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Adam McKay Of 'Funny Or Die' Dissects The '08 Economic Crash In 'The Big Short'


This is FRESH AIR. I'm Dave Davies. The Academy Awards ceremony is Sunday night, and today we feature films nominated for best picture. "The Big Short's" based on Michael Lewis's nonfiction best-seller about the collapse of the housing and credit bubble in 2008, which led to a global economic crisis. It's nominated for five Oscars, and our guest, Adam McKay, is up for best director and best adapted screenplay, along with Charles Randolph. McKay's best known for writing and directing the comedies "Anchorman" and "Talladega Nights." He's a former "Saturday Night Live" head writer and co-founded the comedy website Funny Or Die. "The Big Short's" main characters, played by Steve Carell, Ryan Gosling, and Christian Bale, predict the coming financial collapse, realizing what most Wall Street players have failed to see or acknowledge that the bubble's based on bad loans for mortgages that many homeowners will simply never pay off. Terry spoke to Adam McKay in December and they began with a clip featuring Christian Bale as Michael Burry, a hedge fund founder who's convinced the securities of bundled mortgages are going to tank, so he shorts them. He bets against them. Some investors in his fund already thought he was an odd character, listening to speed metal, wearing T-shirts to work and going barefoot. In this scene, two investors come to his office to tell him his strategy is crazy.


CHRISTIAN BALE: (As Michael Burry) Hey, Lawrence.

TRACY LETTS: (As Lawrence Fields) We have no confidence in your ability to identify macroeconomic trends.

BALE: (As Michael Burry) You flew here to tell me that? Why? Anyone can see that there's a real estate bubble.

LETTS: (As Lawrence Fields) Actually, no one can see a bubble. That's what makes it a bubble.

BALE: (As Michael Burry) That's dumb, Lawrence. There's always markers - mortgage fraud, quintupled since 2000 and the average take-home pay. It's flat, but home prices are soaring. That means the homes are debt, not assets.

UNIDENTIFIED ACTOR: (As character) So, Mike Burry, guy who gets his hair cut at Supercuts and doesn't wear shoes knows more than Alan Greenspan and Hank Paulson?

BALE: (As Michael Burry) Yeah, Dr. Mike Burry. Yes, he does.



(Laughter) OK. Adam McKay, welcome back to FRESH AIR. So if you had to make, like, a one- or two-minute pitch about what this movie is about, how would you describe it?

ADAM MCKAY: I would say it's about a group of outsiders and weirdos and - but at the same time brilliant people that saw what no one else could see, billions of people did not see, which was that the world economy was going to collapse. And the question is, why did they see it when no one else saw it?

GROSS: And how would you explain how that meltdown was connected to the housing bubble?

MCKAY: I actually practiced this on my family.

GROSS: Oh, good (laughter).

MCKAY: I practiced with my wife and then eventually it got down to my 10-year-old daughter Pearl from "The Landlord." And I got pretty good at it. So...

GROSS: That's from your Funny and Die sketch, "The Landlord," yeah.

MCKAY: Exactly, exactly. And at first she was like, Dad, stop, this is boring. And then eventually she was like, oh, I think I see what you mean. So all it is is that at one point in the late '70s, a guy thought, hey, mortgages are boring. You don't really make a lot of money off of them. But if you package thousands of them together and bundle them into one bond, a mortgage bond, you can then sell them, and with those returns you can make a lot more money. And because there's so many mortgages in it, it's safe.

So they started doing this. And they started making billions and billions of dollars. And banking started growing. It grew four times the size it was in the '70s to where it is now. But what happened was they ran out of good mortgages to put in these bonds 'cause there's only so many people that can buy homes, so they started filling them with crappy mortgages. They call them subprime when they're really risky. So all the sudden these safe mortgage bonds that everyone goes, oh, they're completely safe, were filled with crap. And no one noticed or cared because everyone was making so much money. And then off of that they started making other types of bonds that were even riskier and riskier and riskier.

And eventually those risky loans started defaulting, and that was it. It was like a Domino just went down. And it had spread to foreign banks at that point and really literally brought down the world economy for like - there was a day in America where the paper markets froze, which means there was no short-term lending, which means hospitals can't get medicine, which means municipalities can't get fluoride for their water. And then they did the bailout of course.

GROSS: Bravo. That was good.

MCKAY: That was pretty good, right?

GROSS: I am impressed.

