Five stars for this comedy-drama (trailer) based on the best-selling Michael Lewis book about the 2008 financial crisis and the lonely voices in the wilderness calling, “Housing bubble,” “Housing bubble,” “This will end baaaadleeee.” The idea that mortgage-backed securities could be anything other than rock solid so went against conventional wisdom that no one listened. But, as we know now, these securities had become more and more vulnerable as riskier loans were bundled into them, and the chaff soon outweighed the wheat.
It takes a bit of understanding about how this financial market operated to grasp the significance of the action. Director Adam McKay, who wrote the screenplay with Lewis and Charles Randolph, cleverly provides the necessary background, having characters break the fourth wall to speak directly to the audience. For example, from her symbolic bubble bath and sipping champagne, actress Margot Robbie tells us what a financial bubble actually means. It’s “ a terrifically enjoyable movie that leaves you in a state of rage, nausea and despair,” says A.O. Scott in his New York Times review, which includes a clip from McKay on some of the clever ways the film explains the financial goings-on.
The cast does an exemplary job of embuing characters with strong personalities. Christian Bale plays Dr. Michael Burry, a loner physician-turned-hedge-fund-manager who figures out the problem early (and whose character confirms my aversion to heavy metal music). He takes the unprecedented step of actually looking at the individual mortgages bundled into the securities being offered and sees that many of them are weak and involve adjustable rate loans. When their interest rates go up, the homeowners will default. This, to him is an investment opportunity; he’ll bet against the mortgage market. The banks are happy to back his scheme (involving credit default swaps), seeing it as a sure-fire winner for them.
One of the banks he approaches has on staff a skeptical analyst, played by Ryan Gosling, who believes the good doctor may just be right. He convinces the unconventional trading firm led by Mark Baum (Steve Carell) to invest in the swaps, too. In one of the movie’s funniest sequences, Baum sends staff to Florida to investigate some of these mortgages. They find unbuilt houses, a forest of “for sale” signs, and two beach-bum mortgage brokers (Max Greenfield and Billy Magnussen) , who don’t hesitate to say they will insure basically anything. “Why are they confessing?” Baum whispers to his staffer. “They’re not confessing. They’re bragging,” he replies. Similarly, Melissa Leo, as an official at an investment rating agency, is badgered into explaining how, if her firm rated investments accurately, the banks would just take their business down the street.
In a Colorado garage, another pair of youthful investors (played by John Magaro and Finn Wittrock) wants to parlay $30 million into a bigger fortune. They set out to New York to figure out how. There they stumble onto the real estate problem and see the credit default swaps as their big chance, but they need connections, and they get help from their neighbor back home, a disenchanted former investment banker (Brad Pitt).
It’s telling that the few people who foresaw and took advantage of the inevitable crisis were all, one way or another, Wall Street outsiders. They weren’t unaware that their gains were made on the backs of everyday Americans who lost billions in housing value, jobs and homes, pension fund value, and savings. Meanwhile, the many individuals and institutions whose carelessness, greed, or criminality created the bubble in the first place have not been called to account. No less an expert than Paul Krugman has written, “I think (the movie) does a terrific job of making Wall Street skullduggery entertaining, of exploiting the inherent black humor of how it went down.” And, even more important, he says it “got the underlying economic, financial, and political story right.” And it’s still a story lots of people don’t want Americans to hear.
Rotten Tomatoes critics rating: 87%; audiences, 91%.