The Big Short

Movie Analysis

Jorge Yeshayahu Gonzales-Lara

MBA Marketing - International Economic
 The Big Short
Movie Analysis

Content

1. Director and writer an American biographical comedy-drama film

2. Film Stars
3. Award
4. Casting
5. Filming
6. Synopsis
 How the film The Big Short explains the origination of a synthetic CDO?
Who is the actress involved in that scene? Explain the scene.
 How the film The Big Short explains the financial innovation? Who is the
actress involved in that scene? Explain the scene
 Explain the role of Anthony Bourdain in the film The Big Short
Conclusion
References
 The Big Short
Movie Analysis
1. Director and writer an American biographical comedy-drama film
The Big Short is an American movie directed by Adam McKay and written by Charles Randolph
and McKay, based on the 2010 book “The Big Short” is a Oscar-nominated film adaptation of
author Michael Lewis’s best-selling book. The Big Short is an American biographical comedy-
drama film. 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. On September 22, 2015, Paramount set the film
for a limited release on December 11, 2015 and a wide release on December 23, 2015.The film
was released on DVD and Blu-ray on March 15, 2016.1
2. Film Stars

The film stars Christian Bales, Steve Carell, Ryan Gosling, Brad Pitt, Melissa Leo, Hamish
Linklater, John Magaro, Rafe Spall, Jeremy Strong, Finn Wittrock and Marisa Tomei. The film is
noted for the unconventional techniques it employs to explain complex financial instruments,
Among others, it features cameo appearances by actress Margot Tobbie, Chef Anthony Bourdain,
singer-songwriter Selena Gomez, and economist Richard Thaler,2 who break the fourth wall to
explain concepts such as subprime mortgages and collateralized debit obligations as a meta
reference. Several other actors directly address the audience, most frequently Gosling, who serves
as the narrator.
3. Award

The film won the Academy Award for Best Adapted Screenplay in addition to nominations
for Best Picture, Best Director Best Supporting Actor (Bale), and Best Film Editing.3
4. Casting

On January 13, 2015, Variety reported that Brad Pitt, Christian Bale, and Ryan Gosling, were set
to star in the film, with Pitt producing the film along with Dede Gardner and Jeremy Kleiner. Plan
B Entertainment would finance, with Paramount handling the distribution rights. Before this, Pitt
had already starred in the adaptation of the author's Money ball, for which he was nominated for
an Oscar. On January 14, it was announced that Steve Carell would also star. On April 21, 2015,
more cast was revealed by Deadline, including Melissa Leo, Marisa Tomei, Tracy Letts, Hamish
Linklater, John Magaro, Byron Mann, Rafe Spall, Jeremy Strong, and Finn Wittrock. Charles

1 Wikipedia “The Big Short”

2 Wikipedia “The Big Short”

3 Garrett Baldwin, James. “The Big Short explained”, November 2017

Randolph wrote the initial draft. Max Greenfield joined the ensemble cast of the film on April 23,
2015. Karen Gillan tweeted about her involvement in the film on May 8, 2015.
5. Filming

Principal photography on the film began on March 18, 2015 in New Orleans,, Louisiana, On
March 25, filming was taking place on General De Gaulle Boulevard in the Algiers section of New
Orleans. On May 8, Gillan confirmed she was shooting her scenes. On May 20, 2015, filming took
place on Mercer, between Prince Street and Spring Street in Manhattan, New York City. On May
22, the production crew recreated the offices of failed investment firm Lehman Brothers in the
lobby of the New York State Department of Financial Services in Manhattan. An assistant counsel
for the Department of Financial Services played one of the extras in the scene. 4
6. Synopsis of “The Big Short”

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 chronicles 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 virtually 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.
When banks and creditors argue that housing is stable, and the market in fact does keep on surging,
his clients grow angry and fearful as Burry continues his short play; when they demand their money
back, he places a moratorium on withdrawals.

Meanwhile, Jared Vennett (Ryan Gosling) inadvertently discovers Burry’s goal to establish the
credit default swap. Hedge fund manager Mark Baum (Steve Carrell) joins Burry in investing in
the credit default swap market and recognizes that poorly structured loan packages known
as collateralized debt obligations (CDOs) have received AAA ratings and are exacerbating the
mortgage crisis. After discovering that questionable innovation in the CDO market has fueled
massive risk in the markets, Baum concludes that the housing bubble will ultimately lead to the
collapse of the U.S. economy and bets big – shorting the financial sector. Finally, two investors
– Charlie Geller (John Magaro) and Jamie Shipley (Finn Wittrock) – seek the investment advice of
retired banker Ben Rickert (Brad Pitt) after they discover a paper written by Vennett. 5After
Shipley and Geller make a series of successful bets against the housing market, Rickert grows
angry that they have profited off the downfall of the U.S. economy and Middle America’s financial

4
Wikipedia “The Big Short”

5Garrett Baldwin, James. “The Big Short explained”, November 2017.

Investopedia, https://www.investopedia.com/articles/investing/020115/big-short-xplained.asp#ixzz5MtOwNw1c
doom. Geller was based on Cornwell Capital founder Charlie Ledley, while Jamie Shipley was
based on Cornwell partner Jamie Mai. Rickert was based on Ben Hockett, a former trader at
Deutsche Bank.

