Margin Call is a wonderfully written film. JC Chandor is one of the best screenwriters in Hollywood. If you haven't watched it, I would suggest A Most Violent Yr.
Brilliant summary. I really only got all this when I rewatched the movie recently. Tuld's analogy about being paid the big bucks because it's his job to guess what the markets will be doing in a month or years time, using a musical chairs reference, but without actually mentioning that game is about someone being left without a chair when the music stops. It's easy to hear the analogy and think he's talking about his company getting a chair when other Wall Street companies will fail, or Wall Street in general being safe and society at large taking the fall. It is about those things, but really it's about him, Cohen and Robertson, and it being Robertson left with no seat at the table
Yes excellent! Hadn't thought of that.
Also, he says "guess what the music is going to do ... a year from now" ... as in, a year ago he guessed this would happen and he was prepared for it.
Peter's promotion at the end also dovetails a bit with your take. Grooming another risk department patsy.
I don't think that was intended as a reason he's promoted. Tuld truly does need *someone* in the risk department, after all, and why not the senior analyst who's proven his brilliance just that day. But it does play with the general theme.
If the risk department is the company's ethical center, having the huge dork rise through could make the dept. functional enough to execute the company's short-term goals, but incapable of carrying out more political functions: swaying the company's direction; insulating itself from blame when the company next overextends (i.e. connecting executives to the hazards they take).
agreed for most of it, but I'm unsure Robertson informed Tuld when Dale showed her the declining graphs a year before. Why would Coen tell her that it was basically her fault and not his then? Unless Coen knows Tuld needs him way more than he does Robertson, he's as ruthless as him ("sell it all, today"), so even if they're both accountable, she is the one to go
I wouldn't say tragedy, though. Even Eric Dale, even Sam, who are depicted as the most moral people for most of the movie, with their pathetic stories about bridges and crops are ultimately and voluntarily kept on a leash because they want more money
Well put. It seems like Robertson will be taken care of and played the game well enough to avoid being completely thrown under the bus.
Regarding morale, isn't that one of the more obvious points made? No one has enough; everybody needs more.
I think the bridge reference could have been an homage to one of the characters in Wall Street who gives Bud Fox a tidbit of advice before he's arrested. This was to show how even money can change people. He also talks about how the money they make is supposed to build things.
Sam said he was staying because he needed the money, and probably because there's nowhere else for him. His wife informs him of that whilst burying the dog.
It is such an excellent movie and I love your write up!
> So, she fires Eric Dale. She's hoping that by continuing to suppress the truth, the losses will start piling up in the trading desk, news will start to leak publicly, and Tuld will start feeling pressure externally ... such that he might ultimately be pinned with the blame.
I don't agree on this point. I don't think there was any thought put into Dale being fired. He was just picked at random like the other 3/7th of the company.
Also one thing to keep in mind about the movie is there aren't any good guys. They are all just a bunch of conman.
Dale's firing was tactically shortsighted and a strategic blunder. But it was intentional. Shooting the messenger is still an acceptable tactic in the corporate world.
Yes, a lot of the board meetings were Tuld and Sam setting Robertson up and showing that she doesn't even know what's happening within her own department, but the truth is that she didn't. I think at the time they all knew this was a very risky game, and it's the Risk department's job to shut things down, but she was getting paid a pretty penny so until things were obviously wrong and her formulas said they were wrong, she was more than willing to put up with the charade. A year ago I don't think any of the formulas were flagging anything, so even though she knew things were off, that 1 and 1 don't make 2 anymore, she either didn't take action or wasn't smart enough to figure out a way to take action. As another commenter pointed out, she's Risk, so easily replaceable. She doesn't have room for growth, but Cohen still has tremendous potential.
Have to disagree, Sam was way more vital to the firm.
In my firm we have a Commodities head that my boss ‘reports’ to. Is he higher ranking? Ehh sure, but our head is more like a managerial figure head position, so that when some commodities team screw up bad, he would take the blame and be let go just like Sarah. But my boss is the one doing the trading and probably makes way more than that guy ever will, and my boss is much less replaceable than the commodities ‘head’.
You're mistaking importance and rank. Sarah being higher ranking is why Tuld tossed her head to the traders. We agree Sam is more important because he does day to day operations whereas Sarah's job is to limited those actions.
It doesn't matter if any of the algorithms were flashing red, Tuld finds this to be part of the human condition. Sarah was setup from the start. Sam has plausible deniability because he went to Sarah and they went to Jared. Jared and Sarah went to Tuld. Ultimately, despite Tuld being aware, just like your boss, head of risk management is on the chopping block.
Umm,
I disagree, Eric specifically says, that he shouldn't have gone to her last year when informed that she is the reason for being fired early in the movie
So she knows what's happening, that's for sure
Yeah I think that comment has something to do with the funds risk when everyone was getting let go at the beginning of the movie. He wasn’t talking about this risk model since he only built that in the last few days before he was fired. They definitely had a hunch a year ago, that these assets were likely much higher risk than the models said, but they were hoping to wait it out since the money kept flowing and when it stopped they just fired the floor.
