Is America ready for a nuanced movie about Wall Street and the 2008 financial crisis?
We're about to find out, as Margin Call, which debuted last week, goes into wider release.
New York Times film critic A.O. Scott gave the small-budget film with a big-name cast — Demi Moore, Kevin Spacey, Jeremy Irons, Stanley Tucci, Paul Bettany and Simon Baker -- a rave review, calling it "a tale of greed, vanity, myopia and expediency that is all the more damning for its refusal to moralize."
Your humble correspondent was somewhat less impressed. I saw the movie at its Manhattan premiere at a theater on the Lower East Side — an unlikely locale, given that the neighborhood has long been a hotbed of anti-capitalist sentiment. A couple of blocks down the street is the Red Square building, probably the only luxury building with a statue of Lenin at the top. A few miles to the southeast, protesters are occupying Wall Street. (Highlights of the premiere: Demi Moore, looking extremely thin and Kutcher-less; teen heartthrob Chace Crawford there to support his Gossip Girl castmate Penn Badgely; and Liev Schreiber, incognito in worker's cap.)
Margin Call tells the story of a long day in the life of a Wall Street firm, kind of like Lehman Brothers, trying to survive in the fall of 2008. The problem: The model on which its highly leveraged bets on complicated assets are based turns out to be wrong. Despite the high-profile cast, writer and director J.C. Chandor doesn't dilute or glam-up the story to seek broader appeal. The trading floor isn't the pulsating killing field of Oliver Stone's Wall Street films, but rather a few rows of terminals. The views from the top of the building are spectacular, but the offices are generally drab. Perennial sexpot Demi Moore, who plays a finance executive, is borderline frumpy. Unlike the HBO movie Too Big Too Fail, which featured occasional caricatures of familiar characters, Margin Call doesn't dumb down the complex backstory; you'll hear terms like VAR (value at risk) and MBS (mortgage-backed securities) bandied about.
Unlike the Oscar-winning documentary Inside Job, Margin Call is less interested in investigating systemic failures than it is in looking into human frailties. What happens when an organization faces a crisis and its survival is in doubt? Who steps up, who is sacrificed and who is willing to compromise his beliefs?
Margin Call does offer a highly realistic view of Wall Street firms. Characters like Paul Bettany's hard-bitten player display the mixture of insecurity and hauteur that fuel the financial services world. Zachary Quinto, Spock in the most recent Star Trek, is a ph.d. in physics from M.I. T. who now runs financial models instead of figuring out how to keep spaceships aloft. The higher the rung on the organizational ladder, the better the suits and haircuts -- and the less the executives seem to know or care about how the company is making its money. Jeremy Irons, who plays the vulpine CEO John Tuld, parachutes in via helicopter, and doesn't deign to descend to the floor where the action is taking place.
Like real people on Wall Street, the characters in Margin Call are very interested in making money, and not much else. The long-term vision extends about as far as the year-end bonus for the junior people, and for the current quarter at the top. And they're fatalistic; some trades work, some trades don't. Some people make money, and others lose it. People get downsized or blow up all the time. If you're asked to be a scapegoat, take the generous severance package, cash in your options and move on. In order to ensure the survival of the century-old firm, the remaining executives have to dump huge positions of mortgage-backed securities and other toxic assets quickly. Sam Rogers (Kevin Spacey), a 34-year veteran of the firm, argues that doing so will hurt the firm's customers and clients. But in a crisis, firms worry about themselves first and everybody else last.
The film is sharply written and fast-paced despite the absence of fireworks. In the end, though, Margin Call lets Wall Streeters off easily — and not because there's no single, Madoff-esque villain. The model and the markets went against the company. But the story was never that simple. You can blame policy and government and the Fed and Black Swans all you want. But in the end, the financial crisis of 2008 was the product of a series of extremely stupid moves made by people who should have known better, and who were paid huge amounts to know much, much better. Lehman Brothers could have survived the meltdown in the markets in 2008 — if only its executives and board hadn't decided that running an investment bank with 30:1 leverage was a great idea.
Wall Street II resolved with an improbable happy ending. By contrast, Margin Call has a more realistic denouement. The firm survives, and some of the traders and executives still have their jobs. But they're diminished, demoralized, in need of a hug and support. Yet nobody seems to be going home to anybody. In one of the final scenes, Spacey's character is weeping over his dead dog in the front yard of his ex-wife's house.
An obvious metaphor? Sure. On Wall Street, you may have temporary allies, colleagues and co-workers. But if you want a true friend, you'd better get a dog.
Daniel Gross is economics editor at Yahoo! Finance.
Follow him on Twitter @grossdm; email him at firstname.lastname@example.org.
His most recent book is Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation.