A somewhat derivative challenge
Following up on my article about How to Explain Quantum Mechanics, I think it’s high time for the third-ever Scene Challenge. ![[Scene Challenge]](http://johnaugust.com/Assets/scene_challenge.png)
For the first one, Masturbating to Star Trek, you had to write an entire scene. For the second one, Make Your Introduction, you had to introduce one character. This time, it’s both simpler and more difficult:
Have a character explain derivatives, as used in the financial industry. (The thing that’s like a stock, not the thing that you learned in calculus.)
The speaker should be knowledgeable, and the listener should be a layman, i.e. a proxy for the audience. What are their names? What’s the story? What’s the genre? You decide, to the degree it matters. My suggestion would be to create a scenario in which the term needs to be explained — but only to the degree necessary. Metaphors and similes are powerful tools.
You’re welcome to write as much of the scene as you want, but the focus is on the explanation. The winning entry might be one sentence long. I strongly recommend you look at the original article for helpful suggestions.
Here are the rules:
- Post your entry in the comments thread of this article. Please don’t attempt fancy formatting. It usually just screws up the margins.
- All entries must be submitted by 8 a.m. PST on Thursday, May 8th, 2008. Remember that comments are sometimes held in moderation. Don’t submit twice. It will show up. Promise.
- I’ll pick a winner later that day.
- Winner receives hearty congratulations and a brief moment in the spotlight.
And…begin.
UPDATE: A reader asks a fair question: What if two explanations are very similar, and both great? Answer: The earlier entry wins. So there’s no benefit to waiting for the last minute, worrying that someone’s going to read your entry and do a knock-off version.
To summarize: Best entry first wins.
Articles
May 5th, 2008 at 8:05 pm
I think there are two types of derivatives that are probably both used in the financial industry. The first is a financial instrument depending on some underlying variable (like a stock); the second is the derivative of a function you learn about in calculus, i.e., the rate of change of a function.
May 5th, 2008 at 8:15 pm
@Tom:
I made it extra-clear, just in case.
May 5th, 2008 at 8:18 pm
THEO, 30, with a three hundred dollar haircut and a suit that cost ten times that, strides down a narrow hallway in a bustling office. Phones ring, computer keyboards clack, co-workers bark–and none of this slows him down. Trailing him and struggling to keep up is JOEY, early 20s, looking out of place in his cheap blazer and mall outlet khakis.
JOEY I just don’t get the whole derivatives thing.
Theo stops in his tracks and whirls on his heel.
THEO Okay. You’re in Vegas betting football games and throw a hundred on a wild five team parlay that pays twenty to one. You hit the first four and you’ve only got the night game to go. You took the Patriots, laying seven to the Jets. They cover, you’re up two grand. They don’t, you get nothing. To guarantee a nice score, what would you do?
Joey mulls this over for a moment as Theo stares at him impatiently.
JOEY I guess put a few hundred on the Jets. That way you make out no matter what.
THEO And there you go.
Theo walks off down the hallway.
May 5th, 2008 at 8:42 pm
INT. KITCHEN – NIGHT
The middle aged LANE scrapes every ounce of soup into a chipped porcelain bowl. EVAN, her counterpart with a bad combover removes his clip-on tie.
EVAN: They made me a job offer.
LANE: At a startup?
She hands the bowl to Evan, at their tiny kitchen table.
EVAN: With a lot of potential.
LANE: What kind of offer?
EVAN: You know, a lot of derivitives.
LANE: Is that money?
EVAN: Well, not yet.
May 5th, 2008 at 8:48 pm
BOBBY Dad. I’m having trouble with my economics homework. Can you tell me what derivatives are?
DAD I don’t know. Go look it up on Wikipedia.
BOBBY You suck! I want to move back in with Mom!
Bobby storms out of room. A door slams.
DAD I’m not really your father!
May 5th, 2008 at 8:51 pm
EXT. RACETRACK – DAY BOB and MIKE, thousand dollar suits with loose ties but Mike’s has the edge, stand silent in a roaring crowd of desperate gamblers. Bob grimaces as his horse comes in last. He rips up his ticket. BOB Shit. Mike grins and wags his ticket in Bob’s face. BOB What? He lost. MIKE It’s derivatives, guy. You learn nothing from the floor? Bob doesn’t get it. MIKE A grand on Holy Roller to place. BOB You could’ve let me in on that. MIKE Guy, you gotta have a back up. He wanders off to collect his money. The crowd has thinned to a few ruined men. Bob notices Mike’s car keys on the ground. He picks them up. BOB Yes, you do. He jingles the keys. BOB Guy. He walks off, smiling.
