Wednesday, January 15, 2014

Do You Want to Get Rich?

"The Wolf of Wall Street,” by Martin Scorsese, 2013

Wait, did someone do “The Hangover III?” Or “The Great Gatsby Goes to Wall Street?”  Look, its Jonah Hill and Mathew McConauhey!  And Leonardo DiCaprio!  Hookers and blow.  Tits & Ass instead of ‘Travel & Expenses.’  Piles of Quaaludes.  A bland blonde from the soap operas.  Fran Dresher accents.  Is Michael Douglas going to show up with Gordon Gekko?  No, the real King of Queens - Martin Scorsese - returns for 3 hours.  You’d think this was “The Sorrow and the Pity” its so long, but it is just another very cheezball film.  The sexist brokerage world in all its ostensible glory.

This film is an insult to wolves - and women – but then what do New Yorkers know about wolves?  Evidently they’ve never left their 5 boroughs.  Wolves never hurt humans, unlike Wall Street firms.  The 2000 film, “Boiler Room” was also about Stratton Oakmont, the central firm in this film.  If you were really telling the tale of Wall Street, why would you remake an earlier film, especially about such an uncharacteristic outfit?  Even a story about Bernie Madoff as an individual would miss the mark.  Scorsese isn’t really telling the tale of the central pillars of Wall Street or U.S. capitalism.  He’s just pretending to.

As one of Scorsese’s characters might say, it’s time to rip someone a new asshole.  And I know just the person.  This director has basically made the same movie over his whole career - ‘Gangs of New York,’ ‘Raging Bull,’ ‘Taxi Driver,’ “Mean Streets,” “Good Fellas,” “Boardwalk Empire,” “Casino.”  “The Wolf of Wall Street,” based on Jordan Belfort’s own memoir, fits right in.  Most of these films are for conformist dullards who need a thrill in their life, while the sociopaths take them as guidelines for living.  Violent, mostly working class underdogs attempt to make it ‘big,’ but never as workers.  For the most part, Scorsese glamorizes lumpenism as a way of life, and this group of films are his testament to that.  The noveau riche drug-addict Belfort is the greedy punk down the block who succeeds.  He was broke, near eviction until he used his gift for gab. Yet his parents were lawyers.  As one scene announces, ‘getting rich’ is the American dream. 

In this film Belfort, the head of Stratton Oakmont, despises the ‘bus riders,’ just like suburbanites do everywhere.  He gives the little people who buy his bogus penny stocks the finger over the phone, as they actually believe his spiels.  Plumbers, electricians, the working class – the chumps – the people who do actual work.  The dull, sober people of the FBI and courts are the enemy too.  Ultimately, as his father says, he’s stupider than they are, but a man ‘of large appetites’ won’t let a limitation like that stand in the way.  Its up to you who to sympathize with.  

The only scene of any gravity in this film is the last scene, set at a sales seminar hosted by Belfort after he has been barred from the securities industry and Stratton Oakmont shut down by regulators.  It is in Auckland, New Zealand.  Belfort/DiCaprio as the newborn sales genius strolls on stage in his casual white shirt and asks the audience members to ‘sell him a pencil.’  They make fumbling attempts.  Then the camera pans to the faces of these somewhat desperate, ordinary people who ‘want to get rich’ but never will.

Scorsese’s portrayal of Belfort is by turns comedic, sympathetic and then pitying.  After all, DiCaprio won a Golden Globe for his comedic turn in this film - he didn't win it for drama.  The key scene is when Belfort decides not to bilk working-class people anymore, but to bilk 'rich people,' and put the money in the pockets of his group of desperate brokers instead.  Scorsese ultimately buys this conceit, which is also Belfort’s.  In a way, they both work together here.  Belfort makes fun of WASPs and the ‘white-shoe’ firms in the rest of Wall Street – just as the heads of Salomon Brothers and Bear Stearns used to do.  It is a familiar Wall Street pose. 