MCKAY: All right.

GROSS: I'm very impressed.


GROSS: That's very good. And your main characters, like in the Michael Lewis book, "The Big Short," are the people who figured out that a lot of the mortgages that were bundled into these securities weren't any good, that there were going to be defaults on these mortgages and so that the characters in your story, the characters in the nonfiction book that they're based on, bet against these mortgages. And then when the mortgages defaulted, they made a lot of money on these bets that they made.

MCKAY: Yeah, these were guys that - it really started with Christian Bale's character, Dr. Michael Burry. I sort of call him the Oracle. And it's really amazing what he did. He basically never left his office, and he sat in his office listening to heavy metal, and he read these mortgage bonds, which are filled - they're so complicated. They're filled with thousands of mortgages. And he went line by line, and he read a bunch of the bonds and walked out of the room, saying, this is a house of cards. So he was the one who really saw it way before anyone else. And then yes, he shorted the housing bonds, and then, Carell's character caught wind of it, Gosling's character, the two young guys, Jamie and Charlie, played by Finn Wittrock, John Magaro with Brad Pitt, these were guys that believed in the market.

They believed that when there's a bad investment, you're supposed to have a counter investment, and that's how the market stabilizes. So they were doing the right thing, initially. They were doing what the market is supposed to do. But there's a terrifying moment in the movie where they realize there are loans on the other side of the bet and that the whole market's been compromised, and the world economy could go down. So what they thought was a good, sound investment and them doing their job turned out they looked basically into the abyss. And to this day, when you talk to these guys, they're still furious. They're still shocked. They still can't believe that no one was prosecuted. And most of all, they're disillusioned.

GROSS: And they're also very wealthy.

MCKAY: They are, but it's funny. I mean, part of the movie is, you know, so much of our culture keeps score by money, but I didn't see any of these guys tap dancing around. It's not like they're driving around in uber yachts and wearing, like, $7,000 suits. I mean, the primary emotion you get from them is disillusionment and anger.

GROSS: If you're just joining us, my guest is Adam McKay, and he wrote and directed the new film "The Big Short," which is about the housing bubble and the toxic financial instruments that created the financial meltdown of 2008. Let's take a short break, then we'll talk some more. This is FRESH AIR.


GROSS: This is FRESH AIR, and if you're just joining us, my guest is Adam McKay and he directed such films as "Anchorman" and "Talladega Nights," "Stepbrothers." And his new film, "The Big Short," is an adaptation of the nonfiction Michael Lewis book that told the story of the toxic financial instruments and the housing bubble that crashed the economy in 2008.

So you've managed in "The Big Short" to tell the story of some of the main characters in the financial meltdown of 2008 in a comedy, in a very kind of lively film. And when you sat down and asked yourself how do I do this? How do I take this kind of complicated Wall Street story that a lot of people don't understand and make it understandable and also make it entertaining? Like, where did you - like, how did you start to wrap your head around a method for doing that?

MCKAY: I always viewed the movie as two movies. The first half, it's a little bit like a card counting movie where, like, the MIT kids figure out how to count the cards at a blackjack table and they're beating the evil casino. So there's a ton of energy to the front of the movie. You're really rooting for these guys, and it's kind of fun. It's fun to see the banks roll their eyes at them and you know the guys are right. Also some of the characters are very funny. Like - even though they're being played very seriously and in a grounded way. Carell's character, Mark Baum, and his whole team, when you meet the real people, they're very funny guys. And they joke around and give each other a hard time. So the first half of the movie does have that kind of energy and there are some laughs, and it has, like, a motion to it that's really great. And then the second half I always viewed is where it becomes the tragedy. You think these guys have warned the village about the tsunami. They're up in the hills and then they realize the tsunami is 10 times bigger than the hill they're standing on. So someone referred to the movie as a traumady (ph)...


MCKAY: ...Like a combination tragedy comedy, which I think is kind of accurate. Yeah, it doesn't really fit cleanly into any kind of genre box, which is also what drew me to the story.

GROSS: So you have some cutaways for popular personalities, not that I'm necessarily familiar with all of them (laughter) like actors Margot Robbie, and Chef Anthony Bourdain and actress and singer Selena Gomez. Explain some of the more complicated things. And they're just, like, cutaways where, like, Anthony Bourdain's in the kitchen and Margot Robbie is in a bubble bath. How did you come up with the idea to do cutaways like that and to find, like, the comedy - the comic way for them to explain it?

