George Clooney, Julia Roberts

Financial TV reporter, Clooney, is taken hostage on air by a gun man. Roberts plays the part of the show’s facilitator/producer.

Clooney’s character is somewhat modeled on Jim Crammer – cheap special effects, wild gestures, a wavering, shifting voice and exaggerated movements. Clooney lacks a goatee and a bald head; Crammer lacks a head of hair and a clean shaven chin. This parallel to current financial reporting is the only interesting part in the movie.

The gunman, Jack O’Connell, has the typical cliched complaints. He’s lost money in a market that is rigged to make the system profitable to insiders. That situation was explained best by a participant shorting the mortgage market more than a decade ago. He tried to understand CDOs (Credit Default Obligations):

“I had no idea what a CDO was.” I eventually … figured out that language served a different purpose inside the bond market than it did in the outside world. Bond market terminology was designed less to convey meaning than to bewilder outsiders. Overpriced bonds were not “expensive;” overpriced bonds were “rich,” which almost made them sound like something …to buy. The floors of subprime mortgage bonds were not called floors – or anything else that might lead the bond buyer to form any sort of concrete image in mind – but tranches. The bottom tranche – the risky ground floor – was not called the ground floor but the mezzanine, or the mezz, which made it sound less like a dangerous investment and more like a highly prized seat in a domed stadium. A CDO composed of nothing but the riskiest, mezzanine layer of subprime mortgages which was not allied a subprime-backed CDO but a “structured finance CDO.” There was so much confusion about the different terms….In the course of trying to figure it out, we realize[d] that there’s a reason why it doesn’t quiet make sense….It’s because it doesn’t quite make sense.” (p. 126-127, The Big Short)

NOTE: For viewers of this movie, there are no answers except the one provided in The Big Short. This team of investors studied CDOs for four or six months and arrived at no conclusions. There are no answers because the market “doesn’t quiet make sense…because it doesn’t quiet make sense.”


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