How The Big Short Actually Worked

The Big Short with it’s all star cast recounts the events of three groups of traders that bet against the housing market in the years before the sub prime mortgage crisis that would eventually result in the failure of key financial institutions.

The Big Short is unique as a high budget Hollywood production that actually takes the time to properly portray the way that finance really worked behind the scenes and uses financial events to progress the plot rather than focusing on wild parties, sports cars and sexy ladies like some other movies that took a very different approach to storytelling.

Similarly to the Wolf of Wall Street, the big short is a move based off a book only the wolf of wall street was an autobiography written by Jordan Belfort himself and The Big Short: Inside The Doomsday Machine, was a standard non-fiction title that described the role of several players in the creation of the credit default market betting against the American housing market.

The Big Short was written by Michael Lewis, a veteran financial journalist and the book really does read like a 320-page financial article, in that it’s very information dense but also very well researched and verified.

For this video we will only be looking at the players that are in the movie, but the book does go into detail on some people that were either entirely cut from the film or merged into other characters to make the movie entertaining to a broader audience.

Unfortunately, in the process of making it appealing as possible to cinema goers the movie did cut out some very important details, and also just straight up got some things wrong.

So, it’s time to lean How Money Works and give you guys the investment banker’s insight into what really happened in the Big Short.