THE BIG SHORT IS A TEACHING TOOL
Not everyone on Wall Street suffered financial disaster during the Great Recession. The Big Short, directed by Adam McKay, is primarily a biopic of economics student Michael Burry (played by Christian Bale), Greg Lippmann (renamed in the film Jared Vennette and played by Ryan Gosling), and Steve Eisman (Mark Baum of FrontPoint Partners, played by Steve Carell). Thanks to Burry, Lippmann tells Eisman that the effort of banks to loan with balloon interest payments yet with little or no credit checks could not last forever because an examination of payment histories of mortgages within mortgage-backed securities (MBS) in 2007 reveals many zeros as recent payments. Accordingly, sale of MBSs before the collapse proves lucrative. The format of The Big Short is unique, involving actors playing the key roles in a razzed up documentary, even including pedantic illustrations provided by a woman taking a bubble bath and a famous chef. What the film highlights is that the rest of Wall Street consisted of hustlers who lived on unquestioned assumptions, unaware of housing market problems of the 1930s, and nearly everyone paid the price. The message of the film, based on the book with the same title by Michael Lewis, seems aimed at high schoolers who were too young during the Great Recession to know why the financial world was so precarious. Thanks to the bailout, Congress and Wall Street are just yawning. MH