At Sundance, I got a chance to see Arbitrage, the financial thriller from director Nicholas Jarecki that opened last weekend, that’s one of the first movies about the financial crisis to actually be about the financial crisis. The movie follows finance titan Robert Miller (Richard Gere) at a moment when he’s about to sell the firm he created from the ground up, even though he’s made what could be a disastrously bad bed on Russian copper. And as his daughter Brooke (Brit Marling), who has grown up working in the company and doesn’t want to sell, begins to figure out that the firm he’s selling is a house of cards, Robert crashes a car he’s driving, killing his mistress. As he struggles to cover up her death with the help of a young man (Nate Parker) whose father worked for Robert, a detective (Tim Roth) desperate to nail Robert starts closing in on him. I spoke with director Nicholas Jarecki about growing up in a family of commodity brokers, not wanting to just tell Bernie Madoff’s story, and why we love financial bubbles. This interview has been edited for clarity and length.
I wanted to actually start by asking you sort of where the concept–not just for the film as a whole–but for having it be sort of a prediction algorithm at the heart of the movie, instead of pure Ponzi scheme. We’ve seen so much of Bernie Madoff in the pop culture response to the financial crisis, but I was curious about the decision to have that be at the center.
Well, I thought a lot about Madoff: when I started writing the story he had just been caught and I was reading all this wonderful financial journalism in Vanity Fair, of all places. Greydon Carter had commissioned these pieces, which he collected into a book called The Great Hangover. It was all this wonderful financial journalism from great writers like Michael Lewis, and real inside stuff. And I was pretty familiar with this world because my parents were commodity brokers, and still are. And so I know a lot about business and was around it all my life in New York. But Madoff was less interesting to me because I read something he said in jail, “Fuck my victims. I carried them for 25 years and now I’m doing 125 years.” So to me, that was very sociopathic, and the idea of a Ponzi scheme also too simple. I felt like I’d seen that movie, even 25 years ago. Even 25 years ago I feel like I’ve seen that movie, you know?
So what I was more interested in was kind of a man, once good, after many years of success perhaps read one too many of his own press releases, and down the slope he goes. And for that story, I needed a financial crime that was less overt, a little more of a slippery slope, if you will, you know, something that he could get into, make this illiquid investment and you know “Okay we need a little more time”…That’s the thing he never really saw coming, and he says that to his daughter. He says, “It’s like a plane crash–it just happens.” So, even the most brilliant minds in the world–I know from personal experience–can make mistakes like this, and the world can turn upside down, and the South Pole is north.
Well, it also struck me that while Bernie Madoff could have happened at any time and place, and the fact that he was exposed in the middle of the financial crisis, his crimes have been conflated with the crisis, even though they don’t seem to have the same root symptoms. You seemed to find something actually much more symptomatic of the economic trouble we’re in–that sense of certainty that the market would always go up despite past lessons.
Well I’ve lived now, personally, through three bubbles. ’87, [the] ’00 tech bubble, and now the housing bubble. And I’m 33 and I think I’m just starting to conclude that we like bubbles. It’s something that we do. We like to build and get really enthusiastic and “Let’s go get that house, flip it, it’s no money down….The sky’s the limit!” And it’s not. And that’s when people get carried away. I think that’s kind of a common human thing. So in a way, I understand Robert Miller – he was trying to make a good deal. He was trying to make money. It was too good to be true. Unfortunately it was too good to be true. But it could have gone the other way…These brilliant hedge fund guys, they took some HUGE gambles. And what if those gambles hadn’t work? They easily couldn’t have. So we see in Cosmopolis, a film that just came out that some friends made, the main character and he’s made a big bet on the Yuan, the Chinese currency, and he loses his whole fortune in one day. And it can happen. And I know people it’s happened to.