{"id":19332,"date":"2016-02-28T10:03:49","date_gmt":"2016-02-28T00:03:49","guid":{"rendered":"http:\/\/www.thefatwebsite.com\/?p=19332"},"modified":"2016-02-28T10:04:15","modified_gmt":"2016-02-28T00:04:15","slug":"the-big-short","status":"publish","type":"post","link":"http:\/\/www.thefatwebsite.com\/?p=19332","title":{"rendered":"The Big Short"},"content":{"rendered":"

\"bigshortposter\"<\/a><\/p>\n

Director: \u00a0<\/strong>Adam McKay
\nWriter: \u00a0<\/strong>Charles Randolph, Adam McKay
\nCast: \u00a0<\/strong>Christian Bale, Brad Pitt, Ryan Gosling, Steve Carrell<\/p>\n

T<\/span>he Global Financial Crisis was triggered in large part due to the complete and utter collapse of the American housing market which was propped up by the big banks on Wall Street irresponsibly handing out housing loans to people who could not afford them. \u00a0Some examples offered up by\u00a0The Big Short<\/em> include a banker who brags about giving loans to immigrants who barely speak English and\u00a0strangely, a stripper who owns five properties and assumes she can endlessly refinance them.<\/p>\n

The Big Short<\/em> is the story of a handful of investment bankers who became wise to this bubble and made a spectacular sum of money off of predicting the housing market\u00a0collapse by literally creating a currency that did not exist before – credit default swaps. \u00a0In essence, they are bets with banks that massive cumulative mortgage repayments known as CDOs (collateralized debt organization) would fail, with incredible returns of 20 to 1. \u00a0The Too Big To Fail Banks, confident in their belief that the housing market would see endless growth despite their reckless behavior, happily took on these credit default swaps, in some instances to the tune of hundreds of millions of dollars.<\/p>\n

The man presented as the visionary who saw through this complicated swathe of numbers and Byzantine terminology was a one eyed, heavy metal obsessed investor on the West Coast named Michael Burry. \u00a0Burry suffers from Aspergers and as such, he has both an unerring self-confidence that he has done the math\u00a0when no one else predicted this calamitous collapse\u00a0but he also lacks the social skills to effectively communicate his thinking. \u00a0As a result, his clients are alarmed and panicked by what they see as his\u00a0wild and erratic\u00a0behavior. \u00a0In 2005, Burry believed with absolute mathematical certainty that the housing market would collapse in the second quarter of 2007 with the tipping point being 14% of the mortgages failing in the CDOs. \u00a0So he goes all in on purchasing hundreds of millions of credit default swaps and then patiently waits next to his whiteboard doomsday clock, until the percentage ticks over.<\/p>\n

\"thebigshort\"<\/a><\/p>\n

Burry is an extraordinary character but he is also too insular and introverted to carry this film. \u00a0In fact, once he crunches the numbers he mostly sits and listens to his iPod.<\/p>\n

The surrogate for the audience to learn about the American housing market and react with utter disgust at the system built by the banks is hot headed New York investment banker Mark Baum, played by Steve Carrell. \u00a0Incredibly (and apparently truly), Baum learns of\u00a0Michael Burry’s market failure prediction\u00a0when a phone call dialled to the wrong number accidentally tips off his office to Burry’s idea to invest in credit default swaps.<\/p>\n

Baum is a career banker who hates the banks. \u00a0The idea of betting so spectacularly and profiting from their greed and failure appeals greatly to him but he knows nothing of the housing market and is incredulous at Burry’s prediction. \u00a0He meets with a DudeBro investor named Jared Vennett (Ryan Gosling, in the film’s closest thing to a\u00a0Wolf of Wall Street<\/em> character) to explain the fragile state of the housing market to him before he decides to hit the streets and see for himself.<\/p>\n

In\u00a0Tom McCarthy’s\u00a0Spotlight<\/em> – a film about child abuse committed by the Catholic church in Boston – a lawyer remarks that ‘it takes a village to raise a child and it takes a village to abuse one’. \u00a0He means that such a widespread terrible occurrence could not have happened without the complicit behaviour of an entire community. \u00a0And so it is with the housing market in America. \u00a0How could the entire country become entrenched in such a blatantly unaffordable and unsustainable model of money lending? \u00a0Baum and his team meet some mortgage brokers who are obsessed with chasing bonuses and are so conditioned by the culture of the banks that they don’t care who they issue unsustainable loans to. \u00a0They meet housing market regulators such as one young woman who uses her job as an opportunity to have a holiday in Vegas and get cosy with bankers so she can get a better paying job in their industry. \u00a0They have an extraordinary meeting with a representative from the Standard and Poor credit agency who openly states that they give the banks top credit scores otherwise they’ll pursue their ratings from a competitor. \u00a0Even a Wall Street journalist who is handed the story declines to pursue it because he doesn’t want to risk losing his network of friends or jeopardize the market. \u00a0Everyone is complicit.<\/p>\n

The last band of investors who pick up on the impending market collapse are two young bankers – Charlie Geller and Jamie Shipley. \u00a0Two men in their twenties who took $100,000 of their savings and turned it into $30 million. \u00a0When we first meet them, they are turned away from a meeting with Morgan Stanley because they are too small time. \u00a0In an otherwise cynical and depressing film, I guess Geller and Shipley represent an idealistic future of investment bankers. \u00a0They are out to make a buck sure but they manage to retain a shred of their humanity and are as befuddled as Baum when they attend a conference in Las Vegas and meet the bankers in person.<\/p>\n

The Big Short<\/em> is an entertaining and enlightening film explaining the housing market collapse in America through the lens of an eccentric band of investors who saw the whole thing coming when the bankers, Alan Greenspan, the government and everyone else missed it. \u00a0It explains some challenging and obtuse concepts through tongue-in-cheek cameos from Margot Robbie, Selena Gomez and Anthony Bourdain and is a fine companion piece to other films covering the GFC including\u00a0Margin Call<\/em> and\u00a0Win Win <\/em>(which remains one of the few films to explore the GFC from the perspective of the average person).<\/p>\n","protected":false},"excerpt":{"rendered":"

The housing market collapse in America is predicted by a small group of eccentric investment bankers who make a fortune from the bubble bursting<\/p>\n","protected":false},"author":6,"featured_media":19334,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[2444,1147,843,722,2445,2443],"class_list":["post-19332","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-films","tag-adam-mckay","tag-brad-pitt","tag-christian-bale","tag-ryan-gosling","tag-steve-carrell","tag-the-big-short"],"_links":{"self":[{"href":"http:\/\/www.thefatwebsite.com\/index.php?rest_route=\/wp\/v2\/posts\/19332","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.thefatwebsite.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.thefatwebsite.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.thefatwebsite.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"http:\/\/www.thefatwebsite.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19332"}],"version-history":[{"count":4,"href":"http:\/\/www.thefatwebsite.com\/index.php?rest_route=\/wp\/v2\/posts\/19332\/revisions"}],"predecessor-version":[{"id":19338,"href":"http:\/\/www.thefatwebsite.com\/index.php?rest_route=\/wp\/v2\/posts\/19332\/revisions\/19338"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.thefatwebsite.com\/index.php?rest_route=\/wp\/v2\/media\/19334"}],"wp:attachment":[{"href":"http:\/\/www.thefatwebsite.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.thefatwebsite.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19332"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.thefatwebsite.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}