11 Dec Ghost of 2008 Reappears with New Film

“The Big Short” is the story of a group of Wall Street folks who foresaw what indeed ultimately happened – the near meltdown of our financial system and even our economy back in 2008. This was, most agree, primarily the result of aggressive lending by banks to allow unqualified folks to get 100% mortgages and buy homes. The program, to relax lending standards at Fannie Mae and Freddie Mac, started in the Clinton Administration but was exacerbated under George W. Bush.

The banks sold off pools of these mortgages as collateralized debt obligations (CDOs). It was later determined that many of the big banks didn’t even believe their own hype in marketing CDOs but went ahead and hyped anyway despite the looming crisis of defaults. This just got bigger and bigger and was not properly overseen by government watchdogs, since it was the government itself that encouraged the program.

We pretty much know all this already and the film, based on a book, is apparently a comedy. The key players who bet against the CDOs in the credit default swap market made fortunes. The film is getting good reviews, but I’m not sure, even with such an A list cast, that I want to sit through a reminder of a time when we seriously believed there was a chance that everything was going to end.