Adam McKay, “The Big Short” (2015)
How do you tell the story behind the sub-prime mortgage crisis and the massive housing bubble that led to the Global Financial Crisis of 2008, with the attendant collapse of giant global investment banks Lehmann Brothers and Bear Stearns, in a way that the general public can understand? Adam McKay shows one way how this can be done with a fictionalised comedy-drama with documentary-genre elements based on finance journalist Michael Lewis’ non-fiction book “The Big Short: Inside the Doomsday Machine”. Following the fortunes of various characters (all based on real-life people) who believe that the US national housing market is unstable and heading for a massive collapse, and who try to profit from that instability, the film cleverly combines a fast-paced narrative from the viewpoint of several hedge fund traders who represent different character stereotypes with brief excursions into financial education for bemused viewers and a sometimes critical view of American contemporary culture and how it is driven by greed and a desire for instant gratification, cynicism and the kinds of social, political and economic institutions that enable a few individuals and corporations to exploit the American public and the basic need for housing.
The film’s narrative presents through three parallel sub-plots. In 2004, doctor-turned-fund manager Michael Burry (Christian Bale) realises from his analyses of US financial markets that hundreds, possibly thousands, of housing loans sold to people with dubious credit records by banks have been packaged into investment vehicles and then sold to investors such as pension and superannuation funds. He predicts that the sub-prime housing loan market will collapse in 2007 and realises he can make huge profits by creating a credit swaps default market. He persuades various large banks to back him on his proposal and they do so, thinking what a deluded fool he is. His investors are alarmed but go along with his idea nevertheless. As time goes by, Burry’s investment looks more and more foolish and his investors nearly threaten to rebel (so he clamps a moratorium on their withdrawals) but eventually his prediction turns out to be right and he and his investors walk away with 489% profits!
A subprime mortgage bond manager, Jared Vennett (Ryan Gosling) hears about Burry’s gamble and realises he too can benefit so he gains the backing of hedge fund manager Mark Baum (Steve Carell) who, though sceptical of Vennett’s scheme for its cynical moral duplicity, goes along with the idea. To assuage his conscience, Baum sends his employees to check out the homes of some of the people who have bought the dodgy housing loans that have been repackaged; the employees discover large empty kitsch mansions, left behind to rot by people who cannot pay back their loans, and talk to one man whose landlord is someone’s pet dog. Baum then talks to two young brokers who boast that they have made millions selling bad loans to migrants and poor people who have no hope of ever paying back their loans. In one memorable scene, he visits a representative of Standard and Poors rating agency who tells him that her boss issues triple A ratings to large banks because if S&P doesn’t, then they’ll just mosey down the road to rival agency Moody’s who will.
The third sub-plot focuses on two young money managers Charlie (John Magaro) and Jamie (Finn Wittrock) who built up their own hedge fund as student working out of a garage and who also tack their sails into the wind behind Burry and Baum. They enlist the help of retired banker Ben Rickert (Brad Pitt) to make the deals they hope to profit from but Rickert reminds them that thousands of families across America and perhaps beyond will be devastated by their actions. Chastened, the two young men attempt to tip off a financial newspaper about the coming housing collapse but the paper is not interested.
For its two-hour running time the film is engrossing despite the unevenness of its plot. The sub-plot featuring Charlie and Jamie is not quite plausible and the about-face they experience is hard to take seriously. At the very least these two hot-heads come over as shallow and one has to question whether they seriously understand that the industry they are working in is corrupt. Pitt’s detached portrayal as Rickert is troubling and there’s no sense that the character genuinely cares that his two proteges are careening towards the edge of a cliff leading into a gigantic abyss.
The stand-out performances of the film belong to Bale and Carell out of a cast whose overall acting is above average. All actors involved were clearly committed to this film even if individual performances are sometimes uneven. Significantly Brad Pitt helped to produce the film. Bale does a great job playing the eccentric Burry and Carell dominates all his scenes as the morally conflicted Baum who, against his better instincts, follows Vennett into his particular vale of darkness. At no point during his hedge fund’s various shenanigans does Baum consider pulling the plug on the deal-making and marching to the Feds to report the investment banks’ fraudulent activities when he realises the extent to which Federal law and regulations are being broken on a regular basis.
Hilarious cameo performances by Margot Robbie, celebrity chef Anthony Bourdain in an inspired Masterchef-style class and Selena Gomez help break up the tension in the film and provide good laughs along with a crash-course in financial education by explaining how investor herd mentality can lead to unstable financial markets and why banks initially thought bundling bad mortgages with good mortgages and flogging the packages to pension funds was a great idea. At the same time, these little mini-documentaries are satirical jabs mocking people’s obsessions with sex, food and money, and the short attention spans encouraged by modern consumer culture.
The film does a fairly good job of emphasising the moral rottenness of American society at its most cynical and self-interested, and shows something of the impact of the sub-prime mortgage blow-out crisis on ordinary people as the man paying rent to someone’s pet dog is forced with his wife and children to live in a van by the film’s end. What it also does well is show how people within the financial industry realised what was going to happen but were either resigned to it or, worse, decided to profit from the looming apocalypse. All the various characters we follow through their respective sub-plots are intelligent and become aware at some point in the film that the industry they work in is corrupt to the bone, yet either they are unable to help themselves out of the morass or try to extract whatever they can or run off before everything blows over and takes them down.
The film ends on a bleak note: the finance industry may have taken a heavy blow, and thousands of its worker bees may have ended up in long dole queues, but thanks to an $800 million bail-out by the US government it continues its merry way towards another, even bigger financial crash. While the film-makers criticise the culture that led to the 2008 GFC, they basically do not question neoliberal capitalist ideology or suggest an alternative to the dysfunctional financial industry and its toxic culture and values.