The Big Short is clearly a hit. Nominated for (and winning) a host of major awards, the film has reportedly clocked $131 million worldwide on a $28 million production budget.
That should give screenwriters the incentive to follow up with the true-to-life sequel.
Call it The Big Short, Part Two.
Part one offered rare insight into the usually arcane world of government finance.
When the film's protagonists (played by Brad Pitt, Christian Bale, Ryan Gosling and Steve Carell) prepare to bet that the housing bubble is about to blow, they identify the culprits:
The bad guys are not just the sellers who prepared mortgage debt securities but the buyers of those toxic securities as well.
And the biggest buyers of all were the managers of America's public-employee pension funds.
The housing bubble may have collapsed, but the public-employee pension fund managers are still with us.If anything they're bigger than ever, still insatiably seeking high returns just over the horizon line of another economic bubble.
And where do these predators go for their high returns?
Along with their high-risk investments in hedge funds and private equity (where we have minimal transparency), pension fund managers invest in housing, once again inflated to unaffordable levels, thanks to over-regulation and low interest rates.
They invest in public utilities that collect guaranteed fixed profits on overpriced services, thanks again to over-regulation.
They invest internationally.
And they invest in domestic stocks.
In every case, the goal of these powerful pension funds—Wall Street's biggest players—is to rack up another year of high returns.
And to do this they need corporate profits, financial sector profits, rising home prices, rising utility rates—all of it fueled by debt accumulation.
It's an unsustainable model.
As America is slowly turned into a debtors' prison, there will eventually be nobody left to pay the interest..."
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