Is the narrative of 'The Big Short' the best explanation of the financial crisis?

On January 27, the director of "The Big Short", Adam McKay (who also directed and co-wrote “Anchorman,” “Talladega Nights,” and “Step Brothers”), visited Washington for a screening of the film hosted by Economic Studies at Brookings. After the screening, Adam McKay joined a panel of financial experts and journalists to discuss whether the film’s narrative is the right one to explain the crisis to the public.

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[chrisanderson]

My entire 20+ years in the financial sector has been non-stop crises and meltdowns, its a wonder I have any hair left. During the GFC I was working at the pointy end of my government's response to the GFC (doing a lot of work to see who was exposed and investigating collapses). The Big Short is an excellent depiction of the sub-prime mess, I remember reading many prospectuses as emergency research during this time and man, the signs were all there. I remember reporting up the line concerns I had with a suite of products filled with sub-prime CDOs being marketed to pensions and local small council and union funds. Got told not to worry about it.

[brabham]

I worked in the banking industry from 2012-2016 and the banks have already started, and continue to this day, offering the same mortgage "products" that, in part, contributed to the most recent recessation.
IMHO the HARP program was a failure because it merely pushed the "pain" down the road for borrowers who, as we all found, couldn't afford a home in the first place.
Secondly, both Dodd-Frank and the CFPB are a failure as they don't really hammer the banks but it DOES make things much more difficult for the borrower.
Lastly, if something like this happens again, if the banks/industry/business need to go into bankruptcy, they should go out of business! Yes, there will be pain in that scenario for a period of time but at the back end the financial industry may FINALLY behave honestly, ethically and with integrity.

[itskennytheclown]

Very informative. Brings up a lot of interesting points. It's funny how white collar crime get's a total pass in this country. I've heard it said, "in this country it's better to be rich and guilty, than poor and innocent."

[claudebelanger]

I am one of those people who lost a lot of money leading up to and during the collapse in 2008. A valuable lesson learned while at the same time made me a better investor. The only part that irks me is that the people working for Bear Sterns, Fannie Mae etc. took bonuses from the bailout money.

[CHURCHISAWESUM]

The Big Short was a great picture of what happened, but it's not complete. There are three other parts missing: 1. The dealing between the banks prior to TARP that Hank Paulson set up, excellently and accurately portrayed by the movie Too Big to Fail. 2. The experiences of the millions of Americans who lost their homes. Their stories should be made into a movie as well. 3. The role that bizarre government policies and subsidies played in incentivizing lenders and borrowers to open up mortgages on homes too expensive for these families to afford.

[tonyburzio]

The banks issued bad loans and hid them, stealing fixed value dollars. This time, the mortgages are a constant, but money will wildly change value. There are two ways to drown, fall under water or fill the room with water. In the end, how you drown matters little.

[lesslycepeda]

Very informative, and a great movie! Thanks for the great panel.

[eclecticmn]

Read the book and saw the movie. Both are very accurate. For a different aspect of this read Chain of Title (2016) by David Dayen. It will make you very angry. It is hard to believe the courts looked the other way when the forging and fraud was right in front of them. The movie Margin Call is good as well.

[bsimmons]

K, am I the only one that sees the guy on the left as the problem...?

[xevious]

What changed in the past 40 really 50 years in america is that the people common citizens by way of greed and desire, and the growth of the 1percent, began to worship the idea of classism. We went from a regulatory world which was far more fair to the working family, Wage fairness between the lowest and highest paid in a company and the moral foundation that kept those factors in place, to our facination with power and wealth being on display via movies films and television, to being something most people desired. It was no longer just about a decent job to supports one living, it turned into who has the biggest house on the block, who should your daughter be marrying a blue collar worker or a doctor. we put so much emphasis on the justification of rich and wealth that we were fine with the growth of the 1% we championed it believing we could be a member of that exclusive club. that in all that we worshiped in terms of Classism we a let our guard down, and let soft spoken robber barons to change laws and deregulate the system that kept their greed in place. All the while our nation in the 80's when into a season of boon. so no one faught against anything that came across as greed. The 1% acquisition of wealth, saw to many changes draining the wealth and the jobs away from the blue collar worker. Factories shut down domestically and reopened in tax incentive cheap labor nations like China or india. and much of the asian peninsula. we effectively allow the wealthy to sell the nation out for their own personal profit. and that kind of money making must always be fed on that level. So when one source of income began to waver, the banks saw to other schemes to make money. to the point of putting the world at risk. blind greed and stupidity because it was going on for so long. The big short, Too big to fail, Margin Call .. all these great films centering around the 08 crash, are all defined by one single theme.. Dont put your trust in those who have big names big positions and big titles, because they can very well be asleep at the wheel. A quote used in the film itself. It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.

[sthitapragnyadeshpande]

It was really enjoyable listening to these intelligent and diverse folk.
"Dumbing it down" is definitely the only way I would have understood this!

[arrowb]

Can we make another film for COVID finance esp for big Sharks and the hungry tiny fishes ?

[csx]

How times change! When I was starting out, the complaint against banks was you needed to prove you didn't need the money to borrow it.Then, their only way to get repaid was from the borrower. Now the Federal Government (taxpayers) gets stuck with the bill.

[williamchamberlain]

Jumped ahead to 12:00 : "Let's get started..."
17:20 - stories are important: we get crashes every 20-30 years because a generation of financiers have grown up not hearing stories about how it went tits-up last time round.

[devoteeofgeorgesmiley]

51:58 "In the book ('The Big Short'). we turned off CNBC. If you read the book, you realize that we turned it off 'cause it was too much. And I''m sure Greg and David both wrote pieces and there were workers people that work with them that also wrote pieces. It's easy to say that now. But from a behavioral finance perspective, nobody wanted to hear that the housing market was going to crash. You gonna go to a party and talk about that? You'll be drinking alone in a corner. So I think it's easy to look back now and say, 'Oh, that! That!', but you were a person alone on an island if you wanted to make that call."
- Danny
Home. BLEEPING. Run, Danny. Home. Bleeping. Run.

[arrowb]

I rank this financial conversation by one of my favorite Big Short movie as the core of the dialogue as the top FRUITFUL video for personal need. Will scrape this video and save in my YT library shelf

[KP-zdhc]

As the man was talking in 24:30, I suddenly started pounding my tablespoon against my plate really hard to remove Korean paste. Don't read into it too much, guys.

[brabra]

The sequel of The Big Short should be The Big Squeeze.

[chickshusband]

"Was it criminality or was it stupidity?" Really? How about Greed? How about good old fashioned greed which - until fairly recently - was considered a deadly sin?

[josephupton]

Read "Meltdown" by Thomas Woods. The real problem was not the "free market" or "greed" or "bankers". The problem was government policies and government policies and government policies.