Margin call fire sale scene

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Michael Rocha, Dybra Grande, Jeremy Greenland

Professor Watnik

Management 306

March 19,2013

Margin Call

Margin Call depicts a dramatization of a financial firm's crisis as events start to unfold

during a thirty-six hour window. The fiIm was brilliantly written in a way to not disagree nor

agree with the financial firms or employees' actions, but to leave it up to the viewers as to what

their opinion was. The movie begins when Peter, a Senior Risk Analyst, discovers that his

company is going to go underwater when his former boss, Eric, hands him a flash drive and tells

him to be careful. After working for several hours and figuring out that the formula they base

trades off of is bad, Peter tries to get ahold of Eric with no luck. He then calls his friend, Seth,

who is having drinks with Will, who is Head of Trading, and urgently states they should return to

the office. After showing Will, word travels quickly to the Chief Executive Officer, Tuld, who

calls a board meeting at 3 A.M. After hours of discussion, it is decided that the company will sell

off all the mortgages at a discount, eventually to little value, to survive and sink their

competitors. Although some characters are conflicted about what to do, in the end they decide to

help the company and make the sales. Once the sale is completed, the company tries to save their

reputation by stating they were not warned or given enough information to prevent this type of

event from happening, which leads to the dismissal of Sarah Robertson.

Peter Sullivan is a physicist who switched careers to eam a lucrative salary as a Senior

Risk Analyst. Peter, who figures out what Eric was trying to finish before he was fired,

discovered the company will crash and bum unless they took quick action with the fire sale.

Peter's motivation and world view is not as straight forward as some of the other characters' are,

but are easily contrasted against his friend's, Seth. Although they have both seemingly worked

for the company for the same amount of time, Peter is both smarter and older. As Seth is worried

about what he will do if he is fired, Peter is more concerned about the bigger picture: if the fire

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sale is executed and what its implications are for society. For example, Peter was motivated to

look through the flash drive handed to him, and wamed his bosses about what was going to

happen, not to save himself, but to help the company. This falls in line with his worldview of a

general concern for his peers and country. Although Peter's options are not explicitly clear, he

does have a few to which he can take. His choices included either, taking the information he

learned to his bosses and warning them of the coming catastrophe or taking the information to

the media or a rival firm for an exchange of a massive sum of money.

Seth is the youngest employee of the group and is included into the situation when Peter

calls him to help look for his boss. He is a Junior Risk Analyst, who is more concemed with the

amount of money he makes and whether or not he is getting fired. This is evident several times

throughout the movie. For example, he asks his friend, Peter, how much he thinks his bosses

make each year. Additionally, he asks several times whether they think he will be fired once the

fire sale ends the following day. Although Seth does not make any critical decisions, his world

view is evident with his actions throughout the movie. For example, his selfishness is noted

when he tells peter to come down from the office and have a few celebratory drinks, instead of

working to find out why Eric told Peter to oobe careful." Additionally, I believe Seth would have

chosen to do what was more beneficial to help his own bank account, rather than having a

concem for his company or societY.

Jared Cohen, the Investment Division Head, is the individual who comes up with the idea

of ,,selling it all." Simon's world view is evident when he implants the idea of selling their

product to save their own skin. Furtherrnore, it is shown during the scene when he is shaving and

Seth comes out of the bathroom stall crying, Seth states "this is all I wanted to do;" and Jared

replies back with an uninterested look and response of "really." Additionally, during the scene

with Jared and Sarah in the elevator, Sarah is trying to create a strategy with Jared to deal with

Tuld. However, Jared replies o'I'm not sure we need one, that's not the way I do things." His

response states that he does not care if Sarah is thrown under the bus in regards to who gets to

keep their job. Furthermore, Jared knew that there might have been a problem for about ayear

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yet failed to act on it. This shows that he does not care what happens to his work industry or

reputation, only that he wants more money in his pocket and job security. Jared's options could

have impacted society if he decided not to sell. He could have come up with a different idea

which would have not created the start of an economic recession. For example, Jared could have

gone with what Sam had mentioned: the ethical route. Additionally, Jared could have prevented

this entire catastrophe if he had actually listened to Sarah and caught the problem the year prior

when he was first told, rather than letting it grow into what it did in the movie.

Sam Rogers, the Investment Floor Head played by Kevin Spacey, is my favorite

character for a very specific reason. You're first introduced to him after he's been informed that

the firings for the day are finally over with. He goes out to give them an inspirational speech,

calling them "survivors". In my opinion, he comes off as somewhat callous; almost as if he's

insensitive to the situation. You're left wondering if he truly cares for his employees, but over

the course of the movie you see that he doesl even when he's shown to be numb towards certain

situations. The reason for him being my favorite character is the juxtaposition between his work

persona and his personal life. Throughout the movie we're given glimpses of his personal life.