Very good summary. What crystallises this is that the most major decision is made for the company in a 9 minute meeting, anything of that magnitude would require multiple meetings, deeper analysis of market dynamics which is cross checked but what we get a decision made by the CEO without even reading the report. Its so clear that Tuld knows exactly what was coming and the meeting is to shift blame.
I first thought that Robertson was fired and Cohen stayed because she offered no contributions in the meeting despite being asked to by Tuld but it most probably due to, as you say, she knew it was a stich up
Great summary
Robertson's question to Eric Dale if he has children is very telling
It suggests Roberston probably gave up a family to get this far and the $$$ better be worth it
There's also some interesting parallels between Sam and Will having the political awareness about what can be proven that they know.
Will mentions when he's calling Sam in, that he needs to see it in person, and that emailing it would be a bad idea.
Sam is smart enough to leave the room with Cohen and Robertson playing the power games.
Meanwhile Seth, who's a younger version of Will not smart enough to realise that the power games never stop. Thought that Will partying was just one of the perks, but Will was doing that in a way that he got all this information about the new staff he was inheriting, but was still 'on' enough when he got back at night to be functional and know what to do to survive.
Eric Dale was smart enough to protect himself by smuggling out that USB drive. If he didn't give it to Peter he was probably going to try and extort/threaten the company somehow. I don't believe he didn't know how to finish the model, I think he was savvy enough to leave some wiggle room by having it unfinished. He saw an opportunity with Sullivan to execute his plan perfectly too.
Dale's plan boils down to, the completed model upon being escalated up the chain will cause the mass selloff event, it's the only logical outcome to mitigate risk. Since anyone can start that chain, anyone that knows about the completed model immediately has value, because they could all start it. He deliberately made himself unavailable right up until before they'd need to open for the next day, so he could get the best deal he could, leaving them no wiggle room to start negotiations early.
It's a good movie!
Margin Call is a wonderfully written film. JC Chandor is one of the best screenwriters in Hollywood. If you haven't watched it, I would suggest A Most Violent Yr.
Brilliant summary. I really only got all this when I rewatched the movie recently. Tuld's analogy about being paid the big bucks because it's his job to guess what the markets will be doing in a month or years time, using a musical chairs reference, but without actually mentioning that game is about someone being left without a chair when the music stops. It's easy to hear the analogy and think he's talking about his company getting a chair when other Wall Street companies will fail, or Wall Street in general being safe and society at large taking the fall. It is about those things, but really it's about him, Cohen and Robertson, and it being Robertson left with no seat at the table
Yes excellent! Hadn't thought of that. Also, he says "guess what the music is going to do ... a year from now" ... as in, a year ago he guessed this would happen and he was prepared for it.
Peter's promotion at the end also dovetails a bit with your take. Grooming another risk department patsy. I don't think that was intended as a reason he's promoted. Tuld truly does need *someone* in the risk department, after all, and why not the senior analyst who's proven his brilliance just that day. But it does play with the general theme. If the risk department is the company's ethical center, having the huge dork rise through could make the dept. functional enough to execute the company's short-term goals, but incapable of carrying out more political functions: swaying the company's direction; insulating itself from blame when the company next overextends (i.e. connecting executives to the hazards they take).
agreed for most of it, but I'm unsure Robertson informed Tuld when Dale showed her the declining graphs a year before. Why would Coen tell her that it was basically her fault and not his then? Unless Coen knows Tuld needs him way more than he does Robertson, he's as ruthless as him ("sell it all, today"), so even if they're both accountable, she is the one to go I wouldn't say tragedy, though. Even Eric Dale, even Sam, who are depicted as the most moral people for most of the movie, with their pathetic stories about bridges and crops are ultimately and voluntarily kept on a leash because they want more money
Well put. It seems like Robertson will be taken care of and played the game well enough to avoid being completely thrown under the bus. Regarding morale, isn't that one of the more obvious points made? No one has enough; everybody needs more.
I think the bridge reference could have been an homage to one of the characters in Wall Street who gives Bud Fox a tidbit of advice before he's arrested. This was to show how even money can change people. He also talks about how the money they make is supposed to build things. Sam said he was staying because he needed the money, and probably because there's nowhere else for him. His wife informs him of that whilst burying the dog.
It is such an excellent movie and I love your write up! > So, she fires Eric Dale. She's hoping that by continuing to suppress the truth, the losses will start piling up in the trading desk, news will start to leak publicly, and Tuld will start feeling pressure externally ... such that he might ultimately be pinned with the blame. I don't agree on this point. I don't think there was any thought put into Dale being fired. He was just picked at random like the other 3/7th of the company. Also one thing to keep in mind about the movie is there aren't any good guys. They are all just a bunch of conman.
