Monday, January 25, 2016

Film Review: The Big Short (2016)

As you will all no doubt remember, in 2007 the financial world had a little bit of a cataclysmic meltdown due to the reckless behavior of some money men on Wall Street.  A lot of white men in suits had created some difficult financial mechanisms that included hundreds of thousands of mortgages, which could be traded and repackaged and traded and repackaged and traded and repackaged…and as long as the house prices kept going up, everyone was happy.

Yet in 2005, an outsider hedge fund-manager and blogger called Michael Burry (Christian Bale) discovers that a huge amount of these mortgages are at risk of default (or ‘subprime’), and are in fact likely to lead to a massive reversal in fortune for the investment banks.  This idea resonates with a number of other maverick financiers, such as the exasperated Mark Baum (Steve Carrell) and shady trader Jared Vennett (Ryan Gosling), who were willing to bet big against the housing market:  The Big Short. 

Director and screenwriter Adam McKay is more known for his “comedy” films such as Anchorman: The Legend of Ron Burgundy; Wake up, Ron Burgundy: The Lost Movie and Anchorman 2: The Legend Continues, so might not have seemed the most obvious choice for adapting Michael Lewis’s serious book The Big Short: Inside the Doomsday Machine.  Yet apart from a few uncontrollable twitches, the film is indeed a mostly dramatic retelling of the build up to the meltdown from inside the investment banks and surrounding economic Sodom and/or Gomorrah.

The whole genesis of the real-life crisis was that none of the bankers involved knew what the hell they were creating, valuing and trading, and so barely anyone could see the risks involved.  And because of all the cacophony of financial jargon – credit default swap markets; collateralized debt obligations; synthetic collateralized debt obligations – the narrative is unashamedly hard to follow in places.  Yet, rather than have awkward passages of character exposition explaining these things, McKay’s resolution to this is simply have a character break the forth wall to explain it to us – or to have Margot Robbie, Anthony Bourdain or Selena Gomez burst in with a crass metaphor involving fish dinners or casinos…

The Big Short
Mark Baum and Jared Vennett: Money Men
I’ll admit that the style of The Big Short took me about half an hour to smooth in to, but once the plot took hold I was completely hooked.  I’ve read a number of weighty books on the subject, and loved other recent financial thrillers on the crisis such as Inside Job, Margin Call and HBO’s brilliant Too Big To Fail.  Yet The Big Short is easily the most accessible, and tells the vitally important story of criminal financial chicanery, but for the Wolf of Wall Street crowd.  Spielberg’s riotous epic in reference heavily as Baum and his team head to strip joints to interview dancers in Vegas and shooting ranges to shoot Osama cut-outs with clients all with a soundtrack of The Polyphonic Spree, Run The Jewels and Ladytron. 

For all of its fun and pace, the film contains two monumental gut-punches.  Two other early eager young investors find Burry’s paper and team up with retired, veteran Ben Rickert (Brad Pitt) to also short the market.  Yet when the inevitable collapse begins and they start the celebrations, Rickert fiercely reminds them that for their investment to succeed the American Economy has to collapse – a choking interruption to all of the fun as the consequences for the innocent victims begins to emerge.  The second, and even bigger punch to the system emerges in 130th minute in the titles before the credits that explain that the messy financial alchemy is alive and well in 2015 under the new guise of “bespoke opportunity tranches” that are as threatening as the infamous collateralized debt obligations from 2005.

The risk at the heart of The Big Short was to focus on the personalities of the hand full of oddball characters – Burry, Baum, Vennett et al – instead of the more important criminality at the centre of the story.  Yet McKay just about swaggers through enough of the difficult economics so that the big message still shines through.  That bankers are the enemy of the free world and to give them the same freedom that they had ten years ago will destroy us all.  And we will all be left short.  Big, big short…

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