“The Big Short,” the hit black comedy about colorful Wall Street outsiders who bet against the housing market when they detect it is propped up on rotten subprime loans, was yesterday nominated for five Academy Awards: Best Picture, Best Director, Best Adapted Screenplay, Best Supporting Actor and Best Film Editing.
“We all got up at 4:45 a.m. to go to [writer-director] Adam McKay’s house to watch the announcements together. It was very exciting. I’m hoarse from yelling,” screenwriter Charles Randolph told ThinkAdvisor in an interview. McKay (“Anchorman,” “Saturday Night Live”) came to the project after Randolph (“Love and Other Drugs”; “The Interpreter”) had already written the script. McKay imbued it with his unique comic sensibility.
Based on Michael Lewis’ nonfiction book, “The Big Short: Inside the Doomsday Machine,” the film accuses Wall Street of “criminality”; labels the ratings agencies “whores” and calls the mortgage market “fraudulent.” It brands ex-Federal Reserve Chairman Alan Greenspan “one of the architects” of the financial crisis and implies that the Securities and Exchange Commission gets cozy – literally — with firms it regulates.
The movie had earlier chalked up a Directors Guild nod for McKay and a Writers Guild nomination for Randolph and McKay, seven Critics Choice award nods, a Screen Actors Guild award nomination and four Golden Globe nods, though it was shut out in that contest.
In “The Big Short,” A-list actors play versions of real-life figures in financial services who saw the housing debacle looming and used credit default swaps to short mortgage-based bonds: Christian Bale’s character is based on hedge fund manager Dr. Michael Burry (that Best Supporting Actor nod went to Bale); Steve Carell (hedge funder Steve Eisman); Ryan Gosling (trader Greg Lippmann); and Brad Pitt (retired banker Ben Hockett). Pitt’s character helps two young money managers secure an ISDA (International Swaps and Derivatives Association) Master Agreement, permitting them to deal directly with the big banks rather than go through brokers.
The New York Times calls “The Big Short” “the strongest film explanation of the global financial crisis.” But much of the jargon it spouts has flummoxed some film critics and, safe to say, most of the general audience. Indeed, in trying to make complex financial terminology intelligible to the layperson, “The Big Short” often comes up short.
Randolph says elucidating financial terminology wasn’t one of the chief objectives: “Our goal with this material from the beginning was always to be authentic to the [financial] world but that even if the audience got only 60% or 70% of it, in an emotional context they would feel what was happening more than enough to have a pleasurable journey and understand the story. Younger people, especially, are getting comfortable not knowing everything [in a movie]; having things fly past them is part of the fun of it.”
It’s not that filmmaker McKay didn’t try to crack the jargon; and to be sure, he took an entertaining approach. There are, for example, beauties Margot Robbie and Selena Gomez, in cameo roles, talking straight to the camera and explaining subprime mortgages and synthetic collateralized debt obligations (CDOs), respectively.
Blonde actress Robbie, who played Jordan Belfort’s wife in “The Wolf of Wall Street,” gives her little tutorial sitting in a bubble bath and sipping champagne. Summing up, she says: “Whenever you hear ‘subprime,’ think s---.”
“Adam created these moments, when the film stops and celebrities turn to the camera. They really opened it up and freed the rest of the story from having to carry the weight of explaining so much. Once we had those scenes, it made it a lot easier to let the other scenes exist without so much exposition in them,” Randolph says.
“People need to know this stuff in order to follow the story. But when you hear ‘collateralized debt obligation’ or ‘credit default swap,’ they make you feel stupid and bored. Bankers do everything they can to make these transactions seem really complicated,” McKay said, according to the film’s press notes.
Nevertheless, working on the screenplay, McKay himself needed help demystifying the financial nitty-gritty. So he hired financial journalist Adam Davidson, a Peabody Award winner, to work with him. Davidson, credited as the film’s “technical consultant,” is co-founder and co-host of NPR’s “Planet Money.” He co-reported and co-produced the award-winning radio documentary about the housing crisis, “The Giant Pool of Money.”
