The Big Short

 

SPOILER ALERT! The plot will be discussed.

 

Director/writer Adam McKay takes on subjects that are complicated - economics, politics (Vice) - and is able to make them entertaining. In The Big Short (2015), a seemingly contradictory title, he focuses on the factors that led to the financial collapse in 2008 in the United States. He uses a bag of tricks that includes having characters speak directly to the audience, including celebrities playing themselves, in an attempt to explain what happened during this Great Recession. He has a number of quick edits that keep one’s attention from drifting off which can happen during stale discussions about money. The movie doesn’t show anybody as a hero, because there was none. But it does show there was a range of culpability among the participants. 

 

The film opens with a quote from Mark Twain: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” It sounds enigmatic, but it suggests that putting your trust in something that is obviously a lie creates a house of cards that will crash down on you. Twain’s first line grants a pardon for ignorance. The second line assigns blame for knowingly letting bad things happen. The image that the quote is superimposed upon is that of a man balancing a child on his shoulders. Could this imply how regular people were impacted by Wall Street’s big money scammers? Or could the balancing child also point to the precarious nature of our economic health?

 

The story begins with the movie’s narrator, the sleazy Deutsche Bank employee Jared Vennett (Ryan Gosling), talking directly to us saying that banking used to be boring and bonds were something you gave your kid and, “Maybe when he’s 30 he makes a 100 bucks.” Lewis Ranieri (Rudy Eisendopf) invented a type of investment called mortgage-backed securities which bundled large numbers of mortgages together which generated income through fees by selling what seemed like a safe investment because most people were paying their mortgages. Basically, what happened was that greed on steroids kicked in, and there was the granting of home loans to people at risk for paying mortgages back. The inevitable result was that there were defaults and the whole system crashed. 

 

That’s the overview. The many devils in the details were more serpentine in their devious actions. There were some people who saw the fuse that was lit on the impending explosion despite the denial that anything was wrong. Vennett says that outsiders and “weirdos” knew there was a problem. They did something others didn’t, “they looked,” which means they didn’t accept as real what “just ain’t so.” Jared hands over the narrating baton, at least temporarily, to one of these outsiders, hedge fund manager Michael Burry (Christian Bale, in another one of his terrific performances). He provides some personal background in an interview with a new analyst. Burry was a doctor who lost an eye to an illness and turned his brilliance toward making lots of money in financial investing. Burry is funny as a quirky fellow on the spectrum who says that his glass eye (which we see one time fell out playing football in school) was one factor which separated him from others. Thus, he has “always been more comfortable alone.” He quickly goes from unexplainable smiling to projecting a sad appearance. He says he can’t even compliment people without it becoming awkward, as he tells the analyst that he has a nice haircut and then asks, “Did you do it yourself?” He fiddles with drumsticks at the office, plays the drums loudly and listens to hard rock music, so he’s definitely not your typical Wall Street businessman. He tells the analyst that a sure sign that financial disaster will occur is when rates of fraud go up. That happened early in the Great Depression, and he was seeing that occur presently. So, the implication is that when there is an increase in unethical and illegal financial activity generally the chances are that everyone will suffer because they allowed illegitimate activity to happen. He hires the young man and tells him he wants the names of the multiple thousands of mortgage bond investments, quite a big request. But, it’s an example of what Vennett was saying about how these outsiders really “looked” at what was going down.

 

We then switch to outraged, loud, stressed out Mark Baum (Steve Carell, who is over-the-top hilarious and emotional in this role). He hates banks since he lost his brother to suicide. Baum believes the financial institutions destroyed him. He enters a grief counseling session late and proceeds to “hijack” the meeting, ranting about how a bank delayed telling its customers that they had overdrafts in their accounts in order to collect large amounts of penalty fees. He asked a bank executive how he could “sleep at night” for what he was doing. Baum is a character who wants to make money in the capitalist system, but doesn’t wish to “screw” over average working people. Vennett describes Baum as a man who wants proof in order to believe in something, as opposed to those who don’t want to see the writing on the wall. Vennett says the cynical Baum “never believed that any company was legit without proving it.” Humorously, there is a flashback to Baum’s childhood where his rabbi tells Baum’s mother that her son is exasperating because he is “looking for inconsistencies in the word of God.” Yes, Baum didn’t even trust the Almighty. Vennett says that Baum started his own fund on Wall Street, and had a nose for deceit, or as Vennett humorously puts it, Baum knew when the Wall Street bull “had gone number two.” After the death of his brother, he felt everything was a “lie.” His wife Cynthia (Marissa Tomei) is worried about him and says he should quit his job. Baum is torn in two, both loving his job when it’s done ethically and hating it when he sees people getting ripped off. He masochistically loves being the man angry at the way the system is run. As he later says, “I am happy when I’m unhappy.”

