The Big Short: Review

4th February 2016

By Chris Worthington.

For director Adam MacKay The Big Short is more serious take on contemporary America than his previous films such as Anchorman and The Other Guys but it is also very funny. The Big Short is based on the unfolding of 2008 financial crisis as told through the eyes of three small investment companies. They have one thing in common – a growing realisation that the sub – prime mortgages handed out by the million before the crash were worthless in themselves but bundled together as bonds known as collateral debt obligations (CDOs) they could be AAA rated and generate huge profits for the merchant banks.

Investment company number one is Scion Capital where tee shirt and flip flop wearing analyst Michael Burry (Christian Bale) investigates late payments on sub- prime mortgages and decides to short the sub – prime bond market; that is to take a position in the market where he will make a profit if the value of the bonds falls. The smug merchant bankers who trouser a large monthly fee for his gamble can hardly believe their luck. Investment company number two is Frontpoint Partners headed up by caffeine fuelled Mark Baum (Steve Carrell) who has come to the same unlikely conclusion about the sub – prime bond market and is desperately trying to work out how to be fair and ethical towards his investors. Investment company number three is a garage start up with only a laptop to their name who are cut out of the action until they go for lunch with Ben Rickert (Brad Pitt) a former banker who has dropped out to grow urine fed organic vegetables. Fortunately his investment advice is better than the lunch.

Meanwhile the partying on Wall Street never stops aided and abetted by former banking staff turned financial regulators at the Securities and Exchange Commission turning a blind eye and the ratings agencies who make sure that their clients do not take their hefty fees to one of the competitor rating agencies by giving the junk sub – prime bonds a AAA rating. All in it together? Absolutely, up to their necks.

Scarcely able to believe that they are right and that all the big players have missed the signs of the impending disaster they decide to take a look a real world. First a visit to a building site in Florida where construction has stalled and the owners are collecting the rent without paying off the mortgage. Next stop is a lap dance club where one of the dancers owns five apartments and condominium. Party on dude! They round off the tour by meeting a ghastly pair of mortgage brokers who boast about fleecing their low wage, no wage, immigrant clients but simply do not give a toss. And the bankers? Yes they knew alright, but if you make enough money before the crash who cares?

The Big Short is a true story. Major banks failed, some, including Lehman Brothers went bankrupt, the rest got bailed out by the taxpayer. There is a lot of enjoyable dark comedy in the film and the likeable good guys who shorted the market come out on top in the end. And guess what, they also made a lot of money.

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