The Big Short (Movie) — Life Lessons, Learnings & Why I Absolutely Loved It
The underpinnings & lessons learned from the film The Big Short and why it was more than just a movie about the 2008 financial crisis
Director & screenwriter Adam McKay made history, making a film about history, in what was an account of the biggest bet in history. The Big Short is easily one of the greatest movies ever made in the corporate/business film genre, and might I add one of the coolest.
Vulture’s short (meta) description of the movie was perfect: “For starters, it’s a comedy about deadly serious things and a leftish movie lionizing hedge-funders.”
Maybe it had an uncanny semblance to my career path — from starting a franchisee brokerage in Mumbai, to trying to beat the Indian stock market, to then finding what I was dedicating my life towards was listless & uninspiring to then a decade-long career as first a football journalist, & then a film critic to eventually picking up the guitar & piano & learning music production to venture into music immersively, with a football content startup platform/blog sandwiched in the middle; if there was any film that couldn’t be more entertaining & apt for me for various reasons it is perhaps The Big Short.
I could feel the same old feeling; that musician flow state & bursts of modest thrill I feel when I’m playing my guitar & it sounds good. Or for that matter, if the sound while I’m producing something sounds good after I master the track; I could feel semblances of those feelings while watching this movie. The Reward Is To Play as I’ve explained in an old post
The soundtrack & the score & the screenplay were bang on. But the way the all-star cast acted in this movie almost transformed them into one-hit wonder rockstars from the 2000s in some fleeting vein, yet epitomizing suave & relatable.
And yes, in reality, all the hedge-fund managers knocked this once-in-a-lifetime gig out of the park — the only, and last concert they’d ever play.
Cast back to 2011 and I was back in college at MIT, Manipal, India studying for my Bachelor’s in Engineering(B.E.). That year I downloaded and watched ‘The Inside Job’ narrated by Matt Damon, which was about the 2008 financial crisis in the trusty companionship of biryani, juice and cigarettes on one particular Sunday afternoon, after a Saturday night DJ-ing at the local pub.
It was an eye-opening documentary that I watched at the time that created a more informed worldview and a better understanding of the scams, greed, scrambles & convoluted nature & grey areas of the finance world. It also helped me understand finance jargon, structures and systems in much more elaborate detail since I’d been studying programming languages & software architecture & cryptography etc, etc, for the best part of 3 years before then; not to mention I was also in my teens.
The financial technicalities of the 2008 global crisis and meltdown are for another day, but if you’re interested you can check out Investopedia’s article about the movie below.
'The Big Short' Explained
Oscar-nominated film "The Big Short" explains the complex financial instruments that helped fuel the financial crisis…www.investopedia.com
While I could write a peppery & moderately well-written, witty review about the film, and that was my initial thought process, I guess there are enough of them out there already. So I decided to do something a bit different in this piece & share my learnings from the film. They border on philosophical albeit slightly generic, but I also briefly touch upon why I loved the movie as much.
#1 It’s Paramount To Ask — Always Ask
After Christian Bale’s character, Michael Burry finds out that there’s an asset bubble that would lead to the meltdown and crash of the US real estate market, he acts on his discovery by using a bit of inspired brilliance.
Burry travels to New York and meets the boards of several financial institutions on Wall Street and engineers his own financial product called the credit default swap, an instrument which is a kind of contract linked to the CDO or collateralized debt obligation (CDOs) so that he can short the housing market.
The key takeaway here is that Burry went out of the conventions & norms of how systems work (in this case the financial system) and decided to ask if he could get what he wanted. If you don’t ask, you don’t get it; it’s that simple.
Burry created his own financial instrument to take his short position; something few people throughout history can boast.
So if it’s that raise, promotion, new job or it’s that travel plan with someone, or asking that girl out on a date…. you’ve got to ask… or if it’s that business idea, investor pitch or making that song, album, film and it requires something you need from others, you’ve got to ask people for it if you need to get it done. What’s the worst that could happen? Rejection, that’s it.
Message #1 — You’ve got to ask.