 

As Burry analyzes the data he sees that the mortgage loans were granted to people with poor credit ratings who either already defaulted on their loans or would do so soon as these “subprime” adjustable rate mortgages were scheduled to shoot up their interest rates in 2007. As he looks at the information, there are cuts to people who are thrilled about owning the dream houses they can’t afford, and then there are sale signs posted on lawns to drive home that theme of denial about what’s really happening. Burry calls his boss, Lawrence Fields (Tracy Letts) about “shorting” the housing market, that is, betting against the housing market prospering. (“Shorting” is a gamble. It means to borrow, not purchase, a stock or bond from a lender, quickly selling it, and if it’s value declines, buying the item at a cheaper price, while pocketing the difference at the specified time of return to the lender. If the value of what is borrowed goes up, the borrower loses money by paying for a more expensive investment that must be returned to the lender. Hey, I’m not an economist, I just looked it up). Fields perpetuates not wanting to see the truth when he says to Burry, “bubbles are regional, defaults are rare.” Bale is funny, showing Burry’s quirks as he repeats strings of words, cleans the blinds in his office, and brushes and rinses his teeth while trying to speak on the phone. 

 Vennett continues to narrate saying that Wall Street loves to invent jargon like “mortgage backed securities, subprime loans. Tranches.” He says they are meant to confuse people, make them feel “bored” and “stupid,” and present the appearance that only the investment workers “can do what they do.” To entertain conveying this information, McKay gives us actress Margot Robbie, playing herself, in a bubble bath to comically explain some of the economic terms. She drinks champagne as she relaxes in her bathroom, which mirrors the greed of the wealthy. She says Ranieri’s idea was a good one, making billions for banks by getting 2 percent fees selling the bundled mortgage bonds. But then the lenders ran out of mortgages, since there are only so many homes to sell to qualified borrowers. So, the banks filled the securities they sold with very risky mortgages called “subprimes,” which Robbie says are “shit.” 

 

Burry contacts large investment banks, including Goldman Sachs, to create “credit default swap” products which bet against the mortgage loan business. The banks, only wanting to believe what they want to believe, see Burry’s willingness to buy these “swaps” (and pay premiums on insurance to make sure his investment will be forthcoming if the banks go belly-up), as easy money for them. The song that plays with the line “Shake your money maker” mirrors how these myopic banks believed they received 1.3 billion dollars from a foolish investor. Eventually Fields, Burry’s boss, severely questions Burry’s action and wants “his money back.” But Burry insists when the variable rate mortgage interest rates skyrocket in 2007, homeowners, whose incomes have flattened, will default on their mortgages in massive numbers.

 

Vennett gets wind of Burry’s actions at a club where the bankers celebrate their windfall from the “crazy” investor. Baum has a group of investors: Danny Moses (Rafe Spall); Porter Collins (Hamish Linklater); and Vinnie Daniel (Jeremy Strong). Baum’s fund is sort of a subsidiary under Morgan Stanley that allows his business to keep its autonomy. When Daniel was young his father was killed in a violent crime, and Vennett narrates that he doesn’t talk about his loss, just like Baum. McKay then has Daniel address the audience, confirming he doesn’t talk about it. These breaking of the fourth wall moments add to jarring us out of getting bogged down in financial stuff, as do the comical exchanges about the incongruity of the irritable Baum possibly leaving Wall Street and trying to act civil to customers at his own Bed and Breakfast. Vennett’s assistant accidentally calls Baum’s number and that is how Baum’s group finds out about Burry’s idea. They, too, don’t dismiss the belief of eventual collapse, but instead discover that the mortgage bonds are not doing well.

