A Crisis of Their Own Devising

Those of us that were old enough to actually experience the 2008 housing and financial crash probably have memories about that whole time period. The suddenness of the fall (which only seemed sudden because most of us don’t pay that much attention to the stock markets), the reality of what happened, the way it all came crashing down, and then the aftermath that… well, okay, so far less changed in the aftermath than I think any of us would really like to admit. Still, it was a scary time, with many people having to watch their houses values tumble, their retirement funds get wiped out, and a huge amount of money just vanish like vapor (because, well, in reality that’s mostly what money is).

What exactly happens is likely hard for most people to understand. The financial markets are made to seem obtuse and weird to anyone not inside it. If people can understand what you’re doing with all that money then it’s harder to regulate you. In the court of public opinions (which, of course, extends to jury trials as well) the more obtuse and obscure and weird something sounds, the harder it is to get the normal people to understand it. If you make so obtuse no one but the select few get it, then you’ve won because then no one will ever figure it out.

That is the core issue with what happened in the 2008 crash: big banks and the people working for them figured out how to turn mortgages into something akin to bonds and stocks, things that could be wagered on, divied up, combined, arranged, wagered on again, and so on until it was all a teetering house of cards that was clearly going to crumble. Except, no one thought anything could crumble before “mortgages are strong. They’ve never crashed before.” Just because something hasn’t happened doesn’t mean it can’t, and the way the banks set it up, the crash was inevitable.

The trick of The Big Short is that it takes all of this, the heady concepts and weird acronyms and everything that the financial guys working on Wall Street do to make their jobs sound obtuse and esoteric, and it boils it all down into a story that is easy to understand for all the normal people. This was a massive incident that crashed economies and required massive bail-outs by governments to set everything right (or, at least, right enough for everything to slowly get moving again). Trillions of dollars were lost, and no one in the general public could really understand how. The Big Short shows how, with a comedic package that really sells the material.

The film follows three different sets of characters. The first is Michael Burry (Christian Bale), a money manager running his own hedge fund for his investors. He’s the first to notice inconsistencies in the mortgage market, having read through everything in all the files of the CDO (grouped mortgages) market. He realizes that, despite their high (AAA) rating, the mortgages within these CDOs are (to use the film’s term) “dogshit” and are likely to crash. Maybe not in a day, or a week, but within a year or two. So he decides to go off and buy up shorts on the CDOs.

This is one of the many times where the film has to take a break to explain what CDO’s are and also what it means to short them: “the best against.” This is thanks to a cut-in scene with Margot Robbie in a bubble bath. It’s hilarious.

Michael Burry isn’t the only one to see this, though. We also follow along with FrontPoint partners, led by Mark Baum (Steve Carell). When a salesman from Deutsche Bank, Jared Vennett (Ryan Gosling), comes to tell them how the CDO markets are “dogshit”, Baum and his crew look into it, doing their due diligence to see just how the mortgage market really is performing… and then they invest heavily in shorts on the CDO market. And there’s Brownfield Fund, run by just two guys, Charlie Geller (John Magaro) and Jamie Shipley (Finn Wittrock), When they catch wind of what’s going on in the CDO market, they context an old investor contact, Ben Rickert (Brad Pitt) and look into shorting the market as well.

And, as we well know, their bets pay off, making all of them a whole lot of money in the process. No one said any of these guys were saints, mind you, just that they saw what was happening and knew to bet against. There was no stopping this train from coming.

What really works so well about The Big Short is just how compelling it is. The film knows that what it’s talking about – stock markets and CDOs and derivatives and all that – is boring and tedious to the average person. All of it would go over their heads if they tried to talk to a broker about it. By making the story digestible, and focusing it on characters we can link and enjoy, the film is able to craft a compelling narrative from a story that would, otherwise, be completely beyond the bounds of our understanding.

It helps that Baum is basically the heart and soul of the film. While the movie doesn’t ever absolve him of the fact that he bet against the market and won, meaning that he made a ton of money as everyone else watched their lives crumble, it does show just how conflicted he is about it. He and his guys – Hamish Linklater as Porter Collins, Rafe Spall as Danny Moses, Jeremy Strong as Vinny Daniel – do far more than just basic due diligence; they look into everything, from the families that will be crushed when the market crashes, to the people handing out bad mortgages without a care in the world, to all the vile scum at the top that make their money no matter what happens to everyone else. Baum feels so conflicted about everything, and Carrell’s soulful performance lets you feel just how this is tearing the character apart. It’s masterful, really. It’s a performance that really should have netted him some big awards.

As for the other two groups, you do feel for Burry more than the guys at Brownfields. Burry saw all of this coming and he tried to bet against it early enough to maybe send a warning. He wanted people to realize what was going on, and if in trying to buy shorts the banks said, “hey, wait a minute, there’s something off about the CDOs,” you get the vibe that Burry would have been more than happy with the result. He wouldn’t have made money, sure, but the banks wouldn’t have fallen and lives wouldn’t have been destroyed. He still comes out ahead, of course, since he was proven right, but still.

The Brownfield guys are the ones in it just for the money. You don’t hate them for it as they’re a small shop and they discovered something very few others saw. Still, the movie does have to give them a little bit of schadenfreude when they’re celebrating their big wins in the middle of the third act. Yes, they got to short the banks and they stand to make a ton of money but, as Pitt’s Rickert reminds them, they’re celebrating the fact that the entire economy is gonna crash and a ton of people are going to lose their homes, their jobs, and maybe their lives. It’s a sobering fact that really shouldn’t be celebrated.

And I think that, above all, is why this film works so well: it has its heart in the right place. It uses comedy to sell the concepts and to teach people how the markets work so they can follow along the story, and that’s brilliant. It never loses sight, though, of the fact that this was a moment in history that destroyed lives. The drama builds, and when it hits it succeeds so hard because, especially when this film came out in 2015, the crash was still fresh for many people. The lightheartedness gives way to earnest drama and you’re able to feel it because you understand it.

The Big Short is a brilliantly crafted film. It takes something that would be hard to understand and it crafts a compelling, doomsday scenario around it that anyone can understand and enjoy. That fact that (with only mild adjustments for the sake of Hollywood filmmaking) this is an event that really happened only makes the drama that much more real for everyone in the film and those watching as well.