'The Big Short: Inside The Doomsday Machine'

1499 Words3 Pages
bulb-icon

Recommended: Global financial crisis 2007-09

The Big Short is a fantastic movie made in 2015. It is based on the 2010 critically acclaimed book, “The Big Short: Inside the Doomsday Machine” by Michael Lewis. The movie, which does have some comedy value to it, is about the financial crisis of 2007 to 2009. It dives in the causes of the crisis and it how it was caused by the housing bubble and subprime lending. It also shows how certain investors actually made money off the crisis itself. The film stars Christian Bale, as Michael Burry, Steve Carell as Mark Baum, Ryan Gosling as Jared Vennett, John Magaro as Charlie Geller, Finn Wittrock as Jamie Shipley, and Brad Pitt as Ben Rickert. The movie starts approximately 3 years prior to the financial crisis. Michael Burry is a hedge fund manager, …show more content…

Another hedge fund manager Mark Baum (based on real life Steve Eisman), learns about Jared’s plan. After doing some analysis of his own, Mark buys the credit default swaps from Jared. As part of Jared’s analysis and narration, he explains that the crisis is also because of packaging subprime loans into collateralized debt obligations (CDO). What is a CDO? It is structured financing that takes cash flow generating assets and repackages them into separate tranches (portions of debt), which will then be sold to investors. The assets of a CDO include mortgages, bonds, and …show more content…

They would approve mortgages with adjustable rates, knowing that if interest rates increase, the borrower has no way to repay. There was a scene where the one broker was speaking with Mark and explaining his lavish lifestyle because he was able to sell mortgages to just about anyone. They never gave the entire picture to the lender. With adjustable rates, if interest rates rise, your payments will rise with it. Can the lender be blamed as well? Of course they should. Mark was speaking with a “female dance” and she was explaining how she has all these properties. She should have done her homework. It took Mark to give her a Mortgage 101 lecture before she realized she could potentially default. There was some satisfaction, at the end of the movie, when the one mortgage broker was sitting in a room, with what we can only assume were other out of work mortgage brokers, seeking other means of income. Someone losing a job is never good and is sad. However, it showed that greed finally caught up to

Show More
Related

  • Jim Braddock and The Great Depression

    1165 Words  | 3 Pages

    Jim Braddock, the main character of the movie, went through tough times; he lost his job, couldn’t support his family and witnessed loved ones being lost to the Great Depression. Going through all this just made him a stronger man. This gargantuan mess was created because of the Stock Market crash of the 1930’s. This was a time when the stock market fell to the ground. The crash hurt so many American families, including Braddock.

    Read More

  • Grapes of Wrath and It's a Wonderful Life

    1093 Words  | 3 Pages

    Huge technological improvements and scientific breakthroughs have paved the way for larger, more stable and profitable financial markets. Fast and easy money was to be made by playing the booming stock market - many laymen took advantage of these opportunities without having a complete understanding of what exactly they were doing. This inevitably led to the crash that sent America and the world into the Great Depression. In the movie we see the first stages of the panic that spread throughout the country. People got scared and ran to the bank to take out their life savings.

    Read More

  • Causes of the 2008 US Recession

    1519 Words  | 4 Pages

    Many people today would consider the 2008, United States financial crisis a simple “malfunction” or “mistake”, but it was nothing close to that. Contrary to what many believe, renowned economists and financial advisors regarded the financial crisis of 2007 and 2008 to be the most devastating crisis since the Great Depression of the 1930’s. To make matters worse, the decline in the economy expanded nationwide, resulting in the recession of 2007 to 2009 (Brue). David Einhorn, CEO of GreenHorn Capital, even goes as far as to say "What strikes me the most about the recent credit market crisis is how fast the world is trying to go back to business as usual. In my view, the crisis wasn't an accident. We didn't get unlucky. The crisis came because there have been a lot of bad practices and a lot of bad ideas". The 2007 financial crisis was composed of the fall of many major financial institutions, an unknown increase in mortgage loan defaults, and the derived freezing up of credit availability (Brue). It was the result from risky mortgage loans and falling estate values (Brue) . Additionally, the financial crisis of 2007 was the result of underestimation of risk by faulty insurance securities made to protect holders of mortgage-back securities from risk of default and holders of mortgage-backed securities (Brue). Even to present day, America stills suffers from the aftermaths of the financial crisis.