 

Baum and his crew meet with Vennett, who is a pushy salesman as he says he “smells money.” This guy is not an idealistic fellow. He just looks for places to acquire wealth. (As Baum says later he wouldn’t buy a used car from him). Vennett tried to sell Burry’s idea to the banks themselves, but they laughed him out of the office because they felt that Burry’s idea was nutty. So, Vennett tries to get Baum’s outfit to buy those “swaps.” He uses a Jenga tower with segments labeled with the credit ratings assigned to the mortgages, with the “shit” loans on the bottom, propping up the tower. “Tranches” (a portion of something - McKay spells out the definition for us) comprise layers of these various-rated non-government backed loans supporting a large portion of the market. These loans were given to people with bad credit ratings and no verifiable income. The default rate on mortgages has risen to four percent and the prediction is that it will rise to eight percent, which will cause, according to Baum, “Armageddon.” 

 

More humorous diverting entertainment is inserted when Vennett says he is certain about the math as he points to his numbers guy, Jiang (Stanley Wong). He says the man is so Chinese, he can't speak English. Of course, arguing someone is great at mathematics just because he’s Asian is racist, as Baum points out. Jiang then addresses the audience in English and says Vennett likes to add authenticity to the smartness claim, and he really finished second and not first in a Chinese math competition, as Vennett claimed. There is dishonesty it seems, in every Wall Street transaction. 

 

Vennett says inviting them to invest in these swaps is like he’s, “standing in front of a burning house, and I’m offering you fire insurance on it.” A good metaphor as he’s making the argument that it’s a sure thing that the housing market will disintegrate into ashes. The banks, even his own, are getting large fees selling the bundled bad mortgage loans. So, greed has blinded them from seeing anything going wrong. The bonds are getting great credit ratings and thus are erroneously propping up this aspect of the economy even though they are based on nothing. Vennett says when the banks discover a bond is “too risky to buy,” they “repackage it with a bunch of other shit that didn’t sell and put it into a CDO, or Collateralized Debt Obligation.” McKay has Vennett interrupt the film again, telling the audience the late chef, Anthony Bourdain, will explain CDO’s. This sequence mirrors the Margot Robbie bit of getting a celebrity to humorously explain a complex investment term. Of course, our humor comes from outrage as Bourdain demonstrates in a kitchen that CDO’s are similar to making a new stew out of old fish that didn’t sell. The exterior is different, but what’s underneath is the same rotten product. And, they get AAA ratings. Fraud anyone?

 

After Vennett leaves, Baum says he wants him to be right because he is angry about his brother and wants to profit off of the bank’s “stupidity.” He justifies betting against the banks as a sort of revenge for the institutions charging 25 percent interest on credit cards and burying young people with student debt. But is this the ethical way of getting back at the banks, making money from the greed of others? Doesn’t that compound the problem? Why not just expose it? These guys are not as unscrupulous as those at the top of the financial food chain, but they are still in the capitalistic game to make money. Baum says to find out if what Vennett said was true they actually must go out into the field and check to see if there is a problem with the housing market. They are willing to do that, as opposed to others who fiddle while the economy burns.

 

The focus shifts to Charlie Geller (Johns Magaro) and Jamie Shipley (Finn Wittrock) as they hope to pitch to JPMorgan Chase. (By the way, except for Burry, all of the names here are fictitious although based on real people). Geller and Shipley are young and have just arrived in New York from Colorado. But they have grown their investment company from working out of a garage and starting with $110,000 to the point of handling about 30 million dollars in investments. Not good enough, though. They need an ISDA Agreement, which McKay spells out as an authorization to sit at the “big boy table” and its’s not “available to stupid amateurs.” The film implies that considering how dumb the “big boys” were handling the mortgage loans, it is ironic that these young men can’t even have a real meeting with a large institution. There are notes on the screen that say comically that trying to do high level trading without an ISDA “is like trying to win the Indy 500 riding a llama.” The condescending attitude of the company is shown as a low-level employee basically dismisses them in the lobby and they are told by security they must leave. 

 

The two could not get anywhere with any other banks. There are proposals on the lobby coffee table by other people who did not sell their proposals to the bank. They pick one up and it’s Vennett’s pitch. Geller’s character talks to the audience here saying how they didn’t really discover Vennett’s housing bubble analysis in the lobby. It was more a word of mouth thing and they read it in a publication. Director McKay is transparent about how film distorts some of the facts for brevity and dramatic purposes. It’s funny and unusual to have a filmmaker own up to this fact right in the middle of the story. There is more speaking to the camera to help move the story along and draw in the audience to what is being said. Shipley says in a flashback to their early business days, “People hate to think about bad things happening so they always underestimate their likelihood.” Vennett narrates that “the markets will sell options very cheaply on things they think will never happen.” There is a little cartoon of a slot machine on the screen in the lower left corner to stress the gambling aspect of investment work. Since these two men invest little money on long-shot failures, if they are wrong, they don't lose much. If they're right, it pays off big. So, the products that Burry first noticed and Vennett promulgated about worst-case scenarios that people don’t think will occur is right up their financial alley. 

