The Big Short is a 2015 Oscar-nominated film adaptation of author Michael Lewis’s best-selling book of the same name. The movie, directed by Adam McKay, focuses on the lives of several American financial professionals who predicted and profited from the build-up and subsequent collapse of the housing and credit bubble in 2007 and 2008. Published in 2010, The Big Short: Inside the Doomsday Machine was a loose sequel to Lewis’ best-selling book Liar’s Parker a chronicle of his work experiences at Solomon Brothers in the 1980s. Both non-fiction works offer a deep dive into the lives, workplaces and psychology of several wall street professionals and the financial world.
The Big Short, however, is a character-driven piece that focuses not just on the events leading up to the financial crisis but also the conflicted morality of several men who foresaw the crisis well in advance. The film adaptation stars Christian Bale, Steve Carell, Ryan Gosling, and Brad Pitt.
The story borders on the work of hedge fund manager Michael Burry (portrayed by Christian Bale), who recognizes that the U.S. housing market of the early 21st century is an asset bubble inflated by high-risk loans. In 2005, Burry – the manager of Scion Capital — creates a credit default swap that would allow him to short the housing market. However, his clients grow angry.
The Bottom Line
The Big Short received several Academy Award nominations – including “Best Picture” – and won for “Best Adapted Screenplay.” Some critics, including Nobel Memorial Prize in Economics Laureate Paul Krugman, have said that the film fails to acknowledge that several people, outside of the characters profiled in the movie, also flagged the issues with subprime mortgages.
That said, The Big Short offers a highly engaging exploration into the years preceding the collapse of Lehman Brothers and the housing market, which led to the Great Recession. In the end, it concludes, how Wall Street greed sank the global economy for years. Financial terminology and the chronology of the financial crisis is highly complex and difficult for a traditional audience to comprehend in a two-hour movie but if these kinds of exigencies excite you, then it’s a great teach-how” movie.