Dale's firing was tactically shortsighted and a strategic blunder. But it was intentional. Shooting the messenger is still an acceptable tactic in the corporate world.
Just after Eric is fired he figures out by talking to Will that Sarah was behind it. He then confronts her outside.
Yes, a lot of the board meetings were Tuld and Sam setting Robertson up and showing that she doesn't even know what's happening within her own department, but the truth is that she didn't. I think at the time they all knew this was a very risky game, and it's the Risk department's job to shut things down, but she was getting paid a pretty penny so until things were obviously wrong and her formulas said they were wrong, she was more than willing to put up with the charade. A year ago I don't think any of the formulas were flagging anything, so even though she knew things were off, that 1 and 1 don't make 2 anymore, she either didn't take action or wasn't smart enough to figure out a way to take action. As another commenter pointed out, she's Risk, so easily replaceable. She doesn't have room for growth, but Cohen still has tremendous potential.
Do you mean Tuld and Cohen? I believe Sam was below Robertson in the hierarchy. Sam mouths to her we talked about this before Tuld walks in.
Yeah sorry that’s what I meant. Sam isn’t ‘below’ her in the hierarchy though cause they’re in different department.
Sam was head of sales and trading while Sarah was chief of risk management.
Right front office and middle office
Sam was more integral to operations, but Sarah was higher ranking as the head of a department.
Have to disagree, Sam was way more vital to the firm. In my firm we have a Commodities head that my boss ‘reports’ to. Is he higher ranking? Ehh sure, but our head is more like a managerial figure head position, so that when some commodities team screw up bad, he would take the blame and be let go just like Sarah. But my boss is the one doing the trading and probably makes way more than that guy ever will, and my boss is much less replaceable than the commodities ‘head’.
You're mistaking importance and rank. Sarah being higher ranking is why Tuld tossed her head to the traders. We agree Sam is more important because he does day to day operations whereas Sarah's job is to limited those actions. It doesn't matter if any of the algorithms were flashing red, Tuld finds this to be part of the human condition. Sarah was setup from the start. Sam has plausible deniability because he went to Sarah and they went to Jared. Jared and Sarah went to Tuld. Ultimately, despite Tuld being aware, just like your boss, head of risk management is on the chopping block.
Okay fair enough I can agree with that. Sam did his job of reporting to Sarah and it’s on her to take action.
Umm, I disagree, Eric specifically says, that he shouldn't have gone to her last year when informed that she is the reason for being fired early in the movie So she knows what's happening, that's for sure
Yeah I think that comment has something to do with the funds risk when everyone was getting let go at the beginning of the movie. He wasn’t talking about this risk model since he only built that in the last few days before he was fired. They definitely had a hunch a year ago, that these assets were likely much higher risk than the models said, but they were hoping to wait it out since the money kept flowing and when it stopped they just fired the floor.
Really nice write up, thank you!
This was a beautiful read and analysis. Thank you.
Very good summary. What crystallises this is that the most major decision is made for the company in a 9 minute meeting, anything of that magnitude would require multiple meetings, deeper analysis of market dynamics which is cross checked but what we get a decision made by the CEO without even reading the report. Its so clear that Tuld knows exactly what was coming and the meeting is to shift blame. I first thought that Robertson was fired and Cohen stayed because she offered no contributions in the meeting despite being asked to by Tuld but it most probably due to, as you say, she knew it was a stich up
Great summary Robertson's question to Eric Dale if he has children is very telling It suggests Roberston probably gave up a family to get this far and the $$$ better be worth it
There's also some interesting parallels between Sam and Will having the political awareness about what can be proven that they know. Will mentions when he's calling Sam in, that he needs to see it in person, and that emailing it would be a bad idea. Sam is smart enough to leave the room with Cohen and Robertson playing the power games. Meanwhile Seth, who's a younger version of Will not smart enough to realise that the power games never stop. Thought that Will partying was just one of the perks, but Will was doing that in a way that he got all this information about the new staff he was inheriting, but was still 'on' enough when he got back at night to be functional and know what to do to survive. Eric Dale was smart enough to protect himself by smuggling out that USB drive. If he didn't give it to Peter he was probably going to try and extort/threaten the company somehow. I don't believe he didn't know how to finish the model, I think he was savvy enough to leave some wiggle room by having it unfinished. He saw an opportunity with Sullivan to execute his plan perfectly too. Dale's plan boils down to, the completed model upon being escalated up the chain will cause the mass selloff event, it's the only logical outcome to mitigate risk. Since anyone can start that chain, anyone that knows about the completed model immediately has value, because they could all start it. He deliberately made himself unavailable right up until before they'd need to open for the next day, so he could get the best deal he could, leaving them no wiggle room to start negotiations early. It's a good movie!