 

They contact Ben Rickert (Brad Pitt, looking nerdy and older with scruffy long hair and a beard) to help work the credit default swap angle. Vennett narrates that Rickert was a trader in Singapore for Chase, but “quit the whole game in disgust.” We get a flashback of Rickert and Geller as neighbors in Colorado walking their dogs. The movie suggests that sometimes sheer coincidence can change one’s world. Rickert thought “the whole world was going down.” He sort of went off the grid, growing his own vegetables, and is so paranoid he has multiple phone lines to weed out the government listening in on his conversations, even though he is no longer in the brokerage business. We see a flashback shot of Geller and Shipley eating at his table as Rickert says one ingredient to getting the soil ready is to add “urine.” There is a funny shot of Geller hesitating before putting a forkful of salad into his mouth. If it wasn’t for these amusing, quirky aspects of the movie, a story about mortgages would make breathing exciting. 

So, it’s the outsiders, those who hate the system for what it has become (like Baum and Rickert), are rejected by the big shots (Vennett, Geller and Shipley), or are unorthodox (Burry, who says he doesn’t know how to be “funny,” or “sarcastic” or “to work people”) that are willing to look behind the curtain and see what is really playing out. As Groucho Marx once said, he didn’t want to be part of a club that would have him as a member. Being on the outside can bring objectivity and clarity.

 

Moses and Collins investigate what’s happening with the housing market by actually going on the ground per Baum’s instructions. The images presented make the case for the widening economic disaster. What they discover in a housing development near Miami are rows of “for sale” signs, and homes with newspapers piled up outside, showing that the residents left in a hurry without even canceling their subscriptions so they could avoid dealing with foreclosures. There is a renter who has been paying his rent but who doesn’t know he could be evicted soon because the house owner is defaulting. There is another house with past due notices, and the inhabitants only took the TV without even cleaning out the cat litter in their quick getaway. One house that has been abandoned has an alligator in the pool. Scary and funny, a hard combination to make work, but McKay pulls it off here. 

 

Baum joins Moses and Collins and they hit the bricks and see for themselves how over-invested people are in mortgages on high-priced real estate. They meet two young, smirking, swaggering real estate mortgage brokers who say that in one year the number of mortgages they granted went from ten to sixty. One boasts that he was a bartender and now owns a boat. Ninety percent of the mortgages have adjustable interest rates. They laugh when they are asked if any loan applications are rejected, saying that would mean that they weren’t doing their jobs. They call the mortgages “No income, No Job” loans, since “Corporate doesn’t care” about the viability of the mortgages. They target immigrants who don’t even understand what they are signing but are happy to get a home. One broker says that he can make five times as much signing up a subprime (remember that means “shit”) adjustable rate mortgage on secondary markets. Aside, Baum says he doesn’t understand why these two guys are “confessing.” He has a professional ethical standard he follows. Moses and Collins explain to Baum that the two brokers are really “bragging.” The thrust here is that making money in the moment is all that matters, and there is no thought about consequences for the individual home owners or the economy at large. 

 

The brokers say they sell properties to strippers. A very funny scene follows with Baum buying time with a stripper who writhes around him, but all he wants to know is her mortgage situation. She says that people where she lives have multiple loans on their houses and only had to put down five percent. Baum tells her that when the “teaser” interest rate balloons she will be paying 200 to 300 percent more each month. She says her broker said she could refinance. Baum calls the guy “a liar.” She is stunned by Baum’s comments, and even worse, admits to owning five houses and a condominium. She didn’t want to believe the proverbial warning, “If it’s too good to be true, it probably is.” Baum is convinced that there is a housing bubble that is ready to burst. He calls Daniel to contact Vennett and buy the swaps.

