Macaskill on markets: Lights, cameras, bankers

By:
Jon Macaskill
Published on:

If the movie version of The Big Short does prove successful, it could spur the commissioning of other banking-themed films.

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When Rich Herman, Deutsche Bank’s head of fixed income, announced that he was leaving the firm, he framed his departure with a movie reference. “For a short period of time at least, to quote Samuel Jackson in Pulp Fiction, I’m going to ‘walk the earth,’” Herman said in a note to employees.

His former colleague Greg Lippmann, best known for aggressive derivatives bets against US mortgages before the 2008 credit crisis, will soon upstage Herman when he is portrayed in a movie version of the book The Big Short by none other than Ryan Gosling.

The film version of the Michael Lewis book about the mortgage crisis, which will also star Brad Pitt, Christian Bale and Steve Carell, is not due for release until 2016. Former co-workers at Deutsche will therefore have to wait to see whether Gosling can make the character of Lippmann at all sympathetic. 

Lippmann had a reputation for obnoxious behaviour, even in a firm that was overflowing with unpleasant traders, and at a time when Wall Street was at its manipulative worst. 

So Gosling will have his work cut out. But he is a versatile character actor who relishes a challenge and this role could be an Oscar contender if he can keep viewers interested in the trader who handed out T-shirts that read: “I’m short your house” and kept a spreadsheet of his ratings for the relative value of different sushi restaurants in New York.

Bunker

While bankers are waiting for the big screen version of The Big Short, there is surely room for another internet take on the bunker scene from Downfall, the Second World War film, this time featuring Anshu Jain, a former boss of Lippmann and Herman at Deutsche who recently resigned as the increasingly beleaguered co-CEO of the firm.

Deutsche employees have at times been unwilling to deliver bad news to Jain, who is both thin-skinned and irascible, which may help to explain why successive attempts to restructure the firm have been so poorly received by external shareholders.

Jain took greater control of the latest restructuring from his nominal co-CEO Jürgen Fitschen – who stepped down alongside Jain – just hours before Deutsche’s annual general meeting was scheduled to begin in Frankfurt on May 21. This came too late to stem the dissatisfaction of shareholders, including significant stockholder Hermes, which had already indicated that it would not back the latest reshuffling of priorities at Deutsche.

This all contributed to an air of impending disaster for the current management at the bank and would fit well with a reworking of the bunker scene, as tremulous employees deliver the news to Jain that cost-cutting measures are hurting revenues, risk-weighted assets are actually edging up not down, and shareholders are campaigning openly for new leadership at the top.

If the movie version of The Big Short does prove successful, it could spur the commissioning of other banking-themed films. Remakes are always popular in Hollywood and an adaptation of Martin Scorsese’s Oscar winning film The Departed (itself a reworking of a Hong Kong thriller) would be one option. 

Instead of Matt Damon’s character playing a criminal who infiltrates the Boston police department, a banking version could feature a lead role based on Sajid Javid, the former Deutsche banker who is now the business secretary in the UK’s Conservative government.

Could a banker who was once responsible for selling complex structured credit products that went disastrously wrong for investors really end up in charge of business policy and supervision for a major national economy? Spoiler alert: yes!

Of course, there is no reason to confine film commissions to stories based on the thrills and spills of staff from Deutsche Bank, past and present.

UBS could be the inspiration for a comedy of errors about the culture clash between flamboyant Italians and the more buttoned-down Germanic influence on the Swiss soul
JPMorgan CEO Jamie Dimon already does a passable impersonation of Michael Douglas in one of his roles as a man who just can’t take it anymore.

A film might work where Dimon receives one complaining phone call too many from a spotty regulator 20 years his junior, then rampages down Park Avenue kicking over falafel stands, while his driver follows slowly behind him in a limo, wondering what to do. Eventually vice-chairman Jimmy Lee is flown in from the golf course to remind Dimon that he is the Greatest Banker of All Time, and everyone gets back to work.

An Ocean’s Eleven-style heist movie featuring the lead partners of Goldman Sachs would be another option. Quick-witted charmer and specialist in sleight-of-hand magic tricks Lloyd ‘The CEO’ Blankfein finds an ingenious way to carry on making outsized trading profits, even though the casino regulators in Las Vegas think they have designed a foolproof new system to curtail activity.

Little do the regulators know that Goldman has worked out how to co-ordinate its crack teams of traders without ever leaving a trace in the form of incriminating e-mails, phone calls or instant messages.

