Margin Call--"Mama there's wolves in the house"


Jack Bauer comes to Wall Street, in the person of Sam Rogers, played by Kevin Spacey.

The thriller frame is achieved by compressing the slow motion train wreck of 2008 into only 24 hours. (The time acceleration of the opening Manhattan shot foreshadows this compression, even as it pays homage to the opening shot of Inside Job.) See reviews here and here.

“It’s the same thing, over and over. We can’t control it…just react and make a lot of money.” So says the Jeremy Irons character CEO “Tuld”, in the closing stanza of a speech in which he lists the dates of every significant financial crisis of the last two centuries. Financial instability is the generic model in this movie.

“They want what we have to give them”, says Will Emerson (Paul Bettany), the “they” in question being a reference to what everyone now knows as the 1%, the OWS label that post-dates the movie. We make them rich, says Emerson, without having to get their own hands dirty. Stunning economic inequality is thus a further subtext of this movie. (Twenty-three year old trader Seth Bregman, who earned $250,000 last year, is astonished by the $2.5 million pulled down by Emerson, which of course pales in comparison to Tuld.)

The ticking time bomb in this thriller is the various components of mortgage backed securities, which are sitting on the balance sheet of the unnamed firm for only a month until the package can be put together and sold off. Eric Dale (Stanley Tucci) hears the ticking, and is on the track, but gets laid off in the opening scene, although not before he manages to pass on a flash drive to 28-year old uber quant Peter Sullivan (Zachary Quinto)—“Be careful”—and the game is afoot.

Working late, Sullivan discovers that the firm has already breached its risk limits multiple times in the past two weeks, and that things are getting worse. That is where Sam Rogers, his new boss, enters the picture, called back into the office at 11:30 pm. From there, over the next hours, the problem gets kicked up to wunderkind Jared Cohen (Simon Baker), and thence to CEO Tuld who arrives in his own chopper.

Tuld, more concerned about himself than the firm, makes the decision to liquidate immediately. “There are three ways to succeed: be first, be smartest, or cheat”, and his way is to be first. If that means stuffing hapless counterparties, so be it. And if it also means precipitating financial crisis, so be that as well, since after the crisis there will be wonderful bargains. And so the order goes out.

Sam Rogers’ job is to execute, which means persuading his army of traders at a pep talk before trading opens the next morning. We suspect he will do it since we hear him giving a similar pep talk after the opening scene—“Now they are gone. They are not to be thought of again.”—but there is sufficient doubt to sustain dramatic tension for a while. When the moment comes, the persuasion is fundamentally monetary, $1.3 million for individual performance, and an additional $1.4 million for group performance.

It may or may not be the right thing for the firm, but it is definitely the right thing for Tuld, and money is enough to get everyone else to go along. These payoffs are presumably the margin calls to which the film’s title refers.

Everyone in this film has his price, including the just-fired Eric Dale. He gives a nice speech about the bridge he once built, 22 years ago when he was an engineer, which has since then saved a cumulative 1531 years by providing a more efficient way of getting from town A to town B. But even he is willing to take $176K an hour to sit on his hands in the office of his former employer while the dastardly deed is being done.

Sam Rogers executes, so he rationalizes, because he needs the money. Although he is aware that his actions will cause the market to tank, he gives no warning to his own son, saving his empathy for his dying chocolate Labrador. The movie ends with him digging a grave for the dead dog in the lawn of his former home, now the home of his ex-wife. As the credits roll, the sounds of shovel on soil carry us out of the theater.

Most reviewers are reading this film as a fictionalized version of the Lehman story. But the unnamed firm survives, whereas Lehman did not. The film calls for a deeper reading, that looks through the cinematic acceleration of time. Up on the roof, in the middle of the night, Will Emerson opines that fear of heights is not so much fear of falling as it is fear of giving in to the temptation to jump. And jump is of course exactly what the fictional Tuld does. He jumps first so as to survive, at the expense of others who hesitate and are lost.

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