 

Geller and Shipley talk to Rickert, who verifies that what the men sent him was frighteningly accurate about the housing market. They want Rickert to get them the ISDA so they can get at the “big boy table” to trade on a large scale. The disenchanted Rickert says that “It’s a pretty ugly table, guys.” What we have learned about the unscrupulous dealings going on, Rickert’s description is spot on. Rickert agrees to help them. (There is a shot of the paranoid Rickert on an escalator at an airport wearing a N-95 mask, which is like an eerie prescient image of the current pandemic). 

 

We get several shots of people going about their daily mundane activities as an overheard quote at a Washington, D.C. bar appears on the screen: “Truth is like poetry. And most people fucking hate poetry.” (IMDb notes that McKay wrote the lines). These words tie in nicely with the opening reference to Mark Twain which stresses the central theme that people don’t want to know what’s real if it’s not what they want to hear. So, despite the fact that, as Burry predicted, mortgage delinquencies are soaring, the subprime bond prices are rising and Moody and Standard and Poor are still giving the “shit” loans AAA ratings because big finance doesn’t want to acknowledge the collapse of the house of cards they are living in. In fact, pressure is applied to sell the swaps as they still (erroneously) appear to be high risk investments.

 Baum and Daniel confront Georgia Hale (Melissa Leo) of Standard and Poor about still giving high ratings to bonds that make up the risky mortgage packages. Hale, at first,  is wearing these large, dark tinted glasses because of an eye condition. Be alerted that anytime eyes and vision are noted in a film, it is a metaphor, usually for characters being morally blind (Chinatown, Bonnie and Clyde, Blade Runner). When Baum asks if the S&P ever gave poor ratings for the bond applications, she says that if they did, companies will go to competitors, like Moody, and pay them fees to get what they want. Greed in the driver’s seat again. Baum and Daniel are outraged. However, Hale questions their motives since she knows that they own substantial swaps and they will profit by the collapse of the mortgage market. She rightly accuses their attacks on her agency’s desire for profits as evidence of Baum’s group’s moral hypocrisy. 

 

Burry’s fund, Baum’s group and Shipley and Geller have invested heavily in the swaps, and are being told to put up more collateral to back up their investments because, as Shipley says, the banks either are “clueless” of the true value of these crappy mortgage instruments or are covering up their culpability in disastrous investments. It could be they are both, as Rickert on the phone says that he talked to someone at Bear Stearns who didn’t know what a CDO was. (In this enigmatic discussion we get humor, as Rickert says he’s late for his yearly “colonic” which suggests he needs to flush out the poisonous elements invading him physically and mentally). Despite the lack of a payoff, Vennett and Shipley say that they should buy more swaps, which is greeted by dissension from the partners. Vennett and Rickert tell their partners to go to Las Vegas to attend the American Securitization Forum. In order to keep Baum’s outfit committed, Vennett says there will be in attendance “every bond and CDO salesman, subprime lender and swap trader.” He says if they are betting “against the dumb money” then they should learn “how dumb that money really is.” 

 

The first shot of Las Vegas is accompanied by the ominous organ music from The Phantom of the Opera which adds a satiric sound and feeling of hidden horror lurking behind the fake mask of economic prosperity. Here all of the principles (except for the seclusive Burry) assemble. Vennett tells Baum to try to zip it and not “spook” people there by loudly talking about their swaps, since they don’t want everyone to start buying them, diluting their profits. The opening statement at the forum is “Business is good,” and is built on the strong foundation of the mortgage business, which sums up the phony Kool-Aid these people have been drinking. The speaker admits that there will only be a 5 percent setback in the subprime area. Baum can’t contain himself and tells the speaker there is a “zero” percent chance of the subprime losses stopping at 5 percent. 

 

Geller meets with a woman who works for the Federal Government's Securities and Exchange Commission which is supposed to police the financial sector and prosecute illegal activity. At a Caesar’s Palace pool, to emphasize the affluent bubble the deniers live in, she says that they don’t investigate mortgage bonds, and since there was a budget cut, “we don’t investigate much.” More being asleep at the wheel going on. She isn’t even there officially and is actually looking for a job with one of the big banks. Geller questions the legality of her “working for a financial institution right after you’ve been working in financial regulation.” She says there's no law against it, and runs off to network with someone who works for Goldman Sachs, which shows how vulnerable to exploitation the economic system is. 