MCKAY: You know, it came about from, really, the - what I think once again is the central question of the movie, which is why did these people see it and we didn't when the numbers were so obvious if you looked at them? So one of the answers we started talking about was just this kind of white noise pop culture that America has a lot of. I mean, the rest of the world has it, too. So we started talking about the idea of, like, we want to represent that pop culture in the movie. We don't just want the movie to be in offices with Wall Street guys talking. We want to see what America is thinking. And then off of that thought I had the idea of, like, well, what would happen if pop culture actually gave us usable information? Like, what would happen if Kim Kardashian every time she was on camera explained the LIBOR rate scandal? You know, what would happen if any time you're watching a red carpet for an award show and everyone comes down in their gown, you know, each person, you know, talks about climate change statistics...

GROSS: (Laughter).

MCKAY: ...And the rapid change that's happening? And so that's kind of where it came from, and it felt satirical. It felt funny. It felt like it had energy. And at the same time, it was a great way to get this information across in a simple, understandable way.

GROSS: So I imagine you making this movie and shopping it to two different sets of people as you wrote it, giving it one first, like, to the experts who actually understand really well what's - what happened on Wall Street, getting their approval and then giving it to people who didn't follow what happened carefully and seeing if they comprehend what you've written. Is that what you did?

MCKAY: That's exactly what we did. Yeah, it was a very interesting tug of war because we had - Adam Davidson was the consultant on the movie. He was an NPR guy. You know, he started Planet Money. And so he was the...

GROSS: And did this great piece with Alex Blumberg called "The Big Pool Of Money" for "This American Life" that explained one facet of the whole meltdown of 2008.

MCKAY: I agree. And I actually think it's one of the better pieces about the meltdown. If anyone has a chance, definitely listen to it. It helped me a lot. So we had Adam Davidson, who's a really rigorous thinker. He's a University of Chicago guy. And then obviously I was reading a lot and doing my own research, and then we had the real people that we would talk to as well. So somewhere in between that pocket and then on the other side I have to communicate with a regular audience. And we had some people in focus groups admit, like, they don't even know what a stock is or how a stock works.

So there were little things that would happen. Like when Steve Carell says sell everything at one point in the movie, you actually wouldn't say that. You would say unwind our position or it's time to call in our shorts. There's another way you would phrase it. So the experts said you would not say sell everything and I say, yeah, but an audience won't understand that unwind my position. What does that mean? So it became this kind of horse trading game where when it was a key story point I would say, well, can he - would it be terrible for him to say sell everything? And they would finally confess no. It's not crazy. There are some guys that would say that. So I go, OK, then we're going to keep that.

GROSS: So one of the lines in "The Big Short" is that - I'm paraphrasing here - that Wall Street went from the golf club to the strip club, you know, from these - you know, this image of these, like, you know, boring guys who, like - a little men's club. They go to the golf club to - you're, like, you know, rip roaring (laughter) out of control, you know, strip club kind of stuff. So did you come up with that line, with that praise, golf club to the strip club?

MCKAY: Yeah, I actually think it's country club to the strip club, but you're correct.

GROSS: Oh, country club, oh, OK, right.

MCKAY: Yeah. I read a number that just shocked me, which was that banking was 6 percent of our GDP - our nation's GDP - in the '70s and now it's 24 percent. So it literally grew four times the size of what it used to be. And I would talk to people about, like, when I was a kid, I would watch, like, "The Beverly Hillbillies" and Mr. Drysdale, the banker on there, was, like, a lackey. He was, like, a toady.

GROSS: (Laughter).

MCKAY: And nowadays that would not be the depiction of a banker. The banker would be the guy in charge and the oil guy would be chasing him around. And so there was this massive shift that happened in the late '70s and a lot of it came about from these new types of bonds that they created. They call them, you know, securitizations, derivatives - there's a lot of different names for them. But basically they're new kinds of bonds. And it just completely changed banking to the point where those types of sales became way more than - way more than securities, way more than stocks. And the amount of profits they were making just, you know, quadrupled, and with that came a lot of lobbying power. And that was when in the '80s was when the banks really said, like, hey, let's hit Washington, D.C., and let's start giving out some checks, which as we know is what led to the deregulation that we saw in the late '80s and the '90s under - once again, under a Republican president and a Democratic president. This is not a right-wing, left-wing story. So that line was trying to kind of show that, that it went from the country club to the strip club. It went from this, like, safe almost accounting-like job to you're a rock star.

