WARNING: SPOILERS

“The Big Short” is the important, eat-your-vegetables movie that goes down like an ice cream sundae. It’s got big stars, zips, is fun. It shows us Margot Robbie in a bathtub, talking directly to the camera and using the word “fuck.” True,  the actual quote is “Now fuck off,” but feel free to extrapolate.

It also concerns one of the most earthshaking events in our lifetime: the global financial meltdown of 2007-08. Before the closing title credits we get some of the numbers: $5 trillion lost, 8 million jobs lost, 6 million homes lost. And that’s just in America. So why did it happen?

For more than a decade, easy money was made (in mortgage-backed securities) in a way that seemed risk-free, so the powers-that-be kept upping the ante until it was no longer risk-free. Until it sank the world economy.

It also happened because regulation was nowhere. Regulation (in the form of the SEC and ratings agencies, such as Moody’s and S&P) was in bed with Wall Street. Sometimes literally, as the movie suggests.

It also happened because you and I let it happen; because we’re perpetually distracted.

Country club/stripper club
There’s a great early line about Lewis Ranieri, a bond trader with Salomon Brothers, a Wall Street investment firm, in the 1980s:

He changed your life more than Michael Jordan, the iPod and YouTube put together.

This is how things used to work. Banks loaned you money for a house, you paid it back with interest, end of story. Wall Street wasn’t interested because each mortgage was small potatoes and required too much work to figure out the risk-factor of the individual homeowner. It was Ranieri’s genius to take a bunch of mortgages, cut them up, and bundle them together as mortgage-backed securities, which minimized risk and turned small potatoes into big ones. Suddenly, bankers went from the country club to the stripper club, and your mortgage was no longer held by the bank but by ... I don’t even really know. I guess the investment firm? No, the investors? Apologies in advance if/when I use the incorrect nomenclature. I’m sure, throughout, I’ll be talking about this stuff like someone talking up the number of “points” a baseball team scores.

But I understand this much: Because there was risk-free money to be made, the banks kept expanding to whom they would loan money, and the terms of those loans; and in the end we got subprime mortgages.

We get a sense of that expansion when Mark Baum (Steve Carrell) and his hedge-fund team travel to Florida in 2005 to investigate whether they should short (bet against) the housing market. They meet an exotic dancer who owns/is flipping five houses, and two douchebag brokers making a killing by selling homes to people who can’t afford them. Our hedge-fund guys also meet the future: neighborhoods abandoned by people unable to pay their mortgages when the adjustable rates go up.

“The Big Short” follows four main storylines:

• Michael Burry M.D. (Christian Bale), whose lack of social skills is offset by his math skills. He sees the looming disaster first when the internet bust of 2001 doesn’t correlate to a dip in Silicon Valley housing prices; in fact, they go up.
• Jared Vennett (Ryan Gosling), who follows Burry’s coattails from inside Wall Street but can’t get many others to sign on. Conventional wisdom says a bet against the housing market is a sucker’s bet.
• Mark Baum’s team, which gets involved because of: 1) a wrong number; 2) Baum’s desire to stick it to Wall Street.
• Charlie Geller and Jamie Shipley (John Magaro and Finn Wittrock): Two Colorado garage hedge-fund guys who follow Burry’s lead, and, with a reluctant neighbor/mentor, Ben Rickert (Brad Pitt), try to cash in.

Bale is wonderfully off, Gosling a sharp sword. Carrell is grasping, empathetic and the movie’s moral center, while Pitt shows us a quieter morality. He’s a man who left Wall Street long ago; he’s trying to cleanse himself. Behind the bushy beard and longish hair, Pitt barely moves a facial muscle; he acts with his eyes. He sees the looming disaster and knows it’s a double-edged sword. They all do. They know that in sticking it to Wall Street, everyone suffers.

There’s a nice early scene when Burry visits Goldman Sachs, and lets the suits in the conference room know he wants to bet against the real estate market by buying credit default swaps. $5 million? they suggest. $100 million, he answers. They can’t believe their luck. As he leaves, you see them all laughing and high-fiving one another. Then he goes to Deutsche Bank and others and does the same. He winds up betting against the housing market to the tune of $1.3 billion.

Here’s the question the movie doesn’t answer: How much did these credit default swaps, and subsequent ones, help sink the system? I.e., how less bad would it have been if these guys hadn’t gotten skin in the game?

Confessing/bragging
Writer-director Adam McKay, mostly known for Will Ferrell comedies (“Talladega Nights,” “The Other Guys,” “Anchorman”), keeps us both entertained and informed. He intercuts with relevant quotes (“It ain’t what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” – Mark Twain), and cuts away from the action to have stars (Margot Robbie, Anthony Bourdain) explain the more complicated details of the financial system. Characters constantly break the fourth wall, particularly Gosling’s Vennett.

I could’ve done without the star interludes, to be honest. Robbie in a bathtub was more distracting than informative, and having Selena Gomez, all of 23, explain CDOs was just annoying.

But the script, written with Charles Randolph (“The Interpreter”), from the book by Michael Lewis, is super sharp:

• “It’s like 2+2 = fish.”
• “Tell me the difference between stupid and illegal and I‘ll have my wife’s brother arrested.”
• “The truth is like poetry, and most people hate poetry.”

I thrilled at the intelligence of this movie. I can see myself watching it again and again.

One of my favorite exchanges is during the Florida trip, when the douchebag brokers keep talking up the dupes to whom they sell subprime mortgages. Baum, confused, talks sotto voce with his team:

Baum: I don't get it. Why are they confessing?
Moses: They‘re not confessing.
Collins: They’re bragging.

In America, every braggart is confessing; you just need to listen.