The Big Short
The Big Short is a 2015 American biographical comedy-drama film directed by Adam McKay. It is based on the 2010 book The Big Short: Inside the Doomsday Machine by Michael Lewis. The film stars Christian Bale, Steve Carell, Ryan Gosling and Brad Pitt, with Melissa Leo, Hamish Linklater, John Magaro, Rafe Spall, Jeremy Strong, Finn Wittrock, and Marisa Tomei. A critical and commercial success, the film grossed $133 million on a $50 million budget. Jared Vennett (based on Greg Lippmann) is one of the first to understand that subprime loans into collateralized debt obligations (CDOs) will collapse.
His long-term bet, exceeding $1 billion, is accepted by major investment and commercial banks but requires paying substantial monthly premiums. Eventually, the market collapses and his fund’s value increases by 489% with an overall profit of over $2.69 billion, with Lawrence Fields receiving $489 million alone. As the subprime bonds continue to fall, he learns that Morgan Stanley had also taken short positions against mortgage derivatives. Despite pressure from his staff to sell their position before Morgan Stanley collapses, Baum refuses to sell until the economy is on the verge of collapsing, making over $1 billion in their swaps. Geller, Burry and Baum’s $30 million investment turns into $80 million after they learn that the SEC has no regulations to monitor mortgage-backed security activity.
They realize banks and ratings agencies are maintaining the value of their CDOs in order to sell and short them before the inevitable crash. Horrified, they try to tip off the press about the upcoming disaster and the rampant fraud, but a writer from The Wall Street Journal exposes his own personal conflict of interest and will not listen.
Random Citizen 