At one point in Adam McKay’s new comedy The Big Short, a young “investigator” who is about to expose massive fraud at the heart of the American financial system excitedly compares himself to Robert Redford, presumably meaning the actor’s Woodward & Bernstein classic All The President’s Men. This trailblazer and his equally young partner are about to meet with The Wall Street Journal to report that America’s banks and the ratings agencies which are supposed to provide a check on the system are in collusion and knowingly lying to the world. The world economy is about to collapse and those bastards at the banks who caused this to happen are saving their own asses by committing fraud on an unprecedented scale. They won’t get away with it, though, because a couple of outsiders aren’t afraid of speaking truth to power.
It’s a Spotlight moment. In that movie, Mark Ruffalo and a cast of all-stars play the real life Boston Globe reporters who broke the story that the Catholic Church was covering up the rampant child molestation perpetrated by its priests throughout the world.
In fact, The Big Short has a lot in common with Spotlight. It, too, features an all-star cast (Steve Carell, Ryan Gosling, Brad Pitt, Christian Bale) playing real life people (even if some of the names have been changed), and the scandal at the heart of the story keeps getting bigger and bigger. We watch as our cast of oddball characters gaze deeper and deeper into the heart of the beast, interviewing progressively more important people. They begin with realtors, mortgage brokers and cash-strapped homeowners, and end with the truly despicable manager of the nation’s collateralized debt obligation, who turns out to be a glorified middle man for the banks even though he’s supposed to represent the interests of the investors. What they ultimately uncover is astonishing and upsetting, and you’re glad that their experience offered such insight to an historically important event, in this case the breakdown of the world economy.
But these people are not reporters. They are not, as I said in the open, seeking to speak truth to power. And, as history has sadly shown, pretty much no one went to jail for any of this. The Big Short is not the story of how the world discovered an uncomfortable truth; it’s about a group of hedge fund managers who saw the fall coming and sought to profit off of it.
Those two “investigators” (played by Finn Wittrock and John Magaro, pictured above) who met with The Wall Street Journal only knew about the fraud because it was the only explanation for why their financial models had been off. They were among the small group of analysts in the world of high finance who predicted the implosion of the housing bubble, and pursued something called a credit-default swap to profit off it. They knew the housing market would collapse in early 2007. What they didn’t anticipate was how those in power would exhaust all options, legal or illegal, to delay that collapse and minimize their financial exposure. Of course, The Wall Street Journal didn’t listen to their story, but in the end the bubble did ultimately burst. Those two guys became multi-millionaires.
And that’s the moral conundrum at the center of The Big Short. At times, you might fool yourself into thinking this is the All the President’s Men or Spotlight for the housing crisis because it features surface level similarities to a movie about investigative journalists. However, as THR put it, The Big Short is really about “Wall Street guys who made a mint by being right about the home loan mortgage crisis that led to the 2008 financial collapse.” Some of them acted like investigative journalists, making trips to housing developments to verify in person what their data was showing them, but their ultimate goal was to just make as much money as possible for their investors. Does that make the film any less entertaining?
The story begins where it ultimately did in real life, which is in 2005 when Scion Capital executive Michael Burry (Bale) went through all of the data in the sub-prime mortgage market and realized that the rate of defaults on home loans was worse than anyone realized. The data clearly showed that by early 2007 the home market bubble was going to burst. So, he went to all of the major banks and did something called “selling short” on the sub-prime market meaning he bet that they were going to fail. Wall Street is not in the business of turning down money from anyone, but even though they took his money (and charged him a monthly premium fee) the banks basically laughed in Burry’s face because the housing market would never collapse (duh).
Burry essentially bet over a billion dollars that the shit was going to hit the fan, and since it flew in the face of all conventional wisdom word of his astounding gamble spread throughout Wall Street. Virtually no one, including Burry’s own investors and mentor, believed in him. However, a very, very small group of people looked into it and realized Burry was right. The supremely self-confident Jared Vennett (Gosling) turned the remarkably perceptive and unapologetically rude Mark Baum (Carell) onto it, and young upstarts Charlie Geller (Magaro) and Jamie Shipley (Wittrock) more or less lucked into it with the assistance of their retired mentor (Pitt). The film watches as these characters run on a parallel track to the same destination.
The Big Short assumes we all remember that time 7 years ago when the financial sky was falling. Maybe we even know someone who lost their house or job as a result. Maybe we even remember terms like “credit-default swap” and “too big to fail” as well as the related debate about whether or not the government should have bailed out the banks. The Big Short’s goal is to help us actually understand how all of that happened by telling us the story of a group of people who saw everything coming and came out of it rich beyond their wildest dreams. In fact, Ryan Gosling’s character, who frequently talks directly to the camera, tells us as much at the very beginning.
Whether or not you actually like or even come to know much about these characters is beyond the point. Apart from Burry and Baum, almost none of them have any kind of actual arc or hint of a personal life. You won’t understand everything, although the movie goes to extreme, surprise celebrity cameo-filled lengths to dumb the core concepts down for us and help us get the gist of what’s going on. And, if the movie works, you probably won’t care about its awards prospects.
It is an unexpected hybrid of a documentary, investigative journalist drama and off-the-wall comedy. Its cause is just, and its story is necessary and well-told. But in so, so many ways it is doggedly non-traditional. It’s not just Ryan Gosling’s character who talks directly to the camera; multiple characters get their turn, even some we only meet for one scene. In at least one of those instances, the fourth-wall breaking actually informs us that the scene we’re watching never actually happened, and was simply created by the screenwriters to streamline the story.
McKay’s camera veers between standard Hollywood placements (i.e., looks like any normal conversation scene in a movie) to shaky, hand-held and briefly out of focus, mimicking the look of a documentary. The story is occasionally interrupted by textual quotes which take up the entire screen, somehow commenting on what we just saw or what’s about to happen. Photo slide shows are used to similar effect, sometimes showing us pictures of abandoned homes or people weeping outside of their re-possessed houses and other times juxtaposing that with images of exorbitant lifestyles and ultimately frivolous artifacts of pop culture. A lot of these characters never actually even meet each other, and none of them pretend to be the heroes of the story.
All of that is what makes The Big Short so engaging, and at least towards the end it doesn’t shy away from the fact that the big payday for these people meant Armageddon for everyone else. If it was a broken system, they were simply better at playing it. Gosling even tells us, “I can feel you judging me. It’s palpable.” When Steve Carell’s character is accused of being a hypocrite for wagging his finger at the system while also trying to benefit from its inevitable implosion he confidently replies, “It doesn’t mean I’m wrong.”
THE BOTTOM LINE
The Big Short is not so much a movie as it is a piece of film activism, designed to tell us “I know this is really complicated and you’d rather just talk about sports or celebrities, but here is what happened back in 2005-2008” followed by the stark warning “And it could easily happen again because nothing has fundamentally changed since then.” This is a $28 million movie from Paramount Pictures, directed by the guy you know from the Anchorman movies, released just in time for Christmas, and it’s secretly a huge call for Wall Street regulation. Against all odds, it gets away with it because it is so entertaining and aware of the inscrutability of its core concepts. It’s the single best economics seminar I’ve ever attended. As an actual movie it might come up a little short in some areas, but it is an absolutely worthwhile effort.