No one could foresee the housing crash in the mid-2000’s. It had never happened before and if someone had said it was going to happen they would think you were mad. The Big Short is a film that shows the story of a handful of people who predict the burst and gamble big against the banks. In a wonderfully insightful story that mainly focusses on the US, shows how greedy and fraudulent the US finance market was. The Big Short explains in enough detail to make you understand what happened, what when wrong and who came out on top amidst the crisis. A thoroughly engaging film that entertains and educates at the same time.
Michael Burry (Christian Bale) an MD of a hedge fund who has a keen eye on details notices that more and more people are defaulting on their mortgage. As he trawls through endless sheets of CDO information he becomes acutely aware that what the banks were doing wasn’t honest and somewhere in the near future the housing bubble would burst. Instead of selling AAA prime mortgages into bonds that brokers could sell on the trade floor, Michael noticed that many of these bonds included sub-prime mortgages bundled in with AAA ones. This should have meant a regrade of the bonds but the banks didn’t do that, they still listed them as AAA packages. In essence devaluing the bonds but to the unsuspecting person it all looked good. Michael decides to buy ‘Shorts’ or in other words, bet against the banks. He invested nearly all his company’s money and the banks accepted as they thought he was crazy. Little did they know he was right and he would come out with a profit of $1.4 billion when everyone else was bankrupt.
His investment catches the eye of a broker called Jared Vennett (Ryan Gosling) who believes in what Michael is saying and decides to follow suit. During an errant phone call from Vennett to a company called FrontPoint Partners lead by Mark Baum (Steve Carrell), he lets slip about the buying of ‘shorts’ against the mortgage market. Mark is interested to know more and being cautious, decides to investigate the market with his team. Satisfied it looks good he buys $50 Million on ‘shorts’.
While all this is going on Charlie Geller and Jamie Shipley are waiting to get onto the trade floor with one of New York’s biggest firms. Unfortunately for them despite having $30 Million from their own start-up company they are short of $170 million that allows them for a floor license. They are requested to leave but not before one of them find a presentation on the table about buying ‘shorts’. Interested and keen to learn more they take it away. They look to an old friend who used to be a broker called Ben Rickert (Brad Pitt) to help them make sense of it all and see if there really is money to be made. Charlie and Jamie quickly realise it is and invest most of their money into buying ‘shorts’.
As the film progresses there are many abbreviations banded about and it can be a little confusing to understand if you are not from the trading world. So it’s a nice surprise that the director enlists the help of celebrities who are not part of the story to simplify what a Prime and Subprime mortgage is. As well as a CDO and synthetic bonds amongst a few others. It doesn’t quite go into enough detail on explaining what a ‘Short’ is so a few clicks into google afterwards to really understand how it all works was required. It’s certainly interesting and you can see what a high stakes gamble these people were playing at the time when the housing market never seemed so good.
Steve Carrell plays his role brilliantly well. His character appears to be worried and annoyed that people can manipulate the system so well and con people out of everything they have. You really feel the struggle he has morally with what he is doing when everyone around him is losing their jobs and homes. People literally have nothing left. Christian Bale also acts his character with great poise and you really understand his social limitations when dealing with the investors of his hedge fund.
The Big Short nicely written and executed very well. It doesn’t race along and is a typical drama/Documentary film based on real events. Although a little confusing at times it tries to explain in layman’s terms the important bits so you can fully understand what is happening. On the whole it does this well but more could have been done to fully explain what a ‘Short’ is. Overall it is an enjoyable film which enlightens the viewer of what occurred in the finance market not just in the US but around the world.
If you want to know more on what a ‘Short’ is click the following link:
Reviewed by Jon Elliott