    Read More

  • Greediness of Mortgage Lenders

    666 Words  | 2 Pages

    Mortgage loans are a substantial form of revenue for the financial industry. Mortgage loans generate billions of dollars in the financial industry. It is no secret that companies have the ability to make a lot of money by offering a variety of mortgage loan products. The problem was not mortgage loans but that mortgage companies were using unethical behavior to get consumer mortgage loans approved. Unfortunately, the Countrywide Financial case was not an isolated case. Many top name mortgage companies have been guilty of unethical behavior. Just as the American housing market was starting to recover from its worst battering since the Great Depression, a new scandal, an epidemic of flawed or fraudulent mortgage documents, threatens to send not just the housing market but the entire economy back into a tailspin (Nation, 2010).

    Read More

  • Ethical Issues In The Big Short Movie

    1581 Words  | 4 Pages

    Individuals like the two young and rambunctious mortgage consultants portrayed in the film gave loans to anyone and everyone that could sign the paper, regardless of the recipient’s ability to pay the loan in full. It is doubtful that all consultants fully understood the ramifications of their actions, but undoubtedly the overall disregard for consequence was the start of the collapse. Mortgage consultants mislead and tricked people into loans they could never afford by playing on their desire to live the American dream. Distributing adjustable rate loans to individuals without jobs, without collateral is unconscionable. Unfortunately, from their perspective they were helping these individuals. In a twisted way, these consultants were acting ethically from a utilitarian point of view. The consultants won because they received utility in the form of a bonus for distributing the loans, and the loanee won because they could now afford the home of their dreams. What the consultants didn’t consider in their calculations were the long term results and utility of their actions, unethically building the flawed foundation of the housing

    Read More

  • Transforming Your Paper into a Presentation

    1045 Words  | 3 Pages

    In this presentation, I’m going to explain how the key roles worked together to create the 2008 financial crisis.

    Read More

  • 2008 Financial Crisis Essay

    1536 Words  | 4 Pages

    The "subprime crises" was one of the most significant financial events since the Great Depression and definitely left a mark upon the country as we remain upon a steady path towards recovering fully. The financial crisis of 2008, became a defining moment within the infrastructure of the US financial system and its need for restructuring. One of the main moments that alerted the global economy of our declining state was the bankruptcy of Lehman Brothers on Sunday, September 14, 2008 and after this the economy began spreading as companies and individuals were struggling to find a way around this crisis. (Murphy, 2008) The US banking sector was first hit with a crisis amongst liquidity and declining world stock markets as well. The subprime mortgage crisis was characterized by a decrease within the housing market due to excessive individuals and corporate debt along with risky lending and borrowing practices. Over time, the market apparently began displaying more weaknesses as the global financial system was being affected. With this being said, this brings into question about who is actually to assume blame for this financial fiasco. It is extremely hard to just assign blame to one individual party as there were many different factors at work here. This paper will analyze how the stakeholders created a financial disaster and did nothing to prevent it as the credit rating agencies created an amount of turmoil due to their unethical decisions and costly mistakes.

    Read More

  • The Cause and Effect of the Subprime Mortgage Crisis

    1310 Words  | 3 Pages

    The subprime mortgage crisis is an ongoing event that is affecting buyers who purchased homes in the early 2000s. The term subprime mortgage refers to the many home loans taken out during a housing bubble occurring on the US coast, from 2000-2005. The home loans were given at a subprime rate, and have now lead to extensive foreclosures on home loans, and people having to leave their homes because they can not afford the payments. (Chote) The cause and effect of this crisis can be broken down into five major reasons.

