress, Judge Jed Rakoff’s piece in The New York Review about why no Wall Street leaders were criminally prosecuted–is captured in The Big Short.
The Big Short is an overdue antidote to the silence of just about all of the media and the misdirection practiced by the Financial Sector cheerleaders, print and television, before, during and especially after the Recession.
An essential movie.