May 5th, 2008 at 9:16 pm
MARY Derivatives? What the hell’s a derivative?
JACK You’re mine.
MARY I’m what?
JACK You’re my back up. I figure if I lose my job or my pension, you’ll take care of me in my old age.
MARY Wow, you’re screwed.
May 5th, 2008 at 9:49 pm
EXT. GAS STATION – DAY
John pumps gas into his SUV while Lucy squeegees the windshield. John scowls as he sees the rising cost of his fill up.
John Stupid gas prices! I’m paying to line the oil company’s pockets!
Lucy No, you’re paying to get gas, which is a derivative. It derives its price from the price of crude oil, which derives its price from the high demand for oil.
John So demand derives the price of oil because lots of people are driving!
Lucy sighs.
May 5th, 2008 at 9:57 pm
INT. Bar
A middle-aged man in a conservative suit sits in a bar full of men in conservative suits. A dozen shot glasses pin napkin stains to his table. A 13th rests in his right hand. He stares slack-eyed into nothingness as white-man blues moan futilely against the inanity of drunk white men.
MAN IN A SUIT I’ve never even seen a soybean. I don’t know what they look like, taste like… I don’t even know why people buy them. And I don’t care. All I’m supposed to care… is can I get Farmer Dirt to agree to grow his little beans this year for a dollar thirty a bushel …or a dollar five. That’s all that matters. The rest is someone else’s headache.
On the other side of the table slumps another man in a suit, eyes closed, tie open, fat and balding into his fourth decade.
The first man drinks his shot and lets his hand fall back to the table. The glass bangs hard against the wood.
The other man’s head jerks up. His eyes flit open briefly, then close as his chin sinks back into his fat chest.
MAN IN A SUIT Why should it be my responsibility to know… to know what the fucking Yen is going to do when oil hits a hundred fucking dollars a barrel and the rain doesn’t… The jerk-off computer’s supposed to know that. Everybody knows that. Everybody knows that…
His gaze wanders slowly around the room and comes to rest on his fat companion. His face tightens with contempt.
MAN IN A SUIT You will not be missed, lard-ass.
He holds onto his anger a few moments more before his focus stumbles.
MAN IN A SUIT Silver fucking linings. Silver fucking tidings…
May 5th, 2008 at 10:03 pm
INT. DARK CLASSROOM NICK sitting diagonally behind CAROL, he can see her paying attention to the PROFESSOR. He notices her write down something important, underlining it twice, and then chewing her pencap. However innocuous they may seem, Nick is entranced by her movements. He’s hesitant to say something to her, but can’t help himself.
NICK (hushed) Psst.
Carol doesn’t budge.
NICK (CONT’D) (hushed) Carol.
She turns, looking slightly annoyed.
CAROL (hushed) What is it, Nick?
NICK (hushed) Hey, did you hear about my party on Sa–
PROFESSOR (O.C.) Mr. Harver, perhaps you could explain derivatives to the class, as you seem to be doing so eloquently to Ms. Gray?
Everyone in front of Nick is looking his way. The Professor is rocking back and forth, heel to toe, waiting for an answer. Nick smiles uneasily and clears his throat.
NICK Well, the basic principle of derivatives is that their value is relative to certain underlying variables. Generally, they can be based on but are not limited to several assets such as bonds, commodities, equities, interest rates, exchange rates, and so on. They are mostly used as a way to allay risk in other dealings. Kind of like, uh, hedging your bet.
The professor looks stunned, but is satisfied with the answer.
PROFESSOR Pretty much, yeah. (turns back to the powerpoint presentation) As he was saying, hedging your bet is an apt way to…
The Professor drones on. Carol looks back at Nick, trying to hold back a smile but fails.
CAROL (hushed) Nice one.
Nick gives a “ta-da” gesture and smiles.
May 5th, 2008 at 10:19 pm
INT. RURAL DINER – DAY
We are in a grungy Waffle House that looks like it hasn’t been cleaned in years. Most of the patrons look like truckers. We focus on a table with an OLDER and YOUNGER MAN. The former is wearing a t-shirt and blue jeans while the younger is in polo and khakis.
They are silently eating the breakfast special and only occasionally glance-up at one another.
