Financial Films: Margin Call, Too Big To Fail and Wall Street

In Finance class today, we discussed a film called Margin Call that we had to watch as an assignment.

It's a film released in 2011, with Kevin Spacey, Zachary Quinto, Paul Bettany, Jeremy Irons, Penn Badgley, Simon Baker and Demi Moore.

This film, as in its trailer, is about the very first 12 hours of the 2008 Financial Crisis and about how the first investment bank to go down managed not to, by selling off all its toxic assets to other banks, which then couldn't handle them and went bankrupt soon after.

I found the other two films that we had to watch, "Wall Street - Money Never Sleeps"(1987, 2010) and "Too Big to Fail"(2011) very interesting too although I was disappointed by Wall Street because of how much drama there is instead of financials.

But basically, they all have a different take on financial dilemmas.

Wall Street (both the 2010 and 1987 versions) talks about an individual, Gordon Gekko, and his way of making money - by cheating. We can say that he believes in the Efficient Market Hypothesis, which says that you cannot beat the market because all available and public information is already incorporated into the market price. Which is why the only way Gekko believes he can make money is by having insider information.

Too Big to Fail depicts the American financial ways as a whole. From the Government Treasury, to the Fed to the investment banks. This film is actually more real and based on the actions actually taken pre and post the Lehman brothers bankruptcy. The clips used in this film from the tv news are real tv scenes that were aired at the time.

All these films in a way mocks the head of these billion-dollar investment banks because in the end these people got to the top by being "good salesmen" (Margin Call, 2011) and not by having all the technical knowledge. This point, discussed in class brought us to a very interesting debate as to whether the top people need to know what they're doing or just have to have charisma? For example, did Steve Jobs know how to make the iPad? (I'm not saying he couldn't, because I have no idea, but) could he have engineered the software? Or was it just enough that he had the ideas, the charisma and the quality to represent Apple?

On that note, I will leave you to ponder and watch the trailers of the films mentioned above :) Cheers!