Margin Call

Investors can make bets by promising to buy stock at a higher or lower price than the current day’s valuation.  If all goes well, they never actually have to buy the stock.  They can keep buying and selling the bets with borrowed money without ever having to buy the underlying securities.  But if it does not go well, the investor gets what is known as a margin call and has to come up with the cash.

The financial meltdown of 2008 was like a margin call for America, and we will be paying off that debt for a long time.  This movie, as tightly wound as a thriller, takes us through a fictionalized version of the night when it all tipped over from going well to not going well at an enormous Wall Street company, and it was time to pay the piper and a lot of others as well.

“You guys ever been through this before?” asks Will (Paul Bettany), as some serious looking people in suits start tapping people on the shoulder and saying, “I’m afraid we have to speak with you” to the people in cubicles  “Best to ignore it, keep your head down, go back to work.  Don’t watch.”

“The majority of this floor is being let go today,” says the serious woman in a suit.  She speaks of “certain precautions that may seem punitive.”  She glances down at the paperwork when she speaks of “your — 19 — years” with the (never-named) company.  And then we see people carrying cardboard boxes of belongings out the front door of a shiny skyscraper, their eyes blinking in the unaccustomed sunlight.

This is nothing new, as Will’s comment informs us.  It is a routine, if brutal pruning of the staff.  This is a cutthroat business and periodically some throats get cut.  And periodically Will has to speak to those left behind: “These were good people and they were good at their jobs, but you are better.  We will not think of them again.”  Back to work watching all those screens with all those numbers.

But one of the departed has left something behind.  There is evident irony in the name of the division that has been gutted.  It is the Risk Management group.  And the 19-year veteran who has been shown the door has been working on a new analysis of the firm’s position.  He turns his thumb drive over to the young colleague who has been kept on, Peter Sullivan (Zachary Quinto), a literal rocket scientist with “a PhD in propulsion,” who plugs a few holes in the formula that reveal that the firm is in their terms, “projected losses are greater than the current value of the company.”  In other words, on the verge of collapse.  That is when it gets interesting.  Sullivan has proven that there are going to be some devastating losses.  The question is who will pay for them.

The rest of the long night will be devoted to answering that question.  It is like a long game of musical chairs, except that these people get to decide when to stop the music so they can get to the chairs before everyone else.

The guy at the top is John Tuld (Jeremy Irons).  Given a choice between reputation and money, he has no hesitation in choosing money.  He tells the head of sales, Sam Rogers (Kevin Spacey) to sell the ticking time bomb securities by assuring their clients that they are solid investments, even though Rogers points out that no one will ever trust them again.  “You’re selling something you know has no value.”  “We’re selling to willing buyers at fair market value so that we can survive.”

Rogers is not the only one who raises concerns, moral and financial.  But writer-director J.C. Chandor lets us see when and how each of them topple, and what makes them topple, which turns out to be money.  Dale repeatedly says there is nothing that can get him to go back inside the building and yet there he is, back in the building.  Rogers says he will not sell these risky securities to clients because “you don’t sell anything to anybody unless they’ll come back to you for more.”  But he does.

This could just as easily be set in the scuzzy world of the real-estate salesmen of “Glengarry Glen Ross” or the “leave the gun, take the cannoli” world of “The Godfather.”  Chandor keeps enough of the real story to keep things vivid and meaningful but does not get mired in jargon.  Crisp performances by everyone keep things taut until a surprising detour at the end.  For the first time we leave the world of glass and concrete for an intensely personal moment of loss and grief.  “Our talents have been used for the greater good,” one character says, reminding us that the very selection process that takes people who are capable of more tangible contributions are unable to resist the big money that pays them a many-times multiple for financial engineering over mechanical engineering.  And reminding us, too, that if we let people who care only about money make the decisions they will make decisions that are only about money for them.

Parents should know that this movie has constant very strong language, financial chicanery, thuggish behavior, and smoking and drinking.

Family discussion: Sam, Will, John, Jared, and Sarah all looked at the problem of deciding whether their company or the clients should lose money.  How did each one see it differently?  Why was the company unaware of the risks it was running?  What should the government’s role be?

If you like this, try: “Inside Job,” “Too Big to Fail,” and “Wall Street” and books like “The Big Short” and “13 Bankers”