A Shock to the System
J.C Chandor’s disaster movie literally evokes the business end of the 2008 market meltdown; the crisis that ushered in the period we’ve affectionately named The Age of Austerity. Though a false witness, endowed with hindsight, it’s a commendably sober and even handed drama, that gives the much loathed bankers human faces (tethered to animal metaphors, notably fat cats and dead dogs), while noting the culture of profligacy and flippancy within which they operate.
Paul Bettany’s middle manager might have spent $76,000 on prostitutes in the preceding year, but the look of horror on a face we imagine to be doused in expensive aftershave, looks real enough. The implications are writ large across his pore cleansed puss. A later scene has Bettany trying to justify the disaster by pushing the blame onto the millions that lived beyond their means; the baby boom and busters if you like. Chandor’s wise to remind us of our complicity in this world of never never economics, but Bettany’s self-serving rant begs the crucial question; why didn’t the men and women holding the giant chess pieces take more responsibility, when each was a Trojan hollow carrying the security of millions?
The moral tone is set from the off with a lesson in pitiless capitalism – the bank laying off a third of its employees. This is the eve of the crisis; an institution that believes itself to be in rude financial health, yet number cruncher Stanley Tucci is shown the door to keep profits healthy. Forced to stop work with immediate effect, he hands his calculations to protégé Zachary Quinto. That night the younger man completes the sums that foretell of imminent disaster. What follows is a story told over a single evening; events that chart the path from complacency to realisation to panic and finally, the pitiless pragmatism we came in with.
It’s a fascinating setup: if you were the first bank to realise that you were carrying an unsustainable mountain of toxic debt with the potential to destroy the entire banking system, what would you do? The dilemma is given real urgency by compressing the time frame so the bank’s board and risk assessors, having made the discovery after hours, must make a decision before the markets open the following morning. Any delay and they risk being on the wrong side of a fire sale.
It’s then, in a series of terse exchanges between company veteran Kevin Spacey and the billionaire owner, Jeremy Irons, that the moral dimension comes to the fore. Spacey realises immediately that the bank is contemplating an unethical, if perfectly legal move; the underhanded sale of its worthless assets to rivals, pulling the trigger on the entire system. For Irons it’s an exercise in minimising losses. He reels off a depressing roll call of crash years, 1929, 1937, 1974, 1987 and at last we understand the mentality at the top; it may be a livelihood question for those with a junk mortgage but when you’ve got a billion dollars in the bank, it’s a trip to the casino. Irons will be back to have another spin of the wheel tomorrow, we realise, because gambling is how he makes his money.
The movie trades figures that are eye opening (and watering). We learn that “8 billion dollars of paper money” rely on a now defunct equation. Our sympathies are taxed with traders offered a one off bonus of $1.4m to offload our bad debt onto soon to be bankrupt institutions. Tucci, who uncovered the mess, is brought back to the bank’s offices, shut in a room and given $176,000 an hour for agreeing to keep his mouth shut throughout the crucial day of trading. It’s a cavalier world, a poor relation to our own, that nevertheless decides whether we’re prosperous or poor. It’s that insight, something we thought we knew, given dramatic form and urgency, that gives Margin Call an edge; it’s matter-of-fact and really rather frightening.