Movie Review: The Big Short

Jean-Paul’s Rating: 4/5 stars

Bottom Line: Makes collateralized debt obligations fun!  Makes you angry at banks!  Makes you angry at politicians!  But in a sort of feel good way.  It’s weird.

Ah, the good old days of the housing boom!  No money down.  Low teaser interest rates.  You could get the house you always wanted.  Heck, you could get many houses you always wanted.  “Don’t worry, you can afford it”, said every expert to every poor schmuck caught up in the scam.  If it ended there, those schmucks would have been out of a house and some banks and mortgage companies might have suffered.  But the deceptions went on.  All those bad mortgages got bundled together with good mortgages into an instrument called a mortgage backed security.  The ratings agencies gave these instruments their highest rating.  Low risk low reward.  Then those pretty safe instruments got diced up and collected into an instrument called a collateralized debt obligation (CDO), which would have been fine if anyone actually bothered to look what was in them and rate them appropriately.  The ratings agencies gave these instrument their highest ratings.  Then THOSE CDOs were again chopped up and mixed with other CDOs again and again and again and again until one mortgage was in many many different investment instruments and no one had even an iota of a clue as to what was in a specific instrument.  The ratings agencies gave all of these instruments their highest rating.  Then someone decided to look at what was in those instruments.  They found it was a house of cards ready to fall apart.  They were right.  At some point some banks recognized that the house of cards was about to come down and they artificially propped up the house of cards by deception and collusion until their asses were covered.  Then they let the house of cards fall.  Nobody goes to jail.

If you fell asleep reading the previous paragraph, “The Big Short” is just the movie for you!  It takes the above snooze fest and turns it into an entertaining, engaging, and enlightening movie.  How does it do it?  Charm.  Well, that and some of the best actors in Hollywood.  Ryan Gosling, Christian Bale, Steve Carell, and Brad Pitt all sparkle.  And, boy, if there were ever a setup for a Sesame Street “which of these things doesn’t belong” song, it’s the previous sentence, but of the four it’s actually Steve Carell that steals the show.

What’s weird is we basically have a movie about a bunch of people who decided to bet that the entire U.S. economy was going to go into the toilet and we end up rooting for them.  Or if not rooting for, at least empathizing with them.  What they saw was obvious and everyone just laughed at them and took their money thinking it was a fool’s bet.  Writer/Director Adam McKay deserves mad props for making that so.

If you’re old enough to watch this movie, you’re old enough to have lived through the biggest financial crisis since the Great Depression and this is the story of how it started.  You owe it to yourself to get edumacated and learn a little bit about who you should really be mad at.