Margin Call 2011 Senior Partners Emergency Meeting HD 1080p — Transcript

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1. 0:16oh my God
2. 0:19please sit down
3. 0:23welcome everyone I must apologize for
4. 0:26dragging you all here such an account
5. 0:28but from what I've been told this matter
6. 0:30needs to be dealt with urgently
7. 0:32so urgently in fact probably should have
8. 0:34been addressed weeks ago but that is
9. 0:36spilled milk under the bridge so why
10. 0:39doesn't somebody tell me what they think
11. 0:41is going on here
12. 0:43Mr told uh as I mentioned earlier if you
13. 0:46compare the figure at the top of page
14. 0:4813.
15. 0:50just speak to me in plain English
16. 0:54okay but I'd like to speak to the guy
17. 0:56who put this together Mr Sullivan is it
18. 0:58does he speak English sir
19. 1:01I'd like to speak for the analyst who
20. 1:03seems to stumble across this mess
21. 1:04certainly that would be Peter Sullivan
22. 1:06right here oh Mr Solomon you're here
23. 1:09good morning maybe you could tell me
24. 1:11what you think is going on here and
25. 1:13please speak as you might to a young
26. 1:16child or a golden retriever
27. 1:19it wasn't brains that got me here I can
28. 1:21show you that
29. 1:24well um
30. 1:27sir as you may or may not know I work
31. 1:30here for Mr Rogers as an associate in
32. 1:33the risk assessment and management
33. 1:34office at MBS please just relax stand up
34. 1:38tell us the clear voice
35. 1:39what is the nature of the problem
36. 1:44okay uh
37. 1:47well as you probably know over the last
38. 1:4936 to 40 months The Firm has begun
39. 1:53packaging new MBS products that combine
40. 1:57several different tranches of rating
41. 2:00classification In One tradable Security
42. 2:03this has been enormously profitable as I
43. 2:05imagine
44. 2:06you noticed I have
45. 2:09well the firm is currently doing a
46. 2:10considerable amount of this business
47. 2:12every day now the problem which is I
48. 2:14guess
49. 2:15why we are here tonight is that it takes
50. 2:17us the firm about a month to layer these
51. 2:21products correctly thereby posing a
52. 2:24challenge from a risk management
53. 2:25standpoint
54. 2:27and sort of that challenge is well we
55. 2:30have to hold these assets on our books
56. 2:32longer than we might ideally like to yes
57. 2:34but the key factor here is these are
58. 2:36essentially just mortgages so that has
59. 2:38allowed us to push the leverage
60. 2:40considerably beyond what you might be
61. 2:42willing or allowed to do in any other
62. 2:45circumstance thereby pushing the risk
63. 2:47profile without raising any red flags
64. 2:51now thank you Mr sit down what I'm
65. 2:53guessing your report here says and give
66. 2:56me some rope here
67. 2:58what I'm guessing it says is that
68. 3:00considering that shall we say bumpy row
69. 3:03we've been on the last week or so
70. 3:05but the figures your brilliant
71. 3:06co-workers up the line ahead of you have
72. 3:08come up with
73. 3:10don't make much sense anymore
74. 3:12considering what's taking place today
75. 3:15actually not what's taking place today
76. 3:17but what's already taken place over the
77. 3:18last two weeks so you're saying this has
78. 3:22already happened
79. 3:23sort of
80. 3:28and Mr Sullivan what does your model say
81. 3:30that that means
82. 3:32for us here
83. 3:34well that's where it becomes a
84. 3:35projection
85. 3:37but
86. 3:39um
87. 3:41you're speaking with me Mr seldom
88. 3:44well sir
89. 3:46if those assets decrease by just 25
90. 3:49percent and remain on our books
91. 3:52that loss would
92. 3:54be greater than the current market
93. 3:56capitalization of this entire company
94. 4:01so
95. 4:03what you're telling me
96. 4:06is that music is about to stop
97. 4:11and we're going to be left holding the
98. 4:13biggest bag of odorous excrements ever
