The Long and the Short of It

This needs a spoiler alert. But not because I’m giving away the plot but because it may spoil your day. 

We went to see the Big Short at our latest newest cinema, the East Dulwich Picture House. All very lovely, especially the large seats for those of us of comfortable years. The cafe/restaurant is also v good.

But the film is why we are here, n’est-ce pas?

In short (ho ho) it’s about how the world financial system nearly imploded in 2007 and how a few people – weirdos wackos and the serially untrusting mostly – saw it coming and made a killing. It’s based on fact, based on an excellent book by Michael Lewis. I’ve read his stuff since he deconstructed the rise of bond trading at Salomon Brothers in the 1980s. Frankly you had to be either in the world of finance or close to that world to understand the intricacies of his books, especially The Big Short and I did wonder how it would translate.

The answer is brilliantly. Like government, the world of finance is dominated by acronyms – MBS, CDS, CDO – and the concepts these few letters cover are as confusing as the names. The film often breaks the fourth wall, talking to camera to explain things, using, variously a porn star in her bubble bath, a world famous chef and an American pop star to explain mortgage backed securities, collateralised debt obligations and  synthetic collateralised debt obligations in easy to consume chunks. Yeah, really.

Mostly though the film is fun and funny. Or it would be if it wasn’t real. If these guys saw the egregious fraud that was played out by the banks, the rating agencies, the insurers and governments, why didn’t a lot of others. This was a classic example of ‘you can call it pure oxygen, but if it smells like a fart in a phonebox, it probably is a fart in a phonebox and just as welcome’. That’s where the laughter hurts and stops – just like the realisation that a joke, while funny I’d actually really appallingly tasteless. It brings you up short. Lives were ruined, pensions decimated, national economies brought to their knees meaning citizens no longer had the safety nets they once took for granted. All because of exceptional long term greed.

This film is a fantasy come to life. It is science fiction on planet earth where some otherwise odd bods made a lot and huge numbers suffered but a faceless group, in this film at least they remain mostly in the shadows, got away with it. The regulators, the traders in the banks, the complicit agencies that wanted their fees – they all wanted their fees and bonuses – none of these have been prosecuted. A few have been banned from business – Fred the Shred at RBS for instance, but no doubt they will reappear somewhere else, calling time on whatever contrition might have been shown.

The sick thing, for me, is I was part of this world. In 1985 I helped, as a young lawyer, with the early mortgaged backed securitisations that underpinned the market that eventually brought everything to the point of disaster. Back then there were checks. These things were new, untested and people were rightly suspicious, but they made sense and could be understood by most people, unlike the Byzantine monstrosities that grew to dominate the markets post 2000.

And now? As is implicit in the film, as is apparent from the way major world economies remain burdened by intolerable levels of debt from the banking lifeboats, as can be seen from the fact we still have too big to fail banks that haven’t been sliced and diced into bite sized chunks that can be swallowed if they fail; and bonuses that are beyond obscene – we are no safer today than in 2008. Truly we remain a global shock away from a return to chaos.

There were ten ‘good’ years of growth before the collapse in 2007/8 and there have been so far some five or six years of stable creeping forward after the initial disasters played out. If in the next five or six years we see, say, a conflagration in the Middle East, a significant set back in China, maybe a shake up of the autocracy that is the Chinese state machine then the turmoil will return I fear and be awful. And this time we will have no choice but to restructure how the world economies interreact. But while that happens more hurt and more instability will accrue.

That’s what I thought as I left the film. ‘How is the patient doing, doctor?’ ‘Frankly it is far too early to say.’ And I had my small walk on role in this drama.

Go see it. Go clear headed because it is still a tough ask to understand what was so bad – the betting on the betting that’s what they mean by synthetic, which is beautifully explained in a casino, by a professor of statistics and Selena Gomez. And wonder why some financial crooks – Allen Stanford,  Bernie Madoff  who hurt a limited number of individuals – ended up in jail with terms of 100 plus years but no one involved in the bond market collapse went down. Too big to fail? Too many to jail, more like.

About TanGental

My name is Geoff Le Pard. Once I was a lawyer; now I am a writer. I've published three books - Dead Flies and Sherry Trifle, My Father and Other Liars and Salisbury Square. In addition I published an anthology of short stories, Life, in a Grain of Sand this summer. A fourth book will be out soon. This started life as a novel in a week on this blog and will follow later this year. I blog about all sorts at geofflepard.com and welcome all comments. These are my thoughts and no one else is to blame. If you want to nab anything I post, please acknowledge where it came from.
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18 Responses to The Long and the Short of It

  1. trifflepudling says:

    Geoff, you have a bigger guilt complex than all the nuns at my old convent put together!

    This sounds like an excellent film – thanks. I hope I can persuade friends to see it with me. Now, then …

  2. esthernewton says:

    I’ve been very interested in this film and wondered if it was worth going to see. Great post, Geoff 🙂

    Liked by 1 person

  3. Thinking it will make me angry, but I’m anxious to see this one.

    Liked by 1 person

  4. jan says:

    Having been married to a Bernie Madoff type, this would be a hard movie for me to watch. I think there are too many to jail!

    Liked by 1 person

  5. A wonderful review Geoff! I won’t see this movie because as one of the people who lost their home and livelihood because of these events I have no wish to relive the pain and anguish of that time. I have always thought it says much about the ‘great democracies’ we live in that the one country, Iceland, who didn’t bail out the banks and who actively prosecuted and jailed at least some of the culprits has, I believe, recovered more quickly from the global fiasco. Putting people first doesn’t seem to be as aspect of our ‘great democracies’!

    Liked by 2 people

    • TanGental says:

      There are more fingers and more pies still. I’m sorry to hear about your story. I can’t begin to imagine the daily anxiety such stress must cause. And I understand the futility of it all at the end of the film would merely confirm your feelings. Your approach of seeing contentment seems to me to be a splendid antidote

      Like

  6. lorigreer says:

    I thought it was an excellent film. Would see it again and would read the book too.

    Liked by 1 person

    • TanGental says:

      The book is excellent too but more technical. Even thought I worked in the area I needed to reread a lot. It may be familiar territory Lori but if not, ingest strong coffee first!

      Liked by 1 person

      • lorigreer says:

        I think understanding the financial industry requires on-going study. The underlying human motivations are easier to understand. I would love to take a series of courses in the field. Ignorance is not bliss!

        Liked by 3 people

  7. Sacha Black says:

    This made my head hurt. :s

    Liked by 1 person

  8. Charli Mills says:

    I’m not sure what I think of the film. The idealistic artist in me wants to proclaim some sense of satisfaction that filmmakers took on the topic and use cutting humor and real head-spinning banker-babble. But of course, I know how the movie ends and that makes me wonder why anyone would waste artistic expression on the topic. Losing it all the first time I suppose prepares one for the second collapse. So with nothing left to lose, I joyously pick up the pen and write. The mountains are gorgeous, the wildlife amazing, the fresh air revitalizing — from my desk I view it all and don’t have corporate-world stresses or unmet desires. Peace. And in my imagination a banker dies horrifically every day. Too big to fail or jail, but not too big to be killed off by flesh-devouring zombies in a novel. Which reminds me — one day, we need to collaborate and write a different ending.

    Like

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