Sensible Perspectives

Top Ten Reasons You Should See The Big Short

Posted by on March 1, 2016

10. See one of the most intelligible and intelligent movies about finance since It’s a Wonderful Life. See who you like better – Jimmy Stewart or Steve Carell (my money’s on Stewart, by the way).

9. See Brad Pitt in a supporting role! I’m not a serious student of film, but when I have seen Brad Pitt in a movie, he’s always been the star, or at least had a very major role. He doesn’t disappear in this one (in fact, I think he carries his scenes), but he’s not the leading man.

8. See Steve Carell in a serious role! Steve Carell is a very funny man. Here he demonstrates that he’s a well-rounded actor. He’s one of the perspicacious few who benefits most from the big short.

7. Watch a movie based on a great book by Michael Lewis, an outstanding storyteller who shows you what happened, how it happened, and gives you some hints about why it happened. The screenplay just won an Oscar! After reading the book or seeing the movie, you’ll have learned a lot about what caused the Great Recession. And, you’ll have had fun doing it.

6. See a key participant learn about the craziness in the Florida housing market in a conversation with an exotic dancer. It turns out that the dancer is a major real estate investor. Reminiscent of Bernard Baruch’s stories of ordinary people giving him (a market maven of the Roaring Twenties) stock tips.

5. Get a very visual perspective on the fall of Lehman Brothers. Yes, it was a big investment bank. Yes, it went bankrupt. But many people who worked there had nothing to do with The Big Short. They lost their jobs anyway. I’ll bet you never thought you’d sympathize with anyone who worked on Wall Street after the Great Recession.

4. Take advantage of the once-in-a-lifetime opportunity to see a first-rate economist (Richard Thaler – a behaviorist from the University of Chicago) play a role in a major motion picture, opposite Selena Gomez, no less. Guess which one really knows what they are talking about, and which one is there for star power.

3. Watch world famous chef and food writer Anthony Bourdain (Brasserie Les Halles, Kitchen Confidential) make an unforgettable link between day-old fish and collateralized debt obligations (CDOs). You’ll never think about fish stew the same way again. And, you never thought you’d understand anything about CDOs.

2. See Margot Robbie explain mortgage bonds, sub-prime mortgages, and why the movie is called The Big Short, all while taking a bubble bath and drinking champagne. You’ll learn what a short is in an unforgettable way. [None of the classes I attended in graduate school were anything like this!]

1. See that just trying to earn extraordinary financial returns is extraordinarily stressful. Christian Bale’s character tells his investors they can’t have their money back (yet). They sue him. Brad Pitt’s character has to close out his short position on a terrible internet connection in a UK pub (let’s say that the other patrons are not impressed). Every character is constantly worried that their trading partners will take advantage of them. They’re right, but in this movie, fortunately for them, and unfortunately for the US economy, the good guys have clueless trading partners. Taxpayers (that would be you and me) ended up bailing out many of the clueless traders.

 

  • Quentin Regestein

    “Clueless” traders like Long Term Capital Management probably build government bailouts into their plans. They’re clueless like a fox.

  • Frederick Miller

    You make a good point. Certainly some firms did that. I’m not sure that individual traders did, however.

    Interesting question for researchers to explore!