Though they make a fortune on their trades, the duo is left highly dejected about the amount of
risk taken and the moral hazard that ultimately would fuel the bailouts of several banks. Burry,
meanwhile, ends up producing nearly 500% returns for investors who stay with him through the
duration of the housing market's collapse. The five trillion dollars from real estate values, pension
funds, 401k, savings, and bonds had disappeared after the collapse. 8 million people lost their jobs,
6 million lost their homes, and that was only in the U.S. Mark Baum refused to say "I told you so",
and his team continues to run their fund together. 6 Michael Burry contacted the government
several times to see if anyone would ask him how he predicted the collapse. Nobody responded,
but he was audited four times by the FBI. He now only invests in water. In 2015, several large
banks began selling billions in CDOs.

1. How the film The Big Short explains the origination of a synthetic CDO? Who is the
actress involved in that scene? Explain the scene.

The film explains the origination and complexity of a synthetic CDO in a scene where actress
Selena Gomez plays blackjack. Joined by economist Richard Thaler, they explain how
increasingly larger side bets on Gomez’s hand of blackjack are great when she is winning – a
metaphor for a rising housing market. However, when Gomez loses the hand – or the housing
market falls – those increasingly larger side bets set off a domino effect that create larger losses at
the table and the economy, respectively.
2. How the film The Big Short explains the financial innovation? Who is the actress involved
in that scene? Explain the scene

The visual cuts and props explain the complexity of financial innovation. One cutaway features
actress Margot Robbie in a bubble bath drinking champagne and explaining the frailty of
mortgage-backed securities. Meanwhile, TV food personality Anthony Bourdain, explains how
tossing a two-day-old fish into a stew is similar to the subprime mortgages tossed into CDOs to
hide their risky nature from unsuspecting customers.
3. Explain the role of Anthony Bourdain in the film The Big Short

The 2015 Steve Carell movie utilized a brilliant and unique device to explain very complex
economic terms: It would break the fourth wall from in-the-weeds finance talk between characters
to a cut-scene of a celebrity playing him or herself, explaining the jargon with easier-to-understand
metaphors. Bourdain’s role was to break down a CDO, or collateralized debt obligation. He did it

6Garrett Baldwin, James. “The Big Short explained”, November 2017.

Investopedia, https://www.investopedia.com/articles/investing/020115/big-short-xplained.asp#ixzz5MtOwNw1c
with fish. A chef ordering fish for Sunday night’s menu on a Friday is akin to the shorted mortgage
bond used Carell’s financier Mark Baum, Bourdain explained. But instead of throwing away all of
the fresh fish the restaurant didn’t sell that night, he turns into a seafood stew for the next few
dinners. “See, it’s not old fish — it’s a whole new thing,” Bourdain said to the camera. “And the
best thing is, they’re eating 3-day-old halibut. That is a CDO.”
Conclusion:

This story is not just about bad policies, too-extensive borrowers and risky bets that have gone
wrong. It's about fraud and cheating, too. Many people who were trapped in the collapse, owners
and ordinary investors, had fallen under a kind of massive illusion in which the US real estate
market was considered invulnerable.

But many people knew exactly what was happening and tried hard to exploit the situation, often
through dishonesty. While a shamefully small number of people were held responsible, the
circumstantial evidence is quite strong on many fronts. There were potential buyers of homes that
exaggerated their income in mortgage applications; lenders who turned a blind eye knowing they
would not be responsible for the cleanup; appraisers who exaggerated the value of households;
rating agencies that sealed the securities to obtain business.
To win over moviegoers, the Big Short positions its protagonists played by Steve Carell, Ryan
Gosling, Christian Bale and Brad Pitt, while the discouraged engage in a tactic based on ethically
justified robbery against the big greedy and anonymous banks. But the reality is not so simple. The
film vaguely recognizes this moral ambiguity. "You just bet against the American economy, and if
you win, working people will suffer," says Brad Pitt's character, "so try not to celebrate." 7
References
 Garrett Baldwin, James. “The Big Short explained”, November 2017.
Investopedia, https://www.investopedia.com/articles/investing/020115/big-short-
xplained.asp#ixzz5MtOwNw1c
 Matthews, Christopher M. “Big Short’ Recreates Lehaman Bros. Office in Regulators’s Building”. The
Wall Street Journal. 22 May 2015. https://blogs.wsj.com/moneybeat/2015/05/22/big-short-recreates-
lehman-bros-offices-in-regulators-building/.
 Wikipedia “The Big Short”
 The Guadian. How historically accurate is The Big Short?
https://www.theguardian.com/film/2016/jan/27/the-big-short-financially-accurate-adam-mckay-subprime-
money-bale-gosling-pitt.
 The Big Short (2015) https://www.imdb.com/title/tt1596363/plotsummary?ref_=ttpl_sa_2#synopsis.
 Wolff-Mann. Things You Should Know Before You See “The Big Short”. Money Magazine.December 10.
2015.

7
Wolff-Mann. Things You Should Know Before You See “The Big Short”. Money Magazine. December 10. 2015.