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Top 20 Films about Finance: From Crisis to Con Men

The Finance Professional as a Gambling Man

“So, in today’s parlance [on Wall Street], gambling is actually innovation, and clients are actually idiots,” Jon Stewart said in a 2010 episode of the American TV news satire The Daily Show. As much as it may sting when those in the entertainment field compare finance professionals to bookies (see the Trading Places clip below), it’s surprising (and unfortunate) how readily some finance professionals draw the same comparison.

Trading Places (1983; comedy; 116 minutes; commodity futures trading)

Two brothers who run a commodity futures brokerage make a bet to settle their argument over whether heredity or environment is responsible for a person’s character. The brothers arrange for a “scientific experiment” in which they switch the circumstances of a street hustler and their elitist executive. The executive falls apart in his life on the street, while the hustler thrives as a commodities broker. Eventually, the hustler and the executive, who were at the receiving end of the brothers’ bet, decide to exact revenge on them through their bread and butter — futures trading. The brothers, as well as the hustler and the executive, bet on orange juice futures contracts, anticipating the findings of an impending government report about the orange crop. As the brothers go long, the hustler and the executive go short. Here is how the executive explains his trading philosophy to the hustler: “Think big, think positive, never show any sign of weakness. Always go for the throat. Buy low, sell high. Fear? That’s the other guy’s problem.” (If you struggle to understand the frenzied futures trading at the end, the Planet Money team got a commodities trader to dissect the film’s finale in a recent podcast, “What Actually Happens at the End of ‘Trading Places’?“) The film has also prompted the addition of what is known as the “Eddie Murphy Rule” to the Wall Street Transparency and Accountability Act — that is, a ban on insider trading using nonpublic information misappropriated from a government source.

Billion Dollar Day (1986; documentary; 30 minutes; forex trading)

This BBC documentary is about a day in the life of three foreign exchange traders based in New York, London, and Hong Kong. On the one hand, the filmmakers seem to be in awe of the high life and relatively young age of the traders. On the other hand, they do not hide that they largely view these traders as gamblers. The documentary shows the traders in action, going long and short, quickly taking and closing large positions to cash in on narrow price movements. These traders are not working from any economic analysis but, rather, mostly their hunches about what other traders are doing. Together, the three dealers trade currencies worth US$1 billion and make a profit of more than £100,000. Watching this documentary, made less than 30 years ago, you realize how much the physical world and financial markets’ infrastructure have moved on since then — but the underlying issue of the social usefulness of finance remains the same. As the documentary concludes: “By dealing so much with each other, they add to the speculative froth on what has become a very wild business. It’s the price the world pays for a free market in money.”

Trillion Dollar Bet (2000; documentary; 48 minutes; option pricing)

This documentary tells the story of the Black-Scholes-Merton options pricing formula,physics envy in finance, and the collapse of hedge fund Long-Term Capital Management (LTCM). It includes interviews with Robert Merton and Myron Scholes, who won the Nobel Prize in Economics in 1997. (The Nobel Prize could not be given to Fischer Black, who died in 1995.) The effect of the formula on financial markets was far reaching. In the words of the narrator of the documentary, “Capitalism was on the march. The combination of mathematics and money, it seemed, was unstoppable.” The hedge fund LTCM was founded by a bond trader at Salomon, and Merton and Scholes signed on as partners. When LTCM fell, it had losses so large that it became a systemic threat and had to be bailed out, bringing financial losses and lingering embarrassment to its owners. Its fall raised a difficult question: If even Nobel laureates can’t understand the risks in financial markets, who can? The closing line of the documentary: “There is a tempting and fatal fascination with mathematics. Albert Einstein warned against it. . . . Don’t believe in something because it is a beautiful formula.”

Floored (2009; documentary; 78 minutes; floor trading)

Hear it from the Chicago traders themselves — who tell it like it is, with lots of swearing and cigars. This documentary is also a chapter in financial history; it’s about a profession that technology has made largely obsolete — floor trading. It shows how the brutally competitive and in-person floor trading at the Chicago Mercantile Exchange worked. There are a number of surprising quirks to the culture. Floor traders had their cliques, based on which part of the city they lived in or their ethnicity or even their religion. Many traders earned a living by trading on their own account. As one of them says, “I am the hedge fund manager of my own family’s worth.” Others are more frank about what they do. As one puts it, “Whether people like to admit it or not, this is a form of gambling.” The film explains the switch from open-outcry floor trading to electronic trading and its effect on the lives of the floor traders in Chicago. Today’s impersonal and anonymous electronic trading in most financial markets is the opposite of the royal-rumble-style pit trading, and some of those who had great success in the pit struggle with electronic trading. While the film is about floor trading in Chicago, some of its lessons can be safely generalized to markets around the world that underwent the same change.

Wall Street Warriors (2006–; documentary series; 30 minutes each; entrepreneurship)

This documentary series covers the lives of real and ambitious people who are trying to succeed on Wall Street. It features the analyst, the day trader, the options broker, the stockbroker, the fund manager, the dealmaker, and more. Men and women of different ethnicities and from different countries of origin — they are all on Wall Street to compete and to win. As the title suggests, their work is not just a job. It is so competitive — and the financial and emotional stakes so high — that they feel as if they are fighting a war. These Wall Street warriors have one thing in common: They are all pursuing lots of money and taking on lots of stress.

via cfainstitute.org