GROSS: So occasionally in your story, Ryan Gosling, who is with Deutsche Bank in this story - his character's with Deutsche Bank and he's also kind of betting against the bank (laughter) but he's also the narrator of the film. And occasionally he comes on as the narrator and says, OK, that didn't really happen that way. But sometimes he comes on as the narrator and he says, what you're about to see, it really happened this way. Why did you decide to have the narrator explain when something was really fictitious and then reinforce the point when something seems so outrageous but was actually true?

MCKAY: You know, our whole goal with this movie was that we wanted to pull the curtain back as far as we could to see inside this world. And I really felt like you had to have this conversation with the audience - not the whole movie doing it, but occasionally we had to check in and just let the audience know we're doing the best we can to really show you what happened. You know, it was influenced by - there's a Michael Winterbottom movie called "24 Hour Party People" that I really love that did a lot of that and, you know, a little bit from my theater background I'd seen it work as well. So there would be certain scenes in the movie that were just so unbelievable that they actually happened that while Carell's character was giving a speech about how Bear Stearns was no good and everyone's going down, and he's arguing with a guy who's saying, no, Bear Stearns is fine, in the middle of that speech, Bear Stearns is plummeting while he's giving this speech. And if you wrote that as fiction, that would just be bad writing. I mean, it's so cartoonish. And also the fact that Carell's character's company found out about the deal through a wrong number, which is actually true. So I wanted to make it clear that these haphazard relationships, these kind of accidental, you know, deals that came about were absolutely true. And a lot of times that's how the world works.

GROSS: Some of the characters in your movie have real names, like Christian Bale's character Michael Burry is a real name. But I think most of the major characters are fictionalized versions of the people they're based on and the names have been changed. So how did you decide who was going to be based on a real person with their actual name and who was going to be more of a composite or a fictionalized version?

MCKAY: Really they're all pretty much the real people. It was just a matter of some of them for privacy reasons didn't want their last name in there. Like Jamie and Charlie, who are Magaro and Finn Wittrock, those are the real guys' first names. And same with Pitt's character. They just...

GROSS: But not their last names?

MCKAY: But not their last names. They just did - they just said, please don't put my last name in the movie 'cause then everyone knows 100 percent it's me. The one guy who's really kind of a composite is Gosling's character. I would say he's a little bit influenced by the real guy, but because he's dancing in and out of the movie as a character and a narrator, I think that's the character where you see more liberties taken where he's definitely not doing an impression of the real guy. But, you know, a lot of the actions the real guy did he is doing, and there's some elements of the real guy in there.

GROSS: So let's talk about your casting. Christian Bale plays Michael Burry, who is a trader at a hedge fund. I want you to describe his character.

MCKAY: Yeah, he's brilliant. He's, you know, the one - the funny thing in Wall Street is a lot of these guys will slag on each other, kind of like slightly poke at each other and go, he's not that good, he's not that good. But the one guy no one ever said a bad word about was Dr. Michael Burry. Like, everyone acknowledges that guy is a heavyweight genius. And, without exaggeration, his job, before he started a hedge fund, he was in his residency as a neurosurgeon and he got bored and (laughter) he got bored with neurosurgery and instead went and started this hedge fund. He's an amazing guy. And I spent some time with him, and he listens to speed metal. I mean, I'm not talking like light heavy metal. He listens to hard heavy metal. And he is on the spectrum, so he's able to hyper-focus. And he will sit at his office for 16 straight hours reading documents. He's a sweet, sweet guy. And Christian's very method, so Christian spent a lot of time with him. They spent an entire day together just sitting in a room talking. And Dr. Burry gave Christian his real clothes. And you see in the movie that he tends to wear this one T-shirt and shorts a lot that he actually wore during the period. And Christian learned how to play speed metal drums. And so it was an amazing process to work. I mean, we all know Christian Bale's one of the great living actors, and to really just see him become this person was - it was kind of jaw-dropping.

GROSS: My guest is Adam McKay. He wrote and directed the new film "The Big Short." We'll talk more after a break. This is FRESH AIR.


GROSS: If you're just joining us, my guest is Adam McKay, and he wrote and directed the new film "The Big Short." And he also directed "Anchorman," "Talladega Nights," "Step Brothers," "Anchorman 2," and other films.

