Wednesday, April 26, 2017

Business at the Movies: Margin Call

Margin Call is a great way to understand the beginning of the financial crisis and the financial derivatives that caused it.  Set in a fictionalized Wall Street trading firm, the company math whiz discovers that the company mathematical models are geared to a theory that doesn't match the reality.  The problem is, so many people believed the theory was infallible that the firm could not survive any mistakes because no reserves were set aside (why would you?).

That's the quickest way I know how to describe how derivatives and some of the other mathematical models melted down.

Margin Call features a great cast including Kevin Spacey, Jeremy Irons, Simon Baker, Demi Moore and Stanley Tucci, 

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