Nerds That Geek Movie Review: ‘The Big Short’

Written by Scott Edwards 

​In 2008, something that has never happened in the history of the country happened, the housing market collapsed. This led to the biggest recession in American history outside of the Great Depression, but it did not only affect the United States, it impacted the world. As banks slowly started to default, nobody gave it much thought, but once the bigger banks fell, everyone knew that there was something wrong and it made its way to the little guy. Never in a million years did anyone predict that there would be such a huge economic downfall, especially when it came to real estate, but as time has shown, history can and will always repeat itself.

Doctor Michael Burry is always looking for the next big investment to make his clients their top dollar. When hiring a new employee for the company, he asks to get all of the information on the adjustable rate loans that are being handed out like candy these days. Seeing that so many people are late on their payments, he gets an interesting idea, to bet against these mortgages. With this never being done before since homes have always been a secure bet and have the highest ratings, the banks are willing to take Michael’s money as long as he continues to pay interest on his bet. But what the banks do not understand is that their portfolios are about to take a massive hit when the adjustable interest rates spike and people will not have a way to make their payments any longer.

Jared Vennett gets word of Burry’s strange investment and does some digging of his own and finds out that the bet is solid and wants to make some money before his company goes under. Misdialing a firm in the building, he gets ahold of Mark Baum and his crew instead and gives them a little run down on the situation.  What Vennett does not know is that Mark Baum has a distrust for the system and knows that if the right levers are pulled, it could drop like a pile of bricks. Doing their own research, Mark is astonished to see empty neighborhoods and renters in some of the nicest parts of town. With nobody living there or being able to afford to live there, he takes the search even deeper and finds out that the people that do own some high end housing actually own more than one and have no idea what will happen when their adjustable rates go up. The fear that Mark brings to the table is next to nothing when he knows that the economy would fail if what he is seeing is right. But to make sure to capitalize, he also invests his money against the housing market since he knows that there is a bubble that is about to pop.

Two young and hungry investors are ready to take the jump to the big time, but they just need to get their foot in the door. Being able to turn one hundred and ten thousand dollars into thirty million in a couple years, they are on the right track, but they are well short of the two billion dollars needed to be backed by a big bank. When finding out about Vennett’s proposal about buying into the shorts of the housing market, they are able to see the same thing and with promises of a minimum of 20-1 payouts, they are in, but need help from someone that is higher up on the food chain to get them heard. With the help from Ben Rickert, the two are able to get their investment placed and even though their interest payments on the shorts are massive, they decide to stick with it even though they are questioning their decision. When attending a massive housing convention, they see that everything that they thought was right and decide to get deeper into their investment, but while they are celebrating their victory, they are reminded that they are betting against the country and while they might be okay, the rest of the country will fall into deficit. 

This is a very insightful look at what happened during this last economic depression, and while it is just a movie, there are some pretty good points that are made. With the economy looking so good for so many years and the introduction of the adjustable rate mortgages, people were able to live outside of their budget for so long. But as the research was not done by the homeowners about what would happen when the rates went up, or how much they would go up, they had no idea that their lives would change so drastically. You know, it is a frightening look at how things can go so bad so quickly and having lived through it, I am kind of surprised that our economy has been able to come back, not as strong, but at least we are not completely in the red anymore. There are great performances from everyone involved and it really opens your eyes to see what might have actually been going on behind the scenes.  

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