The lessons of “Margin Call”

“Margin call”, with a remarkable cast: Kevin Spacey, Simon Baker (Mentalist), Jeremy Irons,
Paul Bettany, Demi Moore.

Principal photography began on June 21, 2010, in New York City More than 80% of the action
was shot on the 42nd floor of One Penn Plaza, which had recently been vacated by a trading firm

The film made its premiere at the Sundance Film Festival on January 25, 2011, and opened in
theaters nationwide in the United States on October 21, 2011, grossing $5,354,039 in domestic
ticket receipts. It was screened at 199 theaters during its widest release in cinemas. It earned an
additional $14,150,000 in business through international release to top out at a combined
$19,504,039 in gross theatrical revenue. It was a ground-breaking day-and-date release that
earned more than $10,000,000 in video-on-demand sales during its initial theatrical release

It is interesting when two real leaders face each other. And one succumbs to fear. And you are
wondering why the one who breaks down and not the other one?

The action takes place in the offices of a large multinational corporation and the interaction with
the outside world is minimal. The key characters from the company from the smallest to the
chief executive are presented, in hierarchic order.

It's all being told through the levels of analysts, managers, vice presidents and the company's
chief executive, played by Jeremy Irons. The fast and thrilling peace at which they try to resolve
the situation results in an incredible exciting story.

The writer did not waste any time, he was straight to the point. You do not realize what's going
on in the movie butter after about a quarter of an hour. A company that makes high-level
financial transactions is ready to lose more money than the value of its capital.

The story is not just about management, it's not about sales, it's not about money and the power
of the trickiest. It is about leadership. As in the film, it is often the case that a CEO or the
president of a trust is NOT the leader there. People follow him because he has the function,
because he pays them. But the real leader, the one who gives value to the company, comes from
row two, three; he understood that real power means trust, it means relationships, character and
vision. Otherwise, the influence is short-lived and disappeared in a difficult or very difficult
context. And insecure leader’s stealth or run away.

"If you really want to do something with your life, you have to believe that you're necessary.
Because you are." Otherwise, you are going to crash every time you get fired from somewhere,
every time you lose someone or something important... The ones who evolve constantly, even if
sometimes they get down, from where they left off, are the ones who learn from everything that
happens to them. Who learns that everything is fleeting and that they have enough resources to
start over all over again, to earn even more than they had ever earned, to attract people through
their daily behavior and actions? Even if everything comes at a price in this world, be ready to
pay for it and stay on your best path, no matter what others say or do! There are few who do; but
there are more and more.

Roger Ebert wrote: "I think the movie is about how its characters are concerned only by the
welfare of their corporations. There is no larger sense of the public good. Corporations are
amoral, and exist to survive and succeed, at whatever human cost. This is what the Occupy Wall
Street protesters are angry about: They are not against capitalism, but about Wall Street
dishonesty and greed.

Maybe something so bad that hurt so many people and caused so much damage, they came about
without any mistake?

Margin Call is trying to give a real answer to that question. There is no character in the film who
breaks the law, engages in conspiracy, or does something a reasonable person would label as
immoral. Even when the CEO of the film's fictional bank makes the decision to sell all the assets
that fell on the company's stock exchange, the main action that sets in motion the complete
collapse of the entire American financial system, is a choice to understand, even if it is difficult.
What else can he do? If he doesn't sell first and start the catastrophe, someone else will do so the
inevitable struggle of survival arises. The result is inevitable, but still, what is the gain for him to
sacrifice and his firm and all the jobs of his employees if it makes no difference to the result?
This is the central conundrum of what economists call a problem of collective action. If no
individual person or company shares can make a difference, the only reasonable thing to do is
suppose everyone will follow their most selfish instincts even if they are destructive and
destructive.

Another explanatory idea is why did the big investment banks start packing and selling huge
amounts of the mortgage-backed securities that finally triggered the crisis? Because all the other
banks were doing it. They were looking for higher profits, of course, but profits are the raison
d'être of any company and the basis of its survival. The employees of each bank knew that if they
did not enter this new highly profitable branch of the business, they would fall behind their
competitors, their share price would fall, they would have been laid off.

During the movie we can also observe some economical concepts like Oligopoly because the
film takes place in the financial industry, where bankers trade Mortgage-Backed security (MBS).

Another economical concept is Absolute advantage, when Peter (Zachary Quinto) who used to
work as rocket engineer. Peter could analyze and find out the risk of company in hours. Peter’s
specialized skill in math is an absolute advantage compared to other workers.

We can also remind Producer surplus when the company try to get Eric back to the office. The
company offers to pay Eric $176,471.00 an hour.

In the beginning of the film, the company fired Eric, but since it is an emergency, they try to get
Eric back to the office. Eric agrees to go back when company offered to pay him $174,471.00 an
hour.

An important economical concept is the elasticity of demand fact when the company decides to
sell majority of fixed income Mortgage-Backed security (MBS) with minimum price which is
lower than current fade market price.

Since the company reduced the price of MBS, they sold most of MBS. Thus, when MBS price
goes down, demand increases therefore it is elastic.
Bibliography
https://www.imdb.com/title/tt1615147/

How ‘Margin Call’ Gets It Right About the Financial Crisis | The New Republic

The lessons of “Margin Call” (reuters.com)

https://en.wikipedia.org/wiki/Margin_Call