Anyone in the brokerage industry, and I’m one of those, sees what look like many factual errors.  Most rich people already have their own brokers – they don’t take cold calls and sign up to open a new account over the telephone.  Most rich people don’t even buy OTC/pink sheet penny stocks, though Belfort’s method of selling IBM, then “Unknown Stock X” ‘might’ work.  For Oakmont Stratton, the real fraud was in IPOs, and I think that is where the real money came from.  When Belfort/DiCaprio tries to explain an IPO – an Initial Public Offering – to the film audience, he gives up because he thinks it’s too complicated.  It’s not.  Most IPOs are offered to select clientele prior to the offering opening date.  They are not sold to individuals on the day of the offering, certainly not at 1:00 PM in the afternoon.  The difference between brokers who handle individual clients and the oft-pictured institutional trading floor of chaos and insults are combined here.  In this film the ‘trading floor’ or whatever it is, has very few computers, everyone sits on top of everyone else and yells into phones like some Viagra call center in Bangalore.  In most firms, the retail brokers would be in cubes or offices and have at least one computer by this time.  On the trading floor the capital market traders would have a computer too.  Maybe this is how Oakmont housed their staff, but it looks bogus.  Belfort then tells the FBI that he can help them with “internet’ and “CDO’ stock issues as an informant, even though the events in this film greatly predate the 1999 tech crash and the 2007 CDO crash.  Stratton Oakmont finally hires an occasional lawyer who they don’t listen to.  No one in these situations deals with the SEC or the FBI without real attorney involvement. While the SEC is mentioned, they are invisible in this film – camping in the offices of Oakmont and evidently ignored. (!) Yet the SEC was the one who banned Belfort from the industry in 1994.  In a U-tube video, Belfort himself said the hookers were in the basement, not on the trading floor having public sex as depicted in the film.  And did you know Belfort was Jewish?  Scorsese gives you the impression he’s another greasy Italian.  How much liberty did Scorsese take?  Or Belfort?

Essentially their key method of market manipulation was to secretly own low-end bogus companies or somewhat real ones (in this film, Steve Madden Shoes) and sell the (private?) stock to Oakmont for a higher price.  Oakmont would in turn do a public IPO and sell the shabby shit for an even higher price to their clients.  After the IPO, the principals would sell and pocket the differences, and the stocks would become worthless.  Then they’d hide the money overseas in Switzerland. Stratton Oakmont’s principals must have hid their ownership behind bogus shadow companies, as the ownership of a company in an IPO would be in the prospectus, ostensibly vetted by attorneys and ratings companies.  Belfort and other company executives secretly owned large pieces of 34 companies between ’90 and ’97 that they did IPOs on.  They were indicted on money laundering, high pressure sales tactics (i.e. lying) and stock manipulation charges and forfeited millions.  Stratton Oakmont was banned from the securities industry in 1996 and went bankrupt later.  Belfort and Porush (Hill) finally pled guilty to criminal charges in September 1999 after a 9 month undercover investigation where they ‘ratted’ on others.   Little of this is made very clear in the film. 

Belfort was given a kid-glove 3 year sentence, just like Michael Milken.  What happened to the $20M in the bank, portrayed in the film?  Why does Belfort/DiCaprio say while in prison that he remembers he’s still ‘rich?’

The real issue in this film is, does everyone in American want to be rich?  It seems to say yes, and that is the reactionary heart of its message.  This lie is the foundational myth of capitalist culture.  The film is no indictment of the corrupt methods of the larger Wall Street, but a celebration of a fucked-up attempt by a dental school drop-out to beat the odds and get rich.  And he succeeds for awhile, until the whole predictable traffic accident commences.  Now Belfort’s still selling the same snake oil as a motivational speaker in California, living in an ocean-front manse on Manhattan Beach, driving a Mercedes.  He studied Tom Wolfe’s “Bonfire of the Vanities” for his own memoir, which he then sold to Scorsese, who swallowed it whole.  He’s behind on his payments to the government.  He's peddling himself on CNN.  Just another creepy guy making money, who got Scorsese to celebrate his gonzo life. 

Prior books from inside the ‘securities’ industry, “House of Cards,” “Liar’s Poker,” and “The Big Short,’ are reviewed below. Also a review of the film "Wall Street:  Money Never Sleeps."

In Nov 2014, Michael Lewis had this to say about this film:  "What did you make of “The Wolf of Wall Street”?  It was much more about Martin Scorsese’s inner life than it was about Wall Street."
It didn’t speak to you, then, about what you had lived through? "No. I thought it was a very funny movie in its own right, but I didn’t think, “Oh yeah, that describes the world I came from.” It was like a very, very, very distant cousin to that world."

Red Frog
January 15, 2014

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