The Big Short is a movie which was inspired by Michael Lewis’ non-fiction book “The Big Short” in 2010. The movie tells the story behind the housing bubbles and the 2007-2008 financial crises. Some people may not be familiar with finance. To grab viewers’ attention, the director added some humor and pop-culture explanations to finance. It provides a global overview of Wall Street’s collapse and the impact on the financial markets worldwide. The movie also looks at some investors that foresaw the collapse of the mortgage securities industry and its subsequent crash. There are three stories in the movie, all connected by the housing bubble. The characters were aware of the imminent market crash and they decided to profit from it. They also short-bet against the stable mortgage market. This paper will discuss the role of these individuals in the financial meltdown that has occurred in recent history. Christian Bale is the actor who plays Michael Burry. In the movie, he plays a hedge-fund managing director who is socially inept. Even though he was not trusted, he understood and believed that there was a housing market crisis from the beginning. They were based upon high-risk subprime loan, which have fewer and smaller returns. They are too busy making money to grasp the concept and believe that the market will crash. He thus created the credit default swap (CDS), an investment strategy which allows him profitably to bet against US mortgage markets. CDS was his first investment. This caught the attention of stockbrokers and caused confusion and fear among investors. As time passes, his investments become impatient as he waits to see the market collapse. Later, lawsuits and threats were made against him by investors. Michael Burry correctly predicted the market but his timing is not right. He saw it coming so early that he had no choice but to wait and risk a serious loss. Although he was able eventually to stay on the sidelines long enough for trades to be made, it left him with a deep wound. Steve Carell played Mark Baum. He was another key character in the financial crisis. He is a former fund manager who was recently affected by a tragedy in his family. He is aware of the possibility of a crisis but isn’t sure how large it will be. Mark Baum doesn’t use spreadsheets to figure out his answer, like Michael Burry. Instead, he focuses more on the real-world. His team went on the streets to witness the housing bubble. They noticed a disturbing problem in late payments and foreclosures of uninformed individuals. They are all expecting the housing market will rise. Mark Baum realizes the risks are much greater than he imagined after a conversation with bankers. It’s only a matter if the bubble bursts before everything goes downhill. His team was given an order by him to “Shorten every guy that has touched” He also spoke in a hopeless, despairing sigh, saying, “I’m going find moral redemption.” He was aware, and afraid, of the consequences of the industry on thousands of lives. It was also clear that he had contributed to that crash. He didn’t do it to make money. He was actually disgusted at the industry and wanted justice for the average American, the one who is most hurt by a crash. Baum and Burry both want to win but they also want to be successful.
The last characters in the story are Jamie Shipley and Charlie Geller. Two young traders discover the potential for a housing bubble and convince Ben Rickert to help access the financial markets. Brad Pitt portrays Ben Rickert. He left the banking industry after past conflicts and disillusionment and moved to a rural location. He was a mentor to Wittrock and Shipley throughout the film and helped them win against the housing market. Rickert became upset that the Americans were losing their market. Rickert continued, saying, “If they’re wrong, people lose their homes. People lose jobs. People lose their retirement savings and pensions. What do you hate about banking? It reduces people into numbers. Here’s an example:
Every 1% rise in unemployment, 40,000 people die. Ben Rickert’s wake-up call. He reminded everyone that they were rooting for the global economic collapse and not just the United States. Even if the bet is successful, they will not win.
Although they are all from different parts of the world, these characters noticed the problem with mortgage securities. This is especially true for those that depend on high-risk subprime loan inflation. Every character that finds out about the possible crisis is shocked, and they hope it was wrong. They were also shocked when their beliefs proved to be right. The characters were faced with an ethical dilemma. Although they bet against the United States’ market, the possibility of its collapse was present in the world’s banking system as well as the economy. It was a game that saw one person win and another lose. They could be the one who sees and corrects a problem. They were conflicted about their selfishness to make millions out of this situation.
The Big Short movie is a complex, serious and difficult subject that the director does a great job with. However, the director has an impressive eye for detail and a sense of humor. This movie reminds people that handling large amounts of money can be a difficult and morally questionable activity. It is possible for these kinds of situations to occur in the world. People will need to be prepared to take tough decisions when it happens and to accept the consequences. People will destroy relationships as they become greedy.
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