[lbo-talk] Margin Call

[123hop at comcast.net]

I went to see "Margin Call" last night, a movie just out focused on some unnamed brokerage house getting into/out of big trouble. Details were fuzzy and you had to actually already know what the problem was with mortgage derivatives when the shit hit the fan to understand what was going on in the movie. So a little detail would have helped. 

I go to see these Wall Street movies for a sense of the zeitgeist. The basic plot was that a quant discovers a problem with their risk model, tells upper management about it, and they decide the only way to fix things is to be the first to liquidate their position. That is, sell the shit before anyone else realizes it's shit or before they realize that the music has stopped and most of the chairs have been taken away. The basic characters include a wannabe 23-year old hedgie, a quant, some upper management types, and a CEO.

Best line of the movie: the CEO asks the quant to explain the problem in simple terms. "Talk to me," he says, "as if I were a small child or a Golden Retriever."

What was interesting about the movie was that it looked at the rift/collaboration between the 1% and the .1%. First time I've actually seen this on film. So, worth a look see. Not worth $10 bucks at the movie theater, but worth a DVD rental.

(Quant: an MIT/CalTech type who would normally be building rockets or bridges, but currently analyzing risk on Wall St.)

Joanna