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Is "Margin Call" the Best Movie About Wall Street Ever Made?

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In a prophetic guest turn in the short-lived British comedy series, Extras, Kate Winslet played an exaggerated version of herself who is obsessed with winning an Oscar. When Ricky Gervais’ character praises her for doing a Holocaust film, she replies:
"I don't think we need another film about the Holocaust, do we? It's like, how many have there been? We get it. It was grim. Move on. No, I'm doing it because I've noticed that if you do a film about the Holocaust, (you're) guaranteed an Oscar. I've been nominated four times -- never won. The whole world is going, 'Why hasn't Winslet won one?' That's it. That's why I'm doing it. Schindler's bloody List. The Pianist. Oscars coming out of their ass!"
Kate Winslet the character was right: Filmmakers have learned that whenever they make a movie about a serious real-life topic, they immediately gain credibility and awards attention. (And yeah, Winslet did end up winning her first Oscar playing the Nazi guard Hanna in 2008’s The Reader.) It makes sense when you think about it -- a real-life tragedy gives a film gravitas before a single reel has even been shot.
And so it is the case with the financial crisis. Since the recession began almost four years ago, Hollywood has pushed out numerous financial crisis-related movies, and seen them sweep awards and top critics’ lists. There was this year’s Too Big to Fail, based on Andrew Ross Sorkin’s account of the early days of the crisis, which earned some 11 Emmy nominations. There was also the documentary Inside Job, which won a 2010 Oscar for Best Documentary.
Amassing a pile of awards, though, doesn’t mean Hollywood’s portrayal of Wall Street is anywhere near accurate. On some level, that’s to be expected -- you can’t exactly mine drama from intense typing or intense Bloomberg terminal staring, can you? Still, I remember watching “Inside Job” with a friend who works as a banker, and he got furious at what he said was a very inaccurate explanation of how credit default swaps worked.

Kevin Spacey demonstrates the art of intense monitor staring
The latest financial crisis movie, Margin Call, which is in theaters now, has gotten a lot of buzz for apparently being the most accurate portrayal of how Wall Street works. Here’s what Daniel Krauthammer, writing for The New Republic, says about the movie:

(It) examines the thoughts and motivations of individuals, resisting the easy narrative shortcut of lumping everyone responsible for the disaster into some monolithic, single-minded group. By doing so, Margin Call manages to do what almost no book, blog, newscast or Senate hearing has adequately done for the American people: to explain not just how the financial crisis happened (which financial giants failed in what order, which government entities bailed them out, etc.), but rather, to explain why it happened.

In his blog at Yahoo! Finance, Daniel Gross shared the same sentiments, calling Margin Call the most realistic Wall Street movie ever. And how so?

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.

Okay, you’re thinking: These are just folks who write about Wall Street. What would they know about what bankers do behind closed doors? Well, the Financial Times invited two bankers to a screening of the movie, and here’s what one said:

In many ways, this is actually a pretty accurate depiction of banking (before Lehman’s collapse). When the Stanley Tucci character (a risk analyst who first identifies the problem) gets fired at the beginning, that was just the way we used to fire people when I was at Merrill Lynch. The trading floor looks right, the clothes are right; the head of sales has a Turnbull & Asser tie, the CEO has an Hermès tie -- in fact, I think I own that tie. And the speeches the main characters give are right.

Around the Minyanville offices, people were similarly impressed. Michael Sedecca, the editor of our Buzz & Banter application, thought the movie was “very accurate and portrayed the different mindsets of the traders inside of a company that was embroiled in the crisis.”
And our boss agreed: “I enjoyed it, perhaps because I'm intimately familiar with the storyline as well as the vernacular. It's clear that the movie was based on Lehman Brothers -- right down to Demi Moore as Eric Callan and Jeremy Irons as John "Tuld," said Minyanville founder and CEO Todd Harrison. "So through that lens, it was an interesting -- and entertaining -- parallel.”
Unfortunately though, realism doesn't make for mass audience appeal: Since it opened domestically on October 21, Margin Call has made a pitiful grand total of $561,904, according to Box Office Mojo. It seems lines like “unwind our fixed-income MBS book” don’t go over so well with the public. (Or maybe with people still living the crisis, they don’t necessarily need to be reminded about it at the movies.)
And so, even if Margin Call is the most realistic Wall Street movie ever made, when no one is actually watching it, the question remains: Will the bankers remain eternally misunderstood?
POSITION:  No positions in stocks mentioned.