The Big Short End of the Stick

I went to see The Big Short the other day. The circumstances were well aligned for something special. I snuck out of the office for a matinee with my friend Kristen, who was also playing hooky from the small business that she owns. It was a rainy, dreary day, perfect for seeing a movie that is funny, surreal, sobering and maddening on a large scale. It did not disappoint.

The Big Short tells the story of the Wall Street crash of 2008 from the perspective of a few groups of outsiders of the investment world who saw that the crash was coming when nobody around them either would or could see it. Basically, for the 30 years leading up to the crash the economy was built on the bundling together of ordinary, run of the mill housing mortgages and selling shares in the resulting pool of mortgages as securities. Wall Street was at first principally selling securities made up of prime housing mortgages backed by the federal government. All the big institutional investors – pension plans, colleges, 401ks, and the like – that were looking for safe securities bought them.

But the Wall Street banks were making so much money selling these mortgage backed securities that when there were no more prime mortgages to use, they started taking more and more risky mortgages, bundling them together and selling securities backed by these junk mortgages as if they were just as safe as the ones that they had been selling for years. All of the players that were in a position to call bullshit on this fraud – the SEC, the companies that put out investor ratings on securities, the press, the big banks themselves, the Federal Reserve, the U.S. Congress with its investigatory powers, even the bit players – did nothing to stop it. The outsiders depicted in The Big Short did what any investors with their knowledge would do: they bought a form of insurance, called a credit default swap, against the failure of these junked up mortgage backed securities. So when the crash came, their right to a payout against the catastrophic losses made them millions.

The Big Short makes the drama of the crash of 2008 real to the audience. Before I saw the Big Short, I understood the basics of what had happened. I lived through it, like everyone else. I had read the book upon which the movie was based before I saw the movie. I had read about what happened in the papers and online, discussed it with friends. But The Big Short made it real to me. It forced me to internalize this giant fraud and process what was done to me – to all of us – on an emotional level. In a way, I can only now say that I have felt the impact of the crash of 2008.

And now I am really, really pissed off. I am pissed off at the greedy people who perpetrated this trillion-dollar fraud. I am pissed off at the government that bailed them out and failed to prosecute a single person on Wall Street. I am pissed off that seven years later these greedy bastards are engaged in the same kind of schemes with the same callous disregard for the rest of us who stand to suffer when they cause another crash. But most of all I am pissed off because the overriding feeling I had coming out of the movie theater was a feeling of being powerless. Yes, I know, I could do something about it, one person can make a difference, no matter how difficult the challenge. But at that moment I had no immediate recourse to seek justice or change. And like the rest of us, I know that my ability to influence policy has been co-opted by the moneyed interests buying our politicians.

I do not think that I will be alone in these feelings. Millions of people will see this movie. They too will become enraged beyond words at the way that these people blew up the economy in their quest for profits, then ran to Washington the way that entitled teenagers run to their parents the minute that their do-as-we-wish antics land them in real trouble. And they will be enraged that their leaders bailed out these reckless teenagers by passing their debts on to the rest of us. But most of all, they will be enraged that they cannot do a damn thing about it. It happened. They took and took and took and then they got bailed out and now they are taking and taking some more.

By the time that Kristen and I left the theater, it had become dark and very, very foggy. The day had turned into night and the rain had become fog while we sat riveted by this tale of misfit characters who had called bullshit on the American economy and walked away with millions, an insane move played out against the backdrop of the great theft of our time. We had had the kind of quintessential movie experience that I have not had since I saw Good Will Hunting in a Boston theater in 1997. I did not see this movie; I experienced it. A midday adventure, complete with popcorn, skittles and a movie that should have the analysts on Wall Street calculating just how much more they can take before the people overcome their present powerlessness.

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