Animal Spirits Podcast - A Random Watch Down Wall Street: Margin Call

Episode Date: February 17, 2020

On this edition of a Random Watch Down Wall Street we re-visited Margin Call, the 2011 fictional movie about the 2008 financial crisis from the perspective of the various employees at an investment bank that is potentially going under. We discuss where this one sits on the pantheon of business movies, the wonderful cast and how well this has aged over time. Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. Michael Battenick and Ben Carlson work for Ritt Holt's Wealth Management. All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of Ritt Holt's Wealth Management. This podcast is for informational purposes only and should not be relied upon for investment decisions. Clients of Rithold's wealth management may maintain position. and the securities discussed in this podcast.

On today's a random watch down Wall Street, Ben and I are talking about margin call, a movie that was made in 2011 about the financial crisis. This one got a 7.1 out of 10 on IMDB, which I think is fair for overall movie audience. I think if we're talking, scoring on a curve in terms of business finance movies, this is probably more like a 9 out of 10 for me. In terms of finance movies, I thought this movie was, I watched it before, and I remember liking it. This movie aged really well. Rod and Tomatoes, the critics gave it an 87, and the audience gave it a 74.

I'm with you and the critics. This was, this was just, it was an hour of 49 minutes. There was no fat. Start to finish. The cast was excellent. Listen to this. Who's in the cast? Kevin Spacey, he's been canceled, I know.

But still, Kevin Spacey, Jeremy Irons, Paul Bettney, Zek. Quinto, Quinto, Quinto, Kinto, I can't pronounce his name, Penn Badgely, who is... I actually think the cue is silent. It's Into. Pen Badgley, who plays Joe on you, on the Netflix show, You, Demi Moore, Stanley Tucci, Mary McDonald makes an appearance at the end. She's the one from Dances with Wolves and Simon Baker. And the acting in this was really well done. And I thought that the way they wrote it, too, I tend to roll my eyes at a lot of finance movies because I feel like they don't portray it very realistically a lot of times. Well, this was written and directed by J.C. Chandor.

familiar with him. So I looked at some, the IMDB trivia on him, and it was his first movie. He said that he wrote the script that he'd been carrying around in his head for a year and a half. He wrote it in four days, filling time in between job interviews. And he said that... Wait, is he a finance person? I don't know what his background was, but this was the first movie he ever did. He directed it. They shot it in 17 days, and it only cost $3 million, which is kind of crazy because, and he said they had one and a half weeks of prep. So that was like the DVD commentary. So, this thing was thrown together pretty good. So obviously the script was very well received if it got so many good actors. Wait, I've got questions. How did they put together this cast if this person is not

even in the industry? Where did they get all these actors from? And again, $3 million, so they obviously didn't make a lot of money unless they picked it up on the back end. I didn't see how much money they made. Do you want to do the Rotten Tomatoes, how much money it made? So believe it or not, it bombed at the box office. In 2011, it made 700 grand. Oh, wow. That's corn, tomato tomatoes. But it looks like, over. Overall, it made $19.5 million, so not too bad at all. I checked his IMDB page, this guy who wrote at J.C. Chandor, again, just sounds like he was more or less a nobody. And he's written a few movies since then. The only one that I recognize was Triple Frontier, which was that awful Ben Affleck action flick on Netflix last year.

But for being this as his first movie, it was really, really good. I was impressed. Again, that he, not only a good movie, but it was a really good finance movie. If you're into this stuff, this was very, and obviously, this is a fictional version of the Wall Street 2008 crisis. I guess it would be a combination of layman and Goldman. The lead guy's name is John Tulled, which obviously is a dickfold. But didn't this company to you? And so the premise of this movie, if you haven't seen it yet, is a big Wall Street investment bank that obviously got into some stuff in the subprime space. And one of the reasons I actually liked the movie is they didn't get bogged down in the details of that stuff.

Yes, yes. They just kind of glossed over. They didn't get into detail. This was more like a character study movie in the stories, and they didn't get into the nitty-gritty of subprime lending. Well, that's why I like this so much better than the big short movie. I feel like for finance people, at least this movie assumes you have some sort of understanding of what you're watching. Yes.

So they didn't introduce what MBSs are or any of that sort of stuff. They didn't try to hold your hand through it, which I appreciated. It was excellent. Because they could have had an extra half hour of filler to do that stuff. But the way that I took this as they were trying to portray him as more like a Dickfold kind of guy. But this firm, to me, was like Goldman. Because they were the first ones to get out of this crappy loans. And they actually were going to survive and they were going to screw a bunch of people over.

