The film “The Big Short” tells three stories, each with a loose connection to the other. Each story is about one person and their actions that lead up to and during the crash of 2007 and 2008.

Christian Bale portrays Michael Burry, an eccentric manager of hedge funds, in one instance. The US housing market is highly unstable due to high-risk subprime loan defaults. Burry predicts the market will collapse and suggests that he create a creditdefault swap to allow him to place a bet against the market-backed mortgage-backed securities. Burry’s longterm bet, worth more than $1billion, was readily accepted and accepted by large commercial and investment banks. Burry required monthly payments of hefty amounts, which upset his clients. Although they pushed Burry to sell, he was persistent and confident in his decision-making. Burry later decides to limit withdrawals, which upset investors, due to immense pressure. The market finally collapses. Burry’s risky move paid off, and his fund values increased by 489%. His overall profit was more than $2.69 million. Jared Vennett from Deutsche Bank is another example of a decision-maker responsible for global asset-backed securities trading. He was the first person to respond to Burry’s inquiry. Realizing that Burry’s inquiry is valid, Vennett decides to go into the market. The swaps are sold to firms, who then make a profit if the underlying bonds fall. Mark Baum is the Frontpoint Partners hedge-fund manager. Vennet is not a good fit for Baum because he has a low regard of American banking ethics and American business models. Vennett explains that the subprime loans packaged in AAA-rated collateralized debt obligations will lead to the market’s collapse. Frontpoint then conducts a study on South Florida to find that Wall Street banks are making a profit from the mortgage deals sold by mortgage brokers. Wall Street banks are able to charge higher margins for more complicated mortgages. This causes a bubble and prompts Vennett to sell them swaps. As the loans start to default slowly, the prices of collateralized debt obligations rise and the rating agencies begin to lower their bond ratings. Baum is aware of fraudulence and conflicts between credit rating agencies. Baum is shocked to learn that fraud will cause the collapse of the global economy. The fraudster decides to purchase as many as possible at the expense banks and waits till the last moment to sell. Baum’s investment fund finally makes $1 billion profit. However, the banks are not willing to take responsibility for the current economic crisis. This film’s final storyline is about Charlie Geller (a young investor) and Jamie Shipley (a young investor), who are looking for affordable insurance with big payouts. For trades such as Baum’s and Burry’s, one must not exceed the ISDA Master Agreement’s capital edge. Jamie and Geller enroll Ben Rickert, a former securities trader. Geller believes that banks commit fraud when bond values and CDOs rise despite defaults. The trio also visited the Forum in South Florida to learn that there is no regulation to oversee mortgage-backed security activity. The trio made even greater profits than other hedge fund by shorting the higher-rated AA mortgage securities. They were considered very stable and received a larger payout.

Eight million people lost jobs and six million lost their homes to the economic and financial crisis. In the United States alone, trillions in consumer wealth were lost (Mary Gotschall – Learning English News). The financial crises spread all over the globe. The global recession saw an increase of unemployment and slowing economies. International trade also declined.

It is obvious throughout that different businesses were not being objective nor ethical. Fraudulent activities are defined as deceitful, dishonest, and untrue activity. Wall Street firms were acting unethically by failing to ensure that people can afford their mortgage payments. The fact that different securities were given high ratings by the firms is a clear indication of this. Because the rating agencies were competing against each other, they gave higher ratings than they ought to have to investment banks. If they did not, they were afraid that their business would decline. They are dishonest, careless and in fraud. Wall street firms sold thousands upon thousands of home-mortgages to investors and banks, before putting them into a basket of securities. These home loans are safe investments as they have proven to be reliable, with homeowners having a history of paying back their mortgages on time. The securities basket was overloaded with risky mortgage loans because mortgage bankers were lending money too high to people who couldn’t afford the mortgage. This highlights the fraud and greed of Wall Street mortgage banksters and other members of the realty agency. These companies were quick to provide loans without confirming that the individuals could afford them.

Unintentional acts of negligence are those that arise from negligence. These can, however, be accidental and can still be subject to civil law. Other intentional torts include battery and assault, false imprisonment as well as trespassing onto land and chattels. This film shows that mortgage brokers were negligent in their decision to grant loans without ensuring that the homeowners could pay back the loans. Negligence is the failure to exercise proper care when doing something. The film portrays mortgage brokers as reckless but confident in granting loans.

I believe there shouldn’t be any additional regulations to stop this. However, companies should communicate their ethics, morals and values to employees to ensure that the government doesn’t get as involved as it already is. While I do not believe there should be additional regulations, rating agencies and companies should be more cautious about giving loans to people. They should also ensure that they can repay the loan. The market collapse was caused by excessive government regulation. This forced mortgage brokers to make loans to people who couldn’t pay them back. More government involvement can lead to longer processes and higher costs. However, government regulation makes it easier to maintain ethical behavior because there is less competition among firms.

In the end, I do not believe that more government intervention or regulations should be implemented in this sector. Too much government involvement can lead to more costly, complex, and longer-lasting problems. Employees should learn about ethical principles and how they can benefit society and the people in general so that they can set a goal when lending money.