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Collateralized debt obligation. It’s a fantastic phrase; it just kind of rolls off the tongue, doesn’t it? A collateralized debt obligation, or CDO, is what happens when a series of loans are packaged together and sold as a vehicle for sequenced repayments. Principal and interest from the loan payments funnel into the CDO, and the CDO’s contents are paid by credit rating, from the highest-rated down to the lowest-rated, in sequence. They functioned as one of the primary drivers of subprime mortgage loans, and one of the crucial ingredients in the 2008 economic crisis.

This is a very simplified mapping of one factor among many, in a recipe that led to millions of people losing their jobs and their homes (and in many cases, their reputations and lives). It’s more than enough to power a rational, analytical story about a complex process with virtually nothing but shades of gray. This is not what we have here. Adam McKay’s The Big Short is the angriest film on the subject since Inside Job back in 2010, and it’s a potent reminder of how very close we remain to the same precipice. More than that, it’s an intelligent and perceptive piece of work that helps to give us an idea of just how readily we’re willing to skirt the edge of that precipice, as long as we’re given the idea that everything will turn out all right.

The movie begins on a note that’s unusual but appropriate, with Christian Bale’s hedge fund manager, Michael Burry, telling a story to a would-be hire at his Scion Capital investment group in 2005. The story is an anecdote that serves to introduce us to a man who seems to be all wrong for this line of work: partially blind, a doctor of medicine, an eccentric who takes his therapist’s advice (to express himself) in the bluntest of ways. We follow Burry for the first short chunk of The Big Short, as he realizes in short order that the U.S. housing market, thought to be rock-solid and on an unstoppable climb in 2005, is actually unstable and on the verge of collapse. When his initial warnings to his partner go unheeded, he ventures into the world of credit default swaps with several investment banks; he’s betting against the housing market. The investors, believing there to be no end in sight to the market climb, accept his proposals with barely-concealed glee.

This activity is highly unusual; one communication leads to another, which leads to another, and it ultimately reaches a core group of investors and traders who realize the potential for profiting off of the housing collapse puts the revenue from the housing itself to some shame. The principals here are Jared Vennett - played by Ryan Gosling with exactly the sort of combination of intelligence and cockiness that you would figure must be part of the job description for an investor of his type - and Mark Baum. I’m hard-pressed to think of any actor who could effectively represent the real-life Baum’s notoriously caustic and confrontational demeanor better than Steve Carell, and The Big Short gains several extra layers of energy whenever he’s onscreen by the sheer heat and volume of the performance.

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