YOUNGER MAN (cautiously) I haven’t had grits in years. The last time was right here.
OLDER MAN (responding slowly) Are you just living on take-out?
YOUNGER MAN Yeah, it’s what everyone does. Nobody cooks at home.
OLDER MAN Are you just working a lot?
YOUNGER MAN Yeah, it’s crazy hours.
OLDER MAN I’ve heard that bankers put in 80 hours a week.
YOUNGER MAN Well, I’m not a banker. I’m a quant, a quantitative analyst.
OLDER MAN What does that mean?
YOUNGER MAN So, you know how normal investors will look at a stock and think that it’s a cheap buy? We don’t do that. Instead we look to arbitrage the markets.
OLDER MAN stares silently.
YOUNGER MAN We trade options. An option means I can buy or sell a stock at fixed price in the future. Like you guarantee to me that I can buy Microsoft at today’s price, but I don’t pay for it for three months. And even then, I don’t have to actually buy it; I can walk away if the price falls.
OLDER MAN What’s the point of that?
YOUNGER MAN It’s a form of insurance. I don’t have to buy Microsoft; I buy it at today’s price three months from now if the price rises. The option gives me that right, but not the obligation. I can buy an option from you for a fraction of the price of the stock. So if the stock tanks, I’m only out the cost of the option rather than the whole stock. It’s insurance.
OLDER MAN How do you get that option though?
YOUNGER MAN People sell options hoping to make money off the premium. It’s called “writing the option”, just like an underwriter makes money off the insurance premium. You’re taking the risk that the stock doesn’t go up too much, just like State Farm takes the risk that any accident I get into won’t be too costly. The entire mechanism is to shift risk from one person to another. So I pay you money for the option, which guarantees that you’ll sell me the stock at a fixed price in the future if I choose to buy it.
OLDER MAN Well, that option must be expensive to cover the risk!
A WAITRESS approaches the men for coffee. They both refuse and fall silent.
YOUNGER MAN (slowly resuming) The price of the option is determined by the stock’s volatility. If it’s China Mobile and the price moves a lot, then it’s expensive. If it’s Proctor and Gamble and the price is pretty stable, then the option is cheap. Like how health insurance costs more for smokers.
OLDER MAN So how do you make money then?
YOUNGER MAN Well, we do arbitrage. We don’t take a directional bet on a stock; we don’t care if it’s going up or down. What we care about is the volatility. Like if a company is about to report earnings. So if everyone is watching Microsoft and their stock is pretty stable right before the announcement, then the option is cheap. So we buy options that allow us to buy the stock, and then we buy options that allow us to sell the stock. So if Microsoft makes a surprise earnings announcement, good or bad, the stock price suddenly moves a lot, and thus the option price goes up from the increase in volatility. We lose some money from one of the options, but hopefully make more money from the other option to offset the loss. If we pick the volatility spikes correctly, we can make a killing, but with a lot less risk than just investing in the stock market.
OLDER MAN Oh, so can I do this for my retirement account?
YOUNGER MAN Technically yes, but I don’t recommend it. If you make a single wrong move, you can lose half your life savings in a day.
OLDER MAN Ok, but I still need you to look at my annuity when we get home.
YOUNGER MAN Yes, and fix your computer while I’m at it.
Both men share a smile.
FADE OUT
May 5th, 2008 at 10:55 pm
JACK and ETHAN sit across from each other at an outdoor cafe. Ethan looks like he hasn’t slept in a week. Jack looks like he just doesn’t anymore.
JACK You’re not even listening.
ETHAN I’m not getting what you’re trying to tell me.
JACK Look, it’s like, fuck, you know the stock market, right?
ETHAN It exists, yes, I know it.
JACK Derivatives, man. In commodities and shit. It’s a contract – but the value isn’t stable. It fluctuates. The value changes.
ETHAN I get that.
JACK It changes in part of an underlying value, in relation to… (realizes he’s losing him) …shit, buy a contract on gold. When currency and interest rates change, so does the value of gold.
ETHAN So you give me the contract on gold…
JACK And when external forces change…
ETHAN …the value drops.
JACK Right.
ETHAN Meaning when the Senator is quiet…
JACK His value is low. But it has the potential to rise.
ETHAN And when he is called on to talk. And when he agrees to speak.
JACK You hit the jackpot. But if you wait until after he talks. Damage is done. The contract’s worthless.
