REVIEW | The Big Short: What Margot Robbie can teach you about the Financial Crisis

By Henry Newcombe

I have always had a great interest in all things political. Yet, one area I have always struggled to get my head around is the 2007-2008 Global Financial Crash. When reading up on the subject, or watching a documentary about it, I have often become bogged down by the technical jargon of banking. Sub-prime loans, synthetic CDOs, high-yield mortgage backed securities and credit swaps; are all terms of importance when analysing the crash but not easy to comprehend. Last week, however, I had the pleasure of watching Adam Mckay’s star studded dark comedy The Big Short. This film took a very novel approach and made something that I, and many others, believed to be so complicated seamlessly simple. The film is based on the non-fiction book The Big Short: Inside the Doomsday Machine which told the true story of a handful of investors who bet against the US mortgage market in 2006-7; underestimating the systemic flaws and corruption in the market (grants as cited on IMBD). It highlighted how jargon is a brilliant tool to deter those wishing to delve deeper; simply by constructing it in such a way that we decide that we should leave it to the experts.

Jargon                

The inclusive and exclusive nature of language is something which we all take for granted. Today it is more commonly understood as the language of a particular art, sector, profession, trade or predefined group. Whether it be intentionally or not, jargon is about creating outsiders and insiders. As Charles Randolph (adapter of the book) stated, rather bluntly:

“a lot of this jargon was bullshit, was just ways of talking about concepts that either made the person sound like they knew what they were talking about when they didn’t, or made the product seem more real than it was” (Grobar, 2015).

What is crucial about this, is how jargon is used to ostracise. By using jargon, we, as the general public, are kept from understanding the details of this sector; ensuring we are not allowed to look too closely. The Big Short recognised this problem and reacted to this with an ingenious solution.

Firstly, the film is a comedy. The farcical nature of the situation was slowly revealed through different characters’ discussions with the credit agencies, mortgage brokers and CDO managers. The film makes the greed and naivety of individuals within the system so clear that one has no choice but to laugh. After key conversations and revelations, Ryan Gosling’s narration helps to summarise crucial information to ensure the audience are well aware of what is happening.

Haircut quote.jpg

Just one of the witty engagements between Mark Baum and Jared Vennett (http://thefilmexperience.net/blog/2016/2/21/more-guild-honors-make-up-sound-and-adapted-scripts.html)

Secondly, when a piece of technical jargon cannot be avoided, the film cuts to a celebrity to explain. Ryan Gosling introduces each cut away but in the first instance summarises why jargon is used, particularly in Wall Street:

“Mortgage backed securities, sub-prime loans, tranches, it’s pretty confusing right? Does it make you feel bored? Or stupid? Well, it is supposed to. Wall Street loves to use terms to make you think only they can do what they do or even better for you to just leave them the fuck alone. So here is Margot Robbie in a bubble bath to explain” (The Big Short, 2015).

Margot Robbie

Margot Robbie explains sub-prime loans whilst enjoying her Champagne (http://www.dailyrecord.co.uk/whats-on/film-news/big-short-review-blonde-bombshell-7217570)

Margot Robbie is tasked with explaining why these new mortgage bonds were so sought after, why things started to go wrong and the definition behind sub-prime loans. She breaks down these terms into their simplest form. Pictured in a bubble bath to present a more casual position, Margot talks directly to the audience; bringing the film to a stop to ensure the audience understands what’s going on.

Consequences

Discussing a 2014 film in 2017 may seem odd but it postulates as to whether we really understand why the crash happened. As Mark Baum, played by Steve Carrell, concludes when discussing whether we will see some bankers go to jail, a breaking up of the banks and new strict regulations:

“I don’t know. I have a feeling that in a few years people are going to be doing what they always do when the economy tanks, they will be blaming immigrants and poor people

Big Short- Steve Carell

Mark Baum thoughtfully weighs up the situation (https://www.commdiginews.com/entertainment/the-big-short-deserves-an-oscar-for-telling-the-truth-58167/)

This is exemplified by what Barry Ritholtz, called ‘the Big Lie’. In 2011, Michael Bloomberg stated that:

“It was not the banks that created the mortgage crisis. It was plain and simple Congress who forced everybody to go and give mortgages to people who were on the cusp… they were the one who pushed the banks to loan to everybody…and now we want to go to vilify the banks

When the countries leaders are then promulgating nonsense, making this lie go viral, we are laying the groundwork for another economic crash (Denning, 2011); as seen by questions relating to bespoke tranche opportunities (BTOs) (Carlozo, 2016). I openly admit I use to believe this sort of rhetoric; being a victim of jargon’s exclusive ability. Yet, to hold people accountable, we must break through this exclusion. As the film solemnly concludes, Michael Burry, played by Christian Bale, who predicted the crash, was ignored by the US government who had no interest in recognising future economic threats (The Big Short, 2015). Accountability is only effective through awareness.

Conclusion

My conclusions are twofold. Firstly, even ten years on, I still do not believe that we have had an opportunity to hold banks accountable. When enquiries are asked we believe authority figures, not based on facts, but simply because we deem them authoritative and familiar. We must continue to ask questions and hold those responsible accountable. Secondly, if you have not seen The Big Short watch it, it is a fantastic film. It made something, deemed too complex for the public to understand, accessible for all. This film gave me a grounding of the core terms needed to know the fundamentals of the crash, and I have now been able to look back on the  articles and documentaries with renewed understanding of what was going on. Overall, The Big Short made a drab subject both shocking and entertaining allowing the medium of film to educate.

References 

Carlozo, L (2016). Ghost of ‘The Big Short’ Haunts Wall Street. [Online] Available from: https://money.usnews.com/investing/articles/2016-05-23/what-is-a-bespoke-tranche-opportunity. Accessed: 20/12/17.

Collin, R (2016). The Big Short Review: ‘a comedy to make your blood boil’. [Online] Available from: http://www.telegraph.co.uk/films/2016/04/14/the-big-short-review-a-comedy-to-make-your-blood-boil/. Accessed: 15/11/17.

Denning, S (2011). Lest We Forget: Why we had a Financial Crisis. [Online] Available at: https://www.forbes.com/sites/stevedenning/2011/11/22/5086/#14d1a2bdf92f. Accessed: 10/11/17.

Grobar, M (2015). ‘The Big Short’ Scribe Charles Randolph on adapting the bestseller, finance jargon and how Adam Mckay “made the film sing”. [Online] Available at:  http://deadline.com/2015/12/charles-randolph-the-big-short-screenwriter-interview-1201658228/. Accessed: 15/11/17.

Hudson, K (1978) The Jargon of Professions. The MacMillan Press LTD: Basingstoke.

Information courtesy of The Internet Movie Database (IMBD). The Big Short. Available at: http://www.imdb.com/title/tt1596363/. Accessed: 15/11/17.

Kermode, M (2016). The Big Short Review- Life among the Wall Street Sharks. [Online] Available at: https://www.theguardian.com/film/2016/jan/24/the-big-short-review-crash-riveting-steve-carell-christian-bale. Accessed: 10/11/17.

The Big Short (2015). Directed by Adam MCKAY. USA: Regency Enterprises & Plan B Entertainment.

Picture1Henry is currently studying for an MSC in Geopolitics and Security, after completing an undergraduate degree at Royal Holloway in International Relations. He is particularly interested in popular geopolitics and the ways in which threats are portrayed throughout everyday lives.  You can find him on Twitter.                                                                                              

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