The Big Short Movie

[Proserpina]

6. I'll be going after I heard Terri Gross' interview of the maker of the film

Yves Smith of Naked Capitalism pooh-poohed it. It wasn't sufficiently wonky for her...but she's rather strange and possessive like that.

Debunking “The Big Short”: How Michael Lewis Turned the Real Villains of the Crisis into Heros

http://www.nakedcapitalism.com/2015/12/debunking-the-big-short-how-michael-lewis-turned-the-real-villains-of-the-crisis-into-heros.html

Posted on December 13, 2015 by Yves Smith

I hate to give any attention to Michael Lewis’ The Big Short, since the wildly popular book told a fundamentally misleading story of the crisis which sadly has become conventional wisdom. And it wasn’t just harmlessly inaccurate; it directed public and even lawmaker attention away from the real drivers of this debacle.

Absent the actions of the subprime shorts that Lewis lionized, the US would have suffered a S&L-level housing criss (which at the time was seen as a serious blow to the banking system and the economy), not a global financial crisis that came perilously close to taking down systemically important capital markets firms around the world. And let us not forget that the way in which the financial system was rescued represented the greatest looting of the public purse in history.

But the fact that the movie based on the book is now out and getting a lot of attention in the media and even among people I know, it seems necessary to remind readers how the book has done a great disservice by deceiving the public. And that includes influential members of the public; Politico reported that “‘The Big Short’ has been mentioned at least 15 times on the Senate floor and in press conferences and committee hearings.”

In fairness, Lewis did a good job of explaining in laypeople’s language how out of control the subprime market was and how CDOs worked. But he was hardly alone on either account; Gillian Tett’s Fools Gold has a terrific primer on CDOs, and there were plenty of other fine accounts of the lunacy in the subprime market (but in fairness, some of better long-form treatments, like All the Devils are Here, by Bethany McLean and Joe Nocera, were published after The Big Short, and thus lost the “first/early mover” advantage). Greg Zuckerman’s The Greatest Trade Ever is a much more comprehensive overview of the subprime short, and was released a good four months before The Big Short, but lacked its novelistic style, in particular, the reliable Lewis formula of “oddball outsiders take on the Establishment and win big”...