'But John, if you do this, you will kill the market for years. It's over. And you're selling something that you *know* has no value', pleads Sam Rogers (Kevin Spacey) as his boss considers whether to offload its entire mortgage backed securities book.
Margin Call (2011) is the latest, and arguably the best, film about the global financial crisis. Unlike Inside Job (2010), Margin Call is not a documentary but a character study. We're taken into the lives of eight key employees at 'the firm' (which remains nameless) as they avert the bank's imminent collapse due to the unravelling of its mortgage backed securities. In this way the film takes on some of what actually happened at Bear Stearns, Lehman Brothers and Goldman Sachs.
What's most interesting is not the plot itself, as we all know what's going to happen (it isn't good!), but the way in which the characters rationalise their involvement in the financial system. The film's characters are isolated and independent of the outside world, but have a significant impact on it. This separation from the real economy plagues the characters in the film. Each questions, then justifies their involvement. Will Emerson (Paul Bettany) 2IC on the trading desk puts it like this:
'Listen, if you really wanna do this with your life you have to believe you're necessary and you are. People wanna live like this in their cars and big **ckin' houses they can't even pay for, then you're necessary. The only reason that they all get to continue living like kings is cause we got our fingers on the scales in their favor. I take my hand off and then the whole world gets really **ckin' fair really **ckin' 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 wanna, you know, play innocent and pretend they have know idea where it came from.'
It's fiction, but I've heard similar arguments expressed by actual finance professionals.
This is where the strength and poignancy of the film lies. It highlights the absurdities of contemporary finance. As the chart below shows, the finance sector has increasingly taken a larger share of corporate profits. Gerard Minack (strategist for Morgan Stanley) recently put it like this; when he was growing up, all the best suburbs were filled with lawyers, doctors and business owners. Now they are just full of bankers. There's something wrong with that equation.
Despite its somewhat moralising tone, the film is a fascinating portrayal of the tensions and hypocrisies of operating in the financial services industry.
Margin Call is a neat, incisive exploration of the unravelling of global credit boom, and one I highly recommended watching.