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The Big Short is a film based on a non-fictional movie covering the financial crisis of 2007-2008 before it even happened. This movie not only focuses on the events that led up to the financial crisis, but men that saw the crisis in advance. The film uses a few actors that are well-known such as Ryan Gosling, Steve Carell, Christian Bale, and Brad Pitt. The Big Short tells a story of four main outsiders in the world of finance who predict that the market is crashing also known as the housing bubble collapse before anyone else. The Big Short points out the fraud of Wall Street firms. These firms offered loans to people, but without making sure they were going to get payed back. They have no idea what’s going on around them. When house prices started to fall and people stopped making payments on mortgages they couldn’t afford, caused the financial system to break. The film displays many different styles that approach the scenes in the film and the ways that the housing market crashed. That being said it led to the Great Recession.
Jared Vennett also known as Ryan Gosling is a cocky Wall Street trader. He also works with Mark Baum, but he only cares about making his share of the profit and not actually about working together. Jared Vennett undercovers Burry’s goal of the credit default swap. Jared is also a hedge fund manager. He teams up with Burry in investing the the swap market. He also observes the CDO or the collateralized debt obligations. CDO creates risks in the market. Michael explains that this housing bubble will lead to the collapse in the economy. Vennett understands that Burry’s analysis, who also learned from one of the bankers who sold Burry an early swap. Vennett used his quantitative analyst skills to tackle the methods in the financial world. This helped him verify that Burry’s idea is correct. He then decided to enter the market and sell swaps. Vennett ends up making $47 million in commissions selling off swaps.
One of the main characters Michael Burry also known as Christian Bale was the manager of the hedge fund. Michael recognizes that the U.S. housing market is similar to a bubble that is inflated by high risk loans which causes the economy to go down. Michael then creates a way such as the credit default swap which allows him to short the housing market. This starts a war between him and his clients. They become very angry. On the other hand the bank was saying that the housing is stable and the market kept rising which wasn’t exactly accurate. The people started to worry that they were getting shorted by Burry and wanted their money back. In the process of them trying to get their money back he placed a moratorium on withdrawals so they were not able to do so. In the end his investments paid off and he made $100 million for himself and $700 million for his investors. He ended up producing 500% returns for investors that inn fact did not leave his side throughout this process.
Mark Baum also known as Steve Carell in the film the Big Short. Baum is an angry, blunt hedge fund manager. He thinks that the Wall Street isn’t fair and he has had enough of all of it. He goal is to shut down all the fake traders and funds. He is brought into a goal which the common goal of it is to help figure out the housing bubble. He doesn’t believe in the negative injustice ways that the Wall Street portrays. Baum only believes in fairness due to his brother committing suicide at such a young age. He will do anything for people to have the rights they deserve, but doing it legally. Mark is motivated to buy swaps from Vennett due to his regards of business models. Baum realizes a lot of dishonesty and conflicts occur through company’s and he says that this fraud will result in a complete collapse in the economy. He then decides to purchase loans and wait last minute to sell them. By doing this his funds reach $1 billion and he explains how the bank won’t take the blame for the crisis. When in reality they created the crisis.
Ben Rickert also known as Brad Pitt in the film and Ben Hockett in real life. In the film he works as a trader at Deutsche Bank. Two investors in the film also known as Charlie Geller and Jamie Shipley go and seek for advice from Rickert. Rickert isn’t always a happy man and likes things done precisely. He has a quick temper. Geller and Shipley found a paper that Vennett wrote and brought in the Rickert in hopes of help. Geller and Shipley work against the housing market and place bets among it. Rickert grows angry, when they actually made profit off the downfall of the U.S. economy. As these two are out here making a fortune, little do they realize that the risk they are taking and the negative impact on the banks are huge. Shipley and Geller wanted to sue the rating agencies due to there misleading mortgages.
There are multiple things that caused this huge crisis. One main crisis in this film was when Burry screwed over his own people. He proposed an idea of the credit default swap, which makes bets against the market for profit. By doing this he makes people very angry. They all wanted him to sell it, but he refused to. Banks accept his bet, but monthly dues have to be made. His clients think he is wasting capital. Once he places restrictions on withdrawals, the market eventually collapses. Another crisis would be the four main people in this movie predict this collapse before it actually happens. In the business world “to short” is to bet that an investment will go down in its worth. Since they predicted this, it became true. These four guys short securities that are involved in the housing bubble and eventually they end making a lot of money because everyone else is losing their money. Wall Street put all of these housing mortgages in one basket and sold them to banks. While all of the things inside of the basket were considered safe, no one had to pay the bank back money. Since the bankers lend money to people that aren’t financially stable this points more risk into the basket. This whole movie reveals the fraud within the Wall Street that they only cared about the money they were going to profit off of things and how they were quick to offer people loans when they didn’t even make sure they could pay them back. A good example used in this movie is when Selena was gambling and half the people bet she would win and the other half thought she was going to lose. The people that bet correctly knew the mortgage securities would fail. That being said they made money. These bankers created the crisis in the movie and none of them were punished.
The crisis could be avoided if the banks didn’t just lend money out to people and not checking if they would get the money back from the people. If the bankers would of played it smart this wouldn’t of happened. Also, since they wanted the money all to themselves the chances of this being avoided might be slim. If people were smart where they put their money and how they spent in it would be more helpful. Another thing that could have prevented the crisis would be how the brokers regulated things such as loans, and hedge funds. There was too much freedom on them and not enough focus on the issue. Also, if new financial products weren’t established yet then more people would be aware of what was actually happening around them.
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