ETHAN So there’s an open contract for a low price that could be worth something. And if I wait too long to put a call on it, someone may deal with him earlier for cheaper.
JACK Right. ‘Cause you can’t kill him twice.
May 6th, 2008 at 12:19 am
INT. SMALL COURTROOM – DAY
Standing room only. A JUDGE listens intently behind her bench.
DONALD TRUMP It’s simple Your Honor, in a forward contract no actual monies change hands.
JUDGE Fascinating. My sympathies to Ivana and Marla. (BANGS gavel) Next time plug the meter.
May 6th, 2008 at 1:40 am
10-year-oid BILLY sits in the middle of a living room floor. No ordinary 10-year-old, Billy wears a suit and tie, his hair combed neatly back on his head.
Grappling with a giant sheet of pink construction paper, he is currently struggling to cut off the bottom third.
Billy’s MOM pokes her head inside the living room.
MOM You all right in here, Billy?
BILLY Yeah. I was just making a valentine card for this girl in my class.
MOM How sweet! I’m sure she’ll love it. But why are you cutting off the bottom piece? Why not just use all of the paper to make one, even bigger card?
BILLY (leaning back and sighing) You see, mother, this smaller piece is what you might call…a derivative.
MOM Eh?
BILLY Well, there’s a possibility she MIGHT reject my valentine. In which case the remainder of this paper will be used to shoot spitballs at her face.
MOM (taking a deep breath) That does it, I KNEW we should have never let you start watching that raving lunatic on “Mad Money”.
BILLY Aw, come on mom! I’m just preparing for the worst case scenario!
MOM You heard Buffet! Derivatives create a daisy-chain of risk! Now go to your room before I reallocate your 529 to pork bellies.
BILLY (muttering) Might as well. We all know what happened to my college fund when you put it all in tech a couple of years ago…
MOM That’s ENOUGH young man!
May 6th, 2008 at 4:04 am
INT. UNDERGROUND PARKING – NIGHT JOHN(20’s) shuffles towards his rental beamer, he probably has watched “Psyhcho” a hundred times, yet no VP has talked to him about his shoes.
As he arrives at the car door, two armed thugs emerge from a hidden corner methologically, SCAR blocks John’s way with a baseball bat while TOOTH towers John from behind. John is spooked, in fright and tensing.
SCAR Baba says he wants his money back.
JOHN (pretends relief) Whew, you had me a second there, I thought you guys from IRS.
SCAR So where’s the money?
JOHN It’s cool, it’s cool. I got it, two more weeks, I swear to god.
TOOTH (grins, exposing missing tooth) You believe this guy? Aren’t you some hotshot i-banker? You don’t have 100 grand?
JOHN Technically I am a derivative trader.
SCAR You trade what?
John talks faster and faster as the thugs look more and more confused.
JOHN Derivatives, you know, futures, options, etc etc…contractual securities offering returns on the return of some other types of investment, such as bonds, interest rates, tax rate, etc etc. (off the blank stares) No, No? OK, say I make money by coming to work, and Baba make money by ME coming to work, so Baba’s return is based on my return, and if one of you guys break my leg and I can’t come to work, I have no money, Baba has no money, healthy?
SCAR (scratches head) I don’t understand, so you are saying, um, you don’t have Baba’s money, no?
JOHN (pleased with himself) Not yet, but I will, that’s the point. You don’t expect Baba to work my job, do you? Who would want my job? It’s long, it’s boring, it’s stressful…
CRANK. Tooth knocks him out with a crowbar, John falls down SIDEWAYS.
Tooth He really is a BANKER.
Tooth grins to Scar, exposing his missing front tooth.
Tooth You beli
May 6th, 2008 at 4:11 am
INT. LIVING ROOM – DAY
The empty living room of a suburban McMansion. The walls are stripped bare and only a large, empty TV cabinet and an aging sofa are left. A couple of infant toys and a few disorganized clumps of papers and magazines are strewn about.
A distraught WOMAN stands, fighting back tears and looking around at the empty room. Two FBI AGENTS are there. One interviews the woman while the other pokes through the few papers scattered on the floor.
AGENT #1 Your husband was leading something of a double life. Did you realize he was into derivatives?
WOMAN (shocked) You mean … like transvestites or something?
(a beat)
AGENT#1 No ma’am. Derivatives. They’re financial instruments – futures, forwards, options. (beat) Sort of like stocks, but you’re buying the right or the obligation to make a transaction in the future. Your husband was trading derivatives online. Mostly options.
