The $3.5 million Margin Call brings three surprises: First, it is the debut film of the very young and already masterful writer-director, J.C. Chandor (College of Wooster, ’96) who, as they say, has simply come out of nowhere. Second, set in 2007-08, it is by far the best Wall Street movie yet, an insider’s movie, a pure vision, in its immediate focus about the ways and means of the Great Recession (though understandably it is far from a comprehensive drama of that disaster). Third, the performance of Jeremy Irons as John Tuld, CEO of the fictitious Wall Street investment bank, is inspired. Here Irons is great even by his high acting standards and an important portrayal for understanding the Financial Sector. He is helped by screenwriter Chandor’s superb concept of his character, an achievment which makes Tuld the essential Wall Street leader archetype: for me he embodies Blankfein, Cayne, O’Neal, Paulson, et al., their predecessors and their eventual descendants, and is bigger than they in his sum of them. He is the Dark Hero of that realm, the Quintessential One.
Chandor, having paid his moviemaking dues by laboring through an apprenticeship of designing and directing product commercials and whose father worked thirty years in finance on Wall Street at Merrill Lynch and at whose knee, you can only confidently surmise, he heard much about the heart of that essential but dark matter, expertly and knowledgeably immerses us in the drama of Margin Call at once: scene one of Chandor’s story opens with our fictitious Wall Street investment bank, rumored to be modeled on Goldman but to my eye having elements of Bear, Lehman, Merrill and others as well, firing a senior risk-management specialist on the very day that he has nearly completed determining that ruin is upon the bank, a ruin no doubt to be discovered within days throughout the Financial Sector among the bank’s “counterparties”: the causes are: (1) enormous leverage in the bank’s borrowing; (2) the immense and risky subprime mortgage-backed securities packages dangerously carried on the books of the bank as the complex structures are being completed prior to sale to big, blinded investors; and (3) the fact that some of those questionable securities, rather than being sold off, are being held indefinitely on the books of the bank itself in order for the bank to get in on a “Sure Thing,” but now, as the senior risk-management specialist has just discovered, are “exceeding the historical volatility levels measuring risk” (i.e., the value of those assets is tumbling south): In short, Tuld’s bank is nearing the point at which the firm’s losses exceed its market capitalization. This means that the bank would surely be unable to honor its obligations. Given the tumbling value of assets bought by the bank with borrowed money in this period of enormously risky amounts of leveraged purchases, the bank will now face “margin calls” by the brokers in question for it to deposit more funds to “bring the accounts up to a margin that can be confidently maintained,” that is, a level of funds the broker has established is sufficient to safeguard the loans; and the bank will fail to do so. There is a lot of stumbling toward realizing this dire emergency over a few hours, beginning with underlings and leading to a midnight showdown in a lavish conference room with Tuld. Though it is in the wee hours and he has been roused from his warm bed, for Tuld it is just another day at the bank.
Chandor must have started early in becoming realistic about matters on Wall Street by talking with his dad. Tuld knows Wall Street has much in common with Vegas–one generation of casinos is succeeded by a bigger set of casinos, gambling being an invincible human tendency; and Tuld knows too that no one with Wall Street smarts takes seriously the philosophy that “counterparties” will keep each other from excessive risk-taking. Much of Chandor’s drama in Margin Call lies in the slow discovery of an inevitable (“baked in”) tendency toward financial crashes that only the top leaders seem to have grasped, even though they themselves seem to care very little about the day-to-day details of the underlying risk-assessment and other math and operational procedures in their institutions. Tuld’s solution, fashioned calmly by him literally overnight, to avert disaster for his firm is something you must see enacted in the movie to be suitably struck by; indeed, knocked off your horse by.
What is it? Tuld has learned that in a crisis such as the Great Recession, “no one on the Street will escape,” so that his bank is lucky to have grasped the catastrophic danger a shade earlier than his competitors! He orders the fire-sale selling of the toxic assets immediately, before his victims can fully anticipate the impending slide in value of those assets. And he counsels not to worry about near term consequences to the bank’s reputation. Owing to its treacherous garage sale of toxic assets just before the buyers learn fully of the poison they’ve imbibed, Tuld’s bank ironically will weather the storm comparatively well; indeed, in the future, investors will think of Tuld’s bank not as an immoral enterprise but as the smartest bank, albeit a ruthless one, and the one most likely to prevail. In short, what counts over the long course is pragmatic financial smarts. Period. Tuld knows that there are ever to be boom-and-bust cycles; and that booms eventually appear after busts. Besides, in times of financial crash, someone–the government, other investors–will see a chance to make money and will re-energize the financial sector. It’s a long game. The losers are the faint of heart.
Margin Call is dramatic, tightly built, written with the poetic compression of a stage classic, and one of the bright lights in today’s filmdom. For example, there is a monolog by Stanley Tucci (playing Eric Dale, the fired risk manager) about his building bridges in an earlier life that is a tour de force of screenwriting. Ditto an account by a trader on exactly what, by category and proportion, he spent his salary of $2.5 million over the past few months. And yet another on why and how a math whiz in rocket science converted to a risk assessment specialist. But the grandest one is by Tuld in the final scene in which he captures perfectly his diabolical reading of The Way Things Are. Chandor gives us Tuld as neither the Decider nor the Arbiter but the Definer. He speaks the truth of the movie world of Chandor, a truth which is, in the words of Raymond Chandler, “a darkness greater than night.”
Chandor is as good in this rare skill of the Pivotal Scene as is Paddy Chayevsky. Just for these moments, each of which speaks volumes about the unity and probity of Chandor’s screenplay and hence presents his dark view of the Recession and its ilk of financial crises, you shouldn’t miss Margin Call.