Interesting Narrative Film with Documentary Elements About the Housing/Credit Crisis of 2008

Rating: 7/10 (6 January 2016)

Part of the challenge of presenting this kind of material which is quite complex at its core is that the audience needs to understand certain elements to fully grasp the story. The core of the narrative of "The Big Short" is how a few people in finance "bet" against the conventional wisdom that property values would never fall and as a result made $100 million's during the Financial Crisis of 2008. The film attempts to accomplish four things.
1. Define the terminology used by Wall Street and Finance regarding the buying and selling of mortgages, such as "sub-prime mortgage", "CDO", and "tranches". 2. Explain the housing situation prior to Fall of 2008, in particular how sub-prime mortgages became, for a brief time, a means for Wall Street banks and investors to make huge profits. 3. Introduce us to some unlikely Wall Street insiders who saw the flaw in the conventional logic and a means to make a financial killing at the expense of the market. 4. How they were able to convince Wall Street to take their bets against the housing market. Even after having read and seen documentaries about the crisis, I do believe this is still not easy stuff fully understand.
The solution in "The Big Short" was largely solved by narrator Ryan Gosling as Jared Vennett who chronicles the history of the mortgage-finance sub-prime mortgage world while introducing us to the different characters involved who "bet" against the housing market. However, several times the story stops, and interspersed animation or a celebrity detail certain points. For example, Margot Robbie explains what sub-prime mortgages are in a bubble bath, and Anthony Bourdain describes "CDO's" using bad fish as an analogy. Also, they give some of the history of the characters involved, which for some reason I felt was less interesting. This occurs for about the first third of the film, which I found a bit irritating. I think I would have preferred the characters of the story explain these terms, such as Gosling does, as part of the narrative rather than stopping the show and bringing the focus on someone else. And I would have largely left out the histories of the characters, except as it relates to their interests in finance. Also, just about every time Michael Burry (Christian Bale) enters a scene, we hear endless heavy metal music.
After the terminology is defined and the characters' histories are out of the way, the story starts to finally move along. Michael Burry (Bale) was one of the earliest financial wizards to realize the housing market was essentially a lie. Billions of dollars were being invested into sub-prime mortgages, housing loans given to people who more often than not, could never pay them back. Mortgage agencies were able to sign sub-prime housing loans and re-sell them to Wall Street who would in turn sell them as tranches to investors.
Burry decides to bet against the housing bubble using the capital in his hedge-fund. He convinces banks to take his "negative" investment, and they agree to take millions of dollars, believing they've made easy money. They invest in so-called "credit default swaps", a kind of loan insurance. If a loan defaults, the holder of the swap makes the equivalent of the loan in return as long he paid a premium beforehand. So if Burry invests say $50 million in default swaps, he could potentially make $100 millions if the loans ever default, which they did. Part of the story is how Burry's investment strategy in the default swaps proliferates to other Wall Street insiders. The major characters portrayed follow Burry's suit lead, including Mark Baum (Steve Carell), Jared Vennet (Gosling), and eventually Ben Rickert (Brad Pitt).
Overall enjoyable, probably a "one-watch" (my term for a single viewing). Once the story kicks in, the film gets better and more compelling as it goes along. For its intentions, it does a reasonably good job of explaining the complexity of the Housing Market Crisis. By mid-way, a lot of the emotion becomes part of the story, and I found those aspects more compelling than Robbie in her bubble bath. Don't misunderstand me, I like Robbie in the bubble bath, but maybe that scene is for an entirely different film.