The Big Short (film)
The Big Short is a 2015 American biographical comedy-drama film directed by Adam McKay and written by McKay and Charles Randolph, based on the 2010 book The Big Short: Inside the Doomsday Machine by Michael Lewis about the financial crisis of 2007–2008 which was triggered by the United States housing bubble. The film stars Christian Bale, Steve Carell, Ryan Gosling, Brad Pitt, Melissa Leo, Hamish Linklater, John Magaro, Rafe Spall, Jeremy Strong, Finn Wittrock, and Marisa Tomei.
|The Big Short|
Theatrical release poster
|Directed by||Adam McKay|
|Based on||The Big Short|
by Michael Lewis
|Narrated by||Ryan Gosling|
|Music by||Nicholas Britell|
|Edited by||Hank Corwin|
|Distributed by||Paramount Pictures|
|Box office||$133.4 million|
The film is noted for the unconventional techniques it employs to explain complex financial instruments. Among others, it features cameo appearances by actress Margot Robbie, chef Anthony Bourdain, singer-songwriter Selena Gomez, and economist Richard Thaler, who break the fourth wall to explain concepts such as subprime mortgages and collateralized debt obligations as a meta-reference. Several other actors directly address the audience, most frequently Gosling, who serves as the narrator.
The film began a limited release in the United States on December 11, 2015, followed by a wide release on December 23 by Paramount Pictures. The film was a commercial success, grossing $133 million against a $50 million budget. The film was also highly praised by critics, with many highlighting the cast's performances (particularly Bale, Carell and Gosling), McKay's direction and the screenplay. 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.
The film consists of three separate but concurrent stories, loosely connected by their actions in the years leading up to the 2007 housing market crash.
In 2005, eccentric hedge fund manager Michael Burry discovers that the United States housing market is extremely unstable, being based on high-risk subprime loans. Anticipating the market's collapse in Q2 2007, as interest rates would rise from adjustable-rate mortgages, he proposes to create a credit default swap market, allowing him to bet against market-based mortgage-backed securities, for profit.
His long-term bet, exceeding $1 billion, is accepted by major investment and commercial banks, but as it requires paying substantial monthly premiums, it sparks his clients' vocal unhappiness, believing he is "wasting" capital. Many demand that he reverse and sell, but Burry refuses. Under pressure, he eventually restricts withdrawals, angering investors. Eventually, the market collapses and his fund's value increases by 489% with an overall profit of over $2.69 billion.
FrontPoint Partners and Jared Vennett
Deutsche Bank salesman Jared Vennett is one of the first to understand Burry's analysis, learning from one of the bankers who sold Burry an early credit default swap. Using his quant to verify that Burry is likely correct, he decides to enter the market, earning a fee on selling the swaps to firms who will profit when the underlying bonds fail. A misplaced phone call alerts FrontPoint hedge fund manager Mark Baum, who is convinced to buy swaps from Vennett due to his own personal distaste for the banks. Vennett explains that the packaging of subprime loans into collateralized debt obligations (CDOs) large enough to be considered AAA ratings will guarantee the eventual collapse.
Baum's staff investigates the Miami market, discovering that mortgage brokers are profiting by selling their mortgage deals to Wall Street banks, who pay higher margins for the riskier mortgages, creating the bubble. In early 2007, as these loans begin to default, CDO prices somehow rise and ratings agencies refuse to downgrade the bond ratings. Baum discovers conflicts of interest and dishonesty amongst the credit rating agencies from an acquaintance at Standard & Poor's. Baum's employees question Vennett's motives, yet he maintains his position and invites Baum and company to the American Securitization Forum in Las Vegas. Interviewed by Baum, CDO manager Wing Chau, on behalf of an investment bank, describes how synthetic CDOs create chains of increasingly large bets on faulty loans – up to 20 times as much money as the loans themselves. Baum horrifyingly realizes that the fraud will completely collapse the global economy. He purchases as much as possible, profiting at the banks' expense and waits until the last minute to sell. Baum's fund reaches $1 billion, and he laments that the banks won't accept blame for the crisis.
