25th March 2012: Margin Call

Margin Call (2011)

J.C Chandor’s debut film Margin Call (2011) depicts 24 hours in the 2008 blow-up of the Goldman Sachs-like, 107-year-old financial institution MBS. Risk manager Eric Dale (Stanley Tucci) is fired and he warns rocket scientist Peter Sullivan (Zachary Quinto) to “be careful” when Dale hands him a final unfinished project: a simulation model of MBS’s risk exposure to collateralised mortgage obligations. Sullivan and colleague Seth Bregman (Penn Badgley) escalate the issue to boss Will Emerson (Paul Bettany) and trading floor manager Sam Rogers (Kevin Spacey), who is grieving about a dying family dog. Branch manager Jared Cohen (Simon Baker) and risk manager Sarah Robertson (Demi Moore) become involved, before MBS head John Tuld (Jeremy Irons) flies in at late night, and in a series of crisis meetings, decides to liquidate all of MBS’s fixed income portfolio. This action exposes other financial institutions to counter-party risk and a cascade that triggers the global financial crisis.


Margin Call’s subdued focus on risk managers differs from Oliver Stone’s Wall Street films on merger arbitrage and traders. Dale, Sullivan, Rogers and Robertson mention a range of risk management frameworks and tools, from Monte Carlo simulations and Gaussian Copulas to Value at Risk estimates and systemic risk. Margin Call’s dialogue and its all-hands crisis meetings are similar to footage of the 1987 stock-market crash and the April 2000 dotcom bubble. Bergman and Emerson convey how Wall Street is a status hierarchy obsessed with end-of-year bonuses and symbols of ostentatious wealth. Tuld floats above the chaos like a corporate philosopher, calmly questioning Sullivan and Robertson on their simulation models liasioning with Cohen to ensure action plans will unfold; and giving Rogers a list of historical stock-market crashes and panics. Dale and Robertson both had the strategic foresight a year in advance of the unfolding risks, and both are made expendable in a Machiavellian gambit.


Praised for its portrayal of the global financial crisis, Margin Call also illuminates the Power Lab simulations of systems thinker Barry Oshry. All of the characters are caught in vicious cycles. Dale disengages with human resources staff and faces off Emerson when forced to return to MBS during the crisis. Sullivan emerges as the hero and is promoted but he is also used as a pawn by others. Bergman and Emerson illustrate Oshry’s Bottoms: disempowered workers who play blame games. Rogers, Cohen and Robertson each represent different variants on Oshry’s Middles: Cohen collaborates with institutional power; Robertson is the victim of gender discrimination; and Rogers is the over-burdened conscience who has worked at MBS for 34 years, and who decides stay because he “needs the money.” In Margin Call’s closing scene, Rogers buries his dog and talks late-night with his divorced wife Mary Rogers (Mary McDonnell). Tuld is Oshry’s Top: single-minded in his focus on understanding the near-future and lobbying Rogers and Cohen to ensure MBS survives.


Margin Call will resonate deeply with anyone who has been fired, dropped from a deal, or who has compromised their personal integrity in order to facilitate corporate strategy.