The Stakes are High in The Big Short

Big Short 1Adam McKay’s take on the bestseller by Michael Lewis is an investigative romp leading up to the financial meltdown that began in 2007. It’s full of colorful characters and even more colorful language. Mr. McKay uses voiceover and direct talking into an always moving, manic camera. He intercuts images, sounds and liberal use of the close-up in an attempt to show us that chaos was taking place, not simple financial transactions.

Picture begins by explaining that banking was essentially a snooze of a career. Boring, “comatose” and not very profitable. That all changed when Lewis Ranieri, bond trader at Salomon Brothers, invented mortgage-backed securities. Essentially mortgage loans, very stable and reliable, are packaged together and are sold as securities to buyers. When Mr. Ranieri did what he did, the Genie was let out of the bottle.

The casting was inspired. We get Christian Bale as Dr. Michael Burry, an awkward but brilliant numbers guy who takes the time to read what’s inside the mortgage packages and takes a bold risk. Burry is not in New York, but California and Mr. Bale plays it laid back and barefoot. We often see him in his office blasting heavy metal music and banging drumsticks on his knees. He wears a blue T-shirt emblazoned with the Thorn Guitars logo, a California-based custom guitar company founded by Pete Thorn.

Big Short 2

Burry wants to short the mortgage business and gets the big Banks to create an instrument that allows him to do it. He invests $1.3 billion of his small funds money, much to the dismay of his investors.

Ryan Gosling is Jared Vennet who works at Deutsche Bank in New York. He identified the loans were made without proper income verification and many of the borrowers have unacceptably low FICO scores. In short, they were going to default.

A wrong number call to Front Point Partners, a small hedge fund, lets the founder, Mark Baum into the game. Baum is played by Steve Carell who is in constant manic scream mode, fueled by his disgust of big Bank greed and a personal family tragedy that haunts him everyday. Mr. Carell is fantastic from the moment he learns the truth about what’s inside the mortgage-back securities from Vennet, right up until the final scenes when the meltdown unfolds before the whole world.

Brad Pitt plays Ben Rickert, a retired big time trader now living off the land somewhere in Colorado. He is contacted by Jamie Shipley (Finn Wittrock) and Charlie Geller (John Magaro), two guys who started a hedge fund (Brownstone) in their garage and have also gotten wind of the possibility to short the system. They are too small to be taken seriously and don’t have access to the big boy trading desk. That’s where Rickert comes in. Through his connections he enables Brownstone to play.

Based on true events, there is obviously some poetic license taken to condense the events and make them fit inside the 2 hour and 4 minutes running time. The script works hard to weave in easy to understand explanations of complex financial instruments. Chef Anthony Bourdain uses his kitchen and fish to illustrate how bad loans can be magically transformed into something completely new, but still be bad. We even get a scene in a Florida strip club that turns out to be the tipping point for Mark Baum to pull the short trigger on the system.

Ultimately the dominos fall and slowly each of the players sells and makes amazing amounts of money. Especially Jared Vennet, who fondles a check for $47 million, how bonus for the sell.

The picture is often funny but also makes room for a few moments to digest just how much damage the behavior by the Banks and rating agencies did to the economy. Lost jobs, homes, pensions, savings. It all went south quickly.

In his desire to cover as many bases as possible, Mr. McKay hits a few flat notes. The Florida scene seems out of place and the so called debate between Baum and a rival in Vegas is nothing but a couple of personal comments. Despite these minor flaws, I thoroughly enjoyed the picture.

If you Google Mark Baum, you won’t find him. And Mark Baum isn’t the only character in the movie whose name was changed from its real-life counterpart. Ryan Gosling’s character, Jared Vannett, is based on Greg Lippman, a Deutsche Bank trader; Brad Pitt’s character, Ben Rickert is based on Ben Hockett, a partner at Cornwall Capital partners. The only main character in the movie with a non-fiction name is Christian Bale’s role as hedge fund manager Michael Burry.

View the financial crisis full timeline from the Federal Reserve Bank.

Photo Credit: Plan B Entertainment and Regency Enterprises

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