Young investors Charlie Geller and Jamie Shipley accidentally discover a prospectus by Vennett, convincing them to invest in swaps, as it fits their strategy of buying cheap insurance with big potential payouts. Below the capital threshold for an ISDA Master Agreement required to enter into trades like Burry's and Baum's, they enlist the aid of retired securities trader Ben Rickert. When the bond values and CDOs rise despite defaults, Geller suspects the banks of committing fraud. The trio also visit the Forum, learning that the U.S. Securities and Exchange Commission has no regulations to monitor mortgage-backed security activity. They successfully make even more profit than other hedge funds by shorting the higher-rated AA mortgage securities, as they were considered highly stable and carried a much higher payout ratio.
Geller and Shipley are initially ecstatic, but Rickert is disgusted, citing the impending collapse and its effects; when unemployment goes up 1%, 40,000 people will die. Furthermore, they realize the banks and the ratings agency 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 and their families about the upcoming disaster and the rampant fraud but nobody believes them. As the market starts collapsing, Ben, on vacation in England, sells their swaps. Ultimately, they make a profit of $80 million, with their faith in the system broken.
Jared Vennett makes $47 million in commissions selling off the swaps. Mark Baum becomes more gracious from the financial fallout, and his staff continues to operate their fund. Charlie Geller and Jamie Shipley go their separate ways after unsuccessfully trying to sue the ratings agencies, with Charlie moving to Charlotte to start a family, and Jamie still running the fund. Ben Rickert returns to his peaceful retirement. Michael Burry closes his fund after public backlash and multiple IRS audits, now only investing in water commodities. The banks responsible for the crisis escape any consequences for their actions. It is noted that as of 2015, banks are selling CDOs again under a new label: "Bespoke Tranche Opportunity".
- Christian Bale as Michael Burry, M.D., the operator of Scion Capital and the first person to discover the massive bubble in the American housing market. He invests over $1.3 billion in credit default swaps based on his analysis. Burry is quirky, socially inept, goes to work in shorts and bare feet, and much prefers working with numbers to people.
- Aiden Flowers as young Michael Burry.
- Ryan Gosling as Jared Vennett (based on Greg Lippmann), a low-level salesman at Deutsche Bank who stumbles upon Burry's interpretation of the housing market, and persuades Baum to buy credit default swaps from his bank, collecting commissions and fees by doing so. Vennett is egotistical, highly vain and serves as the narrator of the film.
- Steve Carell as Mark Baum (based on Steve Eisman), the hot-headed head of FrontPoint Partners, a hedge fund which also invests millions of dollars into credit default swaps based on the advice of Jared Vennett. Baum is disgusted by the actions of his Wall Street compatriots, and is struggling to cope with his brother's suicide.
- Brad Pitt as Ben Rickert (based on Ben Hockett), a paranoid and germaphobic retired former trader who, like Baum, despises the financial world but goes back in as a favor to Jamie and Charlie.
- Hamish Linklater as Porter Collins, an employee of Baum's.
- Rafe Spall as Danny Moses, an employee of Baum's and an ardent optimist.
- Jeremy Strong as Vincent "Vinny" Daniel, the most rash and impulsive employee of Baum's.
- John Magaro as Charlie Geller (based on Charlie Ledley of Cornwall Capital), co-owner of the Brownfield Fund who asks Ben to help them get a seat at the 'big-boy' table.
- Finn Wittrock as Jamie Shipley (based on Jamie Mai of Cornwall Capital) co-owner of the Brownfield Fund who asks Ben to help them get a seat at the 'big-boy' table.
- Marisa Tomei as Cynthia Baum (based on Valerie Feigen), Mark's loving and understanding wife.
- Tracy Letts as Lawrence Fields (based on Joel Greenblatt), one of the largest investors in Scion Capital and Burry's mentor.
- Adepero Oduye as Kathy Tao, a Morgan Stanley employee who supervises FrontPoint and Baum.
- Byron Mann as Wing Chau, a CDO manager that Vennett introduces to Mark Baum.
- Karen Gillan as Evie, the ex-girlfriend of Jamie's brother who leaves the SEC to find a job at an investment bank, while naively revealing to Jamie that the SEC pays no attention to CDOs.
- Melissa Leo as Georgia Hale, an employee of credit ratings agency Standard & Poor's, who admits the industry is corrupted, giving overly positive ratings on CDOs so the big banks will keep bringing them business. (fees for ratings)
- Max Greenfield as Mortgage Broker #1, a morally bankrupt mortgage broker who specialises in conning strippers into bad loans.
- Billy Magnussen as Mortgage Broker #2, a morally bankrupt mortgage broker who specialises in conning immigrants into bad loans.
