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.
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As Hollywood’s tackled the recession, it focused first on Ponzi schemers in the mode of Bernie Madoff, villains whose schemes were easy to explain, and whose evil didn’t require a thorough examination of the financial system. Slowly but surely, though, we’re seeing financial crisis movies that are structured like mysteries or heist films, where the action — and heroism — are to be found in understanding precisely what financiers got away with behind our backs and the full extent of the damage they’ve caused us. Half of Arbitrage, the financial thriller that premiered here at Sundance, is that kind of movie.

Arbitrage stars Richard Gere as Robert Miller, a hedge fund titan who is on the verge of selling his firm at a very high price determined by the success of his predictive model. It should be a windfall for his family, including his wife Ellen (Susan Sarandon), a dedicated philanthropist, and his daughter and Chief Investment Officer Brooke (a very good Brit Marling), who would prefer to hang on to the firm given its growth. But it quickly becomes clear that Robert is selling a company that was decimated by a bad bet he made on Russian copper, a giant hole that’s been papered over with a loan from a friend so Robert can pass an audit and offload the company at a price that will let him pay back the debt and make his investors whole.

That ought to be enough for one movie, as it was in J.C. Chandor’s justifiably Oscar-nominated Margin Call. But Arbitrage throws another factor into this deal-making stew, giving Robert a French gallerist as a mistress — and having him kill her when he falls asleep at the wheel as they head out for a lost weekend. Robert flees the scene with the help of Jimmy (Nate Parker, who is having one hell of a beginning of 2012 between this, Red Hook Summer, and Red Tails), the son of his late driver, who comes under the eye of angry working-class detective Michael Bryer (Tim Roth).

The question becomes, then, whether Robert can play the information imbalance — his knowledge about the truth about the state of his fund and his mistress’s death — to his own advantage, or whether Det. Byer and Brooke’s investigations will move fast enough for them to expose him before the deal with an irritatingly elusive mogul (played, in one fun scene, by Graydon Carter, who director Nicholas Jarecki credits with commissioning the financial journalism that inspired the movie) closes. Jarecki makes the mistake, however, of thinking that the murder investigation is more interesting than the financial one. Roth is always fun, and gives Bryer a nice insolence in the face of authority, and there’s some appeal in listening to him rant about how men like Miller “outmanuver us, they outbuy us. I’m fucking sick of it. He did it! He doesn’t get to walk just because he’s on CNBC.”
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