Film+Review-The+Big+Short 2‘The Big Short’ uses Bank of America, Wachovia as punchlines


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If you lived through the 2007-08 financial crisis, at some point you may have felt like you had to laugh to keep from crying.

That’s the approach director Adam McKay takes in his new movie, “The Big Short.” It’s his surprisingly comedic adaption of Michael Lewis’ nonfiction book about the investors who bet against the housing market and made billions when everyone else was losing their shirts – and homes.

And so who is the butt of all the jokes? Big banks, including Charlotte’s Bank of America and the late Wachovia. Charlotte itself even gets a little jab.

McKay’s storytelling method is a creative and entertaining way to illuminate an incredibly complex but important subject. And unlike other Wall Street movies that tend to turn despicable characters into near-heroes, this one makes it pretty clear who the bad guys are from beginning to end.

“The Big Short” follows an elite group of investors who figured out the housing bubble was going to someday pop and how to profit when it did.

Banks – with a particular emphasis on Wall Street titans like Goldman Sachs and Morgan Stanley – come off looking the worst. They’re either clueless or crooks or both, the investor protagonists decide.

The main thesis is that Wall Street banks packaged toxic subprime mortgages into super-complicated bonds – and when the housing market burst, the financial system toppled like a Jenga game with one too many blocks pulled out.

That’s pretty much what happened, although everyone parses the blame a little bit differently.

The movie roasts the mortgage brokers who made these home loans, the bankers who packaged them into investments and the ratings agencies who labeled those Frankenstein bonds “AAA” quality. The movie also pokes at toothless, conflicted regulators as well as journalists who failed to raise red flags.

“The Big Short” probably could take a few more swipes at the homeowners who loaded themselves up with debt and the policymakers – Democrats and Republicans – who encouraged them to trade in their apartments for shiny new homes. But it does a pretty good job of pointing fingers at all who were at fault.

Fittingly, the investors betting against these mortgage-backed bonds – known as “shorting” them in Wall Street parlance – realize how right they are on a trip to a Las Vegas casino.

But back to the bankers.

While not central players in the movie, Bank of America and Wachovia (acquired by Wells Fargo as it verged on failure in the crisis) both get a few laughs at their expense.

In one scene, young hedge fund manager Charlie Geller (played by John Magaro) says even Wachovia wouldn’t meet with him about a potential deal, the implication being that even a second-tier bank was blowing him off.

Later in the movie, an investor named Dr. Michael Burry (Christian Bale) says Bank of America was one of the banks that didn’t return his calls when it became apparent they owed him money on his housing market bets. The bank blamed a “power outage,” he says.

Charlotte itself gets mildly mocked in the movie as well. In the epilogue, a title card says Geller (who in real life is named Charlie Ledley) left New York after the crisis and moved to Charlotte to start a family. But a source familiar with the matter told me Ledley never moved to Charlotte. That was made up for the movie, just as Ledley’s name was changed.

The central conflict of the film is that the main characters are rooting for the arrival of a financial crisis to prove themselves right – and line their own pockets. But when the collapse actually does come, they realize there is nothing to celebrate, as stocks tank, unemployment skyrockets and foreclosures spike.

More than seven years past the meltdown, the economy feels much more stable than 2008, although it still has its challenges. And big banks seem more conservative, although the movie points out that some institutions are rolling out a new type of complex mortgage bond.

Despite all the laughs, “The Big Short” should serve as a serious reminder of how quickly things can fall apart, and how we need to be vigilant about letting history repeat itself.

In one final joke, the film rattles off all the reforms that took place after the crisis, including the jailing of hundreds of bankers for undermining the economy. Then comes the punchline: Just kidding.

Rick Rothacker covered the 2008 financial crisis for the Observer. He is the author of “Banktown: The Rise and Struggles of Charlotte’s Big Banks.”

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