The Big Short (2015)

“ Truth is like poetry, and most people fucking hate poetry”

  • Overheard in a D.C Bar

The Big Short tells the narrative of the subprime housing market crisis which was a major precursor to the Global Financial Crisis (GFC). The story is told from the perspective of three parallel stories. Firstly is Michael Burry, an eccentric physician who runs Scion Capital in shorts and has a form of Aspergers. Secondly is Mark Baum and Frontpoint Partners, an idealistic but small firm with large distrust of corporate investment banking but whose firm is not totally independent of Morgan Stanley. They join forces with Jared Vennett to short the US housing bonds market, yet do not trust him. Thirdly is Charlie Geller and Jamie Shipley, who are a “garage band hedge fund” (Big Short 2015) who seek to do the same having found Vennetts prospectus on the issue of a housing bubble. They seek help from an experienced former investment banker Ben Rickert to assist them with getting a seat at the table. (IMDB 2017).

While the film primarily shows this narrative, The Big Short also speaks to our wider literacy towards financial and economic matters. With the narrator explaining that the use of terms like derivatives, stocks, CDOs, synthetic CDOs and NINJA loans are designed to confuse those who are not financially literate. In short, it is a form of financial legalese.

The Big Short also speaks to our society’s fascination with the cult of celebrity and at the same time our shying away from discussions of financial intelligence. Several examples of the use of celebrities to explain these financial instruments, including Margot Robbie defining a traditional mortgage bond while being served champagne in a bubble bath, Selena Gomez explaining behavioural economic principles of Dr Richard Thaler and Anthony Bourdain equating a CDO to a chef reusing old fish. “It’s not old fish! It’s a whole new thing The best part is… They’re eating retailed halibut! That… is a cdo.”

I think this may go a little further. i think the fact that they’re standing around a blackjack table having Richard and Selena explained the ‘hot hand fallacy’ doesn’t just work because they are in vegas, it’s because gambling how the majority of the population views the stock market.

The Big Short speaks to some of the effects and responses to neoliberal governmentality. In that a the role of democracy (democratic government,) in a world where finance and special interest have grown into an obscene power is who view government and working people as nothing more than a bailout option to hedge risky investment.This is evidenced by the selling of ‘bespoke tranche opportunities’ which is a new term for synthetic CDO.  Second evidence being how Chomsky (2015) claim in video two, they want to run to the ‘Nanny state’ (Chomsky 2015) for a bailout so they can continue making risky investments knowing full well the people will bail them out, they even factor it into their investments.

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