This is an excellent film. It is a lightly fictionalized version of the events that led up to the financial crash of 2008 due to the housing bubble. It focuses on several individuals who looked closely at the way that housing prices were rising at a far faster rate than the rise in people incomes would predict, looked closely at the mortgages that were being handed out that enabled people to pay ever-increasing prices for the same homes, and came to the conclusion that the whole system was rotten with no accountability and was destined to crash.
These people then decided to do what had long been considered unthinkable about the housing bond market, and that was bet that it would crash. Betting that the price of an item would fall is called ‘shorting’ the stock or bond and they bet big.
The film mixes styles, with some documentary style bits where they have cameos by famous people talking directly to the camera and explaining what is going on and the terms being used. It uses humor effectively to liven up what could easily turn into a didactic exercise in economics. It provides a devastating critique of how the big investment banks, real estate mortgage brokers, the rating agencies, the insurance industry, and government regulators all contributed to the swindle and it charges that they acted with impunity because they knew that the government would bail out the big banks. One character says towards the end of the film that at least as a result of the disaster that had just unfolded, that at least the big banks will be broken up and those bankers responsible will go to jail, right? Yeah, right, and the film was clearly making the point that the culprits got away scot free.
Here’s the trailer.
Back in 2008 I wrote a whole series of posts on how the oligarchy was ripping off the country and a large part of it dealt with the housing bubble so I was familiar with the subject matter of the film. This post deals specifically with the housing bubble and may be helpful for those who want to know more about it and may enable them enjoy this film more.
This film is reminiscent of another excellent film Margin Call (2011) that I reviewed here. That film dealt with a single financial firm over a period of 24 hours when it discovers that its mortgage-based securities holdings are rapidly becoming worthless.
It is encouraging that entertaining and informative films with big box-office stars (this one has Christian Bale, Ryan Gosling, Steve Carell, and Brad Pitt) can be made about important but esoteric topics.