You find out his dog is dying and that he's going through a divorce. It personalizes him; makes

him more than a faceless corporate stooge. Eventually you realize that he is in fact the conscious

of the movie. He points out the unethical decisions being made and tries to offer a moral

viewpoint on the situation by asking Mr. Tuld, o'Yes, but at what cost?" in regards to selling off

the mortgage backed securities. Towards the end of the movie,I see him as a reflection of the

average good person. He wants to be above that kind ofjob and doesn't want to be influenced to

make unethical decisions; but the realities of his life, paying bills, paying alimony, etc, bring him

back to reality. As he tells Mr. Tuld, near the end of the movier "believe it or not, I need the

monej", Sam wants out but the stresses of real life pull him back in'

My analysis of Sam segues nicely into Will Emerson, Head of Trading and played by

Paul Bettany. Will is, in a lot of ways, Sam's disciple, with maybe a smidge more indifference

towards the average worker. I believe Will has very nicely rationalized what people might

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consider the unethical work he does; this is illustrated in his speech to Seth as they are coming

back from Eric Dale's house. "Jesus, Seth. Listen, if you really wanna do this with your life you

have to believe you're necessary and you are. People wanna live like this in their cars and big

fuckin'houses they can't even pay for, then you're necessary. The only reason that they all get to

continue living like kings is cause we got our fingers on the scales in their favor. I take my hand

off and then the whole world gets really fuckin' fair really fuckin'quickly and nobody actually

wants that. They say they do but they don't. They want what we have to give them but they also

wanna, you know, play innocent and pretend they have no idea where it came from. Well, that's

more hypocrisy than I'm willing to swallow, so fuck em." The quote is a little lengthy, but I think

it's integral to understanding who Will Emerson is as a person. He's not completely insensitive

towards people's plights. He seems to be genuinely sorry about Seth losing his job, but he's also

pragmatic, informing Seth that o'nothing I'm gonna say is going to make you feel any better. It's

just going to suck for a while and then you'll be fine." He truly believes that what he's doing is

necessary and, as such, he's not going to quip over the dirty parts of the job. However, on that

same note, he also very much looks up to Sam and is willing to follow Sam's lead even to his

own detriment. When Mr. Cohen asks Will if he'd be willing to take over for Sam, Will makes it

very clear that his viewpoint of what's right and wrong has and will always follow Sam's. In the

end, I felt a lot more respect for Will than in the beginning. Pragmatic he might be, but he

definitely has his own sense of ethics and morality and he's not willing to compromise them.

Jeremy Irons plays John Tuld, CEO and chairman of the board. I think the director wrote

the part of John Tuld to reflect the face of Wall Street as people see it. A wealthy CEO who's

ruthless and willing to do whatever it takes in order to ensure his company comes out on top.

However he also displays a sense of honor and at least does some rationalizing of his actions.

During the board meeting he tells Mr. Cohen oothere are three ways to make a living in this

business: be first, be smarter, or cheat. And I don't cheat." I think the last part is very significant;

he makes it clear that he will not break any rules in order to come ahead, he might bend them but

his own code of honor will not let him actually break them. That might seem like a fine

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distinction but I believe it to be an important one. Near the end, when he's explaining to Sam

about how the percentages never change between the winners and losers, I think that was an

attempt to explain how people like John Tuld see the world and their role in it. Sam kind of

shrugs it off afterwards though, by saying that he's not staying because of the speech but because

he needs the money. The speech, however, struck me as a lifile contrived. I mean here Mr. Tuld

is, hours after ruining the market as they knew it at the time, thousands of people losing their

jobs around the world, and he's having a steak dinner. It felt like the logic was relatively sound

but behind his choices he, himself, had lost touch with the reality of it all. This was contrasted by

Peter who was still down to earth enough to realize how impactful the company's decisions

would be that day.

Eric Dale has been the head of the risk management department for 19 years until he was

let go one morning, forced to collect his belongings and leave the firm immediately. He is told

that all of his cell phone services have been cut off and he will be escorted out of the building.

As he leaves the company, he encounters Peter Sullivan and gives him a USB drive asking him

to examine his project and departs with these words "be careful". Unfortunately, for the firm

these words proved ominous, since the project warned of an upcoming possibility. Eric's project

analyzes levels of volatility of mortgage-backed securities as they began to lose value. This

provided information on expecting incurring losses that exceeded market capitalization within a

period of time for the firm. Throughout the movie, employees of the firm are trying to get in

contact with Eric about his project. When they find him, he is offered a hefty sum to provide

consultation to the firm on decisions derived by his research. I thought Eric reacted considerately

after being fired and escorted by security out of the building. I personally would have not said

anything about my research due to the fact I was treated like a criminal. The fact that he looked

beyond the behavior of his superiors and genuinely cared for the people working at the firm was

honorable of him and speaks volumes.

Sarah Robertson is the Chief Risk Management Officer for her firm, but becomes a

sacrificial lamb overnight. Although she has filtered several wamings to John Tuld and Jared

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Cohen over the risk of the mortgage-backed securities, her analyses are disregarded.

Unfortunately for her, neither John nor Jared wanted to share the blame of the losses incurred by

the firm. Sarah was forced to take the blame and become a sacrifice to the board in return for the

losses of the mortgage-backed securities. She was offered a hefty compensation plan by John

Tuld and was forced to remain in the company until the market closed. I thought Sarah

Robertson was an interesting character for her courage and ability to handle responsibility. Sarah

could have refused the role of the martyr and left the company for a better one, but she stayed.

In conclusion, this film portrayed a cutthroat industry in which individuals were faced

with important decisions such as, creating financial stability for the company or lookout for their

shareholders, or themselves. For characters such as Sam Rogers, Will Emerson, John Tuld, and

Simon Baker, high level executives, saving themselves from the impending doom was more

important than a financial recovery. For Eric Dale, Seth Bregman, and Peter Sullivan analyzing,

predicting, and providing awareness of the situation was more important. Essentially what it

comes down to is empathy; Margin Call is a realistic take on what happens inside of high level

Wall Street companies when decisions on financial crises occur. You're shown the good, the

bad, and, sometimes, the uglY.

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Works Cited

Margin Catt.Dir. J. C. Chandor. Perf. Kevin Spacey. Roadside Attractions,20II- DVD.