#2 Do Your Research
Being informed, aware & improving your knowledge every day is perhaps paramount. Burry does his in-depth research to uncover the impending real estate market meltdown, while Mark Baum played by Steve Carrell, another hedge-fund honcho who is more pragmatic, does some proper & extensive research by conducting field visits to various states across America. There he finds that loans have been issued despite being high-risk and with high chances of default.
Baum validates the truth about their then-speculated impending market crash by doing his own investigation. This comes shortly after Deutsche Bank executive Jared Vennett played by Ryan Gosling informs him about it.
(The character Mark Baum was based on the hedge fund manager Steve Eisman while Jared Vennett was based on Greg Lippmann, an ex-Deutsche Bank bond salesman)
Message #2 — Do your research & study, study, study
#3 Take Risks
You’re born either rich, poor or middle-class. It’s just the hand that’s dealt. But what you do with the cards you’re dealt determines who you are.
Speaking about the cards that are dealt: you’ve got to take risks and gamble in different areas of your life i.e. take chances. You get nowhere by playing it safe. You’ve got to take risks, calculated risks to a certain degree, but you’ve got to get out of your comfort zone and make some risky moves.
In the film, all the major characters bet millions via their short positions using Burry’s engineered credit default swaps to CDOs, after they learn about them, and understand the high chances of the market crash to come. It was a huge gamble but backed by reasoning & proof. There were still chances of significant losses & it backfiring spectacularly; but that’s gambling for you (I’m not talking about gambling games like rummy and poker but taking risks in other aspects of life, whatever they may be).
A lot of India’s youth & people working hand-to-mouth jobs spend a lot of their time playing random games on their phones or scrolling through or posting on social media. It really doesn’t get them anywhere, and they often find it hard to break out of their predicament.
But it has more to do with them not taking risks, being careless with their time, lacking drive & ambition, settling for less, complaining about their problems and not doing anything about it. A lot of them work hard but they just waste their time otherwise; they stay where they are and don’t take risks.
So be mindful of your time, it’s your greatest resource, and take some risks. Step by step.
Message #3 — you’ve got to take risks.
#4 Every Crisis Is An Opportunity
There are always lessons, learning and opportunities in crisis; whatever they may be. In an old post, I wrote about how spending time in concentration camps turned revelatory for several holocaust survivors, even though it was their darkest hour.
Whatever crisis happens, happened or could happen in our lives leads to life lessons but there’s always a glimmer of opportunity if you look deep enough.
In terms of this story i.e. the extension to this story, which happened in real life — the second wave of people who began to short markets all over the world after the crisis went global in 2008, realized this. They did so by understanding the huge opportunity in the midst of this worldwide crisis.
While a lot of people created a furore in the news about the tanking of global markets, the irresponsibility of banks, and its repercussions while also scorning at the global layoffs worldwide, there was the opportunity to make some money, which the second wave of people realised.
They used the opportunity presented by this market crash instead of joining the bandwagon of managers & civilians who were all just complaining. So being an opportunist and looking for the hidden opportunity amid crisis is a hallmark of intelligence.
Message #4 - find opportunity in crisis & learn lessons from it
#5 Celebrate The Win But Don’t Lose Your Head, Humility & Integrity
An important message McKay depicts in the film is when Charlie Geller (John Magaro) and Jamie Shipley (Finn Wittrock) two 20-somethings who run a small investment firm begin to celebrate their winnings vociferously. The pair discover a message written on tissue by Vennett (Ryan Gosling) that alerts them about credit default swaps and the opportunity to short the market. They then seek the advice and perspective of a retired banker named Ben Rickert (Brad Pitt) who lives in Singapore.
But despite the trio capitalizing on the crash, Rickert lambasts the two youngsters for celebrating their success fervently. Rickert reminds the duo that Americans at the lowest strata of society in the USA would bear the brunt of the crisis and the money the trio managed to make, came at their cost.
While business is business, and you’ve got to be clever, being aware & humble about the truth is a sign of maturity & so is not letting your success get to your head.
This theme is echoed again as Baum books his profit eventually towards the end of the film, & is pictured being rather sad & mournful despite earning millions from his bet.
So celebrate, celebrate your wins by all means, whatever they might be, but be humble and mindful of the reality and the different sides to the story.
