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Psychology of Markets in "The Big Short"

by Charity-Joy Acchiardo

In a scene from the 2015 biographical film “The Big Short”, banker Jared Vennett visualises what everyone else refuses to see - the global collapse of the economy, triggered by the poor investment decisions of thousands of mortgage holders. He also sees in this, an opportunity to make money. The scene illustrates the link between psychology at the individual level and entire markets. In the words of Vennett, “no one is paying attention”. From a tower of jenga blocks, he removes one block at a time, then says “and then that happens” as the entire tower of jenga blocks comes crashing down. His reference to the "quant" adds further emphasis to the difference between what's going on in the market, and the attentive, rational mathematical approach.

Psychology of Markets in "The Big Short"

Banker Jared Vennett visualises the global collapse of the economy, triggered by the poor investment decisions of thousands of mortgage holders. The scene illustrates the link between psychology at the individual level and entire markets.

from The Big Short (2015)
Creator: Adam McKay.
Distributor: Paramount Pictures
Posted by Charity-Joy Acchiardo
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