The Big Short
Yes, both the current movie and the book from 2010, now newly reissued in paperback and on the NY Times bestseller list again. The book by Michael Lewis was published shortly after the catastrophic financial meltdown of 2007 and 2008. It explains with marvelous clarity how our real estate enthusiasm and the sub prime mortgage market combined to create first a bubble and then its ensuing crash. To do this, he identifies several people who early on smelled something fishy about that combination. They are (a} an MD with Aspergers who now heads a small investment fund, (b} the leader of a small investment team mostly independent of but operating under the aegis of Morgan Stanley, and (c} two men in their late twenties operating their own small ($200 million} investment partnership.
Following each of them allows him to create a fascinating narrative into the realms of high finance, low morals, and culpable ignorance. Along the way, Lewis takes time to explain the several sophisticated financial instruments that played such a central role in the bubble and in the crash. You know, the ARM, the tranche, the credit default swap, the collateralized debt obligation. He makes clear how all the players in the game were involved: the big banks, their greedy (I have tried to avoid that word, but I can't} employees, the mortgage originators, the financial rating agencies.
At the bottom of the situation lurked the sub-prime mortgages, sold by mortgage originators to unsuspecting people who just wanted to own a home, under conditions that virtually guaranteed their failure. Mortgage originators sold ARMs-adjustable rate mortgages-with a low teaser rate of interest that would adjust upwards to a rate that the new home owners could not possible pay since the mortgages they qualified for were cynically called NINAs (no income, no assets} or no doc(umentation of the borrowers' financial state}.
The movie-a delight-has been nominated for 4 Oscars: best picture, director, supporting actor, adapted screen play. Read the book or see the movie. Better yet, do both.