Trader Resources

Movie Review: Margin Call

[easyazon-link asin=”B005FITIIC”][/easyazon-link]I decided to watch [easyazon-link asin=”B005FITIIC”]Margin Call[/easyazon-link] the other evening to see if it was something folks interested in the markets would find interesting.

Conclusion? I’m not sure.

I will say that the cast is a pretty impressive one. Kevin Spacey gets top billing, but most of the characters are portrayed  by folks with lengthy lists of acting credits, oftentimes pretty high profile. I found it interesting that they would all be drawn to a film like this that isn’t super high profile. Demi Moore plays the one female character of note.

So as not to spoil things for those who intend on watching the film, I’ll just say the plot is basically one where a major financial firm finds itself in a bad spot in terms of mortgage security holdings and has to work its way out of it. Actually, the story is that simple and straightforward. No major plot twists. There also isn’t too much in the way of high level quant stuff aside from a VAR reference, though there could easily have been (for better or worse, depending on your point of view). There did seem to be a reference to the so-called formula that killed Wall Street, though.

I was tempted to call it a morality tale, but that’s not really a good description. The story’s major tension is one of character perspective and turmoil between the idea of doing what needs to be done for the sake of the firm (at least as they see it) and the impact that could/would have in the broader scope. There is no real attempt to provide a “right” answer, though. It ends up being more a question of characters working through their own issues.

Overall, I found the film a bit plodding and lacking in the kind of tension and drama that pulls through to the conclusion of movies like [easyazon-link asin=”B000RW3VD4″]Wall Street[/easyazon-link] (the original, not the sequel) and [easyazon-link asin=”B00008G8MX”]Dealers[/easyazon-link]. This one ends with a bit of a whimper.

Trading News

Another Rogue Trader

If you were completely out of touch Thursday you might have missed the adventures of our latest rogue trader. And this one’s a biggy. He puts Nick Leeson to shame. How about $7bln+ in losses for his employer, French bank Societe Generale. Inexplicably, he’s vanished. Imagine that!

Let’s just say someone didn’t practice very good money management. 🙂

By the way, a lot of folks are blaming this guy for the market insanity this week. He apparently had gotten very, very long (read tens of billions worth) in European stock index futures, especially the DAX. The unwinding of that position, which Soc Gen only found out about on Friday, was a major contributor to the global sell-off.

Rogue Trader - Nick LeesonIn case you never heard the Nick Leeson story (he’s the guy who sank Barrings Bank about a decade ago) you should definitely read his book – Rogue Trader. If you can get beyond the questionable ethics of helping a guy who caused the loss of over $1 billion and the death of Britain’s oldest bank make a few bucks based on his experience doing so, then it’s a interest read. The film version starring Ewan McGregor is ok, but lacks the real depth of the story as Leeson tells it in the book.

Another good read if you’re into the kind of “inside Wall Street” type of book is Black and White on Wall Street. This one is an autobiography written by Joseph Jett, a former Kidder Peabody fixed income trader who was accused of improper trading or accounting or something (it’s a bit unclear) which resulted in substantial losses. Unlike the Leeson book in which he admits to his wrong-doing, this one is an attempt by Jett to tell his side of the story and clear his name. There are some complex financials issues discussed in places, but they don’t really hinder things when you read it.