The 1920's was a time of economic and cultural growth. For once, farm areas were deserted while people were moving into cities. The 1920’s was a time of prosperity, happiness, and depression. This period in time is referred to as either the “Roaring 20s” or the “ Jazz Age.” Books like " The Great Gatsby" outlined this. In some ways, “The Great Gatsby” predicted the great depression. In some ways, the Great Gatsby resembled the Great Depression." The Big Short" was able to somewhat outline the economic pitfall that occurred in America.
The big short highlighted the 2007 and 2008 financial crisis. The financial crisis that occurred during this time was the housing crisis. The crisis involved subprime home loans that were at risk for being defaulted. Michael Burry noticed that the housing market was flawed, and decided to use it to his advantage. He proposes an idea: a credit default swap plan. This allowed for him to make money from betting against mortgage securities. Jared Vennett notices that Burry’s plan makes sense, so he buys into the market. However, Jared sold swaps to firms who would make a profit when bonds would fail. Frontpoint notices that brokers are making money from selling mortgages to banks on Wall Street.
Burry notices the dishonesty and wrongful doing of credit rating agencies. This causes Burry’s employees to become unsettled by Jared. He stood by his beliefs and went as far as to invite Baum and his team to Vegas. This trip to Vegas gave Baum the opportunity to speak to Wing Chau. During this talk, Wing explains how synthetic CDO’s work. He explained that a synthetic CDO occurs when there are large bets placed on faulty loans. In some cases these bets can reach to be 20 times more than the actual loans. This causes him to purchases as many CDO’s as he can because he realizes that these synthetic CDO’s would collapse the economy.
Charlie Geller and Jamie Shipley find a prospectus by Jared Vennett that convinces them to invest in swaps. The two go to Ben Rickert for investment advice. In turn, they both place bets against the housing market. As they tell Rickert their successes, Rickert begins to get angry. Perplexed on Ben’s sudden mood change, they ask him why he isn’t happy with their results. Rickert explains that in placing bets against the housing market would cause 40,000 people to die. Charlie and Jamie panic at this revelation. They call their family and friends, and try to tip off the press. However, the press did not want to put their jobs on the line just in case they both turn out to be wrong.
The Great Gatsby is a novel written in 1925 by F. Scott Fitzgerald. The novel is a first person narrative of Nick Carraway. Nick was a recent Yale graduate who took a job in New York as a bondsman. He moves into the small town of West egg. His neighbor is Jay Gatsby. Gatsby was a mysterious man. He threw lavish parties in his enormous mansion but, was never present at the parties.
Once settled in the city, Nick meets up with his cousin Daisy. Daisy lived in the East Egg with her husband Tom. Through Daisy and Tom, Nick met Jordan Baker. Jordan was a clinical cheater so Nick was wary of her presence. As Nick and Jordan conversate, she reveals to Nick that Tom has a mistress named Myrtle Wilson. Myrtle lived in the Valley of Ashes with her husband George (Tom’s mechanic.)
Nick takes a trip with Tom to get Myrtle, so they could head to Tom’s secret apartment. Tom used this secret apartment as a place to sleep with Myrtle and multiple other women. A party breaks out in the apartment. When the party starts to die down, Myrtle begins saying daisy’s name multiple times. In retaliation, Tom hits Myrtle in her nose and breaks it.
Sometime after, Nick gets invited to one of Gatsby’s parties. Nick notices that Jordan is also at the party, and together they try to find the mystery man. Once they find Gatsby, Nick is taken aback to the fact that Gatsby knew of Nick. Gatsby explains that he remembers Nick because they fought in the same division in the Great War. Later on it is revealed that Gatsby and Daisy met years before. During that short period of time, Gatsby fell madly in love with Daisy. He never stopped loving her. In fact, he threw these parties to attract daisy ( she lived right across the bay.)
As Nick and Gatsby continue to talk, Gatsby finds out that Nick is Daisy’s cousin. Gatsby finds this as a way to get back to daisy. He begs Nick to set something up so that he could see her again. Nick, being a good friend, invites Daisy over to his house. What she did not know was that Gatsby would also be there. As the tea date continued, what was awkward at first, spiraled into a newfound love for Daisy. Daisy invites Gatsby over for lunch at her house. Tom notices that during this lunch, Daisy is very flirtatious with Gatsby. Tom realizes that daisy has fallen in love again, but not with him. In a fury, he tells everyone that they were to go to New York City that day. Once they arrive, they get a suite at the Plaza Hotel. Drama soon unfolds in the suite after Tom exclaims to Gatsby that he and Daisy have something that is not comparable with what Gatsby and Daisy have. Tom goes as far as to expose Gatsby to everyone in the room. Tom tells everyone that Gatsby makes all of his money illegally.
When it was time to leave, the group split into two different groups the two different cars. In an attempt to prove to everyone that he was the “stronger man,” he tells Daisy to ride with Gatsby to East Egg. Gatsby lets Daisy drive back although, she is very intoxicated. As they drive through the Valley of Ashes, Myrtle sees a yellow car and assumes it’s Tom. What she did not know was that Daisy was driving Gatsby’s car. As Myrtle enters the street, Daisy hits Myrtle and kills her. George soon begins to question whose car it was that killed Myrtle. Tom tells George that it was Gatsby who killed Myrtle. Tom gave George Gatsby’s address, and George decided to get revenge. He snuck into Gatsby’s house while he was swimming, and shot Gatsby. Once he realized what he had done, he killed himself.
The Great Gatsby and The Big Short have quite a bit in common. In both of these, a main character used economic pitfall to make money. In the big short, the stock market traders made money from betting against the housing market. Unlike the Big Short, Gatsby made his money from speakeasies. He realized that the Great Depression and the Prohibition would make people desire alcohol even more than before. In both of these works, there is a character that wants to become rich by any means necessary Gatsby started his illegal business over a woman. He figured that if he got enough money and power, he could attract Daisy. He later realizes how funny and dumb it sounds after Daisy visits his home and is mesmerized by all of his possessions. In “The Big Short,” Michael tries to find out why the housing market was doing so poorly. Once he found out why it was doing so poorly, he advised his friends to place bets against the stock market and to buy stocks.
A main comparison of both of these works is that they both show how their goals are achieved through unconventional means. They both find flaws in the system, and use it to their advantage. Another similarity is that both of these works are in a period of economic crisis. In the Great Gatsby, the Great Depression was a looming crowd. Unemployment in the United States rose 25% while some other countries’ rate went up as high as 33%. The Big Short was based on the financial crisis of 2007-2008. The crisis caused for there to be a Great Recession, which led to a 31.8 percent decrease in in housing prices. The crisis continued to have negative effects even after the Great Recession ended. Unemployment rates were still up 9% with a uncalculated margin of error.