How do you think your sense of humor has changed over the years?

MCKAY: I definitely think through the years - I probably started more in my teenage, early 20s as just a fan of absurdist comedy. You know, I grew up on "Monty Python" and Steve Martin. I definitely think as I've gotten older I've just taken more of an interest in a lot of things in the world, so that leaks into my comedy more. But I still think at root I love comedy that has a prank quality to it, a comedy that upends expectations or you think it's one thing and it's another thing. I'll always love that. Like, I'm 47 years old, and I swear if they didn't have caller ID I would still be doing crank phone calls.

GROSS: Did you do crank phone calls as a kid?

MCKAY: Oh, my god, constantly. Oh, yeah. For pretty much...

GROSS: What was your thing?

MCKAY: (Laughter) Pretty much age 15 through college - we had one we would do in college where we would just - everyone was constantly getting pizza, you know, in the dorm rooms. So you'd get a call and it'd be like, hey, it's, you know, whatever pizza place - Tony's Pizza - giving you your pre-call, be in the lobby in two minutes with your pizza. You take the elevator down. You get your pizza. You pay the guy. You go back up. So we would just sit around because they had a student guide, and so it was people's names. So you would call them and go, hey, is this, you know, Ben Leviton (ph)? And they would go, yeah. And I'd go, it's your pre-call. Your pizza's coming. And they'd go, I didn't order a pizza. And we'd just go, look, I don't have time for you smart-asses, you know. Just come and get your pizza. I'm telling you, I didn't order a pizza. And we'd just go like, look, I am so sick of you spoiled kids messing around with me. I'm down here with your pizza. And then, eventually, we'd talk them into a fight and it'd be like, I'll fight you right now.

And then my friend and I would run downstairs and go sit in the TV room. And we'd watch these four or five jacked-up guys come out of the elevator pacing back and forth, flexing their muscles ready for a fight. And we did that dozens of times. And we'd tell people that they're, you know, they were having a hot tub delivered to their dorm room. Or we'd call them up and tell them that I was an exchange student, that I'm at the bus. 'Cause you could see it in the student guide they were a Spanish major. And it's like, hello, I'm Manuel. I'm at the bus station. I'm in from Nicaragua. They'd be like, what are you talking about? I'm supposed to stay with you. You're a Spanish major. And we were idiots. We were full-on idiots. But, oh my god, would we laugh.

GROSS: Did you ever feel the least bit of guilt for doing this?

MCKAY: No. None whatsoever. They were all...

GROSS: Why not? Why not?

MCKAY: 'Cause the guys - you had to know - I mean, I went to Penn State for one year and then I transferred to Temple University. And there's a lot of guys at Penn State who are very jacked up and like to think of themselves as, like, wannabe football players and frat guys. And the idea of stirring up a bunch of those guys to come down into the lobby ready to fight. And then the hot tub one was harmless. No one ever did anything. We'd just call them and the person would be like, what, there's a hot tub? And, you know, same with the exchange student. It would all just kind of go away. So we weren't taking anyone's money. We weren't putting anyone in danger. We were just kind of giving them a chaotic hard time.

GROSS: So one more question - has making "The Big Short" about the financial collapse of 2008 and Wall Street's role in that, has that changed your relationship with your stockbroker?

MCKAY: (Laughter) My financial adviser loved the movie. He really loved it. This movie is not targeting bankers. Banking is good. We actually need banking. But banking that overreaches or banking that has corruption is not good and can do a lot of destruction. And right now banking just has way too much power. So we really went out of our way with the movie never to point the finger at any one individual. We really believe it's a systemic issue.

GROSS: Adam McKay, it's been great to talk with you again. Thank you so much.

MCKAY: Terry, always a pleasure and much love to my hometown of Philadelphia.

DAVIES: Director Adam McKay speaking with Terry Gross, recorded last December. The Academy Awards are Sunday night. On Monday's FRESH AIR, writer Victor LaValle. As a 10-year-old boy, he idolized early 20th century horror writer H. P. Lovecraft, but as he grew older he found the writer's racist attitudes disturbing.

VICTOR LAVALLE: What did he just say? And it was the kind of thing that if you were walking down the street and somebody said that you'd smack them in the mouth.

DAVIES: LaValle's new novella, "The Ballad Of Black Tom," is a response to Lovecraft. Hope you can join us. Transcript provided by NPR, Copyright NPR.