*The Big Short*

by on December 22, 2015 at 12:02 am in Economics, Education, Film | Permalink

I liked it much more than I expected to, and was pleased to have been invited to yesterday’s special screening.  (By the way, there are no real spoilers in this review.)  The most noteworthy features of this movie, from my admittedly skewed perspective, are these:

1. The story is told through the medium of changing market prices.  Really.  Reported prices convey the action and its significance, repeatedly, and the audience is expected to “get” this.

2. There is no central villain, none whatsoever.  The filmmakers succeed in showing how the collective actions of many, operating together, can give rise to structural problems and systemic risk.  And yet the story remains suspenseful.

3. It is amazing how much jargon they packed into this movie, let’s hope audiences accept it.  They even try to explain what a collateralized debt obligation is, and why its true risk can be higher than its apparent risk.

4. In terms of flow and pacing, it doesn’t feel like a traditional Hollywood movie.  There is no background music (except Led Zeppelin at the close), the density of information is much higher than expected, and it draws inspiration from various souped-up YouTube clips, some where characters occasionally turn and speak to the audience directly.

5. I enjoyed how this movie showed the world of finance as being a menagerie of different kinds and levels of intelligence.  My favorite scenes were at the CDO conference held in Las Vegas, showing the very specific ways in which people of above-average intelligence nonetheless can be intensely stupid.

6. Yes, the movie was “too leftie” on various points, or occasionally not nuanced enough, such as the SEC regulator scene.  But what the movie does well — namely to condense amazing amounts of economics and finance into what is likely to prove a popular and critically acclaimed film — is path breaking, and more important than its shortcomings.

By the way, the preview for this movie is misleading, for one thing Brad Pitt has only a minor role.  The preview is technically well done, but it makes the film look too mainstream.

Addendum: A recent movie I enjoyed on Netflix was Tangerine, which also has a unique feel to it, shot solely on iPhones.  But if you’re allergic to the idea of a movie about transgender prostitutes, skip it.  It’s one of the great LA movies, though.

1 Steve Sailer December 22, 2015 at 1:01 am

I’d mostly agree, although I’d say that The Big Short doesn’t quite live up to the impressive standards of clarity achieved by Aaron Sorkin in his business trilogy (Social Network, Moneyball, Steve Jobs). But that’s complaining that the glass is part empty when this entire genre of high IQ nonfiction feature film about business events barely existed before a half decade ago.

Here’s my review of The Big Short in Taki’s Magazine:


2 Jake December 24, 2015 at 4:46 pm

I don’t follow your meaning re Sorkin. I didn’t see Moneyball but Social Network and Steve Jobs seemed much more focused on the PEOPLE, and were therefore very tradidional Hollywood movies. The Big Short is much more focused on the PROCESSES.

As far as technical details go (as in, how things actually work, e.g. what is a CDO really) Steve Jobs had none and what Social Network had was embarrassing. Again, The Big Short outshines those two like the sun does a candle.

3 Larry Siegel December 24, 2015 at 11:08 pm

Moneyball was focused on the process and the science.

4 chuck martel December 22, 2015 at 1:02 am

The Michael Lewis version might be good but a screen adaptation of Gillian Tett’s “Fool’s Gold” might have made a better movie.

5 China Cat December 22, 2015 at 1:22 am

I was invited to an advance and I wanted to decline. I read Jamie Mai’s interview in Schwager’s book and though the film would be pap.

Went for fickle reasons.

I never liked Steve Carrell before. He was Awesome!

The cuts reminded me of Casino.

Ryan Gosling was a nonentity. Character actors were superb.

The film was fun! Tyler is right, “The filmmakers succeed in showing how the collective actions of many, operating together, can give rise to structural problems and systemic risk.” Gustav LeBon, sexy on the big screen. I liked it.

6 carlolspln December 22, 2015 at 1:45 am

“The filmmakers succeed in showing how the collective actions of many, operating together, can give rise to structural problems and systemic risk”

The Wisdom of Crowds, right? No regulator could have done ANYTHING to avert it.

It was just one of those things…

& nothing whatsoever about Magnetar [in the Michael Lewis book]


7 Thomas December 25, 2015 at 10:41 pm

Regulators are nothing but members of crowds.

8 Mark December 22, 2015 at 4:13 am

>The preview is technically well done, but it makes the film look too mainstream.
Um, that’s what a trailer is supposed to do, get the largest possible audience into the theater. Your comment suggests they did their job well.

9 Dan in philly December 22, 2015 at 5:11 am

I work in that industry and dislike most movies, but I may have to check this one out, thanks.

10 rayward December 22, 2015 at 6:08 am

Has the “rot in the system” that gave us the financial crisis and Great Recession been expunged? Hardly. As for Cowen’s wisdom of crowds take on it, I suppose it’s an improvement from the Big Lie: that the government did it. Revising history is the standard practice of those who gave us the Iraq War and the Great Recession, those who have no shame.

11 Lee A. Arnold December 22, 2015 at 6:26 am

“…for one thing Brad Pitt has only a minor role.”

