The Financial Crisis In The Movie: Margin Call

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J.C. Chandor has embraced Rahm Emanuel's dictum "never let a serious crisis go to waste." The 37-year-old writer and director used the financial crisis as a springboard to create the most insightful Wall Street movie ever filmed. Margin Call captures a day in the life of a Lehman Brothers-like bank as it scrambles to avoid falling into the first cracks of the financial crisis. Briskly paced and marvelously acted, the movie reveals how large financial institutions operate and the motivations of the people who work within them.

Margin Call should not be confused with journalism. It is not a precise overlay of the financial crisis. You'll never hear the words collateralized debt obligations uttered in the movie. As the reporting I did with my
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Risk managers and accountants are among the few who actually know what the numbers mean. They see the whole picture. It's a running joke through the movie that Sullivan's bosses, right up to the CEO, don't understand the financial wizardry behind the products they make and sell. When confronted with Sullivan's analysis, Sam says, "Oh Jesus, you know I can't read these things. Just speak to me in English."

The risk manager is not in sales, which is the heart and soul of the institution. He or she only offers recommendations. Throughout Margin Call there are a number of references to warnings unheeded. And indeed, in the real world, the success of investment banks at subverting their risk management rules correlated nicely with how badly they fared when the crisis hit. In the ultimate irony, when it's time for someone to take the fall for the firm's risk taking, it's the head of risk management, played by Demi Moore who is pushed to the scaffold.

Sullivan and his side-kick Seth, played by Penn Badgley, are still new enough to the system to be doubtful of its utility. Seth is enamored with the money Wall Street offers and particularly impressed by his boss Will Emerson, who pulled down $2.5 million the previous year. They briefly wonder whether that's "right," but push the unwelcome thought away
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He itemizes his expenses for them, including $76,520 for hookers, booze and dancers. Their adulation only increases when he admits he claimed most of that back as entertainment expenses.

Later when Seth bemoans the fact that normal people will be hurt by their actions, Emerson's ferocious response is shocking both for its amorality and its kernels of truth.

"If you really want to do this with your life you have to believe that you're necessary. And you are. People want to live like this in their cars and their big fucking houses that they can't even pay for? Then you're necessary. The only reason they all get to continue living like kings is because we've got our fingers on the scales in their favor. I take my hand off and the whole world gets really fucking fair really fucking quickly and nobody actually wants that. They say they do but they don't. They want what we have to give them, but they also want to play innocent and pretend they have no idea where it came from. That's more hypocrisy than I'm willing to swallow. Fuck them. Fuck normal

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