Movie Review: The Big Short

the-big-short_0

Based on Michael Lewis best-seller The Big Short: Inside the Doomsday Machine, “The Big Short” won the Oscar in the Best Writing, Adapted Screenplay category this year. It tells the chilling story of a few financial traders and managers who saw the signs of a downturn before it took place, and decided to “short” the banks. The portrayal of total collusion of greed and corruption makes it a different kind of scary movie. It is for those who are still confused about the housing bubble of the early aughts, and want to understand what happened while being entertained, and closely depicts what it was like for Floridians at the time as well.

Written by Adam McKay, who is known for tongue-in-cheek, goofy comedies like “Talladega Nights: The Ballad of Ricky Bobby,” and “Anchorman,” “The Big Short” has a fast-paced, sophisticated humor that breaks away from McKay’s previous movies. In this way the movie works as infotainment. The stellar cast of comedic actors, including Steve Carrell, Brad Pitt, Ryan Gosling, and Christian Bale, carry the intelligent undercurrent well. Occasional appearances by beautiful celebrities explaining credit concepts like CDOs or sub-prime markets highlight the complication and confusion surrounding the market. We kept asking ourselves, “who is the bad guy in this movie?” It revealed how much of our economy is tied to the housing economy, and how it compared to the depression in the 1930’s. When our system faltered, the whole world suffered. 

A quote attributed to Mark Twain flashed on screen, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” This quote sets the tone for these characters and how their plan to bet on failure pans out for them. In a telling scene of the movie, a trip to South Florida reveals the turmoil of the housing market. What the characters discover there are braggadocios mortgage brokers, delinquent homeowners, and streets full of for sale signs. This scene stood out to us, because we know multiple people who sold a home in a short sale or had gone through a foreclosure, or worse a bankruptcy. There were subdivisions in Orlando where you could see half a dozen “for sale” signs on the street from the front yard of one house. After a while, it appeared that people just gave up. They gave up trying to take care of their houses, maybe they were underwater. It was pretty common for people to just stop paying their mortgage and still be able to live in their home for years, or people just walked away from their home. “The Big Short” captures the recession at a grand and individual scale, and switches between the two seamlessly.

In the weeks since watching this movie, we’ve discussed it with neighbors and friends. People were surprised, angry, frightened, and saddened by this movie. There was a feeling of, “we were all duped,” and “we did this to ourselves.” It’s sad to think so many innocent people lost jobs and houses and their lives were upended. We actually thought about withdrawing all our money from the bank and putting it in a mattress after watching this movie. It seems the negative social stigma of a foreclosure or bankruptcy has gone away – so many people had one or the other or both.

Florida continues to see growth and recovery. Right now there is a shortage of homes, both for sale and rent, multiple offers on most properties, and things sell for at or above market rate. The Dodd Frank regulations that came about because of the crisis have put in place laws that will help keep this from happening again. But they have also ensured that big banks are in control. There is new home building here, but mostly for homes in the $400,000+ price range (and a lot of apartments and townhouses). Builders seem to want to max their profits by only building high end homes which puts a lot of pressure on sales of homes that cost less.

The housing bubble taught us some valuable lessons that we hope to never repeat again. Our takeaway from “The Big Short” is don’t use your home as a piggy bank, and think twice before taking out a second mortgage. Overall this film was entertaining while presenting some seriously scary facts around the credit crisis. For those of you who are curious, we highly recommend it!