But they were going to survive as a firm. And to me, that seemed to me like it was more of a Goldman Sachs than a Lehman brothers. Okay. Good point. I took it to be Lehman, I guess just because they mentioned that it was a hundred year old investment. I guess you could say the same thing about Goldman. but I think actually you're right because they panicked first

and they were the first domino down so they did such so that they would survive so I think you're probably right about that The other crazy one to me here we'll get into some best characters Kevin Space who's in the movie and I thought he was way down the list of really good actors in this movie

he wasn't even that good I thought he would have been way better as he was the one that I thought was the most miscast he would been way better as the jerk Wall Street boss instead of he was trying to be the voice of reason. Don't you think Kevin Spacey is when he acted still in the past was way better as the jerk? I'll take the other side. I thought he was very good. Okay, I thought he was miscast in this. Who would you have put in his role? I don't know. I just would have thought he would have

been more the jerk Wall Street boss that was looking to screw people because he's played a lot of those characters in the past as opposed to the voice of reason, the adult in the room. That's why I was a little surprised after seeing this. But anyway, you know who should have played him? Vin Diesel. He could have, he had to land on his feet after J.T. Marlin somehow. Okay, so let's get into some categories. Best character. This one was actually tougher than I would have thought. I really liked how they looked at this story from a number of different perspectives.

So they had those two young analysts, which was Zachary Quinto and Penn Badgley. I loved those two characters. The one guy was in his early 20s, the one guy was in his late 20s, and they were both kind of like, what is going on here? They'd never experienced this where a bunch of people had job losses because they started the movie out. I love how they started the movie out with they really set the tone where they start firing people right off the bat and you know that this movie is going to be a little heavy and deep and these two young guys are sitting at their desk just with her head down being like, what is going on here. And then they had the middle management guy, Paul Bettany, who was great as that character.

And then they have the upper management people who are kind of second and third tier. And then you get to the top and the board and then the head guy. And I thought Jeremy Irons just slaughtered in this movie. Was he not amazing as the head guy? He was. I don't know that I love Simon Baker, and I'm not sure what you were expecting out of that role. I thought he was just so-so. Yeah, he was okay. He was like the young, hot shot, 40-year-old. And it seems like a lot of those places have that as the C-O or the CFO.

I thought he was cast pretty well. Yeah, he didn't do that great. Demi Moore, as like the risk management person was very subdued. She was good. I thought the casting was all really good. And I really liked the two young guys, but I think my favorite characters were either Paul Bettney as the middle management guy VP who can't. go up anymore. He's hit his ceiling or Jeremy Irons. I thought he wasn't in it very much, but like his two big scenes, he was just amazing in this movie. So the Ring of Rewatchables,

they would call this the Deon Waders Award for, for Jeremy Irons. Yeah, he had the hot hand. Yeah, he was great. And it was, again, a very well-written movie you could tell because some of the lines were, I thought, great. Anything that aged the worst here, I didn't find much. I thought it's not that old, obviously. I have something for this. Okay. I have two things. the young analyst, Pam Badgley, I think he was 22 in the movie. So when he knew that stuff was blowing up, he was in the toilet crying and he just got out as somebody was obviously in the, at the sink, brushing their teeth or shaving or whatever he was doing. This is nitpicking. But if you're in the toilet and you're crying, you don't come out when you know somebody's in there.

Okay. This is jumping on future categories, but that was for me the Pomp Award for Overacting when he was crying in the bathroom. He really, really went and he was like openly sobbing. But the funny part of that scene was, he walks out, and Simon Baker, they've been up all night trying to figure out these deals and how to get out of these bonds and what to do for the morning when the market opens. And Simon Baker is shaving as Penn Badgley walks out and he knows he's been crying. And he says, what's wrong with you? And he says, I just got fired. And Simon Baker just kind of goes, oh, he just kind of shrugs his shoulders. I don't really give a shit

that you just got fired. It happens. He's like, you'll be fine. And I thought that was, Can you see people on Wall Street just having that feeling of just, yeah, this is what happens here. Yeah, that was rough. He's like, listen, get over it. You'll be fine soon enough. I like that. What I thought didn't age well was everyone had Blackberries. Obviously, that's a technology thing, but that was the one thing that said out to me is everyone was walking around typing on Blackberries.