Message #5 — celebrate the wins but stay humble & aware
#6 Always Go In The Opposite Direction To The Crowd
You’ve got to be different in life. You’re made different, so why act like you’re the same as everyone else? You’ve got something to offer the world in your own unique capacity, that only you can. So do that!
You’ve got to go in the opposite direction to the crowd. You can’t be in the top 5% of the world: whether that’s in terms of net worth, professionally in your particular industry, or in expertise of the field of your work by doing what everyone else is doing and thinking like everyone else.
This is brought to light majorly in the film. All the characters are all oddballs, outsiders and misfits; at least that’s how the movie portrays them. But they go left when everyone goes right.
So you’ve got to go against the flow. You’ve got to challenge norms and stand out. I touched a bit about this in an interview I did for a composing platform a year ago.
Buddhism also stresses the importance of this. The way is inward, the way is within and the way is the different path we take alone. So remember to take the journey that not everyone takes and the path that not everybody takes as well.
Message #6 - go against the flow
On A Personal Note
These tips might seem rather preachy, and a bit cliche which I’ll agree to, but truly understanding them and using them might just help you. If you find them sensible & they resonate with you, you can try to follow them.
On some personal reflection, Christian Bale’s character Michael Burry is quite literally me. If there was any perfect character in the history of cinema that mirrored me in reality, or also who I’d be if my music career doesn’t take off, it would probably be Bale’s portrayal of Michael Burry.
From running his hedge-fund Scion Capital by sitting in his office in a t-shirt and shorts to analysing & geeking out on data to find discrepancies way into the night in his office cabin way beyond work hours, to playing the drums like late Rush drummer Neil Peart — either on his drum kit at home or air drumming his sticks while he’s in his office, McKay’s characterization of Burry & Bale’s acting was phenomenal.
It reminded me of several days & nights I would play rock & roll, in my stock broking office on my mini-speakers while conducting fundamental analysis & looking for good trades.
I’m no genius, and neither was Burry, but he paid attention. He looked where nobody else was looking and he did something nobody would fathom doing. The only blemish on the character as depicted in the movie was that he listened to too much Iron Maiden. But man did Burry make the bet of the century.
In all his actions throughout the movie, including being terrible at managing his clients & staff & sucking at drafting emails to them, Bale’s Burry put me in a time capsule shuttling back to my stock broking days and then back to my music present, in high-speed.
Christian Bale as Michael Burry was the embodiment of me, old & new (Bale is also my favourite actor).
But that bit of congruence & my take on the film aside, movie is absolutely fantastic, and humorous & is a must-watch.
An excerpt from the classic film critic platform RogerEbert’s review states:
“The money smelt, and earned, by the adventurers of this story of the real-life 2008 world economic meltdown is arguably tainted by bad karma.
“The terminology is both dry and dizzying, the machinations incredibly convoluted. The main thesis of the story, adapted for the screen by director Adam McKay and his co-screenwriter Charles Randolph, is that as banking became the top industry of the United States, bankers deliberately concocted Byzantine financial tools whose main function was to help the rich get richer and screw over the little guy. You can expect a lot of pushback against this film of the “where do these affluent Hollywood types get off criticizing income inequality” but that won’t mean the movie is wrong.”
“I started off feeling skeptical about this movie: the hairstyles and clothes of the main characters were more ‘90s music-video than early 2000s, and the sometimes-color-desaturated flashbacks to some characters’ back stories were a little on the drearily commonplace side. But the narrative momentum, combined with the profane wit of much of the dialogue, and the committed acting going on beneath the hairpieces, all did their job.”
“And they got across the angry, pessimistic conviction behind the movie, which is that the major banks all engaged in fraudulent, criminal activity, and that the U.S. government bailed them out at the expense of the little guy, and that there’s no indication that the banks aren’t going to do something like the exact same thing all over again. You are free to disagree. But this is a movie that uses both cinema art and irrefutable facts to make its case. It’s strong stuff.”
Nuff said, go watch the movie!
The Big Short is on Amazon Prime and you can stream it here.
If you’d like to thank me for this post, if it helped you, or you found value in it, you can buy me a coffee instead of, or alongside subscribing to this publication by scanning the QR code below so that I can sip my next brew of coffee, all thanks to you! :)