- Rudy Eisenzopf as Lewis Ranieri, a no-name banker who created the first mortgage-backed security.
- Margot Robbie as herself, explaining mortgage-backed securities and subprime loans
- Anthony Bourdain as himself, explaining Collateralized Debt Obligations (CDOs)
- Richard Thaler as himself, explaining synthetic CDOs
- Selena Gomez as herself, also explaining synthetic CDOs alongside Thaler
In 2013, Paramount acquired the rights to the 2010 non-fiction book The Big Short: Inside the Doomsday Machine by Michael Lewis, to develop it into a film, which Brad Pitt's Plan B Entertainment would produce. On March 24, 2014, Adam McKay was hired to write and direct a film about the housing and economic bubble. Screenwriter Charles Randolph, who co-wrote the film with McKay, said one of the first challenges was finding the right tone for the film. He told Creative Screenwriting, "In general it was trying to find the right tone that was slightly funnier than your average Miloš Forman comedy, which is all grounded character-based but not so satirical where you got Wag the Dog. Somewhere between there was what I was shooting for. Once I got the tone down, then I went through the plot. The market's movements provided you with an underlying plot. You make your short deal, then the bank is trying to squeeze you out, and then it all breaks loose. So that was pretty easy, and it provided character arcs against that." Two years after Randolph wrote his draft, McKay, as director, rewrote Randolph's screenplay. It was McKay's idea to include the celebrity cameos in the film to explain the financial concepts.
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 Moneyball, 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 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.
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 a short stretch of Mercer Street, 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.
The Big Short grossed $70.3 million in the United States and Canada and $63.2 million in other countries for a worldwide total of $133.4 million, against a production budget of $50 million.
The film was released in eight theaters in Los Angeles, New York, San Francisco and Chicago on December 11, 2015 and earned $705,527 (an average of $88,191 per theater). It set the record for the best ever per-screen gross for a film opening in eight locations, breaking the previous record held by Memoirs of a Geisha ($85,313 per theater), and was the third biggest theater average of 2015 behind the four screen debuts of Steve Jobs ($130,000) and The Revenant ($118,640).
The film had its wide release on Wednesday December 23, 2015 and grossed $2.3 million on its first day. In its opening weekend it grossed $10.5 million, finishing 6th at the box office.
On Rotten Tomatoes, the film has an approval rating of 88% based on 281 reviews, with an average rating of 7.8/10. The site's critical consensus reads, "The Big Short approaches a serious, complicated subject with an impressive attention to detail – and manages to deliver a well-acted, scathingly funny indictment of its real-life villains in the bargain." On Metacritic, the film has a score of 81 out of 100, based on 45 critics, indicating "universal acclaim". Audiences polled by CinemaScore gave the film an average grade of "A–" on an A+ to F scale.
The New York Times' "UpShot" series stated The Big Short offered the "strongest film explanation of the global financial crisis". The series also stated that it "wouldn't necessarily have been able to cash in as successfully as the characters in The Big Short. The success of this film is due to the work of the actors who played the characters.
Movie critics with backgrounds in finance also commented on the film. Many agreed with the public that The Big Short was entertaining and engaging, but also terrifying. Glenn Kenny reported that the film accurately got the message across even though the lives of the characters were not interconnected, their stories were.
Steve Eisman, who is portrayed as Mark Baum in the film, said that he respects Carell's portrayal but that it was not 100 percent true to his real character. Eisman told The Globe and Mail that he felt his character was too funny. Instead of having a sense of humor, he felt that his character should have been angry all of the time.
Adam McKay and Charles Randolph won the Academy Award, BAFTA Award, and Writers Guild of America Award for Best Adapted Screenplay. They also won an Empire Award for the Best Screenplay. Christian Bale won the Critics' Choice Movie Award for Best Actor in a Comedy and the Satellite Award for Best Supporting Actor (Motion Picture). Hank Corwin won the American Cinema Editors Award for Best Edited Feature Film (Comedy or Musical) and Los Angeles Film Critics Association Award for Best Editing.
The film earned the Critics' Choice Movie Award for Best Comedy and was named one of the Top 10 Films of the Year at the American Film Institute Awards 2015. Dede Gardner, Jeremy Kleiner, and Brad Pitt won the Producers Guild of America Award for Best Theatrical Motion Picture. The cast also won the National Board of Review Award for Best Ensemble.
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