An opening title informs us that The Big Short is based on a true story. That usually means that the film we are about to see has only a tenuous connection with reality, that most of it is invented and the events depicted may not have happened at all. Is anyone suggesting that the Global Financial Crisis, the subject of this scarifying comedy from director Andy McKay, may not have happened, that the millions who lost their jobs, their homes or their businesses, or saw their families shattered by the crisis were victims of some strange delusion? Well, of course not. McKays film is a viciously funny and horrifically convincing account of how the GFC came into being, driven by the base instincts of crooked bankers and cynical financial go-getters.

Its based on a best-selling book by Michael Lewis, The Big Short: Inside the Doomsday Machine, described by Reuters newsagency as probably the best single piece of financial journalism ever written. McKays film, already a winner of many awards and a nominee for best picture Oscar, I rank as the best single film on the subject - though there havent been many. The last big one was J.C. Chandors Margin Call, set in the (well-disguised) offices of the New York investment banker Lehman Brothers, whose collapse in 2008 triggered the global crisis. In one of the more poignant moments in The Big Short, McKay gives us a desolate recreation of Lehman Brothers abandoned offices, a wasteland of scattered paper, idle computer screens and overturned chairs.

So its funny, its sad and its scary. I remember when it first occurred to me that stock exchanges were little more than glorified casinos. But compared with those dignified bastions of financial sobriety, with their long-established rules and venerable traditions, the Wall Street financial scene (at least in the years from 2005 to 2008) was closer to a certified mad-house. And as befits a film about an outbreak of collective insanity, McKays film is pretty mad itself a bundle of cinematic tricks with scarcely a moment for reflection or calm analysis. We get it all jump cuts, freeze frames, little touches of animation, odd mixes of colour and black and white, hand-held camera stuff, and characters speaking direct to the audience as if to vouchsafe some deeper truth. But its never overdone, and somehow, miraculously, it works.

McKay has assembled a top-flight Hollywood cast and given them their heads, with the result that there is much shouting and ranting and a generous scattering of four-letter words from actors of both sexes. Among the standouts are Michael Burry (Christian Bale) a retired neurologist and former Deutche Bank guru who is the first to recognise mysterious trends in the US housing market; Mark Baum (Steve Carell), a hedge-fund manager with a troubled conscience; and a barely recognisable Brad Pitt as Ben Rickert, a retired banker and one of the films token good guys. The cast also includes plenty of himselfs and herselfs, though I dont think Id heard of any of them. Margot Robbie is a real-life glamour-puss who appears in a bubble bath quaffing champagne while explaining the intricacies of the sub-prime housing market.

Its not important thank goodness that we follow whats going on or understand what anyone is talking about. The gobbledegook of the high-end finance industry has an inscrutable charm of its own - credit default swaps, mortgage-backed securities, ninjo loans (mortgages issued to people with no job and no income), bespoke opportunity tranches, and my favourite, collateralised debt obligations (CDOs). Theres even something called a synthetic CDO, which I leave to your imagination. But we get the picture: when these guys talk about shorting the AA-rated tranches of CDOs we know theyre up to no good. Something has to give, and eventually, tragically, it does. We laugh and seethe with anger at the same time.

Its a compelling film even when we have no idea what actually going on. I had the much same feeling reading Paddy Mannings book Born to Rule, his excellent account of Malcolm Turnbulls rise to power and prominence in the worlds of finance and politics. Of course, no one would dream of comparing our esteemed PM with the wicked wolves of Wall Street, but both in their time pursued similar intricate paths of financial wheeling and dealing, and I had little idea of what Turnbull was up to.

In The Big Short McKay seems to be hinting at something deeper than mere financial skulduggery: his glancing references to cocaine addiction, strip joints, idiotic pop music, drug cheating in sport, and other contemporary foibles suggest that The Big Short is both a critique of market capitalisms worst excesses and something closer to cultural decadence. Only one banker was charged in the wake of the GFC and nothing whatever was done by governments to tighten regulation in the finance industry. Yes, it could happen again. I read somewhere that Bernie Sanders, the self-proclaimed socialist candidate for the US presidency, has commended The Big Short as excellent. He would say that, wouldnt he? But what does Malcolm think? Or Bill Shorten? I urge them to see it.

The Big Short (M) is in national release in selected cinemas. Four and a half stars.

Evan Williams has reviewed films in The Australian newspaper for 33 years. He is a Life Member of the Film Critics’ Circle of Australia for services to film criticism and the film industry.In 2015 he received the Geraldine Pascal Lifetime Achievement Award for critical writing.