Whenever McKay made the note on a script page: “Financial gobbledygook goes here,” Davidson filled in the blanks, the journalist recounted on a Slate Money podcast. He also worked with the set designer and prop department, as well as clued in the costume designer on suit styles favored by various sectors within the industry.
Further, Davidson served up an “understanding of how each of the characters were making slightly different bets that had different moral and emotional dimensions,” the journalist said.
“Adam was on set a lot and really helped with both the authenticity of the environment and the dialogue. He helped shade some of the actors’ [improvised] moments to make sure what they were saying was right,” Randolph points out.
In one of the cameos, helping pop singer-actress Selena Gomez shed light on synthetic collateralized debt obligations, Richard Thaler, behavioral economist at the University of Chicago, offers a blackjack analogy. The two held forth in a Las Vegas casino.
Gomez was, um, surprised when McKay offered her the part.
“I read the script and didn’t understand most of it, which scared the hell out of me because it’s important to learn about our economic system,” she said, in the press notes. “My generation is the next generation up. It’s important for us to understand what happened.”
Teaming with Gomez, Thaler talks “extrapolation bias”: that is, the tendency to assume that something happening now will continue to happen. “People thought that the real estate market would just keep going up and up and up,” he said.
Sultry Gomez is seated at the blackjack table with a huge stack of chips in front of her. Onlookers make side bets that she’ll keep winning.
“My odds are good,” she said. “I’m on a winning streak. How can I fail?” She lost big time.
“It was investors making those kinds of side bets on mortgage-backed securities through CDOs that drove the whole world economy to where it was poised to crash,” McKay said. “The film explores how an entire culture can get caught up in the mania of a corrupt system.”
Chef and TV host Anthony Bourdain does an “explainer” about CDOs with an analogy of Friday’s fish morphing into Sunday’s seafood stew. Comparing triple-B rated bonds to tired fish, he said, seafood stew isn’t “old fish.” “It’s a whole new thing. That’s a CDO.”
To McKay’s way of thinking, that dish was “the perfect metaphor for a collateralized debt obligation, where the banks bundle a bunch of bad mortgages and sell it as a triple A-rated financial product,” he said.
As part of his early research, Randolph met with a handful of traders, salesmen, mortgage brokers and hedge funders.
In the movie, Gosling’s character takes a visual approach to make his case by using a tower of stacked Jenga blocks representing subprime home-loan tranches.
“Nobody knows what’s in them because they’re filled with subprime [stuff]”; but the ratings agencies gave them triple-A ratings, he scolded.
To illustrate that, one scene shows a Standard & Poor’s manager (Melissa Leo) wearing dark glasses after visiting the eye doctor and telling Carell’s character and associate that competition among the ratings agencies forced them to grant false ratings.
“That character is literally blind. It’s a very overt metaphor – and I’m to blame for it,” Randolph half-jokes. “But finding ways to differentiate various people from a character perspective was probably one of the [top] challenges” in writing the script. “In a world like finance, there are a lot of similar types.”
Nevertheless, much of “The Big Short’s” industry lingo and transactions inevitably float over the audience’s head.
“The movie did a good job of making people think they understood what was going on in real time. But if you really think [it] explains things, you’re wrong,” said Felix Salmon, hosting the Slate podcast. “Twenty-four hours later, you remember Margo Robbie in a bathtub – but not a word of what she was saying.”
McKay’s hope is that after seeing the film, “people get really mad and upset, walk out of the theater and ask their congressman how he’s been voting on banking reform, and tell him ‘If you’re not for breaking up the big banks – I don’t care if you’re right wing or left wing – you don’t get my vote’,” he said.
Randolph is adamant that as a culture, “we shouldn’t have to choose between incompetence and corruption. We should be able to successfully navigate past both of them and not get stuck. So if [this movie] is part of the process of finding ways to identify problems in the culture and move toward correcting them, nothing would make me happier. If we can get more people talking about what happened, that’s terrific.”
Brad Pitt, whose production company, Plan B Entertainment, produced “The Big Short,” reportedly had this to say right after a screening in New York:
“It’s a story that needs to be told because nothing has changed.”
The Oscar ceremonies are scheduled for Feb. 28.
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