In ACTING, you mean. He was one of the producers, and he is probably one of the biggest reasons this movie (and likewise, several other movies) even got made. Go, Brad!

12 Andrew M December 22, 2015 at 6:49 am

How does it compare to Margin Call?

13 education realist December 22, 2015 at 9:20 am

“How does it compare to Margin Call?”

Yeah, I’ve been surprised at how little mention that movie has gotten. Margin Call is clear enough that I show it to my high school kids. It’s structured a bit differently–the denouement of The Big Sell and Jeremy Irons’ speech is almost unnecessary, but it’s certainly very clear on what happened. I just showed it to a class before Christmas break, and I told them that Margin Call is the flip side of The Big Short. The people in Margin Call created the financial opportunity that the Big Short folks spotted and profited from.

They’re very different movies, obviously, but if previously uninterested high schoolers can follow and be entertained by Margin Call, then I don’t think The Big Short has a premium on making financial concepts comprehensible.

BTW, Steve, I’m pretty sure you agree that Sorkin shaves away anything that doesn’t fit his particular narrative. I am unconvinced he offers clarity so much as he offers an often entirely false story told in an entertaining fashion. Well, entertaining to most. Apart from Moneyball and Charlie Wilson’s War, I find his recent movies unwatchable.

14 Mort Dubois December 22, 2015 at 7:30 pm

Another excellent business movie: “A Most Violent Year”

15 Steve Sailer December 23, 2015 at 4:36 am

“A Most Violent Year” is pretty good, but J.C. Chandor plays a trick on the audience that caused a fair amount of disappointment. It’s sort of a low key parody of typical business movies like “Michael Clayton.”

Spoiler Alert:

It’s just a business movie. There’s no violence in “A Most Violent Year.”

J.C. Chandor (“Margin Call”) has done a fair amount of non-movie business before finally breaking through into making movies, and he has a pretty realistic approach to portraying business. But there are reasons that until recently Hollywood pretty much always put a few murders into every business movie.

16 Steve Sailer December 23, 2015 at 4:24 am

Margin Call has a pretty classic skeleton. I wouldn’t be surprised if the origin of the story in “Margin Call” goes well back before 2008 to Wall Street events in the past that J.C. Chandor’s father (more or less the Kevin Spacey character in the movie) told him about when he was young. Without giving away the plot, I’ll just say that the ending makes more sense if just one this one Wall Street firm is in dire straits rather than all of Wall Street.

There is one screenshot in the movie that pins the blame for the collapse of the firm on mortgage-backed securities, but overall the screenplay is designed to be fairly timeless and could be remade the next time there’s a wipeout on Wall Street, with only modest adjustments of the dollar amounts referenced in the dialogue. I suspect the movie could be adapted to the stage fairly easily, and would make a good high school play for an all male school.

17 Christine December 22, 2015 at 9:20 am

Can’t wait to see it.

18 jorgensen December 22, 2015 at 9:32 am

“Yes, the movie was “too leftie” ”

Hard to imagine how it could be “too” leftie unless it ends with a howling mob dragging the bankers into the street and murdering them for destroying the lives of tens of millions of Americans. That MIGHT be too leftie.

19 Observer December 22, 2015 at 11:04 am

The “too leftie” plot twist is that everyone winds up voting for Obama.

20 ibaien December 22, 2015 at 11:06 am

that was just some light mood affiliation on Tyler’s part; as ridiculous as the notion that some of his readers might be ‘allergic’ to stories about trans sex workers (whatever that means).

21 Cooper December 22, 2015 at 1:13 pm


You must be new around here.

Lots of MR commentators seem to have strongly conservative views on human sexuality and gender identity.

22 T. Shaw December 22, 2015 at 3:09 pm

Please expand. Name the bankers that destroyed tens of millions of American lives, and tell me how these bankers could possibly destroy tens of millions of lives.

23 Colin December 22, 2015 at 6:52 pm

If you’re looking for the too lefty critique you can find it here:


24 chuck martel December 22, 2015 at 9:58 pm

What’s “too lefty” about it?

25 angus December 22, 2015 at 9:42 am

never reason from a price change, bro.

26 mulp December 22, 2015 at 2:16 pm

Because costs must govern rational decision making….

But that’s pretty leftist. Keynesian even.

27 Erick December 22, 2015 at 10:09 am

The previews turned me off with the idiotic line about “the big banks committed the biggest fraud in history” as that is a description of events too stupid to describe. But if that was just a line to get people in and doesn’t describe the actual movie, I’d be interested. The book was interesting enough.

28 libert December 22, 2015 at 10:16 am

From the trailer, I was concerned that it was going to be too much of a white-hat/black-hat depiction. It is a good sign that there’s no central villain (no black hat).

But I’m still worried that the movie will heroify the shorters. Does it? Are there white hats?

29 Keith December 22, 2015 at 11:01 am

Watch it and find out. It is ok if you are caught out of your safe zone. It is just a movie.

30 libert December 22, 2015 at 3:19 pm

I do plan to see it. I was simply asking for elaboration on the review. Thank you, Bski, for your response.

