Tuesday, October 25, 2011

Margin Call

MPAA (R)  CNS/USCCB () Roger Ebert (3 1/2 Stars) Fr. Dennis (3 1/2 Stars)

IMDb listing -
http://www.imdb.com/title/tt1615147/
Roger Ebert's review -
http://rogerebert.suntimes.com/apps/pbcs.dll/article?AID=/20111019/REVIEWS/111019980

Margin Call (written and directed by J.C. Chandor) is a Wall Street drama obviously inspired by the events leading up to the financial collapse of 2008.

The movie begins on a day of internal housecleaning in the life of a highly competitive Wall Street firm.  Outside hired hatchet-folk are brought in to deliver the news to a fair percentage of the firm's traders and other employees that their jobs are being terminated.  They tell them that "it's nothing personal."  To some employees being terminated with more sensitive jobs they add, "We regret that we're going to have to take some steps with you that are going to look 'punitive' but these are not understood as a reflection of your past work here.  Instead, they are being done simply to protect the firm's security." 

One of the people being terminated "in a manner that may seem punitive" is Erik Dale (played by Stanley Tucci) the head of the firm's risk assessment department.  After being told by the outsourced hatchet-folk that he's being terminated, he's given a box to clear the "personal effects" from his office while a security guard stands at the door watching him do so.  When Erik seeks to go to his computer, he's told not to touch it anymore.  He protests saying that he's "been working on something fairly important (even to the firm that he's leaving)."  He's told that it doesn't matter, that it's not his concern anymore and that his passwords had been changed at the moment of his firing anyway. 

Being escorted with his box of personal affects in-hand by the security guard to the elevator, Eric runs into one of his former assistants, Peter Sullivan (played by Zachary Quinto).  He hands Peter a flash drive telling him "I had been working on this in these last couple of weeks.  Please take a look at it.  I think you'll find it interesting."  With that Eric arrives at the elevator, security guard at his side.  Eric and Pete look at each other, not even having a chance to really say goodbye.  And with this the elevator door closes.  When Eric arrives at the ground floor and is finally escorted to the exit of the building, he tries to make a call on his (company) cell phone -- to his wife? to Peter?  One's not sure -- but it doesn't matter because the cell phone has been disconnected.  Eric takes the defunct cell-phone and smashes it on the pavement in front of the building saying "F-U..."

After the culling of a fair percentage of the traders at the firm is completed, the floor's senior manager Sam Rogers (played by Kevin Spacey) steps out of his office to give them a pep-talk.  He tells them that their former co-workers are gone, to not think of them again, to understand that they remain at the firm because they are deemed valuable, and finally to consider this culling as an opportunity: "Five people who stood in your way from your boss' job are now gone. Now work hard so that one day it will be yours."

After Sam returns back to his office, Sam's assistant, Will Emerson (played by Paul Bettany) who actually manages the traders on the floor for Sam stops-in to give his approval of Sam's speech.  The moment gives Sam a chance to express a surprising moment of humanity.  This fleeting glimpse of humanity is not expressed in any concern about the culling of the floor that just took place. Indeed as senior floor manager, he would have made the decisions of who to cut.  Instead, he tells Will that he's broken-up over the deteriorating health of his dog, that he might have to put the dog to sleep.  Will is somewhat bewildered by Sam's odd/distracted comment about his dog -- again 1/3, 1/2 or even 2/3 of the floor had just been let go -- but since Sam's his boss, Will nods with strained understanding.

Among the people surviving the culling are Erik's two young former assistants in the firm's "risk assessment" department: Peter who was given the flash-drive by Erik and Seth Bregman (played by Penn Badgley).  They realize that with Erik gone, their boss is now Will.  As work ends, Peter and Seth go out to a bar.  Still somewhat stunned by the mass firing (apparently the first time that they went through such a thing) they banter about it at the bar and about other random things.  Each apparently taking to heart Sam's pep-talk at the end of the culling, Seth seems to wonder how much Will (his new boss) makes, while Peter decides to go back to the office to look at the flash drive that Erik gave him as he left.

When they return to the office, they run into Will.  Will and Seth want to go out again, but Peter decides to stay to play with the figures that Erik had left him on the flash drive.  So Will and Seth go out to play, while Peter plays with the info that he had received.  Soon however, Peter realizes what Erik was working on and the implications of this to the future of the firm:  The firm, like many others on Wall Street had been purchasing mortgages from banks, shuffling them around, repackaging them and reselling them back to investors.  Erik, as head of risk assessment for the firm had been analyzing the risk to the firm of hanging on to these mortgages while the firm hung-on to them even as it combined them with others for resale.  Well Erik had found that keeping these mortgages on the firm's books for the period of time that it took to reshuffle them for resale (about a month) was proving to be increasingly risky to the firm, to the point that it could crash the firm in a time period far shorter than it took the firm to prepare them for resale.  And since other firms were doing this kind of mortgage paper-reshuffling as well, as soon as someone found out that these mortgage products being sold were dangerous, the market (along with firms like theirs) would completely collapse. 

What to do? -- Well Peter calls Will and Seth back to the office.  Will, a business manager not a mathematician, tells Peter that he's going to have explain this to him is if he were a 10 year old.  Peter explains the urgency to will with sufficient clarity that, even if it was the middle of the night, Will calls Sam his boss to come back to the office immediately.

Within an hour, Sam arrives, quickly understands the urgency as well, and soon the big brass is called in.  These include Sarah Robertson (played by Demi Moore) and Jared Cohen (played by Simon Baker) who had been the firm's chief designers and marketers of these mortgage products and John Tuld (played by Jeremy Irons) the firm's CEO who arrives on helicopter.

They all come to a hastily arranged meeting, where Sam presents Will who presents Peter, who presents Erik's results.  John Tuld interrogates:
     "Where's Erik?"
     "Well we just let him go."
     "Peter, what's your background?"
     "Well I have a PhD from MIT on friction profiles in fuel injection systems of rocket engines."
      "So you're literally a rocket scientist.  What are you doing here?"
      "Well at the end of the day it's all numbers and to be frank, your pay is much better than in the aerospace field."

Sarah Robertson, the mortgage products' chief designer who knew Erik and knew some of his concerns about the risks, asks that she and her assistant Ramech Shah (played by Aasiv Mandvi) check the numbers.  They're given some time, less than an hour to do so.  The come back reporting that the numbers are right.

What then to do?  That's when John Tuld tells the group: "I've learned that there are three ways to make it in this business: Be smart, be first or cheat."  He continues, "we don't cheat."  (So that's off the table).  "And while we're pretty smart, I'm sure that a lot of other people on this street are pretty smart as well. So we're left with being first.'"

The rest of the movie is about the firm struggling quickly (by dawn) to respond to this discovery first.

The movie is excellent, reminding me of  Oliver Stone's movie of last year Wall Street: Money Never Sleeps, and last year's Oscar Winning documentary Inside Job.

This movie, Margin Call, adds to the conversation and gives the viewer much to think about.  Among the interesting things presented in the film are: (1) that a fair amount of the managers on Wall Street are not particularly bright (and know that are not particularly bright) but are good salesmen or managers, and (2) that a fair number of the brightest minds on Wall Street today are like Peter (and there are others in this film) who not even from the finance fields but arriving (pillaged?) from other fields.

And of course, the question that our whole society is asking is raised:  What do these finance people actually do?  Well, they move around numbers and lots and lots of money.  An engineer, in contrast, would actually be building or at least designing something.  But are the financial engineers doing the same if on a different level?  When does "friction" become real?


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