It’s safe to say that all things accounting and financeusually get a bad rap for being complex and boring. So, learning more about the financial crisis probably isn’t on the top of everyone’s list of things to do on a Saturday evening. Some people would much rather spend time hanging out with family and friends or get lost in a movie marathon, but what if I told you that you could do both, have fun doing it, AND enjoy learning about the financial crisis?
Don't believe me? Keep reading!
You don’t need to be a finance professional to understand what triggered the financial crisis and the fallout that followed. All you have to do is like movies…
Without getting into too much of the financial jargon/mumbo jumbo here is a list of four finance movies for non-finance professionals that do a great job depicting different vantage points of the financial crisis, and in my opinion are extremely entertaining in doing so.
The Big Short (2015) – The Big Short is the most ‘decorated’ of the films listed here - nominated for five Academy Awards and four Golden Globes. The Big Short boasts a star-studded cast that tells the story of the financial crisis from the side of a handful of hedge fund managers who realize that the housing market is driven by an asset ‘bubble’ that is made up of high-risk loans/mortgages. These hedge fund managers realized that this ‘bubble’ would burst sometime in the near future and decided to short these mortgage backed securities and make A LOT of money. (Stay with me.)
Why I liked it – This movie does a great job explaining short selling, mortgaged back securities, collateralized debt obligations, and tranches using flashy celebrities who break the third wall. They found a way to make a complicated situation extremely easy to understand and made it as funny as possible in the process.
Margin Call (2011) – Nominated for one Academy Award, Margin Call tells the story of the financial crisis from the desks of a few employees that work for an unnamed investment bank. Now, the employees are frantically trying to rid themselves of the newly-discovered, worthless sub-prime mortgage-backed securities. Once they start selling off their high-risk mortgages they trigger a domino effect where everyone is trying to sell these securities before they reach rock-bottom. Bubble = burst.
Why I liked it – Margin Call depicts the reality of the crisis and how it affects individuals working at these investment banks and also shines light on how an early mover of these securities had an OK chance at survival, where as late movers had little to no chance of surviving the crisis. Early movers were selling these securities at 93 cents on the dollar and late movers were selling the securities at 55 cents on the dollar. Crazy!
Too Big to Fail (2011) – Nominated for three Golden Globes (TV Movie), Too Big to Fail delves into the government’s role in the crisis. The film reveals how the government made the decision of who gets chosen for bail-outs and who gets made an example of (Sorry Lehman Brothers). The main point the film tries to get across is that without the banks, the economy has no life blood (i.e. too big to fail). The film actually reveals that without a bailout it was possible that the financial crisis of 2008 could have been worse than the Great Depression.
Why I liked it – Too Big to Fail takes a situation that is based heavily on facts and numbers and adds a ton of emotion which makes it more enticing for viewers.
Inside Job (2010 Documentary) – Nominated for one Academy Award, Inside Job is a documentary that explains the roles that the big banks played in the financial crisis and how government deregulation played a huge role in the collapse. The film breaks the crisis down to five parts which include:
How we got there
The Bubble (2001 – 2007)
Where are We Now
Why I liked it – Inside Job really addresses all aspects of the crisis from start to finish and is very thorough. It’s also narrated by Jason Bourne. This may be the most educational of the movies listed here, but doesn’t follow a character plot like the other three.
If you’re interested in learning more about the financial crisis in order to do your part to keep history from repeating itselfthenwatch one or all of the above movies. You don’t need to be a financial expert to enjoy these films either. Plus, it’s education without all of the reading which is always a plus.