The Big Short

The Big Short is a film adaptation of the Michael Lewis book of the same name. But in a similar fashion as Dr. Strangelove being a version of the Peter George thriller novel Red Alert, this film is done as a dark comedy, directed by Adam McKay. It’s an oddly-toned film, not a ha-ha funny comedy, but more like a comedy based on the absolute absurdity of the collapsing ponzi scheme of the credit default swap market of the mid/late 00s.

The plot follows a few players: a borderline-autistic hedge fund manager (Michael Burry, played by Christian Bale) who’s got one eye and a Supercuts bowl ‘do, used to be a doctor, blasts thrash metal in his office, and walks around wearing no shoes and the same t-shirt and cargo shorts every day, but is able to zero in on the housing bubble before anybody else. When he calculates that the mortgage industry is going to collapse in about two years, he goes to Morgan Stanley and purchases a fairly new financial instrument which enables him to bet on the collapse of the housing market, which he could do without actually owning any of said market. It’s essentially like taking a fire insurance policy on somebody else’s house. And because the banks thought that metaphorical house was fireproof, they were more than glad to sell him a billion dollars of fire insurance and take his money.

Ryan Gosling plays a trader who hears of this scheme, and accidentally hooks up with a damaged, type-A personality hedge fund manager played by Steve Carell and his ragtag team of misfits. There’s also another team of garage band young investors partnered with a retired banker played by Brad Pitt (whose Plan B produced the film) and gets in on the action.

The movie covers some of the background of the predatory lending market and absurdity of the housing run-up, like mortgage companies handing out loans to people with no income and no jobs (a so-called NINJA loan), but is fairly light on this information. I think the film would have been much more preachy if they spent any time on it (and it already clocks in over two hours) but there’s certainly the case that a different film could cover this human angle much more.

Instead, this film blows through the Manhattan banking side, and at a quick pace. McKay does try to explain this slightly by breaking into celebrity cameos, for example having Anthony Bourdain explain repackaging bad mortgages into investment vehicles by explaining how old halibut is repackaged into fish stew for the Sunday brunch crowd. Even with this, it might be well beyond the ability of an average civilian to grok all the financial background here. I recently read Matt Taibbi’s Griftopia, which was a good high-level introduction to the financial crisis (albeit sensationalized, Taibbi-style. And cognitive bias trigger alert: he skewers Obamacare in the book, calling it a gross giveaway for the insurance industry, which, as much as I love affordable health care, is largely true.) Anyway, without that background, I would have been lost. But with it, the total absurdity of the scenario becomes hilarious.

The other thing I appreciated about the film was the near-past nostalgia aspect of it. The trading aspect starts in Manhattan in 2005, only a few blocks from where I worked at the time, and my company at that time had most of the major players involved as customers. As the timeline of the film advanced, I spent a lot of time in the back of my head calculating where I was or how the events correlated to my own timeline and when I left the city (about halfway through the film.) I also kept an eye on the backgrounds of the street scenes, looking for anachronisms. (License plate colors, guys! And a Ralph’s in Florida?)

Overall, an interesting film. Best picture-worthy? I don’t think so, but it was entertaining without being too preachy, and the absurdity of the black humor made it enjoyable for me.

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