Newsletter - February 2016
It’s not every day (or year or decade for that matter) that you get a full-fledged Hollywood blockbuster that focuses on the ins and outs of the financial industry. Yet that’s what we got at the end of 2015 when The Big Short debuted in theaters.
The film, directed by the man who directed Anchorman and populated by A-listers like Brad Pitt, Ryan Gosling, and Steve Carell, tells the story of the bursting of the housing bubble by zooming in on the tiny handful of people who foresaw the catastrophe and were able to profit from it. It is a well-told story with great acting, and it deserves the award conversation that is floating around it.
But how accurate is it? Most films about the financial industry go to great lengths to make the content palatable to a lay audience, occasionally skirting the truth in the effort. So I imagine many of you are wondering where on the spectrum of truthfulness The Big Short falls. Let’s take a look…
The Big Short” makes a big deal of its protagonists realizing that there was a giant housing bubble in the middle of the last decade at a time no one else could see it. But that’s not quite right. When no-money-down home loans were commonplace and home prices were soaring, there was widespread discussion of the possibility that the United States was experiencing a housing bubble.
Mr. Irwin is right to say that movie makes its characters seem a bit more prescient than they may have truly been. He points out that publications like Economist and New York Times were running articles that spoke of the possibility of a catastrophic bubble years before it popped. In fact, Google’s peak search traffic for the term “housing bubble” came in 2005, two years before the crash began. So tuned-in people were aware of the possibility.
But this weakness doesn’t cripple the movie. Mr. Irwin also states, “It is the strongest film explanation of the global financial crisis … The movie does an impressive job of conveying arcane financial concepts that are very hard for a general audience to grasp.” He notes, quite correctly, that the characters’ abilities to profit from the collapse are where their true genius shines.
The Verdict: The Big Short makes some minor accuracy concessions for the sake of brevity and storytelling, but overall is on point with its depiction of the housing bubble and the economics that led to it. The characters may be a bit larger than life, but the spirit of the film captures important truths about the financial industry.
So watch, laugh, and shudder all over again at the painful memories the film invokes. It is an important reminder of lessons we should never forget. In the meantime, if you need a helping hand with your document retrieval/compliance systems, Blue Streak Docs is here for you. Plus, if you haven’t worked with us yet, you can try us out and get your 5th order FREE!
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