Mckay's film exposes the greed at the core of the system, but fails to tell the story of those most affected by the crisis
'The Big Short’ is a movie adaptation of a book by Michael Lewis, which explores the process through which this crisis evolved.
It’s an unlikely subject for a screwball comedy-cum-crime investigation, especially from director Adam McKay, best known for his trashy comedies ‘Step Brothers’ and ‘Anchorman’ films. Nevertheless, using all manner of cutaways, interspersed with news footage, and direct to camera monologues, the film attempts to explain both the technical banking vocabulary as well the complex financial deals that led to the crash.
Some of these devices are more successful the others, the low point being the frailty of ‘mortgage backed securities’ being explained by actress Margot Robbie, whilst drinking champagne in a bubble bath. For the most part though, it does manage to give insight into the murky world of finance whilst remaining both funny and, importantly, angry.
It’s a starry cast that includes Brad Pitt, Ryan Gosling, Steve Carell and Christian Bale all playing, to various degrees, Wall Street outsiders.
Bale plays Dr Michael Burry, a successful if unusual hedge fund manager with Asbergers Syndrome, a taste for heavy metal, bare feet and bad hair. Despite his poor social skills, he is brilliant at scanning the numbers. He was the first to recognise that the US housing market was massively inflated by loans that were worthless. Mortgages that had been given to people who could not repay them!
Recognising that this pyramid will surely collapse, he spots a once in a lifetime opportunity to score big time. He makes enormous bets with the banks that their mortgage loans will fail. The banks are only too happy to take him on: their arrogance, not to mention ignorance, knows no bounds.
Somebody else has noticed Burry’s activities, a slick unflappable operator Jared Vennett, (Ryan Gosling), sporting hair that frankly doesn’t match his head (what is it with Hollywood hair?). He works for a big Wall Street company where nobody listens to him, so he is looking for somebody else’s money to get him in the game. Welcome Mark Baum, a guy who sees himself as some sort of crusader, an ethical banker, someone who sees injustice all around him, and is thus permanently pissed off. Entertainingly played by Steve Carell, despite the hindrance of an awful wig.
Vennett explains to Baum that whilst once home mortgages were a 'boring investment with low returns’, at some point a bright spark gets the idea of bundling thousands of mortgages together, thus magnifying the returns whilst leaving the risks low. These are then sold on to pensions schemes and other investors. The money pours in.
Pretty soon though the limited pool of folks who can afford to buy their own homes dwindles. How do they keep the money tap running? Sell mortgages to people who can’t afford them. Mix these with regular mortgages creating ‘collateralised debt obligations’ (CDOs), and sell on. As the bogus mortgages become more prevalent the CDOs become ever more toxic.
Along with Ben Rickert (Brad Pitt), a disillusioned former banker turned organic veg evangelist and a couple of small time investors , we follow the fortunes (literally) of Baum, Burry and Vennett in their endeavor to outsmart the system.
It's more than a little ironic that in a movie that is critical of the selfishness of the money markets, we are asked to sympathise with characters that don’t want to expose the lie at the heart of the American economy, but instead make a killing from it.
When the anticipated crash doesn’t occur even after mortgage defaults multiply, Baum etc. are left scratching their heads until they uncover layer upon layer of criminality, compromise and incompetence. Where those that are meant to regulate the banks are found to be in bed, both figurative and physically, with the people they are meant to be regulating.
Eventually of course the housing market did crash. Lehman Brothers, the 4th largest investment bank in the US, went bankrupt, sending shock waves around the globe. As in Britain, the US state jumped in to rescue the banking and financial sectors from disaster. This is something that the reckless bankers had been relying on. If you're too big to fail, why worry? One solitary senior banker went to jail, the rest are still at large paying themselves huge bonuses.
Baum et al. go through a moment of soul searching about the millions they will make, whilst others suffer, but it's only a moment and they take the money.
Whilst the ‘The Big Short’ only glimpses at the misery caused to ordinary people, it is a timely reminder of the outrageous crime behind what is the biggest financial crisis since the 1930s. It also implicitly questions the lie that the present economic woes are due to an unaffordable welfare state, rather than an irrational system based on greed.