The woman stares blankly.
The Agent picks up a book from the couch – “Taste of the Town 2008″. It’s one of those coupon books school kids sell for fundraisers.
AGENT#1 Like the coupons in this book. (He shows her a page in the book) This Burger Bonanza coupon here – “Any sandwich for 99 cents during the month of December”. That’s like a derivative. When you bought this coupon book you purchased the option to buy an item for a set price at a set time in the future.
WOMAN I think I liked it better when he was just surfing the Internet for porn. At least my furniture didn’t disappear then.
May 6th, 2008 at 4:52 am
Hmm. Discussion of derivatives actually fits fairly well into my current project.
This scene features CHARLIE, a young businessman, and AIDAN, an elf. Charlie and Aidan are stranded in hostile (and mythological) territory, due to the machinations DORAN, an evil elf who somehow controls MR. HALLEY, Charlie’s boss.
Charlie has just been told that Doran is, for all intents and purposes, Rumplestiltskin.
EXT. FAERIE–MUSHROOM FOREST – DAY
CHARLIE He’s playing a derivatives game
Aidan stares blankly
CHARLIE Like with stock options.
Doesn’t help at all.
CHARLIE (under his breath) You don’t even know what stocks are, do you?
AIDAN Broth. A restraining device. A store of goods–
CHARLIE (Interrupting) Does this stupid place even have money?
AIDAN My neighbor can make gold from straw. You’ll forgive me if I prefer barter?
Charlie pauses. How can he phrase this?
CHARLIE When you were telling me the rules of elfland, you said something about favors, right?
AIDAN (Quoting) Always repay a favor in kind.
CHARLIE Good advice. But say you did a favor for a hunter–Shared your bread with him.
AIDAN Then he would share his catch with me.
CHARLIE Okay, but this is before he goes hunting. So depending on how he did, you might get venison, or you might get… squirrel.
AIDAN Or worse.
CHARLIE Right. But you don’t want that. So you go to the baker and you say “I’ll trade you that pie for whatever the hunter gives me”. That’s futures trading.
AIDAN But I would forfeit the venison.
CHARLIE That’s where options come in. If you made the right deal, It would be your choice to trade for the pie or keep the deer. And that’s what Doran’s doing.
Aidan nods. He’s getting it.
CHARLIE He finds people in trouble, people who have potential. Helps them out–straw into gold, whatever. Later, he comes back looking for his payoff–Makes the queen find his missing name, Gets the Duke to poison the Bishop, whatever. And if they don’t cooperate…
AIDAN Another mortal child for the Queen.
CHARLIE Hedging his bets–Planning for every possible outcome.
AIDAN But… Halley never had children.
CHARLIE Wanna bet he never planned for THAT?
May 6th, 2008 at 5:02 am
INT. HALLWAY – DAY
JACK, mid-thirties, talks on a cordless phone as he makes his way down his hallway.
JACK Damn it Harold, the derivatives are killing us! (Listens) Okay. Call me back. I’m going to check the prices right now.
Jack walks past his daughter’s room.
ANNA (O.S.) Daddy.
INT. ANNA’S ROOM
Jack pokes his head in.
Anna, four, plays with her plastic kitchen set. She stirs some imaginary food.
ANNA Daddy, what a derivative?
Jack thinks for a moment.
JACK What are you making?
ANNA Cake.
Jack takes a fake can of frosting Anna’s kitchen counter.
JACK Your cake depends on this frosting for how good it is. Right?
Anna nods her understanding.
Jack pours the fake frosting into Anna’s bowl.
JACK (CONT’D) So the cake is a derivative of the frosting.
Anna stirs her imaginary cake. She puts a bite to her lips.
ANNA Yum. Derivatives are tasty.
May 6th, 2008 at 5:24 am
EXT. URBAN STREET – DAY
Two homeless men, JONAS and RICHARD, sit on the curb and smoke.
JONAS And then they fired me when they found out about the turtle. You?
RICHARD Derivatives trader. Bankrupted one of the largest and oldest banks in the Benelux region.
JONAS Damn! But what the hell’s a derivative?
RICHARD It reduces risk in investments. You base your performance off something else.
JONAS Like plagiarism?
RICHARD But with better digs.
May 6th, 2008 at 6:11 am
INT. OFFICE – DAY
Opulent office, antique desk and you know there’s a buxom blond outside the door at reception.