 

Even Burry has doubts about his mathematical logic paying off. He admits that he may have underestimated how fraudulent the system had become. At dinner, Shipley says they should “short” AA rated bonds, knowing that they will go down. Rickert says they can pull it off because the adoption of that “clueless” attitude that Vennett noted would cause the banks to go along with the deal because they would see the bond prices going up and would think Shipley and Geller were suckers. As the two men celebrate what they think will be a killing in investments, Rickert brings outraged perspective by saying how many millions will suffer from what is coming because people will lose jobs, homes, and pensions. Since they like numbers, he tosses out a lethal statistic that says for every 1 percent unemployment goes up, 40,000 people die. They are making a fortune by “betting against the American economy,” which, when one thinks about it, shouldn’t even be allowed, because then one has a vested interest in failure. So, Rickert says, “just stop fuckin’ dancing.”

 

To add to the unbelievable selfishness of investment managers, we have Baum talking to a man named Chau (Byron Mann) who sells CDOs for Merrill Lynch. He claims to represent the customers and says that the CDOs he sells are of the highest quality. But, he states that he personally assumes “no risk for these products.” Basically, no matter what happens to the people taking out these loans, which they don’t realize they can’t afford, or those investing in these worthless mortgages, he will get his fees and not be hurt. In other words, I’ve got mine, who cares about you. Baum can’t believe his ears as Chau starts talking about CDOs derived from other CDO’s, some of which are called “synthetic CDOs,” which contain more investing in bad loans. This stuff is so unbelievable it gets funny just hearing about how convoluted all of these crazy monetary terms are. From another table, Vennett adds more humor by saying that Baum’s face looks like it’s boiling like the villain in Dune.

 

McKay once more uses a celebrity, Selena Gomez, along with “the father of behavioral economics,” Dr. Richard Thaler, to help decode synthetic CEOs. They sit at a card table, appropriately in Vegas, because all of this investing is speculation and gambling. Gomez has been winning and is holding a good hand right now. She thinks she can’t lose, and everyone wants to get in on the action. It is fallacious reasoning, says Thaler, to think past winnings translate into continuous future success. That’s what happened with the housing market. Two people now want to make side bets on Gomez’s future hands. That would be the “first synthetic CDO.” Then another couple bet on whether the first two people will win or lose, which comprises the “second synthetic CDO.” And so on, until an original investment mushrooms into a great deal of money in several pots. However, if the initial investment is a bad one at the outset, you are talking about a whole lot of losers. 

 After talking with Chau, Baum feels ill from the unscrupulous machinations that are going on. Chau wants to compare how much he is worth with how much money Baum has, as if that is the only measure to show how worthy one is. Baum tells his team to short all of Chau’s investments, betting against him, and says he will try to find a little redemption playing roulette. Small time gambling seems virtuous in comparison to what he just heard. Baum back home tells his wife that things are so much worse than he ever could have imagined. He feels guilty that the first thing he did concerning his brother when he was depressed was to offer him money, which probably he realizes was like rubbing salt into a psychological wound. 

 

Burry bangs out his frustration and anger at how broken the system has become on his drums. He has special prerogatives in his authority over his fund, and takes the extraordinary and daring move of writing to his investors preventing them from withdrawing their money. If he is wrong about his projection, many would suffer financially.

 

We get another quote, this time from the novel IQ84 by Haruki Murakami: “Everyone, deep in their hearts, is waiting for the end of the world to come.” If one is honest, the film suggests, all of us have apocalyptic thoughts. If not, why are there so many books and films on the subject? Here it is the economic “Dark Ages” coming, as Shipley puts it. The financial news broadcasts how the housing market is crashing and lenders are going bankrupt. In order not to deal with the situation, the large investment banks fake power outages or computer problems so they will not have to deal with Burry’s claims. Shipley and Geller realize that the banks are trying to dump their lousy CDOs on unsuspecting buyers as they try to recoup some money before the prices on those investments tumble. Shipley calls his mother to warn her about the coming crash, and the two want to warn everyone by way of the press. But their contact at the Wall Street Journal won’t touch the story because he doesn’t want to burn the bridges he built with investment banks based on what he calls Shipley and Geller’s “hunch.” The problem about a “Big Lie” is that if voiced loud enough and by those in authority, it tends to become believed. 