If George Clooney agrees to take the role of Blankfein he would no doubt make his own decision on whether to wear the hipster beard that Blankfein sported for a while. He would probably also decide which of his Hollywood friends to cast as his fellow heist pullers. Brad Pitt and Matt Damon might feature, though there would not be an obvious role for Julia Roberts, given that Goldman, like many investment banks, does not have any women in its ranks of senior managers.

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The answer to that perennial problem might be to cast a movie in which women take all the lead roles. The Second Career Club could be based on choices made by the few women who do manage to secure senior positions at major banks, only to decide later that the job isn’t all it is cracked up to be. 
In a reversal of fortune, Ruth Porat (played by Meryl Streep) leaves her position as CFO of Morgan Stanley to take up the same position at Google, where she can exact revenge on chilly former boss James Gorman (as performed by Hugo Weaving, not Gorman’s own apparent role model of Russell Crowe in Gladiator) by refusing to allocate business to the bank. 

There is also room for foreign language films based on banking stories, rather than standard Hollywood fare. UBS could be the inspiration for a comedy of errors about the culture clash between flamboyant Italians and the more buttoned-down Germanic influence on the Swiss soul. Urbane UBS CEO Sergio Ermotti effortlessly bridges the gap between the two cultures, but what will happen when couture-loving Italian investment banking head Andrea Orcel is stuck on his own with the bank’s dour German chairman Axel Weber? 

Orcel’s attempts to talk about contrasting tailoring standards in London and Milan are met with frosty disapproval by Weber and silence falls in the Zurich boardroom. Disaster is only averted when the two men finally bond over a shared dislike of the monogrammed shirts worn by the few remaining senior American wealth managers at UBS.

A ruminative film, of the type the French do so well, could be made based on the career of European Central Bank board member Benoît Coeuré, perhaps called My Dinner With Benoît. 

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We watch as humble economist Benoit toils quietly in the poorly lit offices of the Agence France Trésor in Paris. As the years pass there is little to divert Benoît from his daily routine of issuing bonds on behalf of the French government. Then one day all the central banks in Europe get together and suddenly Benoît’s dull job of issuing and trading bonds becomes vitally important to key markets, such as foreign exchange. 
Benoît finds that he has lots of new friends from the hedge fund world, the type of dashing characters who used to ignore the lowly bond manager. One evening at dinner he becomes a little tipsy after drinking Domaine de la Romanée-Conti wine supplied by his new investor friends and accidentally tells them about the bond buying planned by the ECB for the coming months. 

When Benoît goes to work the next day he discovers that his supposed friends have spent the night placing bets on a lower euro using the Asian and US markets, and scored huge trading gains. 

Benoît feels foolish, but he is able to keep his job after he tells his bosses that he had been planning to announce the ECB’s bond buying plans the following day anyway. Chastened but wiser, Benoît returns to his role as a bond manager and resolves to stick to dinner with his real friends in the future. 

A more action-packed, though slightly implausible, film could be made based on the attempts by bankers to rig various interest rate and derivatives markets over the last decade. It might stretch the credulity of viewers to have a plot in which vast teams of bank traders and brokers gang up to manipulate the prices set for virtually any market they can think of, including some markets that they create purely as a means to generate a rigged price. 

But life can be stranger than fiction, and The Cartel just might work as a movie concept. It has one particular advantage in that it could potentially become a money-spinning movie franchise, like the Fast and Furious series of films, which now number seven in total and counting. 

If The Cartel – Libor, turns in to a box office hit it could be quickly followed by The Cartel – FX, The Cartel – Interest Rate Swaps, and so on, virtually ad infinitum. 

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Each film could end with regulators congratulating themselves that they have finally stamped out market manipulation, only for the final scene to show that somewhere out there a group of junior traders are delicately discussing the best way to ensure that prices end up exactly where they want them, rather than having to rely on the annoying vagaries of supply and demand. 

This approach would also have the advantage of allowing the use of a fresh cast for each film, rather than having to pay up to retain stars whose fees have escalated in response to any success in their earlier work.

The star system is one of the areas where Hollywood and Wall Street have a great deal in common, with a harmful ultimate effect on the bottom line for the investors who fund projects. Stars, whether they are in trading, like Greg Lippmann, or acting, like his unlikely film alter ego Ryan Gosling, command such high fees that they reduce the margin of error for any new project. 

This problem has not gone unnoticed in the two industries, but there seems to be limited appetite for tackling the issue, especially among insiders who become used to incentive structures that would seem warped to most observers. 

Ultimately investors have only themselves to blame, of course, if they choose to finance heads-I-win/tails-you-lose trading operations, or films that only deliver decent returns to their star performers.