Margin Call directed by J.C Chandor (Before The Door Pictures, Benaroya Pictures, Washington Square Films, R, 107 minutes)
A Financial Crisis
Margin Call catalogues a thirty-six hour period of the events that took place at a prestigious investment firm, which looks similar to the notorious firm Lehman Brothers. Through the lens of the firm, the audience gets to see the financial crisis of 2007-2008, and how investment bankers handled the crisis. The film also had what I considered to be a particularly stellar cast, including Kevin Spacey, Stanley Tucci, and Jeremy Irons. I was excited to see this movie, though I had a feeling that any movie surrounding the financial crisis might be a bit over my head – and (spoiler!) it was. So, with a great sense of forthcoming confusion, I embarked into this movie.
The Wrong Place at the Wrong Time
The movie begins with our three protagonists, junior employees Seth Bregman (Penn Badgley) and Peter Sullivan (Zachary Quinto) as well as fixed income salesman Will Emerson (Paul Bettany). These three watch as the Human Resource department walks from floor to floor conducting mass layoffs in the wake of the financial crisis. Their boss from risk management, Eric Dale (Stanley Tucci), is one of the first employees to be laid off. As Eric packs up his belongings, he hands a USB drive to Peter, warning him to “be careful”.
|Photo by Walter Thompson
Obviously distraught by the warning, and in lieu of celebrating with his still-employed teammates, Peter, a doctorate in aeronautical engineering, remains in the office crunching numbers and trying to figure out why Dale told him to be careful. He discovers, to his horror, that trading will soon exceed historical volatility levels via the Value at Risk (VaR) system. The VaR system notifies risk managers about the danger of loss on a specific portfolio of financial assets. The company’s assets – mortgage backed securities – are in danger because of excessive leverage (borrowing too much money). If the firm’s assets decrease by twenty five percent, the business (again remember, the story represents Lehman Brothers) will suffer a loss greater than its market capitalization (the value of the share for the company times the number of shares outstanding).
Coming to this realization, Peter tells his coworkers, and his boss, the head of sales, Sam Rogers (Kevin Spacey).
An Unsettling Option
|Photo by Walter Thompson
The head of risk management, Sarah Robertson (Demi Moore), head of securities, Jared Cohen (Simon Baker), and CEO John Tuld (Jeremy Irons,) meet with the three main characters all night long. John, the CEO, finally reveals his unsettling plan: first, the firm will sell all of its bad shares before the market can react to the dim reality that the shares are completely worthless; and second, he will offer Sarah Robertson (the head of risk management) up as a sacrifice to appease members of the board, much to her dismay.
Uneasy with the plan to start, Sam Rogers switches tunes when he discovers that he and his traders will receive seven figure bonuses if they achieve a 93% or greater reduction of mortgage-backed securities assets.
Don’t Forget Your Financially Savvy Father-in-Law
I would have enjoyed this movie quite a bit more if it weren’t so complicated. The cast helped pique my interest, but if I hadn’t had my financially-savvy father-in-law watching the movie with me explaining things like mortgage-backed securities, value at risk, and leverage systems, I would have been completely lost as the plot unfolded.
The cast delivered a compelling performance, but perhaps for the not-so-financially-brilliant folks out there, Margin Call isn’t the movie for you. If, however, you’ve mastered the financial jargon, I think it is worth a view.
Verdict: 2 out of 5
Posted by: Andrew Jacobson