'Big Short' bets Americans can understand the housing bubble - if it's funny and sexy

A few minutes into "The Big Short" you can feel director Adam McKay wanting to scold the American public for gawking at celebrities instead of doing its homework on the 2008 Wall Street meltdown.

Just as palpably, you can feel McKay ("Anchorman") recover his comedian's instincts, and instead find a way to turn our boobs-and-blondes priorities to his advantage.

So he has a naked actress (Margot Robbie) in a bubble bath deliver a lesson on mortgage-backed securities. Later, Selena Gomez weighs in on cognitive bias and investment choices.

And if you want to show how Wall Street cooks the books, why not bring in Anthony Bourdain?

And the rest of the movie is just like that - a gonzo crash course on the finer points of finance and fraud, set forth while we absorb the funny, infuriating true story of the men who beat the Street at its own crooked game during the housing bubble.

"The Big Short" is adapted from the best seller by Michael Lewis, who is both a crackerjack storyteller and a former salesman at Salomon Brothers - he was there in 1980s, when, as he puts it, deregulation took the first bond trader off his leash.

One of those traders, as the movie notes, had the idea to bundle mortgages into bonds, a product so popular that by the 2000s it had become a dip-your-beak trough for mortgage brokers, banks and ratings agencies.

The trough was soon emptied of good mortgages, so Wall Street went looking for not-so-good ones, then awful ones, then clones of awful mortgages and a lot of this crap came to market with solid-gold AAA ratings, so it could be sold to your pension fund and doofus outfits like Freddie Mac and Fannie Mae.

But everyone loved these "safe" securities - they paid a higher rate than treasuries - and the banks that bundled and sold them started holding them on their own books as collateral.

They got high, as the saying goes, on their own supply.

"The Big Short" tells the story of an oddball investor Michael Burry (Christian Bale) whose obsessive nature led him to study the arcane details of one of these bundled securities, and to see they were full of terrible loans, destined to implode.

Meanwhile, a banker (Ryan Gosling) reaches the same conclusion, and since he can't get his own bank to make the trade, takes it to another bunch of oddballs - a firm led by Steve Carell. By this time, the situation has caught the attention of two guys who run a hedge fund out of a garage, who find a moneybags partner (Brad Pitt) to back their wager against Wall Street.

We see them "gamble" on the implosion of the market, follow their bumpy ride as they wait for the inevitable collapse, and cash in.

It is, in the hands of Lewis and McKay, an entertaining tale, even if it has no heroes. To this day, the men who "won" are mostly embarrassed to admit how much they made on these trades. They know they've basically earned a commission on the collapse of the American economy, and the movie recognizes this.

In doing so, it avoids the usual pitfalls of the typical anti-Wall Street movie, wherein a character's greedy indulgences ("Wall Street" and "Wolf of Wall Street") end up being the subject of the movie, more persuasive than repulsive.

Thus does "The Big Short" make an important point - not all profit is equal. Some ways of making money are inferior to others. And some modern financial "innovation" is economically pointless and anti-capital.

As was the unregulated playground where these bundles of mortgages were made, rated, sold, insured and gambled upon. Deregulation is meant to make pricing efficient, but as the book and the movie correctly note: The prices on virtually all of this shoddy, opaque Wall Street merchandise were completely wrong.

As Gosling's character puts it, he's offering cheap fire insurance on houses already engulfed in flames.

What McKay and Lewis offer isn't the usual Hollywood lefty bitch session. It's a cutting, capitalist critique of useless, wealth-destroying activity - a vision of the invisible hand of the market beset by a chronic case of onanism.

thompsg@phillynews.com
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