Maria Katrina T. Abrigo Sir Alain Jomarie G.

Santos

4LM3 November 10, 2016

The Big Short: The Prognostication of Minds

Often than not, most people dream of having everything; wealth, power, luxuries, and a perfect

life. But what does it takes for one to obtain those things? Is it necessary for a person come to a point

where he will take advantage of the misery of others? Although the effect is indirect, is it still valid to

obtain wealth while betting on others that he will fail? There are a lot of questions in between because

this is when conscience and morality will enter. It is in the persons discretion which will help him decide

between right or wrong, and if he will let his conscience bother him throughout his decision making

process.

The film Big Short is about a few people who foresee the crisis in credit and housing loan bubble

to collapse in the year 2007 that would eventually affect the entire economy not just of the US but the

whole world. The movie starts with Michael Burry a fund manager, who observed that the US Housing

Market is unstable based from the high risk of subprime loans. He later developed an idea that this can

be a profit gain by creating a credit default swap market, allowing him to bet against market-based

mortgage-backed securities. He proposed this plan to other major bank companies on which they agreed

but his investors were doubtful because they thought it will be a waste of capital. When the US Market

House collapses and eventually he had a lot of gains he became frustrated so he closed his fund.

When Michael Burry was just starting his plan and proposing it from the banks, a salesperson

named, Jared Vennett understood his analysis and believed that it is likely to happen. Jared began selling

swaps to firms who will be profitable when the mortgage bonds fail. But the selling does not went well

since the firms strongly believes that the US housing loan is unlikely to be unstable. Jared Vennet had a

misplaced phone call to the fund manager Mark Baum and later on convinces him and his team to buy

credit default swaps. But before he agreed to buy, Mark Baum first investigated the brokers as well as the
buyers and found out that there were risky mortgages that rooted the unstableness of payment dues in

housing loans. Baum and his team also went to American Securitization Forum where he met the CDO

manager who makes a chain of increasingly large bets on the faulty loans, involving up to 20 times as

much money as the loans themselves. Baum soon realized that the continuance of this fraud would

collapse the global system and can affect millions of workers around the world. He later ordered more

swaps and soon realized that the banks would not care for the blame for crisis.

There were two young investors who also found out about the swaps, these investors are Charlie

Geller and Jamie Shipley. They seek help from a retired securities trader Ben Rickert because they are

below the capital threshold for an ISDA Master Agreement. With the help of Ben Rickert, they manage to

be successful in profit deals but later on it was disgusted by Rickert as he reiterated to them that

unemployment rate affects the deaths of the world. It was also soon realized by the two and their faith in

the system was broken.

With these given scenarios and plot of the film, Big Short made me realized five important life points:

First, Be Practical. Practicality does not apply only to buying commodities and such but it covers

the decision making process of a person. In life, there is no such thing as certain. Things around you will

certainly change. It will continue to evolve, it will persist to transform. People and I, myself need to focus

on something that is real which is possibly can happen.

What is important in the word practical is the term now. Now, defines something which is

certain, it is what we need to face even if we want it or not. Practicality also means reasonably doing

things for the sake of what is right and what is good for the general welfare. It helps the person to think

fast and to act efficiently, given with the pressured situation.

Second, Be Futuristic. It is not enough for a person to be practical all the time. A person needs to

consider his own future in order to survive. The contention of the line Be contented does not apply to
all when the topic involves the needs of man. Man in nature, need to cope up and adapt to the changes

around him, in order to survive. Just like in the movie, only a few saw that there is something wrong in

the system and thus making them alarmed of the possible effects in the global economy. People there are

reluctant when it comes to the survival of the system. They did not foresee that there might be something

wrong and tends to ignore making a plan B.

Third, Be Benevolent. In this world full of hatred, selfishness, and cruelness, one must be able to

standout. What will happen if all of the people got blindsided by money, jewels, and materials things,

there could be chaos, war, because all of the people strive for more. They do not want to share because

for them what matters is the material possession that they have. This is the part where the rich get richer

and the poor got poorer. Since the upper class has the all possible means to buy everything, even it is for

the poor they will still steal it since they are blinded by those material things that they tend to forget what

is essential. This can be seen when Baum talked to the CDO Manager. It can be observed that the CDO

Manager is very much happy when he makes a chain of increasingly large bets on the faulty loans without

considering the general welfare. He just concentrated for the fact that he makes more money from his

bets because it was twenty times greater. And because of this, he doesnt think clearly anymore since hes

not interested to its effect to the people because he was benefited at cause.

Fourth, Be Optimistic. There are times, when life is going to hit you really hard. It will also come

to a point that you want to give up because all that are happening around you does not make any sense

anymore. It may seem that your problems are endless but it doesnt not mean it is the end. This is the

time when you need to be optimistic. It is very hard to think positive when you are living negatively. It is

a long process because the enemy here is yourself. You need to fight back to the negative thoughts and

feelings that hindrance you attaining happiness. Also, when youre optimistic it helps you to calm the mind

and eventually helps you to think clearly. And this is the start where you can now solve your own problem.
 Fifth, Be Grateful. The line There is something good in everyday shows that no matter how

stressful your life maybe or how unlucky your day is, there is something wonderful that happened like

someone helped you to carry your things, or you got to see your loved ones, as simple as these you can

be grateful. It does not mean extravagant situations but it means be grateful always especially in simple

things. People used to ignore those things because for them it is common, but they did not realize that

those simple things are the ones who can give them true happiness. This is obviously showed when some

of the characters are looking at their family photos or talking to their family. It means that how much

pressure they experience in it will always not matter because they have a family to look up for after a long

day of work. It is always their main source of strength and joy.

At the beginning, the characters all wanted to profit gain from the failure of the mortgaged bonds,

but soon these characters, changed their perspective when each of them was unfolded from different

realities that can affect the lives of many from the crisis they are going to face. It is like that they are

gaining from what they are losing. It makes them feel horrible inside because they are enjoying things

because someone is suffering or miserable. It is not hard not to think that you already knew something

would happen like that and still you are here just preparing, waiting, without having concern over the

people who are likely to suffer. It brings to a point that people became greedy when it times of problems

and only wanted to save himself. In the movie, it took those characters for a while for them to realize that

you cannot achieve perfect happiness from the misery of others or even from wealth. It is the people who

surrounds you, accepts you, and love you unconditionally, who makes ones living worthwhile.