Hindsight is a fine thing, and hindsight about a bit of foresight is even better when it comes to storytelling. There was a time when nobody knew anything about what was happening, whatever it was – except for the few people who did. The difficulty with such a story is that the ones who know are likely to appear so wise as to be inhuman, and the ones who don’t know seem more ignorant than anyone can be.
This is not a difficulty for Adam McKay in The Big Short, it’s his opportunity, his way of turning a film about the financial crash of 2008 into a very funny, if ultimately desperate screwball comedy. His heroes are socially dysfunctional but honest in their contorted way, and the ignorant mass has carefully and in many cases profitably cultivated its ignorance. The film has an epigraph supposedly from Mark Twain – ‘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’ – and like all good epigraphs, it invites us to rework it a bit. The film suggests that you can get into trouble for knowing as well as not knowing, even if the trouble is different. And that it may not matter what ain’t so as long as everyone else thinks the way you do.
Michael Lewis, in the book the movie is based on, calls ‘not knowing’ a ‘talent’. ‘Their ignorance seems incredible,’ he says. ‘They’ in this case are traders who don’t know that sub-prime mortgages, waiting to default, make up 95 per cent of many apparently classy financial packages. In other instances the apparent ignorance is a strategy, a way of knowing just enough. ‘The market might have learned a simple lesson: don’t make loans to people who can’t repay them. Instead it learned a complicated one: you can keep on making these loans, just don’t keep them on your books.’ And in the case of most but not all large institutions, ignorance was a kind of patience or confidence: you were too big to fail, and when you were bailed out your rescue would look like a reward. There is a wonderful moment at the end of McKay’s film when Ryan Gosling, as Jared Vennett, the sub-prime man at Deutsche Bank and our clever, smarmy guide to a world he knows is tottering, tells us in voiceover that everything fell apart and hundreds of people went to jail. Pause. He says, ‘Just kidding.’ Only one person went to jail, and we get a still of the unfortunate fellow.
One of the things that screwball comedies teach us is that you have to be a little crazy, like Katharine Hepburn, to get things right. Or at least, like Cary Grant, attuned to someone else’s craziness. This is why it is so satisfying that Christian Bale, as Michael J. Burry, is central to the story. He has a glass eye because a childhood illness deprived him of his natural one, and likes to sit in his office and play the drums, write emails, and sift data as if he were a housebound Sherlock Holmes on an economic trail. In Bale’s performance he is amiable, twitchy, stubborn, just weird enough to have rumbled the even weirder financial world. Vennett hears of his ideas when Burry starts buying bonds that no one wants because he knows they are going to fail, and Vennett gets in touch (by accident) with another gang, the analysts at a hedge fund led by Mark Baum, played by Steve Carell. Here is another unsocialised character, this one rarely off his mobile phone, and scarcely able to speak to people without shouting at them. He and his team don’t trust Vennett but the idea of a massive failure of the market appeals to them for all sorts of reasons. Meanwhile, two young fund managers (played by John Magaro and Finn Wittrock) who don’t have enough money to play in the big leagues pick up Vennett’s startling prospectus while they are waiting not to be welcomed by a large bank. They consult their guru, a trader who has left the financial world all together (he is played by Brad Pitt, decorated by so much facial hair we can scarcely recognise him and wonder whether he may have strayed in from The Revenant).
All of these players bet against the market in various ways, and all make fabulous amounts of money. Not for the money’s sake, you understand, but because of the game and its challenges, and a little bit because of their hatred of Wall Street and the ratings agencies – let’s say of normality. What’s important to them is to have been right, to have known all along that the improbable was true. And here is where the film subtly modulates from one story to another. It’s smart (and entertaining) to challenge the system, to know its secret weakness. It’s something else to count on the complete breakdown of the system, because that alone will justify your hunches and your behaviour. As Lewis says in his book of Burry, ‘It wasn’t until after he’d made a fortune from that collapse that he began to wonder about the social dimensions of his financial strategy.’ There’s a good moment in the film where Baum hesitates for a long time before he sells the pile of bonds he bought for just this occasion. He wants to win yet he knows the real losers are not his competitors but their victims, all the people now without houses or jobs. Still he pulls himself together.
Just in time, because a certain sentimentality threatens the film when this sort of remorse appears. There is a fine sequence when Baum and his men go to Miami to look at some of the empty houses that are the basis of sub-prime mortgages and to meet the casually unscrupulous bunch of local lenders. Why would they care whether their clients can afford the mortgage? They’re getting their cut, and how would they get so rich if they restricted their lending to plausible customers? One of Baum’s Florida interviews is with a pole-dancer (while she’s at work): she owns five houses she can’t afford, and is very cheerful about it. Why not, people can’t wait to give her another loan.
These scenes are funny in the way cartoon characters walking in the air as if they hadn’t just stepped off a cliff are funny, and of course there is a difference between working in a money market based on transferable values and one based on worthless bits of paper. But I do find the tone of virtue that sneaks in here – and in similar scenes in Lewis’s book – a little worrying. From a distance the differences don’t seem huge. Of course honourable traders are not cheating their clients or counting on their ruin. But they’re not doing anything to prevent their ruin either; they’re too busy winning the game.
The film invites me to think this, though, and it escapes the lurking sentimentality every time by implementing its witty assumption that neither hindsight nor foresight is going to be enough. We’re all in this together, and we’re not going to understand what’s happening, however often it is explained to us. One of the many pleasures of the film is its persistent mockery of the very idea of explanation. Margot Robbie (just to recall The Wolf of Wall Street) sits in a bubble bath sipping champagne and tells us about one intricate bit of financial machinery; the chef Anthony Bourdain chops up fish in his kitchen while he describes another; Selena Gomez plays roulette to illustrate the idea of gambling on other people’s gambles. And throughout the film title-cards appear on the screen with definitions, adages and commentary. Do you know what a tranche is? The film will tell you whether you do or not. Several characters talk to the camera, in one case to explain that what actually happened was not what was enacted on screen; in another to contradict the previous speaker.
The last example is perhaps the funniest. Vennett has with him a statistical expert, known as a quant, and explains that the man won first prize in a maths contest in China, and knows no English. He is therefore entirely reliable. ‘How can a guy who can’t speak English lie?’ When Vennett has done his spiel, his colleague (Ted Jiang) turns to us and says in impeccable English that his boss’s remarks are not quite true. He gives his name as an actor rather than a character, and tells us he won second prize, not first, in the contest. It’s good to know what ain’t so – when you can.