Thursday, 27 October 2011

OMG Margin Call !

Margin Call The Movie

Margin Call does offer a highly realistic view of Wall Street firms. Characters like Paul Bettany's hard-bitten player display the mixture of insecurity and hauteur that fuel the financial services world. Zachary Quinto, Spock in the most recent Star Trek, is a ph.d. in physics from M.I. T. who now runs financial models instead of figuring out how to keep spaceships aloft. The higher the rung on the organizational ladder, the better the suits and haircuts -- and the less the executives seem to know or care about how the company is making its money. Jeremy Irons, who plays the vulpine CEO John Tuld, parachutes in via helicopter, and doesn't deign to descend to the floor where the action is taking place.
Like real people on Wall Street, the characters in Margin Call are very interested in making money, and not much else. The long-term vision extends about as far as the year-end bonus for the junior people, and for the current quarter at the top. And they're fatalistic; some trades work, some trades don't. Some people make money, and others lose it. People get downsized or blow up all the time. If you're asked to be a scapegoat, take the generous severance package, cash in your options and move on. In order to ensure the survival of the century-old firm, the remaining executives have to dump huge positions of mortgage-backed securities and other toxic assets quickly. Sam Rogers (Kevin Spacey), a 34-year veteran of the firm, argues that doing so will hurt the firm's customers and clients. But in a crisis, firms worry about themselves first and everybody else last.
The film is sharply written and fast-paced despite the absence of fireworks. In the end, though, Margin Call lets Wall Streeters off easily — and not because there's no single, Madoff-esque villain. The model and the markets went against the company. But the story was never that simple. You can blame policy and government and the Fed and Black Swans all you want. But in the end, the financial crisis of 2008 was the product of a series of extremely stupid moves made by people who should have known better, and who were paid huge amounts to know much, much better. Lehman Brothers could have survived the meltdown in the markets in 2008 — if only its executives and board hadn't decided that running an investment bank with 30:1 leverage was a great idea.
Wall Street II resolved with an improbable happy ending. By contrast, Margin Call has a more realistic denouement. The firm survives, and some of the traders and executives still have their jobs. But they're diminished, demoralized, in need of a hug and support. Yet nobody seems to be going home to anybody. In one of the final scenes, Spacey's character is weeping over his dead dog in the front yard of his ex-wife's house.
An obvious metaphor? Sure. On Wall Street, you may have temporary allies, colleagues and co-workers. But if you want a true friend, you'd better get a dog.

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