Did you have anything else? No, go ahead. Okay, so for most unrealistic scene, so right in the beginning, beginning, Stanley Tucci is getting escorted out. He's like one of the chief risk managers. And he actually says, interesting that you're firing me first, like of all people. They bring him into his office, fill up your stuff, get out, fill up a box of your belongings to get out of here. And he's in the elevator with a big security guard and he gives young Zachary Quinto a thumb drive and says, you got to take a look at this. No way would that happen with the security guard standing right next to him.

I was thinking unrealistic, and I think they do this in a lot of movies where once Zach Rukinto got the thumb drive, he went through it, and he just is typing away furiously, and he's like, hey, you guys have got to come look at this. And it's always the young person at the firm who's, like, finally looking at the numbers and realizing like, oh, my gosh, something really big is going on here. And it's always just this one person who figures it out, and it's always the young person. And then they call in the upper management to look at it. And everyone kind of looks around the table going, oh, yeah, he's right. This actually, this, we're screwed. That it's always just the young person who, but even then, they were looking at like value at risk numbers and historical volatility and how you can't really trust that. And that actually is, that was pretty right on in terms of what these places were doing.

They're using numbers that didn't make any sense historically. Oh, wait, you know, did we miss what aged well? I thought they nailed the investment banking lifestyle. So they're working till 10 o'clock at night. Then they all go out to the club afterwards to drink. And then they get called back and they're working straight through the night. I like the PAP talk after they fired half of their employees. Like, people are really going to feel safe about their job after you just saw half the company get fired.

Again, I love the Paul Bettney character. He's the guy who plays the voice in Iron Man. He plays like the computer that he was like a VP, but he was bitter that he couldn't really move up higher in the firm. There was this younger hotshot who was ahead of him that Simon Baker. And I loved how I'm going to save this for best scenes, but they talked about how much money he made and then how much he spent. I thought that was really well done. That was good. That was really good. And the other thing was, so at the end, they fired Demi Moore because they realized,

listen, the street is going to want someone's head for this. And she was the sacrificial lamb. And I feel like that is certainly how a lot of these firms do this when they have to do the kitchen sink thing. They sell everything and they have to blame someone. And they fired their head of risk management, which was Demi Moore's character. And I thought that was really well done too because a lot these terms, they do that, even if that's not the person to blame. So I thought that Demi Moore aged very well. Obviously, she still got it. And you know who else aged very well?

Stanley Tucci, a beautiful bald man. And I think, right, he looked terrific. I think because he's got a really nice full salt and pepper beard, which I'll never be able to do. So, all right, whatever, I'll never be. Like, he's a very overlooked character actor. I think he's always good. I agree. I'll never be a good looking 60-year-old man. He looked very handsome. The other tiny things that aged well. Every person there had six screens open to Bloomberg at all times. That was very realistic. They were all trying to guess how much of the higher-ups makes. How much money do you think he makes? How much money do you think they make? I thought that was perfect. I'm sure that goes on at a lot of Wall Street. And then finally someone would know and they'd be like, oh shit, really? They make that mantra.

Well, that was interesting when they were guessing how much the Dickfold character made. It's like, wait a minute. He's a CEO of a publicly traded company. Isn't that public information? Yeah, you can look it up. All right, I have a few more things for what aged well. So Kevin Spacey wanted to leave at the end, but he couldn't because he needed the money, which is just classic. Yes. He'd been working at the firm for 34 years. Probably making, did they say how much he made?

I'm sure it was millions. Millions of dollars a year. And he needed to stay for two more years because he needed the money. That was great. And then when Kevin Spacey came back to the office and Zachary Quinto was showing to him, or maybe the middle manager was, he said, he did. he didn't know how to read the chart. He said, explain it to me in English. Yeah, that was good. I also liked how that Zachary Quinto character was a legitimate rocket scientist who was now an analyst at an

investment bank. They asked him in the boardroom, what exactly is your background? And he talked about all this jet propulsion stuff they'd learn to MIT. And then they're like, they kind of looked at like, why is this guy working for us? And he's like, you guys just pay way better than it would be if I worked at NASA or something, which he probably should be working at. Yes. That was terrific. When Kevin Spacey couldn't read the chart, don't you feel like that is so, so nails the character of the better paid manager that just sort of oversees it but can't really understand the nuts and bolts? And probably used politics to get where they are and isn't necessarily the smartest person. That was good. How about best scenes?

