The recent release of the movie, Money Monster, offers not only great entertainment, but edification. Directed by Jodi Foster, starring George Clooney and Julia Roberts, the film has been released in the US, this past weekend in the UK, with cascading release worldwide through June. Yes, it is another fast and furious Wall Street fiasco flick, and yes, I loved it. Why not?
Mr. Clooney and Ms. Roberts are credible, convincing, and even a tad endearing in their roles, engaging their audience from the outset until the final frame. Mr. Clooney, as TV host Lee Gates, portrays an over-the-top financial prognosticator, brandishing a bit of mad reverie with his business news entertainment. Ms. Roberts, as senior director Patty Fenn, draws us in with her cool, keen wit and competence in contradistinction to Gates’ affable but extemporaneous, script-free approach to live broadcasting. “It always sounds so simple and yet…so moronic,” she deadpans. Brit actor Jack O’Connell plays disgruntled blue collar worker Kyle Budwell, who seeks to blow up Gates and anyone around him on live television as retribution for a bad Gates stock tip by which Budwell lost his modest inheritance and entire savings. O’Connell paced Clooney and Roberts with great ease, delivering a magnificent performance with an impressive New York accent.
Unlike The Wolf of Wall Street (2013), an arguably profane story of financial fraud, drugs and sex with a bluesy back beat, there are market takeaways and knowledge to be gleaned from Money Monster. The first is simple, customary and quite obvious: Diversify. The second is more nuanced: Technology in markets may seem scary, but it is neither the computer nor the algorithm that is the greatest threat to market risk. Despite our discomfort with technology and the accompanying speed and pace of change, the paramount risk to financial markets is vintage: people.
The blame for the massive one day stock loss (IBIS Global Capital in the film) was attributed immediately to a computer “glitch”: typical and surely precedented, but not revelatory. While they do occur, (Knight Capital in 2012 where $440 million was lost in 30 minutes), true glitches are few and far between. Regulators now seek to require pre-market testing of automated programs prior to their being launched. Kill switches are being instituted to stop programs before they massively move markets. Increasing light is being shown into previously dark markets. Computers, algorithms and capital are tremendous tools. Failsafe? No. Regulatable? Yes.
In stark contrast is human behavior, your basic garden variety of shameless greed and tightrope ethics. What has not been regulated effectively in markets, or in society throughout history, is illicit behavior of those who seek personal gain at the expense of morality or legality. As Gates says in the film, “We’re human beings. We not computers. We have a conscience.” Market technology isn’t the conman, nor the scam artist, nor the fraud.
It is far too easy to point the fat finger of blame and make technology a scapegoat for subpar standards of integrity.
In fact, technology and electronic markets have made trading commerce better in a number of ways. Increased trading translates to better pricing for average investors. With electronic data trails, regulators have the best capability they have ever had to catch nefarious traders. Back in the day of traders physically on exchange floors, at the end of daily trading, scraps of paper were shoveled into large bins to be examined by regulators!
O’Connell’s character emotes a sentiment of anger and angst felt by many when he says, “They’re stealing everything from us and they’re getting away with it, too.” A survey released by pollster Stan Greenberg and the Roosevelt Institute reported that of likely US voters, only 20 percent have a favorable view of Wall Street, 82 percent of voters believe the economy is “rigged” in favor of the wealthy and political elites, and 62 percent blame politicians for the mess. The sentiment, suffice it to say, is global.
In addressing the “wrongness” of the current system, as well as in distinguishing between the roles of technology and human corruption, Money Monster does a good deed in an entertaining manner. In the end, without any major spoilage here, technology might even play a righteous role in catching the bad guy. Money Monster is a solid film with financial markets, the media and integrity as its subjects. Abide the teaching moment and enjoy the show. Why not, indeed.