[Movie] Margin Call (2011)

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Right, this is the most awaited moment of the week. Friday!

Before the weather gets colder, it will be a good idea to go on a picnic for this weekend. However, I found many people having got flu these days. Some of you might be the one with a runny nose and keep sneezing. Then, for your weekend at home a bit more enjoyable, I am introducing an interesting movie.

“Margin Call (2011)”

Margin Call (2011)

First of all, I would like to tell you what ‘Margin Call’ means as a financial term. You would receive a margin call from a broker if one or more of the securities you had bought (with borrowed money) decreased in value. Then you would be forced either to deposit more money in the account or to sell off some of your assets. (Reference to Investopedia http://www.investopedia.com/terms/m/margincall.asp#axzz29dbRzQHI)

 

The movie tells about a famous financial company on Wall Street. For making more profits, the company downsizes. Eric, in this movie, is one of the victims fired during the downsizing process.

As he was working in the risk management division, he did a major analysis which was not yet completed at the time of his leave. The analysis is passed on to his protégé, Peter, who later finds out that certain financial products issued by the company have actually caused a large volume of debts.

The core message of this movie is ‘moral hazard’. The financial company is illustrated as having lost the sense of morality in financial market. Profits are the only ends for the company, while the others are not on the list of values that the company is pursuing. This message is directly spoken by the entrepreneur of the company, saying that “Be First, Smarter, or Cheat”.

 

Nobody blames that a private entity is driven by a profit motive. However, that does not equal to becoming a corporation not caring about its social responsibility in the economy. This point was also mentioned by the FSC’s Chairman as well, when he met the representatives from the major financial holding companies in Korea. Chairman Kim, at the meeting, said that “Do not take away umbrellas (financial support for households) on rainy days (times of economic downturns)”. By saying so, he asked the financial corporations to hold their social responsibilities in our economy. For more details, you can have a look at our other blog posts; https://financialservicescommission.wordpress.com/category/mr-kims-meeting/

Does this movie sound interesting and seem to be the right choice for this weekend? Why don’t watch it, and find out how ‘margin call’ appears in the movie? Have a good weekend!

Regards,
Frank

p.s. Movie Trailer is available at http://vimeo.com/45554855

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