The Big Short

The Big Short, directed by Adam McKay, is a 2015 biographical comedy-drama film based on the non-fiction book of the same name by Michael Lewis. The film tells the story of several individuals who predicted the 2007-2008 financial crisis and made significant profits from their insight. The story centers around a few eccentric characters who recognized the enormous risk of subprime mortgages, which were widely sold by banks to unwary customers. These banks lured customers with housing loans that offered low initial payments but higher, unforeseen charges later on. These borrowers often defaulted on their loans, causing a potential wave of colossal losses known as a cascade of mortgage foreclosures. We meet our key characters through the perspective of several traders, including Jared Vennett (Steve Carell), one of the shrewdest employees at Deutsche Bank, who sets out to sell the idea of credit default swaps, essentially an insurance contract that pays off if the underlying asset experiences a specific loss. However, to establish his role in the movie, he introduces us to the central theme of subprime mortgages. Dr. Michael Burry (Christian Bale), a short seller who recognizes the inherently flawed mortgage securities, made a fateful call. Unafraid to challenge traditional Wall Street norms, Dr. Burry developed complex financial models that predicted future losses from mortgage foreclosures. He, along with investors from his hedge fund, Scion Capital, embarked on their shorting adventure. They sold hundreds of millions of dollars worth of mortgage-backed securities short. Meanwhile, in New York, a talented young trader named Charlie Geller (John Magaro) and his best friend, Jamie Shipley (Finn Wittrock), meet and recruit 19-year-old trader Jared "Ben" Rickert, portrayed by Peter Billingsley, who helps them learn the ways of the big trade. Another pivotal character emerges in the film: Mark Baum (Ryan Gosling), a disillusioned and tenacious hedge fund manager who initially dismisses the potential threat of subprime mortgages but soon realizes that they pose a significant financial risk to major banks. Over the next couple of years, subprime home loans skyrocket, causing house prices to inflate at an uneven pace in the USA. Unaware of the inherent fragility of these mortgages, typical consumers struggled in vain to keep their homes – each time they succeeded they also bought more houses hoping that the value would remain steady or possibly swell even higher. Dr. Burry's cautious moves prepare him, as an investor, for a coming storm; things unfolded accordingly, and so did his ability to reap phenomenal profits. The financial impact as yet to become clear started unraveling by 2008, putting all at risk including the economy. As Dr. Burry built momentum, other astute investors joined him, including Mark, who is well-pleased with the profits coming in till more complex arrangements turn sour. Jared Vennett strolls in, looking for a sale, before discovering that none of the investors are interested. Mark Baum is an avid critic of his top analysts, Neil McCauley, and Vinny Daniel, who all believe in pushing for positive financial growth than just short-selling only products underperformance. Finally, we see the climax of the movie where more traders on Wall Street have no idea their problems are not out of their hands; by the autumn of 2007, it was time for us to understand that economy might be getting worse due to long-standing debts lying fallow.