 

Baum’s group now learns that the swaps that nobody thought were worth anything are now the hot item to purchase. Baum finds out from Kathy (Adepero Oduye) who works for his umbrella company, Morgan Stanley, that the company sold a ton of swaps which means Morgan Stanley owes a tremendous amount of money on these bets that mortgages would fail. So, Baum realizes he was betting against Morgan Stanley which means he was betting against himself. Because Morgan Stanley is $15 billion in the hole, all of Baum’s company’s “accounts go on their balance sheet,” according to Daniel. The point here is if you bet against the whole economy, one gets sucked into the black hole that results. Baum says he doesn’t want to sell the swaps yet because he wants to see the banks “bleed” before selling them life rafts. But he is putting his own company at risk if he waits too long and Morgan Stanley goes bankrupt.

 

Shipley and Geller are in a similar predicament since they bought 80 percent of their swaps from the tanking Bear Stearns. Unlike Burry, who protected himself in case the banks went out of business, these two are at risk. They need Rickert’s help to unload their investments. There is more humor as Rickert is in a pub in England that he says smells like “sheep” with hardly any wi-fi service and is trying to sell 200 million dollars in securities on his laptop. The customer in the bar says Rickert is either a drug dealer or a banker, and he has more respect for the former, which we can understand, given what’s happening. Rickert is able to net them 80 million just in time before the economies of many countries froze assets and were on the brink of failure, so expansive is the economic meltdown.

 

Vennett, addressing the audience, holds a bonus check for $40 million dollars. He says he never said he “was the hero of this story.” He was the narrator because, besides tying the plot together, he is the right selfish person to show how there are no heroes here. Mark Baum is the only “Big Short” (thus the film’s title) who delayed selling. (As IMDb points out there is also a visual pun in the film as there is a large billboard shown with comedian Martin Short’s face - thus a “big Short). Baum speaks at a financial summit meeting and says people in America reside in a world of “fraud in banking, government, education, religion, food, even baseball.” He says this time deception flourished, and he thought we were better than that to let it happen. And, “average people will have to pay for all of this,” since they always do, he says. The eventual bailout of the banks proved him to be right. Even as he speaks, the false optimism previously voiced by a Bear Stearns executive rings false as the stock of the company drops 38 percent in the short time they spoke. Everyone starts to bail out of the auditorium, most likely to try to salvage what’s left of their wealth. 

 

Investment giant Lehman Brothers’ stock went to zero and was not rescued by the government. People who lost their jobs there leave in droves. Shipley and Geller walk through the decimated headquarters of the institution, stressing the catastrophic results of greed and the denial of truth. Burry says that his work wasn’t what he expected. He narrates, “This business kills the part of life that is essential.” As we see those strutting Florida real estate brokers now looking for jobs, Burry says that unfortunately people don’t choose who to listen to based on facts, but upon what “seems authoritative and familiar.” In other words, it’s easier and more comforting to listen to the well-known person with the big microphone who is in power than to question what is being said. 

 

After Burry’s fund gained 48 percent, with a profit of $2.69 billion, he closed it down and retired. The bailout is coming, and Daniel believes that as part of that action the government will have to break up the banks and send people to jail. Baum says no, the banks always knew they would get rescued and in the end they’ll find a way just to blame immigrants and poor people for our economic problems, implying that those marginal groups will be portrayed as the leeches that drained the economy because they couldn’t pay their mortgages.

 

McKay has Vennett be satiric as he says hundreds went to jail, the SEC was overhauled, and Congress broke up the big banks and regulated the mortgage industry. He follows that with, “Just kidding.” With the bailout, Vennett says, the banks took the money, paid themselves bonuses, and lobbied against any major reforms. “And then then they blamed immigrants and poor people,” he adds. As it turns out only one guy went to jail. Baum finally sells the firm’s assets, but he felt like he was one of the bad guys. Daniel says they were kicking the real bad guys in the teeth for selling people out of the American Dream. But, Baum’s group contributed to the depletion of funds that added to many employees losing their jobs and possessions.

 

The notes at the end of the movie sum up the economic fallout: five trillion dollars was lost in real estate values, pension funds, 401k accounts, and bonds; eight million people lost jobs; six million lost their homes. Burry contacted the government several times to show how he predicted the collapse, most likely to prevent another one. Nobody responded to him, again emphasizing the desire not to want to hear the truth, no matter how disturbing it is. And, to show how pointing out flaws in the system is a threat to that mindset, Burry was audited four times. At the time the film was made, banks were selling a new form of CDO.

 

The thrust of this movie is that every human system is subject to corruption, and to protect the powerless, there must be vigilant policing to protect a country’s citizenry.

The next film is Picnic.