The Big Short follows 4 stories that run parallel tied to these outsiders, their personalities and their decisions.

The first one begins with Dr.Michael J Burry, a socially awkward medical man who spent 16 hours in medical practice and study while simultaneously posting investment advice for free on a dingy blog that ended up drawing the attention of so many investors that he started a fund. Not comfortable with humans, Burry find his love in numbers having no problem in parsing reams of paper that nobody cared to read. He was the first one who woke up to the inbound crisis and was the first one to act on it as he went to the banks to short subprime bonds and ended up creating Credit Default Swaps on CDOs that finally became the instruments of leverage.

If you don’t understand the concept of CDOs and CDSs well: //To add a bit about CDOs and CDSs, CDOs are basically stacks of bonds on loans. So if you purchase a CDO, you are effectively lending money and receiving interest. But you are taking the risk of default ie your money not getting paid back.

CDS is simply an insurance on the CDO. So if you have a CDS on a CDO you are basically paying insurance premium so that just in case the CDO defaults, you will get the entire money back. So if you own the vehicle, you purchase an insurance on it right? But here’s the catch. You don’t need to own the vehicle. You can take an insurance nonetheless on synthetic CDO! So an imaginary vehicle identical to the original one is created so that you can buy the insurance on it.//

In comes Greg Lippmann. All the banks were making good commission by selling the CDOs but there were only so many of them. So they needed to create the synthetic ones for which they need buyers for the CDSs. Deutsche Bank asked Greg to take one for the team and sell CDSs so that the other could sell the glamorous CDOs. Lippmann was an outspoken, materialistic wall street sales person. While reluctantly this job, Greg realized that the CDOs are being incorrectly price and the risk wrongly assessed. The insurance seemed more lucrative then the investment itself and so while pitching the CDSs to several clients, he himself kept many CDSs on his own books.

One of Greg’s clients is Steve Eisman and his team in the Frontpoint Capital, a hedge fund owned by Morgan Stanley. Eisman is not just outspoken but borderline crazy. He actually loved to find shit and holler on the street about the shit’s creator. So when Eisman found out this pile of dung his team had to actually hide information from him so that he didn’t come out of the room shouting let’s short a trillion dollars worth CDOs.

While Greg was working in one of the Wall Street banks, Eisman was at the periphery and Burry way outside the circle sitting in California. Then there these 3 guys of Cornwall Capital who were beyond the stratosphere. With a fund that had just their own money, James Mai, Charlie Ledley and Ben Hockett had exploited the pricing models of financial world that assumed a normal distribution and underestimated the chances of a rare event. Dubbed as ‘event-driven investing’ these 3 bumblebees had turned their $110,000 capital into several million dollars which by Wall Street standards was puny and no one took them seriously. This is what made them do what other’s didn’t; make the most long-shot bet. They shorted the AA tranches of CDOs which were considered to very safe hence their premiums were much cheaper as well.

Scion Capital(Burry), Frontpoint (Eisman), Lippmann and Cornwall Capital all essentially did the same. However their method, motives and expectations were different.

Burry, despite staying the farthest was most aware of the abyss the market was heading to and viewed at as a certainty. His motive was simple; maximum returns for his investors, which is why he had never charged any fixed fees but a performance-based one.

Lippmann was the typical Wall Street sales guy who when coming upon this opportunity wanted to utilize it to maximize his bonus. The only difference between him and most other sales people was that he sold the right product.

Eisman saw himself as a champion of the underdogs. He could be called the only socialist on the Wall Street. So shorting the CDOs was not just a good bet but an opportunity to say ‘screw you’ to the banks which why he didn’t stop at the CDOs but actually shorted the stocks of most major banks except Morgan Stanley because Morgan Stanley owned his fund.

James, Charlie and Ben were just doing what they always did. They weren’t extraordinary or savvy or some sort of crusaders. They did one thing and they understood it well and were damn good at it.

So over and all, The Big Short shows us the entire crisis unraveling from the eyes of these outsiders. The characters are as fascinating as the story and you can’t help fall in love with them despite each being completely crazy and different.