I have a lot of these, actually. So why don't you give me some of yours? Well, it was either when Jeremy Irons first came into the boardroom or when Kevin Spacey went to go see him later on in the early morning. morning. So I had both of those. So that first boardroom scene when you, Jeremy Irons flies in the helipad and he's the last person they tell. And they've got everyone together once they realize, okay, we need to get, we need to let the CEO know what's going on. This is such a boss move. When Zachary Quinto, everybody looked at Zachary Quinto, it's like, all right, tell him what's going on. And Jeremy Irons says to him, speak to me as you might a young child. Like that's

such a boss move. Yes. Or golden retriever. He says it wasn't brains that got me here. I can assure you of that. That was really good. He's basically saying, I'm just good at selling stuff and I know people. I thought that was really good. And he talked about how the music is about to stop. And Jeremy Irons, I thought, just nailed that. And then the last scene where he gives the speech to Kevin Space, and this is after they've kind of saved the firm, they've decided they sold off all the crappy loans.

They're going to make it, but they're going to have to let their whole trading team go in the process. And Jeremy Irons gives the speech. And it's certainly no different today than it's ever been. 1637, 1797, 171937, 1819, 37, 57, 84, 1901, 2007, 29, 1937, 97, 1984, 19887,

Jesus, didn't that fucker fuck me up good? 92, 97, 2000, and whatever we want to call this. It's all just the same thing over and over. We can't help ourselves. And you and I come, control it or stop it or even slow it. We even ever so slightly alter it. We just react. We make a lot of money if we get it right.

And we get left by the side of the road if we get it wrong. That speech was really well written. He talks about all the crises before. And just at the end, he talks about how there have always been and there always will be the same percentage of winners and losers. happy foxes and sad sacks, fat cats and starving dogs in the world, there may be more of us today than has ever been, but the percentages they say the same. That was just, that was perfect, I thought. His whole that speech. That was like a blog post. Yes. My other favorite scene was when the two

young guys go up to the roof with Paul Bettney. Wait, can we just stick with, before we move on to that scene, can we just stick with the Jeremy Irons thing? Yeah, go ahead. So I love the line. The music is about to stop and we're going to be left holding a bag of the biggest odorous excrement ever established and ever assembled in the history of capitalism. Yeah, that was good. And he talked about how his job is to figure out, I don't care if the music stops. I'm trying to figure out what it's going to do in a week, a month, a year from now. All right. So when they're on the roof, go ahead. So it's the two young guys with Paul Bettney, who's again, like the VP middle management guy. And Penn Badgely's character asks him, did you really make two and a half million last year?

And he's like, yeah, I did. And he's like, well, what happened to it? And he's like, well, you learn to spend what's in your pocket. So he walks through and he says, well, after you take off taxes, the mortgage was $300K. I gave my parents $150 to live off of. I probably spent another hundred eating $25 grand on clothes, then I put $400,000 away for a rainy day. And he went back, he went through all this stuff. And then he says, well, then the rocket scientist guy is going, well, there's still much left over. And he says, well, I spent about $76,000 on booze, hookers, and dancers or something. And it's just interesting that that was another thing where these people make so much money, but it's so easy for them to just blow it all to keep up the

lifestyle. I love that scene. Yeah, so not a fire member. No, which I'm going to go out on a limb and say probably not too many fire members of the investment banking crowd in terms of keeping up. You'd think that would make sense for you make a relatively high salary or bonus at a young age, but probably not too many fire people in that contingent. All right, we've gone through a few of them. Any other favorite quotes that you had? Yes. This made me actually laugh when Zachary Quinto was explaining to him about the different tranches of the securities that they were packaging and bundling and selling. And he said to Jeremy Irons, this has been enormously profitable, as you probably noticed. At Jeremy I's is like, yes, I did. Yeah, that was good. Zachary Quinto

was very good in this as he was like really unsure about what to say. And they had to coax him along a little bit. When they were in the room the first time with Simon Baker, who plays like the young, they don't really say what he is if he's like the COO or the CFO, but he's like the number two basically. And it kind of dawns on him that, okay, this is crazy. And he goes, what time is it? And they go 2.15 a.m. And he goes, fuck me. I guess in the trivia, they said that he adlept that. But I just love that when it finally dawned on him. Like, we are screwed. That was good. The other one, here's one, when John told, who is that Jeremy Irons' character, goes in the boardroom, he says there are three ways to make a living. Be first, be smarter or cheat.

