According to the National Bureau of Economic Research, the Great Recession officially began in December 2007. But for many Americans (and most of the world), the recession truly began in September 2008 with the spectacular collapse of the investment bank Lehman Brothers. It was the largest bankruptcy in history, causing a stock market crater and a shockwave of panic that would eventually lead to the elimination of $10 trillion in equity. It was also undeniable proof that our economy suffered from systemic, potentially fatal weaknesses, and that the subprime mortgages, derivatives, and credit-default swaps that had become the highly profitable darlings of Wall Street were actually toxic.
But before Lehman Brothers, which had already been in decline, did the unthinkable and finally imploded, there must have been a moment when LB executives truly realized that their exposure to mortgage-backed securities was a poison the company could not recover from. And that in the once-venerated company’s death, there was still money to be made, even if doing so was essentially pressing a self-destruct button on the world economy.
“MARGIN CALL” takes us inside a lightly fictionalized stand-in for Lehman Brothers called HMS. The film’s title comes from a stock market term referring to a demand for money when something bought with borrowed funds has ruinously decreased in value, which pretty much describes the crux of the situation the firm finds itself in.
The film depicts the last night of good times on Wall Street, as a deadly certainty travels up the executive ladder at an investment firm: Disastrous speculation in the mortgage markets is leading to the firm’s collapse. The film does a great deal to humanize the authors and beneficiaries of the 2008 financial crisis. There are no hissable villains here, no operatic speeches condemning or celebrating greed. Just a bunch of guys (and one woman, Demi Moore) in well-tailored clothes and a state of quiet panic trying to save themselves from a global catastrophe of their own making. Watching them going about their business, you don’t feel the kind of fury inspired by “Inside Job,” Charles Ferguson’s great muckraking documentary on the origins of the financial crisis, but rather a mix of dread, disgust, pity and confusion.
“Margin Call” is a thriller, moving through ambient shadows to the anxious tempo of Nathan Larson’s hushed, anxious score. The movie is a fictionalized account of a disastrous twenty-four hours in 2008, when “financial instruments” that had seemed solid dissolved into air. The rush of panic is halted, now and then, by moments of disbelief. It is also a horror movie, with disaster lurking like an unseen demon outside the skyscraper windows and behind the computer screens. It is also a workplace comedy of sorts. Hovering over all of it is the dark romance of capital: the elegance of numbers; the kinkiness of money; the deep, rotten, erotic allure of power.
The movie rarely leaves the Manhattan offices of the fictional investment bank (loosely modeled on Lehman Brothers) in which it takes place and limits its action, which consists mainly of phone calls and hurried meetings, to a frenzied 24-hour period. Within that narrow frame the gears of a complex narrative mesh with ravishing clockwork precision.
As the movie opens, people at the firm are being summoned to a glass-walled conference room and politely told to clear out. Among the victims is an uncomplaining risk-management executive, Eric Dale (Stanley Tucci), who, leaving with nineteen years of his life in a cardboard box, passes a flash drive to Peter Sullivan (Zachary Quinto), one of the young analysts. “Be careful,” he says.
A young risk analyst named Peter Sullivan (Zachary Quinto) may be as close as the movie comes to a hero, but it is also possible to see what happens to him as a parable of how the system corrupts and exploits its most decent and honest minions. Working late on the trading floor, and plugging Dale’s numbers into standard volatility models, Peter Sullivan (who we later learn has a Ph.D. in physics) glimpses a sign of the apocalypse lurking in the mathematical model : if the mortgage-backed securities currently on the company’s books, which are heavily leveraged, decline in value by an additional twenty-five per cent, the company’s losses will be greater than its total market capitalization. Recent volatility in the market is threatening the stability of the mortgage-based securities that have been generating most of the company’s profits, and the resulting losses are likely to swallow this bank and make trillions of dollars vanish into thin air.
Peter alerts his callow co-worker Seth Bregman (Penn Badgley) and their immediate superior, Will Emerson, a cynical soldier played by Paul Bettany. In a gangster movie Will would be the midlevel enforcer, entrusted with the dirty work but denied real authority. His superior is Sam Rogers, played by a splendidly world-weary Kevin Spacey. Sam oversees the sales force that has been peddling the bad securities, and he must now carry the bad news upstairs, through several more layers of company hierarchy.There is a tense showdown with Sarah Robertson (Ms. Moore), who seems to have promoted the scheme that is now unraveling and who may have ignored warnings about its outcome. Eventually word of what Peter has learned reaches John Tuld (Jeremy Irons), the charming, dapper, black-hearted boss of bosses. Tuld sweeps in by helicopter, assembles everyone in a conference room at 2 A.M., and, with debonair flourishes, devises a desperate strategy: dump the “greatest pile of odiferous excrement in the history of capitalism” the next day; sell all of it, at discounted rates, in a few hours, before word gets around to buyers that the paper is nearly worthless.
“Margin Call” is one of the strongest American films of the year and easily the best Wall Street movie ever made. It’s about corporate manners—the protocols of hierarchy, the rituals of power, and, most of all, the difficulty of confronting flagrant habits of speculation with truth. That moment is avoided until it’s absolutely necessary, at which point communication among the responsible parties becomes exceptionally nasty. Margin Call is the best fictional treatment of the current economic crisis. It’s altogether superior to Oliver Stone’s hollow Wall Street: Money Never Sleeps and in the same class as Charles Ferguson’s revealing, piercingly intelligent documentary Inside Job.
