The Wolf of Wall Street
3 hours
In the 1990s there was a stock brokerage firm called Stratton Oakmont. The
firm specialized in over-the-counter transactions (OTC). OTC trading
involves securities transactions (i.e., buying/selling stocks) that are not
performed or monitored by an Exchange (NYSE, Nasdaq, etc.). The trades are
directly between the buyer and seller with the brokers setting up the deal and
representing one or both parties. This specialization allowed Stratton to
perform many "pump and dump" scams where they would buy a large amount of a
bad cheap stock and then push that stock onto many buyers so that the price
is driven up, and then Stratton would sell (dump) their shares to make a huge
profit. The leaders of Stratton were convicted of securities fraud.
This movie is about Stratton's founder, Jordan Belfort and his wild life during
his years with Stratton. His life, and the film, is full of out of control
parties, an incredible amount of drugs, and the crimes that put this movie
on this list.
Starring Leonardo DiCaprio, Jonah Hill, and Margot Robbie.
The Big Short
2 hours, 10 min.
In 2007 there was a housing crash. An economic bubble had been growing for
many years and it finally popped. This sent the U.S. economy and the world
into what became known as The Great Recession. There was a lot of blame to
go around. Who committed the crime? Whose fault was it?
Was it the Wall Street people who thought that it was genius to turn mortgage
loans into a form of exchangeable security?
Was it the bank executives who incentivized giving out more home loans to people
because then the bank would have more mortgages to securitize and sell?
Was it the loan officers who freely gave the loans to people that clearly could
not repay the loans?
Was it the people taking the loans out knowing that they could never repay?
Or was it everyone involved that knew that this whole picture was happening and
that the biggest financial institutions in the world were relying on the mortgage
backed securities as most of their balance sheet?
This movie expertly, and captivatingly, explains the economics of the crash that set the tone
of the economy for many years after.
Starring Christian Bale, Steve Carell, Ryan Gosling.
Margin Call
1 hour, 47 min.
This movie is also about the 2007 Financial Crisis.
The market, Wall Street, stocks, bonds - all of it - revolves around people
and emotions and impulses and predictions. So when the first financial
firms realized that most of their assets were worthless, they did what they
needed to do to survive. They sold as much as they could. This spread
suspicion and eventually the knowledge that most big firms owned a lot of
worthless securities too.
A thing is worth as much as someone will pay for it. The mortgage backed
securities were losing value every second, and many banks' balance sheets
along with them.
This movie is about a Wall Street firm during the beginning of the crisis
realizing that they need to get rid of all their worthless securities before
the price drops too much and it's too late.
Starring Kevin Spacey, Zachary Quinto, and Demi Moore.
The Wizard of Lies
2 hours, 13 min.
During the 2007 Crisis, many big financial institutions were going
bankrupt and closing down. Many people were also becoming increasingly
worried about their money. So the big finance firms were less willing to
loan money and people were more motivated to get their money out of these
firms or at least into relatively secure accounts. This situation was a
nightmare for the biggest discovered ponzi scheme and financial fraud in
U.S. history.
A ponzi scheme is a fraudulent operation where the schemer gets
people to invest their money with the schemer in exchange for returns
on that money (like any other fund), but the schemer doesn't invest
the money. Instead, the schemer uses recent investors' money to
give "returns" to the earlier investors thus creating the illusion
that the fund is legitimate and successful. This could only work if
not everyone wants their money at the same time and fresh money is
always coming in.
This movie is about Bernie Madoff. He ran the biggest ponzi scheme
in the world until his luck ran out during the 2007 crisis. He was
convicted of fraud and sentenced to about 150 years in prison plus
financial penalties to try to repay his former clients who lost billions
of dollars with him.
Starring Robert De Niro, Michelle Pfeiffer, and Alessandro Nivola.
Wall Street
2 hours, 6 min.
The 1980s in America is commonly referred to as the decade of greed under
various Reaganomics policies and cultural trademarks in fashion, drugs,
music, and finance. If greed was anywhere, it was on Wall Street.
Sometimes that greed led to the Hamptons, but other times that
greed led to prison.
This movie is a fictional story about Wall Street stockbrokers and corporate raiders inspired
by real people who helped define the decade of greed.
Starring Michael Douglas, Charlie Sheen, and Martin Sheen.
Wall Street: Money Never Sleeps
2 hour, 16 min.
This movie is the sequel to Wall Street. As the first movie built its
plot around greed in the 80s, this movie builds its plot around the
2007 Financial Crisis with a couple of familiar characters and many
new ones.
Starring Michael Douglas, Shia LaBeouf, and Josh Brolin.