The Big Short (7/10)
by Tony Medley
Runtime 122 minutes.
Not for children.
I read Michael Lewis’s book, upon which this film is based, when it came out. I certainly didn’t
envision this kind of movie about it.
And what kind of a movie is this? Well, to start out with, directed by
Adam McKay, it is comedic. It is an extremely inventive telling of the
story of how four guys saw disaster coming as the result of the Clinton
Administration’s idea that everyone should be able to own a home,
regardless of whether or not they could afford it. And this was abetted
by the Bush Administration, which did nothing to stop the lunacy.
And what was the lunacy? This is explained in the movie, which neglects
to mention the primary responsibility of Clinton and Bush and Fannie Mae
and Freddie Mac and the people who run them.
Since this is Hollywood, the bad guys in this movie are the big banks
and brokerage firms who took shaky mortgage loans and packaged them into
things called Collateralized Debt Obligations (CDO) which were simply
horrible mortgages on homes bought by people who couldn’t possibly
satisfy the increased payments when the adjustable interest rate
increased from the teaser to the real cost of money on all the mortgages
that were packaged together into one unit that got AAA ratings from the
lazy, weak ratings agencies.
Dr. Michael Burry (Christian Bale in a good, quirky performance)
looks into it and it stares him in the face that all these things will
go belly up when the rate changes. Being a money market manager, he
sells as many short as he can (sells CDOs he doesn’t have with the idea
of buying them back, covering, when the price drops, as he thinks is
inevitable). McKay has this and other arcane things like Credit Debt
Swaps (CDS) explained to the audience by unexpected celebrities like
singer Selena Gomez. The explanations, while comedic, do a good job of
explaining what these securities really were.
Of course the “smart guys” (like those at Bear Stearns and other people
who like to think of themselves as money managers) laughed at Burry and
his cohorts and made markets for them. When the deluge finally came, as
Burry knew it would, it resulted in the financial debacle of 2008 and
Burry and his friends were about the only ones who came out of it with
profits, and their profits were huge.
The movie is entertaining, but the book is much better even though it’s
not a comedy.