Archive for September, 2012

Margin call

Demi Moore

Demi Moore

Around four years back, most people saw the chain reaction of financial disaster. High level investment companies located in different parts of the world had to declare bankruptcy.

The major reason for bankruptcy was the housing bubble destruction and the resultant decrease in value of real estate in the US and abroad. These changes led to a drastic change in economic structure, such that they could only be addressed by a congressional bailout.

Margin Call was released in the year 2011, and it accurately weaves a cold, yet compelling story. This review of the movie ‘margin call’ describes how the movie is connected to real life.

Most of the movie is shot inside a NY investment company, where characters speak about complex financial terms that are unknown to a common man, but J.C. Chandor manages to immerse viewers in the panic where actions mean more than words.

The movie plot has a strong connection with reality. In the beginning of the film, the investment company, which is not named but appears to be related to Lehman Bros, has just fired 4/5th of its total employees. One of the fired employees is Eric (played by Stanley Tucci), he worked as head of the risk analysis department. While leaving the office he hands over a flash drive to Peter (played by Zachary Quinto) and asks him to analyze data carefully.

Peter finds some shocking facts in the data storage device given by Eric, and reports them to his seniors. Seth (played by Pen Badgley) his supervisor Will (played by Paul Bettany) and their boss Sam (played by Kevin Spacey), gather in the office at night to view the data left by Eric.

All these characters discuss a number of financial facts with each other, and the bottom line is that their company and the whole market are rapidly moving towards disaster. The rest of the movie is shot inside the emergency meeting conducted during the same night. The role of Sarah Robertson a senior executive is played by Demi Moore (picture above), while Jeremy Irons plays the role of the company’s CEO John Tuld.

Later that night, the company’s higher management took several decisions that depict several bitter truths of the investment sector. These major decisions are related to mortgage backed securities, which are securities backed by real estate mortgages. These are the securities that started the crisis in 2008.

The company CEO and investment floor head i.e. Sam take several decisions that are in the company’s interest, but totally against investor interest. Sam announces that he will be giving 7 figure bonuses to his traders if they are able to sell off 93% of the mortgage backed securities. These huge bonuses are offered as traders will lose all their clients after deceiving them by selling securities that will collapse in value (as everyone will try to sell them). The management feels that sharp gains and losses are all a part of the economic game.

The top actors played at their best. The movie has a close relationship with reality and the 2008 financial crisis. Investment companies often misguide their clients to invest in securities that are soon going to lose their all their cash and financial worth, and become nothing more than a piece of paper.

The cold hearted behavior of senior company executives has been depicted with perfection. Kevin Spacey and Paul Bettany acted really well in the film, especially in the places where they showed lack of interest in investor’s benefits. J.C. Chandor, the writer and director of Margin Call received a lot of accolades for creating it, and it’s his finest creation till date.