    Read More

  • The Wolf Of Wall Street Movie Analysis Essay

    1301 Words  | 3 Pages

    This movie starts off as Jordan Belfort, the main character in the movie, losing his job as a stockbroker in Wall Street. After losing his job, he goes and gets a job in a Long Island brokerage room. In the brokerage room, he sells penny stocks. Thanks to him being aggressive in his selling skills, he was able to make a profit. With the new income, he gives his wife a bracelet and she asked him why doesn’t he go after the people that can afford to lose money, not the middle-class people or lower income people. That is when he gets the idea to get a lot of young people and train them to become the best stock brokers.

    Read More

  • The Big Short: Inside The Doomsday Machine

    675 Words  | 2 Pages

    Michael Lewis is the author of “The Big Short: Inside the Doomsday Machine” and Lewis’ main theme, or the main point, that he is trying to get across is how the 2008 financial crisis came to be, who saw it coming, and how people reacted. Lewis has experience with Wall Street and has worked for Salomon Brothers when he was younger. Today, Lewis is an American non-fiction author and financial journalist. There were three things I highly enjoyed “The Big Short”: the character development, themes, and personalization.

    Read More

  • Morals and Ethics in the Movie Wall Street

    926 Words  | 2 Pages

    The movie 'Wall Street' is a representation of poor morals and dissapointing business ethics in the popular world of business. This movie shows the negative effects that bad business morals can have on society. The two main characters are Bud Fox played by Charlie Sheen and Gordon Gekko played by Michael Douglas. Bud Fox is a young stockbroker who comes from an honest working-class family but on the other hand, Gordon Gekko is a millionaire who Bud admires and wants to be associated with. Greed seems to be a huge theme of this movie. This movie portrays the unethical society we live in. It shows how money oriented society has become and that people will do almost anything to get ahead. Competitiveness has become such a widespread game all over the country, especially in big cities.

    Read More

  • Of Mice And Men Film Analysis

    948 Words  | 2 Pages

    Directed by Gary Sinise, this movie will bring many emotions to anyone who watches. This movie takes place during the depression, where the two men are traveling from farm to farm in California. John Malkovich plays a strong, mentally retarded migrant worker who cannot control his own strength. He is best friends with George Milton, played by Gary Sinise.

    Read More

  • Review of movie Wall Street

    838 Words  | 2 Pages

    In the big city of New York there always exist those who push the envelope a bit, and stretch the law. One such man played by Michael Douglas makes money buying and selling others' dreams. He is a stock speculator; but one that succeeds based on illegal inside information. As he puts it "I make nothing, I own" Released in 1987, Oliver Stone's Wall Street is a representation of bad morals and poor business ethics in the business world. It also shows the negative effects, bad morals and poor business ethics can have on society. The film revolves around the actions of two main characters, Bud Fox (Charlie Sheen) and Gordon Gekko (Michael Douglas). Bud is a young stockbroker who comes from a working-class family and Gekko is a millionaire who Bud admires and wants to be associated with. Wall Street points out how wrong it is to exchange morality for money. Gordon Gekko reflects this message, and yet receives a standing ovation at a stockholders meeting after delivering his "greed is good" speech. The underlying theme of the movie is that greed is not only not ethical but it lacks moral substance in today?s society.

    Read More

  • The Big Short Movie

    581 Words  | 2 Pages

    After watching the movie The Big Short, I have a much better understanding of the financial crisis that took place in 2008. One topic from the movie that really stood out to me was the idea of synthetic CDO’s, which I thought explained the crisis perfectly. For example, Selena Gomez is pictured playing a game of black jack in which she is winning. However, a large audience is in attendance making side bets on Selena’s hand. In addition, more audience members are making bets on the side bets.

    Read More

  • The Big Short Movie Essay

    834 Words  | 2 Pages

    The movie, The Big Short, came out in 2015 and was made based on true events in the book by Michael Lewis, 2010. One good thing about the

    Read More

More about 'The Big Short: Inside The Doomsday Machine'

Open Document