That reminded me of the Charlie Ellis, which is a little different because he doesn't say cheat, but Charlie Ellis in one of his books says that there, there's three ways to win in the market. You have to be, number one is physically exhausting. Number two is mentally exhausting. And number three is emotionally exhausting. That was the first thing that popped in my head there. It's funny. I had the same thought. Yeah.

So that was, you wonder if the writer is a Charlie Ellis fan. I like, so when Jeremy Irons is eating and Kevin Spacey comes up, and Kevin Spacey says to him, you're panicking. And his response was, if you're first at the door, that's not called panicking. Yeah, right. Yeah, he said, if you're the first one to do it, it's not panicking. That was, yeah, he had a lot of really good lines. Again, his whole speech was good. Again, when Penn Badgley found out he got fired, the Sunday Baker guy goes, nothing I say is going to make you feel any better.

It's going to suck for a while and then you'll be fine. that was his sorry you got fired but it happens that was really good the other one that obviously there was some sort of big message in there but the whole storyline behind Kevin Spacey and his dog dying and then that was the final scene I don't know why that imagery just you know what that was fat we could have done without that yes I know they were trying to make a big point but it probably was a little unnecessary what was the point was it like a cycle of life type thing I think kind of like I think it was kind of symbolizing the fact that he's been there for so long and it's time for him to move on, basically.

I think that's how I took it. When he was digging in the yard, I thought he was going to be like burying cash or something. Oh, right. But yeah, he was burying his dog. Or gold bars, it should say. It was a little over the top. I saw what they were doing.

All right, if they made this movie today, and obviously it's not that long ago, the movie was made in 2011. It was about the 2008 crisis. What do they make it about? Soft bank and we work. I don't know. That's actually not bad.

I mean, I kind of go to crypto for a lot of this, but. Did you know there actually is a movie out there called Crypto? Someone sent this to me. Okay. Kurt Russell's in it and one of the Hemsworth brothers. And it's a tangled web of corruption and fraud in upstate New York dealing with cryptocurrencies and blockchain.

I can't imagine this movie did very well. But anyway, I feel like a lot of these, it would have to come down to crypto. Maybe it would be active managers slowly realizing that Vanguard is soul-crushing and taking away their business. But again, I thought in terms of the, and there haven't been that many movies made about the crisis, I thought this was my favorite one. So I took a look at this. So the other ones, Wall Street, Money Never Sleeps, came out in 2010. Terrible movie, but it did $134 million at the box office because of Oliver Stone and Wall Street. This came out in 2011. Arbitraged with Richard Gear came out in 2012, did $35 million. I thought that was

very good. Maybe we'll do that for a future show. And the big short came out in 2015, did $133 million. So of those four, I think that this was the best. Yes. And especially in terms of just straight finance people, the big short was obviously being made for a wider audience. Right. And I thought they did a good job of doing that. But in terms of a finance business movie, this was really good. I thought, did you ever read for people who want to go a little deeper into this. Larry McDonald's book on Lehman. I never read it. It's called a colossal failure of common sense, the inside story of the collapse of Lehman Brothers. He actually worked for Lehman and had some inside stories. That was one of my favorite, more underrated ones on just

the investment banking side of things. And understanding that, that would be one that to recommend to people that haven't read it. And he wrote it with Patrick Robinson, who has courted in a couple of other books. That was very good. But I thought they just nailed the investment banking stuff. They nailed every single personal. Because a lot of these movies, they may follow one or two people, could just be the head person of the firm, but the fact that they showed the whole life cycle from youngest people at the firm to middle management to top dogs, to the board, I thought that that whole succession thing was just, I thought they really nailed it. They did. It was great. Every person along the way. It was really good. In terms of

finance movies, this one was up there for me. And I think it was actually better on a rewatch than it was the first time. Send us any other movies that you would like us to rewatch and talk about. We've done. Boiler Room was the first one. We did trading places. Now we just did margin call. What else is on our list? We talked about arbitrage. We've got inside job. I never saw that. The Wolf of Wall Street, Moneyball, the big short, playing with fire, the gambler, the company men, in time, too big to fail, the prime gig. These are everything that people have sent us. Glenn Gary, Glenn Ross, Michael Clayton, up in the air, barbarians at the gate. We've got a lot to choose from. Yep. Send us any that you can think of. Animal Spirits Pie at gmail.com and we will talk to you next time.