99. 4:16assembled in the history of
100. 4:20capitalism
101. 4:26sir I'm not sure that I would
102. 4:28put it that way but let me clarify using
103. 4:31your analogy
104. 4:33what this model shows
105. 4:36is the music so to speak just slowing
106. 4:40the music were to stop as you put it
107. 4:42then this model wouldn't be even close
108. 4:45to that scenario it would be
109. 4:47considerably worse
110. 4:53let me tell you something
111. 4:56do you care to know why I'm in this
112. 5:00chair with you all I mean why I earn the
113. 5:03big bucks
114. 5:05yes I'm here for one reason and one
115. 5:09reason alone
116. 5:10I'm here to guess what the music might
117. 5:12do a week a month a year from now
118. 5:17that's it
119. 5:19nothing more
120. 5:23I'm standing here tonight
121. 5:26I'm afraid that I don't
122. 5:29hear a thing
123. 5:34just
124. 5:38silence
125. 5:55so now that we know the music has
126. 5:58stopped what can we do about it
127. 6:00Mr Cole Ms Robertson
128. 6:04I'm afraid I think this is where you're
129. 6:06supposed to step back in
130. 6:08Lord knows we've relied enough on Mr
131. 6:10Sullivan tonight
132. 6:13what do you have for us
133. 6:23what have I told you since the first day
134. 6:25you stepped into my office
135. 6:28there are three ways to make a living in
136. 6:30this business be first
137. 6:33be smarter or cheat
138. 6:35I don't cheat
139. 6:38and although I like to think we have
140. 6:40some pretty smart people in this
141. 6:42building
142. 6:43it sure is a hell of a lot easier to
143. 6:45just be first
144. 6:47sell it all today
145. 6:52is that even possible Sam
146. 6:54yes but at what cost
147. 6:58I'll have to pay
148. 7:01really
149. 7:03I think so
150. 7:05where is this going to come back to us
151. 7:09everywhere
152. 7:11Sam I don't think you seem to understand
153. 7:13what your boy has just said
154. 7:19if I made you
155. 7:21how would you do this
156. 7:29well you call the traders in for the
157. 7:30normal 6 30 meeting and you be honest
158. 7:32with them because they're going to know
159. 7:33it's the end either way
160. 7:35so you're gonna have to throw them a
161. 7:36bone and a pretty big one
162. 7:38and then you've got to come out of the
163. 7:39gate storming
164. 7:41no swaps no nothing
165. 7:4340 done by 10 15 by 11 o'clock all your
166. 7:46trades have to be gone because by
167. 7:48lunchtime word's going to be out
168. 7:50and by two o'clock you're going to be
169. 7:52selling at 65 cents on the dollar if
170. 7:54you're lucky and then the feds are going
171. 7:55to be in here up your ass trying to slow
172. 7:57you down Ramesh it can slow you down it
173. 8:00can't stop you it's yours to sell yeah
174. 8:03but John even if
175. 8:06we managed to pull that off and that's
176. 8:09saying something
177. 8:11the real question is who are we selling
178. 8:13this to
179. 8:14same people we've been selling it to for
180. 8:16the last two years and whoever else will
181. 8:18buy it but John if you do this
182. 8:22you will kill the market for years it's
183. 8:25over
184. 8:28and you're selling something that you
185. 8:29know has no value we are selling to
186. 8:32willing buyers at the current fair
187. 8:34market Price
188. 8:36so that we may survive you will never
189. 8:40sell anything to any of those people
190. 8:42ever again I understand do you do you
191. 8:48this is it
192. 8:49I'm telling you this is it
193. 9:03well now it's four o'clock
194. 9:05Jared you got till five to break this
195. 9:07down draw me off the plan is there
196. 9:09anybody else who knows what's in here at
197. 9:11the moment block by block
198. 9:13Eric Dale
199. 9:15and where is he
200. 9:17as of today he's no longer with the firm
201. 9:20we have been trying to locate it
202. 9:26Carmelo yes get me Eric Dale here by 6
203. 9:2930. done
204. 9:32we meet back here in an hour
205. 9:36so let's talk