Paper 1 Critical Assignment: The Big Short Movie Summary

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“The Big Short” Movie Summary
The movie ‘’The Big Shot’’ shows the financial crisis that occurred in 2008 causing several investments to collapse as banks increased their lending. In the movie a group of individuals speculated the market and decided to bet that sizeable number of banks will collapse and others will experience economic downturn. The financial crisis occurred due to increasing number of housing investments that were funded through mortgages and other bank loans. The increasing number of lending by financial institutions is what caused the global financial crisis that was experienced around 2008. Hence, the financial experts were able to make large premiums through the insurance policy that they initiated to benefit in case banks collapse.
There are several scenes in the movie that supports that the financial crisis was caused by a rise in the number of loans that were lend to the public by financial institutions. During the period, the demand for housing mortgage increased making the prices of houses to rise. More so, the banks were not scrutinizing the credit worthiness of those they were lending the loans. Therefore, several people who borrowed the loans were unable to pay back the amounts due which led to financial crisis. The opportunity created a gap for financial experts to exploit by accurately speculating that a sizeable number of banks will collapse. Hence, those who wager against large debts were able to earn a premium.
More so, there are several scenes in the movie that supports the financial crisis. For example, Anthony Bourdain who is a television host and a renowned chef is shown at the kitchen of an elegant restaurant cooking a meal. He cooks a fish that has lasted for three days and is likely to have rotten. After cooking the meal, he decides to serve it to its customers without caring he risks losing them in case they realize that the stew is rotten. The idea is to demonstrate what Wall Street did by selling risky securities to financial institutions such as banks. They did not care about the possible impact of their actions. For example, a cook who sells rotten and unhealthy food to its customers is likely to make large quantities of losses. The same concept applies t...