'The Big Short: Inside The Doomsday Machine'

“When the dust settle from the collapse, 5 trillion dollars in pension money, real estate value, 401k, saving, and bonds had disappeared. 8 million people lost their jobs; 6 million people lost their homes” （120min.）.The amount of money is equal, just from one person to anther person. Many people suffer a lot in the financial crisis, and also some people predict the financial crisis to make money. Financial crisis is a certain event and happens not only once. The financial crisis still exists in today’s market. As the movie mentioned last, “In 2015, several large banks began selling billions in something called a “bespoke tranche opportunity”, which is just another kind of CDO”

The financial collapse is a very complex issue rooted in multiple causes, making it hard to put into a single sentence. However at it’s core the reason for the collapse is that many investors and banks tried to get rich by taking on assumptions about the housing market and taking on huge risks that they didn’t realize the full extent of.

A Colossal Failure of Common Sense was one of many books to be published in the aftermath of the Financial Crisis of 2007. After seeing the global economy stall in the face of massive losses in word financial markets, many Americans sought to better understand the crisis and its causes. This book, written from the perspective of a financial market insider, provides a glimpse into the world of global finance and also seeks to explain how the players in this world were involved in the crisis. In the words of the author Lawrence McDonald, “My objective in writing A Colossal Failure of Common Sense was twofold. First, to provide … a close-up, inside view of how markets really work…..And, second, to give… as crystal clear an explanation as possible about the real reasons why the legendary Lehman Brothers met with such a swift end”1. By writing about his personal experience at Lehman Brothers and recounting stories from within the famous investment banking firm, Mr. McDonald largely succeeds at his first goal. However, the elements of personal biography and the chronological order of the book make it difficult for the reader to fully appreciate all of the varied causes of the financial crash. I believe that the main value of reading this book is in understanding these causes, with Lehman Brothers acting as a microcosm of the greater financial universe. As such, in this review I have isolated elements from Mr. McDonald’s book which highlight how the crisis

The movie was an overview of the life of a quirky doctor, Michael Burry, who analyzed the mortgage practices and exposed the fraud of subprime mortgages that allowed people with shaky credit to borrow money. The movie also highlighted two other investors in Burry’s theory, Mark Baum’s group and Charlie Geller, that invested millions to gamble against home loans and short the market by buying credit defaults. All of these people made billions of dollars by betting against the economy, but all three groups realized they were betting for a failing economy. Their win was the world's loss, leading into something similar to the Great Depression of 1929 when millions lost their jobs and were no longer able to keep up with their mortgage.

The Big Short is based on a real life story that is about the 2008 financial crisis which was a result of housing bubble. Sadly, unethical choices made by bankers, financial institutions and rating agencies led to a crisis that hurt the World economy badly. The main ethical business dilemma is that many people were aware of the potential risks; however, they preferred to avoid the truth, and play stupid. There are many dilemmas throughout the movie that support this finding.

The collapse of Lehman Brothers, a sprawling global bank, in September 2008 almost brought down the world’s financial system. Considered by many economists to have been the worst financial crisis since the Great depression of the 1930s. Economist Peter Morici coined the term the “The Great Recession” to describe the period. While the causes are still being debated, many ramifications are clear and include the failure of major corporations, large declines in asset values (some estimates put the drop in the trillions of dollars range), substantial government intervention across the globe, and a significant decline in economic activity. Both regulatory and market based solutions have been proposed or executed to attempt to combat the causes and effects of the crisis.

Due to the mistrust in Public Relations and Advertising and since there is a higher number of people who watch the same movie than reading the newspaper articles, the public narrative is very much influenced by the movie's version of the financial crisis. That these other media fields are in the shadows of the movies is problematic, since movies tend to simplify complex issues in order to correspond to the public opinion. Therefore, it is very important that the audience makes an effort to inform themselves independently and outside of the public narrative, in order to make decisions based on fact, rather than on a biased version of events. Only then can the best actions be made to prevent further such catastrophes from occurring in the

Michael Lewis, he did not have a job, but he did not stop until he found on Wall Street in the 1980s. Then he noticed that everything was built from nothing and he wrote a book about it. After 20 years, he made a lot of money. In this book, he explored the stock market crash of 2008.

