The Big Short (2015)

Fast-paced comedy-drama about the 2007-2008 global financial crash, Adam McKay’s The Big Short makes brilliant entertainment out of a true story of men behaving madly.

The Big Short
[rating=4]

CAUTION: Here be spoilers

To turn a true story revolving around complex financial instruments into a film that’s both entertaining and accurate enough to satisfy professionals and understandable enough to interest punters is no mean feat, but director Adam McKay has done it with The Big Short. Best known for his “goofball” comedies such as the Anchorman movies, McKay has sees the 2007 bursting of the sub-prime mortgage bubble in the US and the subsequent global financial crash of 2008 as a mixture of farce and cautionary tale. The film is closely based on ex-bond trader Michael Lewis’s book of the same name, its characters are the actual protagonists but with their names changed. All of them except for the first – and for a long time – the only person who saw the crash coming, Dr Michael Burry.

Hedge fund manager Burry is socially awkward, probably borderline autistic, has a Supercuts haircut, and wears shorts and flip-flops to the office (Christian Bale in a performance that holds the film together). He’s also a mathematical genius. Analysing reams of data no-one else has bothered with, he spots “the giant lie at the heart of the economy”. But no-one believes him. So he shorts the market – in other words, he bets the cash in his fund on the mortage market crashing. Wall Street banks, believing he is crazy, take his money, while laughing behind his back.

The film interweaves Burry’s story with separate but parallel story lines linked by a chain of coincidences. Trader Jared Vennett (slick Ryan Gosling) hears gossip about Burry and is the next person to grasp the implications. A misrouted phone call alerts sceptical hedge fund manager Mark Baum (Steve Carrell, permanently angry and expostulating, and greatly responsible for the film’s manic pace). Vennett sells Baum the shorting concept by bringing a Jenga tower into his office, removing a baton and making it duly collapse. Eager young garage-office-based investors Charlie Geller (John Magaro) and Jamie Shipley (Finn Wittrock) accidentally discover a proposal document discarded by Vennett and decide they want to become involved in the credit default swaps too. Since they are too inexperienced to get approval to do big trades, they enlist the help of retired banker Ben Rickert (scruffy Brad Pitt), now living an alternative lifestyle after quitting the money markets in disgust. His is the lone voice of reality, reminding them that this virtual trading gold mine is actually about the tragedy of people losing their homes.

When the bubble finally bursts, banks and credit ratings agencies collude in a cover-up until they have safely covered their own financial backs. However, Burry and his hedge fund Scion, and all the others who bet along with him, still made huge profits, although $5 trillion disappeared. McKay cuts through the jargon. Though the topics are deadly serious, jokily incongruous celebrity cameos explain some of the finer financial points and make them easily digestible: Margot Robbie (The Wolf of Wall Street) in a bubble bath sipping champagne explaining mortgage bonds, chef Anthony Bourdain explaining collateralised debt obligations (CDOs) using fish stew, and Selina Gomez at the blackjack table explaining synthetic CDOs. It’s a “crash” course in economics.

In one of his interviews promoting the film, McKay says, “The premise was that we were going to take this 24-hour pop-culture machine that tells us what Kim Kardashian is up to, and then say, ‘What if that machine told us real information?’.” And that’s exactly what The Big Short does so successfully. You painlessly learn a lot about financial markets and incidentally discover that understanding them can be fun. And you learn enough to understand the film’s scary postscript – only the names – not only those of the people but also those of the financial instruments – have been changed and that this could all happen again right now.

The Big Short is released on 22nd January 2015 in the UK