Sunday, 22 January 2012

Margin Call - film review

Usually the word “crisis” puts you in mind unpleasant associations of jobless people, bankrupting companies, rampant impoverishment and other miseries. But if you look at how the recent meltdown influenced contemporary culture, you can notice the upsides of it. Before 2008 there had been few and far between books or films depicting the sleazy world of disgustingly well-heeled bankers. Scandals surrounding misconduct of financial industry that broke out in 2008 not only have shed light on workings of the only industry when one’s legally obtained earnings looked like telephone numbers, but also turned out to be an excellent inspiration for artists willing set their works in the murky world of investment banking.

From this blog you should remember reviews of Let’s make money (film), Cityboy (book) and Inside job (film). Each of the abovementioned works can be catogorised to a bit different genre, each has some features of a documentary, unlike Margin Call, a new film which had its premiere on 26 December 2011. “Margin Call”, in Poland translated as “Greed” (what’s the Polish for margin call?), has gone down well with film critics and cinemagoers and I must say the accolades are well-deserved.

It can be easily inferred that the plot is set (PL: osadzona) in mid-2008, in an investment bank with a head office in NYC, which has a huge portfolio of toxic mortgage-backed securities whose value, if the worst-case scenario materialises, will drop to zero, sending the highly leveraged bank under water. Makers of the film avow any semblances between actual persons and events are unintended and if someone happens to discern them, they are only coincidental. But if the stricken bank’s CEO’s surname is Tuld, similarities are evident… But don’t dare to think the film tells the story of Lehman’s collapse…

“Margin Call” repeats a few truths that have been said about the banking industry.

1. Guys who work in risk management are not economists but quants – rocket scientists, physicians, engineers, mathematicians. They have little notion about non-quantitative factors that influence workings of financial markets and are behind the laws of economics. Probably many of those individuals, attracted by sky-high salaries, have not been the right men in the right places. Eric, one of the characters fired out of the blue at the beginning of the film, at the end tells a story of a bridge he had designed and overseen the construction of some 22 years earlier. The power of his brain is underlined by quick mental calculations on numbers hitting up to nine digits. You can find this funny that the guy can multiply millions without using a calculator, but the purport of the scene, for me the principal one in the whole film, is that Eric recalls making something tangible that still serves people, in contrast to what financial engineers have contrived. Real engineers build, while financial engineers destroy?

2. Thursday evening parties in strip-clubs are an indispensable part of the male-dominated industry.

3. Earnings are shocking and even the old rule that one shouldn’t earn more than $ 100,000 over the first year has long been waived.

The above are typical for Anglo-Saxon investment banking, so is there anything common with what you can come across while working at a bank in Poland? The film begins with a scene showing how people are laid off out of the blue in the ruthless industry. It would be fool to describe it, just watch and I hope you will get the point. I witnessed it in Poland and… it is done in exactly the same way…

The film, however, could do with some enhancements. Firstly, it is not comprehensible for laymen. If you’re not familiar with the workings of the financial industry, your chances to find out what is going on, how and why, are grossly limited. Secondly, the film is drawn-out – the same story could have been squeezed into a 20 minutes shorter film, although I have to admit shots of New York on a September night are memorable. Thirdly, the lacklustre ending. This is my second letdown this year (first was when I was finishing reading “Money to burn”) and sadly I must say “Margin Call” lacks a head-splitting ending. The bank shown in the film does not end up like Lehman Brothers. Its survival strategy is to get rid of toxic assets, incur huge losses and foist worthless securities upon clients and other banks. Stinky shit is being spilled over the whole financial system, while the culprit stays afloat. Few have remorse, the unprincipled chaps are proud of their well-done job.

The film again reminded me I should be grateful I was born and live in Poland, not in the United States. May my country never stoop so low…

1 comment:

Michael Dembinski said...

Margin Call is the Economist's pick as the best movie to come out of the current financial crisis. You have prompted me to see it!