Margin Call Paper Film Margin Call Director J. C. Chandor Pe ✓ Solved

Margin Call Paper Film Margin Call Dir J C Chandor Perf Kevi

Your assignment is to write a paper on Margin Call. Margin Call takes place over a 36-hour period at a large Wall Street investment bank and highlights the initial stages of the financial crisis of 2007–2008. Although the film does not depict any real Wall Street firm, or similar corporate action during the 2008 financial crisis, Goldman Sachs similarly moved early to hedge and reduce its position in mortgage-backed securities, at the urging of two employees. Other firms like Lehman Brothers and Bear Stearns found themselves similarly and catastrophically over-leveraged in mortgage-backed securities.

After Peter Sullivan informs Will Emerson and Sam Rogers about the potentially catastrophic risks posed by the firm's current holdings in mortgage-backed securities, they meet with Jared Cohen, Sarah Robertson, and Ramesh Shah. That meeting then leads to a middle-of-the-night board meeting, where John Tuld, CEO and Chairman, asks for solutions. Jared recommends selling all of the firm's mortgage-backed securities during the next trading day.

For the final paper, discuss the actions of the main characters in the film. What were their motivations? Their options? How did their "world view" influence their decision-making? Do you agree with their choices or not, and why? Analyze their predicament and discuss the merits of their actions.

For this paper, discuss how the decisions made by the main characters influence the "real world." What did their actions do to the other Wall Street firms? How did they influence domestic and global financial markets? What effect did they have on the valuations of other securities? How did they influence lending, mortgages, and retirement accounts? And finally, what effect did they have on capital allocation and formation?

Paper For Above Instructions

Introduction

Margin Call, directed by J.C. Chandor, provides a gripping view of the events leading up to the 2008 financial crisis through the lens of a fictional Wall Street investment bank. This film is pivotal not only for its cinematic achievements but also for the insight it provides into the human motivations and systemic failings that contributed to one of the most significant economic downturns in recent history. This paper will analyze the characters' motivations, options, decisions, and the implications of their actions, both within the world of the film and in reality.

Character Actions and Motivations

The narrative of Margin Call unfolds over a 36-hour period, during which key characters are faced with the impending collapse of their firm. The actions of these main characters are heavily influenced by their motivations, which range from self-preservation to a belief in their ability to control their fate amid chaos.

Peter Sullivan, played by Zachary Quinto, is the junior risk analyst who discovers the impending crisis. His primary motivation is a mix of loyalty to the firm and fear of the consequences of inaction. Will Emerson (Paul Bettany) and Sam Rogers (Kevin Spacey), in their roles as trading heads, represent a blend of pragmatism and desperation. Their motivations revolve around the survival of their positions and the preservation of company assets.

John Tuld (Jeremy Irons), the powerful CEO, epitomizes the ruthless drive for profit. Tuld's actions reflect a broader worldview that prioritizes immediate financial gain over long-term consequences, showcasing a typical mentality in high-stakes finance. The motivations of these characters lead to pivotal decisions that not only affect their firm but reverberate through the entire financial system.

Decision-Making and Worldview

The film illustrates how each character's "world view" heavily influenced their decision-making. Tuld's pragmatic and often cold approach to leadership highlights a traditional Wall Street ethos where profits overshadow ethical considerations. He sees the opportunity to mitigate losses by selling off toxic assets, which ultimately drives the narrative toward a quick fix rather than a sustainable solution.

In contrast, Rogers displays a sense of conscience amid the turmoil, albeit one that is quickly drowned out by the prevailing culture of profit maximization. Rogers’ decision to engage in moral contemplation nearly costs him his position, demonstrating the inherent conflict between personal ethics and corporate demands.

The characters are aware of the precariousness of their situation, yet they each pursue choices that confirm their individual world views. This reflects a broader commentary on the collective mindset present in the finance industry leading up to the crisis, where risk-taking was normalized, and short-term success was idolized.

Analysis of Their Actions

The characters’ choices are not without merit, as they respond to substantial pressure and limited time. Their quick decision to sell mortgage-backed securities is portrayed as a necessary evil to avert an even larger disaster. However, one can argue that their fundamental negligence in addressing the underlying issues of over-leverage and systemic risk demonstrates a lack of accountability in their actions.

Moreover, the film prompts viewers to consider whether the decisions made were indeed geared towards averting the crisis or merely postponing it. By prioritizing immediate monetary safety, the firm contributed to the overall destabilization of financial markets, leading to a domino effect across the global economy.

Overall, while the characters are forced to act under dire circumstances, the moral question of whether their actions were justified remains contentious. The absence of foresight and systemic change reflects a structural flaw within the financial institutions themselves.

Impact on the Real World

The consequences of the characters' decisions extend far beyond their firm, influencing the trajectory of entire financial markets and economies. When they opted to sell vast quantities of mortgage-backed securities, it triggered a plummet in asset prices, affecting other firms and investors globally. The dumping of these assets eroded trust in financial institutions, contributing to panic and further destabilizing the economy.

Furthermore, the film emphasizes the interconnectedness of Wall Street firms; other companies, like Lehman Brothers and Bear Stearns, were also ensnared in similar predicaments, further illustrating the contagion effect inherent in financial markets. The decision to offload toxic securities exacerbated existing vulnerabilities in the system, leading to a cascading failure that would culminate in the 2008 financial collapse.

Domestic and global financial markets faced unprecedented turmoil, and the repercussions were felt by ordinary citizens. Retirement accounts were diminished, home values plummeted, and lending froze, marking a significant shift in capital allocation across various sectors. The actions of the characters in Margin Call not only spotlighted their immediate architectural failures but also indirectly laid the groundwork for stringent reforms and the re-evaluation of risk management frameworks in finance.

Conclusion

Through a close examination of the characters in Margin Call, one gains a better understanding of the motivations that drive decisions within high-pressure environments like Wall Street. While these characters made choices that reflected their worldviews and immediate circumstances, the broader implications of their actions reverberated throughout the world economy. Ultimately, the film serves as a cautionary tale of how individual decisions can aggregate to produce far-reaching consequences, highlighting the importance of accountability, ethical considerations, and foresight in the realm of finance.

References

• "Margin Call (film)." Wikipedia. Wikimedia Foundation, 20 Sept. 2012. Web. 20 Sept. 2012.
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