31 Bski December 22, 2015 at 1:38 pm

>But I’m still worried that the movie will heroify the shorters. Does it? Are there white hats?

SPOILERS BELOW??? Not sure if it is really but….

It mostly only heroifies them in the sense that the protagonists saw what was wrong with the system when no one in their field wanted to accept that it was even possible. One of the protagonists does get a little bit up on his high horse about it, but another specifically says he’s not really even a good guy and is doing it just for money. I think the movie succeeds in making a lot of people look very bad as opposed to the protagonists being good.

32 jorgensen December 22, 2015 at 12:57 pm

“worried that the movie will heroify the shorters.”

Why worry about that. The shorters spotted the fraud first. Why not acknowledge that they had the courage to see the truth and act on it when everyone else was drinking the Kool Ade.

33 libert December 22, 2015 at 3:18 pm

That doesn’t make them heroes. Heroes are people who help others at large cost to themselves. These folks were in it entirely for themselves, selling crappy loans (recall that shorting is just another word for selling-without-buying). Sure they had courage, but courage and heroism are very different things.

I don’t think they’re bad people, but they sure ain’t heroes.

34 foodie January 4, 2016 at 6:11 pm

I think this is the first time I’ve seen somone posting at this blog assert that Randian Heroes, aren’t.

Worth reading the comments late for.

35 Anon. December 22, 2015 at 1:02 pm

Other than the gimmick, what the hell is the point of shooting on an iPhone when good cameras are so cheap? One of my favorite films of all time, Upstream Color, was shot on an $800 Panasonic GH2 and it looks fucking incredible.

36 Captain January 1, 2016 at 12:21 pm

They spent the $800 on locations instead. They already had the phones.

37 Bski December 22, 2015 at 1:33 pm

My wife is a tv writer and so we got a home screening from the studio as she is in the writers guild.

Overall we both enjoyed the movie and I did agree that some of the conclusions and some of the political blame that was left out did lean left but overall it conveyed a lot of information that I don’t think the public understood at the time.

My wife doesn’t have the same background in economics and finance as I do so it sparked a lot of conversation after we saw it as she didn’t fully understand certain things. I ended up spending my Sunday night explaining how shorting worked and in detail what a mortgage backed security is, both things I’d never have thought she’d have been interested in before this movie.

38 Quantitative Sneezing December 22, 2015 at 1:54 pm

I’ve always wondered what conclusions Michael Lewis’s books would reach if he had worked in a government job straight out of college instead of a Wall Street job. It’s one thing to be sitting around Salomon Brothers and thinking the accumulated power with arrogance and ignorance all around him could do a lot of damage and imagine that more government is the solution…but that takes the logical leap that the government isn’t composed of human beings as well, who could be just as, or even more, incompetent than the jerkwads on Wall Street.

I’ll go see it, though. I hope Steve Carrell’s character tests at 98% protective instincts.

39 T. Shaw December 22, 2015 at 3:42 pm

I (tangentially) worked in it. I have not seen anything said or any written thing that satisfactorily defines the multitude of complex factors and the large numbers of players on all sides of the initial underwriting of the individual lending transactions through securitizations, CDO’s, CLO’s, CMO’s, pricing tranches, mezzanine financings, etc.

I saw huge weaknesses RE appraisals notably estimating values in overheated RE markets. appraisal values were not “stabilized” for factors like everybody can’t afford a million dollar mansion, despite the facts that all the comparable sales said so . . . It was profession-wide and I don’t think it has been corrected. The thing is US appraisal standards are such that everything that occurred was and still could be justified.

Also, individual loan underwriting was loosened (I think) because in “originate and sell” operation, the seller has minimal risk. I do not see that the causes have been banned and am not confident that adequate means of precluding recurrence exists.

The causes were many and complex. There is sufficient blame to go around. Everybody was realizing big profits. It was intoxicating and the participants were fully in their cups. A few saw the end of the world as we know it, and shorted it. They could have mis-timed the crash and you wouldn’t have these movies/novels.

Big government not only allowed the massive mess to happen it exacerbated it. It would not have been as widespread without (almost) the entire alphabet soup of Federal banking and market regulators and regulations.

A mind-set and precedent may have been set by the Fed acts relative to Long Term Capital Management in the mid-1990’s. FDIC-insured deposits provided relatively unlimited liquidity – insured depositors have no credit/default risk. Additional excess liquidity was provided FHA, FNMA and FHLMC run by HUD. Then, throw in liquidity from the Fed and FHLB’s. The list goes on and on.

40 jorgensen December 22, 2015 at 2:10 pm

“allergic to the idea of a movie about transgender prostitutes, skip it. It’s one of the great LA movies”

And that boys and girls tells you everything you ever wanted to know about LA.

41 Captain January 1, 2016 at 12:24 pm

It’s also a great Christmas movie.

42 Michael Nielsen December 23, 2015 at 9:46 am

Color me surprised. I saw the trailer and thought it looked awful, full of boring tropes about Wall Street greediness. But Tyler’s review and the above comments make me want to see it!

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