Reviews in the Nick of Time: The Big Short
by wjw on January 14, 2016
First I have to say that, with all respect to The Force Awakens and JJ Abrams, this is the movie I wanted to see this holiday season. Due to various delays, including the movie not showing any closer than 65 miles away, I didn’t get to the theater till this week.
Check out the star power here. Brad Pitt, Christian Bale, Steve Carell, Karen Gillan, Marisa Tomei, Ryan Gosling, Casey Groves, Selena Gomez, Margot Robbie, and Anthony Bourdain as “himself.”
All of whom are compelling evidence for the theory that if you write a really great script, really good actors will want to be in your movie.
In this case, the script is by Charles Randolph and director Adam McKay, based on the excellent book by Michael Lewis.
The Big Short is about the guys who made money— billions, really— on the 2008 financial collapse, because they could see it coming and everyone else couldn’t. They aren’t heroes exactly, because after all they’re profiting on the misery and suffering of hundreds of millions of people, but compared to everyone else on Wall Street, these guys are fucking Captain America.
Christian Bale plays a character located somewhere on the autism spectrum who digs deep into data, Ryan Gosling is the Deutsche Bank trader who bets against his own bank, Brad Pitt is the mentor to a couple noobs who discover to their delight and horror that the collective IQ of everyone in the housing market is maybe 86, and Steve Carell plays the Angriest Man in New York, a title for which (believe me) there is some serious competition.
In fact watching Carell repeatedly expanding like an outrage-filled bullfrog is one of the highlights of the film.
The film deals with some fairly complex financial issues, but these are cleverly explained to the audience by celebrities brought into the film just for the occasion. Anthony Bourdain explains how to repackage BBB bonds as AAA through the metaphor of a fish stew, Selena Gomez explains shadow banking at the blackjack table, and Margot Robbie lectures on collateralized debt obligation bonds while drinking champagne naked in her bubble bath. (You do not want to look away.)
The film never stops being funny, and never stops being deeply serious. Ultimately, though, The Big Short so relentlessly hammered me with the stupidity, greed, ignorance, and corruption of Wall Street and its so-called regulators that I ended up walking away depressed. I mean, those guys are back in charge, right? And how do I bet against them?
Michael Burry, the real-life character played by Christian Bale, is now concentrating his investments in water trading.
Oh, dear.
I’ve said this before, but it bears repeating.
I love all of Michael Lewis’s books, including the Big Short. I liked the movie too. But there is a fundamental conflict between Lewis’s need to tell a good story, and his desire to explain the crisis. The problem is that the protagonists in the story were neither rare nor somehow “outside” or “against” the market; they were players whose participation was necessary to keep the game going. To see this, think back to the moment when it is explained that most CDOs were synthetic. The buyer of a synthetic CDO tranche is selling protection via a basket of CDS. For this to be possible, protection buyers for these CDS must be found. Those buyers were lots and lots of guys like Burry and Baum. Without them, the market would have been smaller and the consequential damage likewise.
Now look, I understand that the audience needs someone to root for; even as it was, you walked out depressed. And if heroes must be found, then they chose correctly. I’m not saying they should have changed the narrative, but I wish they had made a brief nod to the underlying facts. The simple way to do this would have been to have Burry and Baum be the ones to make the side-bets in the casino explainer vignette. I also think that would have been aesthetically pleasing; one scene that links the celebrity explainers to the characters in the movie.
Phil, that is a terrific point. And you’re right, adding Burry and Baum to that scene in the casino would have made that all very clear.
South Park explained the crisis, the response and the probable “solution” in 22 minutes, plus huffed some squirrels at people.
But bubble bath Harley Quinn probably works too.
How do you exploit their stupidity? The hard part is, timing the market. It is easy to know, there is a bubble. It is hard to know, when that bubble will pop. The traditional solution is, when you think, the market is bubbling, pull a big chunk of your assets out of the market, keep them liquid and buy in when the wings come off and the DJIA goes flaming into the ground.
If you keep all of your money in cash, you are not making anything with it. If the economic Armageddon is only a few months away, this is no big deal. If the bubble stretches on for a year or seven, it’s hard to watch your money sit and rot.
Another problem, If your brokerage winds up swimming upside down at the top of it’s shark tank, the stocks you own are protected. The cash, not so much.
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