One of the running jokes in the film is that the higher a person’s rank, the less he is likely to understand what the firm is actually doing. This ignorance is almost a point of pride. “I don’t get any of this stuff” — this line is repeated about Peter’s discovery by Will, then Sam, then Sam’s boss, Jared Cohen (Simon Baker) and then Tuld. In a further absurdity, one person who does get it, Peter’s mentor, Eric Dale (Stanley Tucci) has just been downsized out of the company. As a security measure his cellphone has been disconnected, which means that his increasingly desperate former colleagues are unable to find him when he might be of most use.Not that anything can really be done. The most chilling and most believable aspect of “Margin Call” is how calmly and swiftly its drama of damage control unfolds. A scapegoat must be found, and a survival plan worked out. The consequences are acknowledged — those we are living with now — and then coldly accepted in the name of a vaporous greater good. “We have no choice.” “There is no choice.” “It’s not like we have a choice.” These phrases are uttered again and again, by people who truly believe what they are saying. Some of them may have sleepless nights ahead, but none are likely to suffer very terribly. The accomplishment of this movie is that it allows you to sympathize with them, to acknowledge the reality of their predicament, without letting them off the hook or forgetting the damage they did.
The second half of the movie is devoted principally to the conflict between Tuld (his name a not too subtle play on that of Dick Fuld, the former head of Lehman), who thinks that investment is merely the greatest of games, and always subject to bubbles and crashes; and Sam Rogers, who hesitates to carry out Tuld’s strategy, on the plausible ground that if you peddle junk to your customers they will never buy anything from you again. Kill trust, and you kill the market, he says. But Tuld waves away his worries. The game will go on, he believes; the firm will rise again and make money. Irons is stentorian, charming, threatening. Spacey, after a long career of playing acidulous bad guys, gives a performance of surprising gentleness. As Rogers, sleepless, makes a speech to his traders in the morning, prepping them for the unsavory task ahead, Spacey’s body slumps and his facial muscles go slack.
“Margin Call” is an extraordinary feat of film-making for Mr. Chandor’s first feature. The young writer-director, has made documentaries and commercials, but he’s never had a script produced before. His formal command — his ability to imply far more than he shows or says and to orchestrate a large, complex drama out of whispers, glances and snippets of jargon — is downright awe inspiring.
In this largely indoor movie, the city looming outside is a palpable presence; the camera, quiet and relentless in moments of confrontation, tracks silently at night through the empty trading floor, a ghost invading a once healthy company. As visual and verbal rhetoric, the awe-inspiring appearance of Manhattan at night and the moods of choking anxiety aren’t terribly fresh, but the writing and the acting in “Margin Call” are so good that we get completely caught up. Shot by Frank DeMarco and set almost entirely in the unnamed firm’s shadowy office high in a Manhattan spire, “Margin Call’s” sense of brooding tension comes from its confined space, from the gloom of events taking place during the wee hours of a long night of the soul, and from an effective score by Nathan Larson.
Chandor’s only obvious qualification is that his father spent forty years at Merrill Lynch, which, like Bear Stearns and Lehman Brothers, destroyed itself with an excess of mortgage-backed securities and finally, in 2008, subsided, at a bargain rate, into the arms of a wealthier firm. The task Mr. Chandor sets himself is not to explain, once again, what occurred in 2008 — though a comparison with the journalistic records suggests that “Margin Call” is broadly accurate — but rather to explore the psychological pressures and ethical choices at work among those who caught an early glimpse of the abyss and then helped push everyone else into it.
“Margin Call” has a fondness for business jargon in its dialogue, but even if the specific financial details being discussed are sometimes unclear, the thrust of events is never in doubt.
Chandor’s prickly script attracted a talented cast. At the company, Sullivan’s findings quickly work their way upward: first, to his immediate superior, Will Emerson (Paul Bettany), a cocky, cynical, free-spending pit boss with a streak of decency; then to the longtime head of trading, Sam Rogers (Kevin Spacey), a lonely man who believes that the company does some good in the world and finds himself grieving excessively over his dog, who is dying of cancer (a decent enough symbol); then to the head of risk, Sarah Robertson (Demi Moore), who warned of danger but still has to take the fall; then to their boss, Jared Cohen (Simon Baker), a severely controlled corporate snake; and then, at last, to the C.E.O., John Tuld (Jeremy Irons). In “Margin Call,” money insistently pushes its way into personal decisions; the movie is sympathetic to the executives’ plight but hard-nosed about their constant desire to elevate pay packages over principle.
Written and directed by J. C. Chandor; director of photography, Frank DeMarco; edited by Pete Beaudreau; music by Nathan Larson; production design by John Paino; costumes by Caroline Duncan; produced by Joe Jenckes, Michael Benaroya, Robert Odgen Barnum, Neal Dodson, Corey Moosa and Zachary Quinto; released by Lionsgate, Roadside Attractions and Benaroya Pictures. Running time: 1 hour 45 minutes.
WITH: Kevin Spacey (Sam Rogers), Paul Bettany (Will Emerson), Jeremy Irons (John Tuld), Zachary Quinto (Peter Sullivan), Penn Badgley (Seth Bregman), Simon Baker (Jared Cohen), Demi Moore (Sarah Robertson) and Stanley Tucci (Eric Dale).