The current debacle at Archegos Capital Management that has emerged after they defaulted on margin calls from their banks is part of a domino effect kicked off with a fall in share values of various companies in which it had big holdings including in Viacom and Discovery. Both these companies suffered their largest ever daily falls last week.
And, talking of margin calls takes me back to a very enjoyable movie made in 2011: Margin Call. I doubt if many people saw it as I have never seen it included in any top box office gross numbers. But everyone I have ever discussed it with, has hugely enjoyed it. It may perhaps be something to do with the people I spend a lot of time talking to – Finance people! If money turns you on, Margin Call will also.
It stars Paul Bettany, Kevin Spacey and Stanley Tucci, but my favourite character, the Chairman, is played by Jeremy Irons. He wants to know what the problem is, and asks the rookie who has discovered it: “Maybe you could tell me what is going on. And please, speak as you might to a young child. Or a golden retriever. It wasn’t brains that brought me here; I can assure you that.”
When he looked at the fallout from the Margin Call he reflects: “It’s just money – it’s made up. Pieces of paper with pictures - so we don’t have to kill each other, just to get something to eat!” And his thoughts on how to make a living: “be first, be smarter or cheat.”
The great script was written by Jeffrey Chandor who also wrote and directed another of my favourite films, A Most Violent Year! I have learnt to appreciate great screen writing more and more – no one could ever call it an easy job.
I would speculate that recent board meetings at Archegos Capital must have been as fraught and tense, as at the meetings in Margin Call. But, I bet no-one had these, or any other lines as great as those said by Jeremy Irons.