Semilla, Hazel Erica B.

ABFS 201
IITN04F : Introduction to International Trade
Mr. Jumel G. Estrañero

MARGIN CALL (2011) : FILM REVIEW

I. BACKGROUND OF THE FILM

The film was released in the year 2011, written and directed by J.C. Chandor. It is based on a
true story. It is set in the time where an upcoming event will change their whole investment firm
from its existence. In order for it to prevent to happen, certain measures have to be made. Every
character in this movie has own set of personal sentiments and fear of losing. Also, the
character’s personality unravels as they about to make a decision of choosing whether or not do
the right thing. The film is also set to a lot of mysteries that will only be able to unfold if it is
watch completely. It also explains how a firm is functioning in this society and how they
negotiate with their trading partners. It also describes the lifestyle when it comes to business in
the Wall Street.

II. BODY
The beginning took place in the office of an investment firm, where three men taking a break for
a while noticed that there are employees who are leaving the building together with their stuff.
They realized that a massive layoff of workers is being conducted. One of the head of risk
management named Eric Dale, was included in the list of layoffs. Before he left, he explained
that he is still working on an unfinished project, but the staff said it was not his business
anymore. He then returned to his office to pack up his things, one of his co-workers and the head
of trading, named Will Emerson came by his office to make farewell, Eric, on the other hand
discussed the same thing to Will about the unfinished project, but even him didn’t listen to him.
Upon leaving the building, he met one of his analyst, Peter Sullivan. Peter said his farewell to
Eric, just as Eric is about to go to the elevator, he followed him and said how thankful he was to
Eric. Before Eric left via elevator, he hand a USB device to Peter containing the project he was
working on and said that due to them not allowing him to finish what he was working on, maybe
him, Peter might look at it and finish it also. Before the elevator closes, Eric able to say the last
words as an instruction to Peter upon looking at the file saying “be careful”.
At night, Peter work on finishing the incomplete project of Eric Dale, and by the time he
completed the project he got surprised of what was the result. He then called one of his
colleagues, Seth who was at the club that time to go back to the office with Eric’s boss, Will due
to what he found out. When Seth and Will came back, Peter explained about the project that Eric
had been working on but wasn’t able to finish because he got laid off and also mentioned what
Eric said to him before he left, he then said that Eric was trying to compute the numbers for
levels of volatility which is in the outside of the standard VAR model. Will requested Peter to
simplify what he was saying, then Peter said that levels of volatility are set by using the historic
pattern then these patterns extended at around 10 or 15%. Peter and Seth said to Will that they
are already starting to test these historic patterns, he then asked the two when did it happened,
they said that they’ve been doing that few days ago already.
They then found out about it going to the wrong direction and gets increasingly high, the
projected losses are higher than the current value of their company. Will get bothered of what
Peter discovered and immediately started to search for Eric. They can’t contact him due to the
suspension of his phone service and he’s even not at home. Will called his boss Sam Rogers and
also brags him to go back to the office to discuss what they had discovered. Sam Rogers came by
to Will’s office, he discussed what Peter told him.
He concluded that Peter had fill in what was missing to Eric’s work. Sam even got alarmed about
it. They asked for a second opinion of Peter’s work to Jared Cohen, Sam’s boss, together with
Sarah Robertson, Ramesh Shah who is also a management officer on another floor and David
Horn, the firm’s in-house counsel. Sarah and others, double checked the program, and she
confirmed that Peter was right, the equations are considered worthless. At midnight, all the
firm’s executives conducted the emergency meeting, which included the CEO of the firm John
Tuld to discuss the alternatives to address the problem. Peter explains the problem’s nature: in
about a month, their firm must layer their products which are the MBS correctly, therefore
posing a challenge from the risk management group, they also must hold the assets to their books
longer than they expect to.
The benefit here is that these are just mortgages which they can be able to push the leverage
beyond depending on their capabilities to do with. Then he also said that if these certain assets
decreased by around 25% but still remain on their books, that loss would be higher than the
market capitalization of their company, thus leading it to bankruptcy. John then used a term
wherein if the music is about to stop concluded that they will be left with assets that are
considered as unworthy to them. Peter said then that by his analogy, the “music is just slowing”
but if it stops then this would worse as it happens. Jared conduct a plan of selling the worthless
assets in a fire sale before the word spread out, this strategy as for Jared would limit the firm’s
exposure but Sam is against to this solution.
John Tuld on the other hand approved the plan. But for Sam, their consumers will definitely
discover their plan and will realized that they just only do the selling method and without the
buying method. The next day, Eric was found home, Will then found him, and persuade him to
come back and the benefits that was discussed to him will not guaranteed to him if he rejects the
favor participating on the conducted plan, but still, Eric didn’t agreed. Will together with Seth
left Eric’s home after receiving the answer of disapproval. Will then told Seth that he might lose
the job because of the upcoming crisis but will get a huge benefit.
It is then unraveled that the CEO, the chief risk management officer and her colleague already
knew about the crisis that is about to come. Sarah then felt guilty of what had happen. As soon as
the markets start to open, Sam ended agreeing to Jared’s plan. Sam then explained the
instructions to his traders for the upcoming fire sale they about to do. He also said that this may
affect their relationship with their counterparties and even their careers, but despite of what will
happen Sam mentioned about the offer that if any of them achieve a 93% of sale of their assets,
they will receive a $1.4 million one-off bonus and if the floor as whole achieves a 93% sale they
will get an additional $1.3 million bonus, each of them equally. The markets then began to open,
they all immediately started to sell off.
Some agreed with the price that the traders had offered but some insisted on getting the price
down. Although there are certain suspicions, they able to nailed it successfully. Afterwards,
Jared said to Sam that there will be continuation of layoffs to be conducted but still he will be
retained from his work. Frustrated because of what he had heard, Sam confronted John Tuld and
demands for his bonus because he wants to quit his job but John didn’t allow him to leave and
offered him a hug salary if stayed in the firm with additional of 2 years. He also said that this
crisis has no different from other market problems. Gains and losses are the basic part of this
cycle. In the end, Sam just accepted his offer and its just because of the money. At the end scene
of the film, Sam’s dog died and he buried his dog in his ex-wife’s yard. He also found out what
happened to his son but he is safe at all cost.

