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Margin Call Analysis

2262 words - 10 pages

Margin Call portrays the last night of good times on Wall Street; when a disastrous speculation in the mortgage markets is leading to the firm’s collapse. Its main focus is the actions taken by the employees during the subsequent financial collapse. The movie begins with the first victim Eric Dale, Head of Risk and Management, being fired from his position. On his way out the door, Eric Dale hands a USB drive to Peter Sullivan, a Senior Risk Analyst, who realizes the firm and the market are clearly trembling on the brink. That night, Sullivan finishes Dale's project and discovers that current volatility in the firm's portfolio of mortgage-backed securities will soon exceed the historical volatility levels of the positions. Because of unwarranted leverage, if the firm's assets decrease by 25% in value, the firm will suffer a loss greater than its market capitalization. Will Emerson, Head of Trading is contacted by Peter, Will takes a look to and calls his boss Sam Rogers, Investment Floor Head. Others are called in for an all-night emergency meeting until the CEO John Tuld arrives to make very drastically decisions. After a series of meetings, Jared Cohen, Investment Division Head, proposes to quickly sell all of the toxic assets before the market learns of their worthlessness, thereby limiting the firm's exposure. Although, management colleagues wrestle with the ethical implications of their decisions it is decided to save the company and go along with the fire sale of the toxic assets. Unfortunately, it was also decided that Sarah Robertson, Chief Risk Management Officer, would be used as the scapegoat stating that she did not communicated or warned the executives about the risks on these mortgages on time.
Sam Rogers, Investment Floor Head, is one of the main characters in the movie. He has a strong sense of rightness. Rogers goes head to head with the impossible in this clash between upper management and his devotion to the employees under him. It’s his drive in an attempt for a resolve, no matter if it means the demise his own job that controls all the drama. When 80% percent of his floor teammates are swept away by all the layoff Sam goes on to say, “They were good people and they were good at their jobs. But you were better. Now they’re gone. They are not to be thought of again.” It turns out that Sam is the hero and moral conscience of this story. Sam has given the company 34 years of loyalty; even Sam is repulsed by what his bosses ask him to do to save the firm. Not because he’s opposed to cutting throats when necessary, but because he’s been around long enough to know if you slit too many of your customers’ throats, nobody will buy from you again. At the end, Sam decides to help save the company against his moral position because he needed the money. Money was Sam’s motivation to go along with the plan of getting rid of all the toxic assets. Even though his worldview had a total different perspective, Sam decided to make decisions...

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