The Big Short – Taking Advantage of a Catastrophe

As most of you might remember, the worldwide economy and the financial market back in 2007 where booming and nobody thought that a recession was near. The housing market was stable as a rock, and even the most conservative Wall Street investors were positive about the upward direction of their investments. However, history tends to repeat itself, and when we’re talking about finance, a market crash is inevitable. Back in 2008, the unthinkable became a reality – the world entered a deep recession leading to the downfall of numerous companies and households. However, a few people were able to predict the outcome before the start of the storm, and in The Big Short review we’ve created, you can see some of the winners from all of this!

Information About the Development of The Big Short Film

Since we’re talking about a specific movie which isn’t your ordinary action film, The Big Short cast had to be very strong. Some of the most famous and well-paid Hollywood actors were included in the picture, so if you are still thinking about watching it, maybe the following cast of the four main characters will help you make up your mind. Apart from that, in the following table, we’ve also included other valuable details behind the development and overall success of The Big Short.

The Big Short Review – What’s the Movie About?

If you’re not a financial trader and you’ve never come across the world of mortgages, this movie might be hard to comprehend. However, we’ll do our best to explain the specifics in a way that everybody could understand. The Big Short film starts with one of the main characters, named doctor Michael Burry – a successful hedge fund manager, operating more than $600 million. With a vast knowledge in the field of finance, Michael decides to analyze the housing market and see whether there are opportunities he could take advantage of. What he discovers, however, is a ticking bomb that nobody sees, best illustrated in the following trailer:

Back in 2005, the housing market in America was based on high-risk subprime loans. These loans were packaged in collateralized debt obligations (CDO’s), highly dependant on mortgages and credit ratings. Having in mind the fact that banks were sloppy in evaluating their clients’ trustworthiness and were busy with filling their pockets, you can imagine that the number of bad mortgages grew exponentially. Michael Burry was able to see past the banks’ greed which was similar to a very strong gambling addiction. He dug deep in the components of CDO’s and saw that these obligations would be worthless in the near future. However, due to his analysis, a couple of other hedge fund managers were also able to profit from this.

Joining the Michael Burry Position – Unthinkable Madness

One of the few people who believed in the analysis of Burry was Jared Vennett, an executive from Deutsche Bank. From various banks, including Deutsche, Michael was able to buy CDO’s and convert them into swaps. This derivative contract allows two parties to exchange the cash flows of two financial instruments. This way, the doctor was able to initiate his “short” position, meaning that he would bet against the market. This was viewed as a huge gamble by bankers, and they happily fulfilled Burry’s trade as he had to pay a fee on the swaps.

When Jarred Vennett saw the opportunity in all of this, he mistakenly made a call to another investor named Mark Baum. Baum also believed in the idea and decided to buy swaps himself. Apart from that, two other characters named Charlie Geller and Jamie Shipley accidentally came across the marketing presentation of Vennett. Since they were young investors, they also were quite interested in the trade. With the help of retired trader Ben Rickert, they also entered in a short position on the market, awaiting the crisis.

The Crushing Financial Pressure of The Big Short Film

Although this great financial discovery has numerous advantages for our characters, it does come at a price for them. The fees on the swaps became huge and the crash wasn’t as near as these investors thought it would be. Imagine digging a well, constantly investing in resources without reaching the coveted water source – that’s the pressure these people felt. That’s why more conservative people can consider the Big Short movie as a gambling film, worthy of making its way among the list of top 10 gambling movies of all time.

Like that wasn’t enough, Michael Burry faced the wrath of investors who wanted their money back, but he refused to listen to them and even restricted withdrawals. Mark Baum also wasn’t keen on selling his swaps to leading banks even though he constantly got in arguments with Jarred Vennett about the trustworthiness of this high-risk trade. Geller and Shipley also struggled with the swap fees and considered ending their position on the market. What followed, however, perfectly illustrated what the financial market was all about.

Fraud, Deception, and a Huge Financial Armageddon

As some of you might tell, bad loans on the housing market reached their peak and people weren’t able to pay their mortgages. CDO prices should have fallen, but rating agencies refused to evaluate the obligations correctly. Our characters oversaw the fraudulent marketplace, and some of them like Geller and Shipley decided to sue the agencies who covered the crumbling market. This comes to show you that US gambling laws were much more strict compared to Wall Street’s lack of regulations and reckless gambling practices. However, the truth about the housing market emerged on the scene.

Finally, the struggles behind a couple of years of intense pressure paid off for our characters. The youngest of the bunch, Shipler and Geller, scored a profit of $50 million, Baum got more than $1 billion profit for his fund, and doctor Burry was able to amass more than $2.6 billion for his investors. As for Jarred Vennett, he received a commission check for $47 million – a huge pay for his consultant services. At the end of the day, with all twists and turns, betting against the market wasn’t such a mad idea after all!

FAQ’s About The Big Short Movie

Although we’ve been quite extensive in our movie review, some questions still pop up in the minds of many. Below we’ve made a list of the most popular queries about the movie and The Big Short cast, so don’t hesitate to check their answers for more spicy details! And if the movie inspired you, we advise you to give online roulette a try and aim for the big wins!

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