III. ANALYSIS
The movie is set for 24-hour period of time. At the first part of the movie, it is already obvious,
that there is something going on with the company. It’s seems that the upcoming event which
will change their firm throughout the history is being cover up. Despite of the reports and
warnings of the managing officers about this possible crisis due to the anomalies, the CEO keeps
on ignoring it because there’s no enough evidence to prove it. But when a hardworking analyst
gets curious and finished the work made by his boss that entrusted to him and find out the
outcome, that’s the only time they took serious of the situation and conduct an action.
As for the actions they have made, it shows greediness, a method of capitalism and an act of
swindling. As the movie flows, it unravels the part on who will do the right thing or commit a
hidden agenda just to remain on top of the line. It clearly shows the typical situation of the firm
on how they will act in these challenges. How the leaders did everything to prevent themselves
being drag down. The film also describes the struggles of every people when they face this
scenario, there are some who decides to latch on to what they think will benefit them even if it is
an immoral act, and there are some who had no choice but to accept the situation even if he/she
really wants to leave and aware of the injustice but due to the need of money they’ll just choose
to stay and endure the ones who are being fired off despite of their good performance.

IV. CONCLUSION
Be first, be smarter or cheat, these words hook up my mind as I finish watching the movie. Upon
watching this movie, it broadens up my knowledge on what is happening behind the investment
firms. It also unravels my curiosity on how the executives conduct their actions and their chose
of decisions. Everybody’s afraid of dragging down even being bankrupt and lose everything.
Actions done by these people here in the movie might also happen in reality.
This film depicts realism in the field of trade, some may do what is right despite of the
circumstances that will happen but don’t forget that there will also be individuals who will do
everything immoral or not just to prevent their downfall and continue to be in the first place, in
other words, to cheat. But despite of certain negativities in this movie, it also gives us lessons
like conducting an action immediately if you start to notice inconsistencies to avoid it for getting
worse. Also, don’t just think of yourself, also think of the people around you, the people who
worked hard to keep the foundation of your field. Just like in the restaurant for example, even if
the owner is very brilliant when it comes to handling businesses, his business will never be
successful if there are no certain individuals like the waiters, manager, clerks, chefs, etc. for it to
function very well.