“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” – Mark Twain [1]. As children we are taught to look both ways before crossing the street because something can be approaching at either side, as adults we have yet to learn to look to the past and then back to the present to prevent ourselves from causing the same economic mistakes. It is no secret of mine, that I have the strong notion that majority of our American society is lazy when it concerns self-educating, but also blind to the destruction we may cause due to greed. I have decided after our in-session viewing of the film “The Big Short” to write my final paper on the information and effects that were portrayed by the film which was based upon the novel, “The Big Short: Inside the Doomsday Machine” by Michael Lewis. This film for many Americans was a necessary wake up call to educate themselves about the causes behind the Financial Crisis that struck our economy in 2007, and what better way to educate an over indulged lazy society than to put it in a movie with attractive actors breaking down basic financial terms into layman’s terms.

What caused the financial crisis to happen? The origin of the crisis, the film argues, can be traced back to the 1980s, when the process of deregulation was eagerly implemented under the Reagan Era. Prior to the emergence of Reaganomics, the financial industry was tightly regulated following the Great Depression. Most of the banks were local and were prohibited from speculating customers’ deposits (brought by the Glass-Steagall Act), while the investment banks were modest and private. However, everything changed after 1980, when Ronald Reagan became president and the U.S economy entered a thirty-year phase of deregulation. Financial institutions, which included commercial and investment banks then embarked on the process of maximizing profit by making risky investments with the depositors’ money. By the end of the decade, saving and loans companies went bankrupt, causing tax payers to lose more than one hundred billion dollars. However, the government did not implement any reform and deregulation continued to take place under the Clinton

Wall Street was the responsible for the 2008 Great Recession. The took advantage of both the people and the system. Not only did the start the Great Recession in the U.S.A, but they also made it global because of the ability to trade worldwide. Wall Street investment banks though they were “too big to fail”. Because of this arrogant attitude they did not realize that they were causing a great problem throughout the world. And most important of all, it was Wall Street’s greed that ultimately brought about the Great Recession. Wall Street used poor decision making and invested in abad stocks. Once the Recession hit

Coincidentally, I watched The Big Short the night before I read Chapter 9. In the movie, a hedge fund manager named Michael Burry (played by Christian Bale) realizes that subprime home loans are in danger of defaulting. Alongside other investors who follow in Burry's footsteps, he bets against the housing market by investing in credit default swaps. When the market economy collapsed in 2008, these investors profited immensely while in the U.S. alone 8 million people lost their jobs and 6 million lost their homes. Having seen the movie, Wheelan's discussion of the Great Recession was even more interesting as he explained what followed the financial disaster. This chapter supplemented my knowledge as it explained the public's reaction to the

“The big short” is a financial crisis movie directed by Adam McKay and released in 2015. It bases on a truth story that some smart investors bet against the United State mortgage market in 2006 to 2008. Michael Burry, an eccentric hedge fund manager, discovered with his own research that the United State housing market was a bubble about to burst within in a couple years. He started to bet against the United State mortgage backed securities market by convincing some large banks to create a credit default swap market, which was kind of a bond insurance police, and he invested about $1,3 billion in the credit default swap market. If he was right about the market collapse, his fund would bust up very high and make a hug profit. On the other hand, his fund would be gone if the market stay stable.

It was 1929, and in the United States things could not be better for those smart enough, or for that matter, brave enough, to gamble on the Stock Market. All of the big stocks were paying off handsomely, the little ones too. However, as much as analysis tried to tell the people that this period of great wealth would last, no one could imagine what would come of the United States economy in the next decade. The reasons for this catastrophic event in American 20th century history are numerous, and in his book, The Great Crash, John Kenneth Galbraith covers the period and events which lead up to the downward spiral in the fall of 1929 and the people behind the scenes on Wall Street who helped this fire spread.

The Big Short: Inside the Doomsday Machine by Michael Lewis is a non-fiction New York Times #1 bestseller. This text is published by W.W. Norton & Company and contains 320 pages. This is a book that focuses in on the 2008 financial crisis and the build up of the housing and credit bubble during the 2000’s. The author channels in on the persons who saw the crisis coming that wanted to protect their investments or did not want to speak of the issue.