A barrel of a gun. Pointed straight at the camera.
DAN (O.S) Its your fault. Your fault she left me. She was a porn star. The love of my life!
SLICK SAMMY, late 40s, sauve, fit, gray-hair at the temples stares calmly at the gun pointed at his cold heart. You get the feeling he’s done this routine a thousand times.
SAMMY I”m sure it was love at first hard-on.
GEEKY DAN, mid-30s, beanie hat, holds the gun steady. Sammy walks over to the wet bar. Dan follows his every move with the gun.
DAN You told me those derivatives would be valuable in the future. Like pre-order the new model sports car now, get it at a low price, accept delivery at a later date.
Sammy pours a scotch.
SAMMY Macallan Fine and Rare, 1926, the most expensive scotch you can buy.
Sammy holds out the glass to Dan. BANG. The glass shatters as the bullet goes through it. Sammy places the glass bottom on the bar. A bead of sweat drools down Sammy’s chiseled cheekbone – implants of course.
SAMMY Ever buy a lottery ticket?
DAN Never. The mathematical odds are a joke.
SAMMY Derivatives are like a lottery ticket. You have a piece a paper – that paper has no value – unless, unless your numbers come up. Sorry, Danny-boy, your numbers they didn’t come up.
Dan lowers the gun to his side. Sammy pours another scotch. Downs it in one gulp.
SAMMY Please close the door on your way out.
Dan points the gun at Sammy. BANG. BANG. BANG.
INT. LIVING ROOM – DAY
Vivid colors clash for dominance.
Dan takes off his beanie cap. Pulls out a tiny HIDDEN CAMERA.
INT. OFFICE – DAY
Sammy types at his computer. BEEP.
COMPUTER (V.O) You’ve got mail.
ON COMPUTER MONITOR
An envelope flies across the screen. Opens. A YOUTUBE video appears.
The title of the video: DO YOU WANT THIS GUY AS YOUR FINANCIAL ADVISOR?
Sammy, as bullets fly around him. Sammy frowns. Looks down.
Big wet spot in front of his pants. Yep, Sammy peed his pants like a schoolgirl.
The camera zooms in on the wet spot.
FADE OUT.
May 6th, 2008 at 6:25 am
INT. EMPTY WAREHOUSE – DAY
MAN (to his cellphone): An when I say deliver the cash by 8PM, I mean that by 8:01, he is dead, and you’ll never, ever hear from us again.
He puts down the phone. Another MAN IN SUIT, tied, blindfolded and obviously beaten up is sitting next to him.
MAN: So now we’ll just sit and wait, and by 8′o’clock you’ll get to see how much she really loves you. Bet you’re more excited than on the floor. Your life has just become… How you broker pigs say this? Den… Deb.. A derative, that’s it!
OTHER MAN: Derivative.
MAN: Oh, you’re right, I’m so sorry.
Punches the man in the head.
May 6th, 2008 at 6:29 am
int. Poker Room – Night Eight people sit around a poker table, staring intently at the dealer. Most notable among the group is THE GUNNER. He’s wearing his trademark hat and uber-cool sunglasses. INTERNETKID100, as he is known on the ‘net sits to his left. THE GUNNER So how did you switch over to poker? You look a bit older than the average ‘net player… INTERNETKID100 I realized I was already playing poker, just without cards. The dealer shuffles and deals the cards. Action folds around to The Gunner. THE GUNNER What do you mean? Call. INTERNETKID100 I was trading derivatives. They are just like betting a hand. We either think the risk is worthwhile to chase, or we think the other guy is taking too much of a risk… THE GUNNER So what are the “cardsâ€? in that game? The three frat boys in between call the action and sip their Jack & Coke’s. INTERNETKID100 (beat) Anything you want them to be. I raise.
May 6th, 2008 at 6:42 am
DISTRICT ATTORNEY How are you going to approve he’s guilty of insider trading to the court?
ASSISTANT DA Derivatives.
DISTRICT ATTORNEY Deriva-what?
ASSISTANT DA It’s like this. The CEO knows his product is going to fail and the company’s stock is going to crash. But he can’t sell his shares outright without drawing attention to himself.
DISTRICT ATTORNEY Go on.
ASSISTANT DA So what does he do? He convinces some poor schmuck that his stock is going to soar based on the new product line, and gets this guy to buy them at a later date for the price they are worth now.
DISTRICT ATTORNEY And this later date is after the price falls.
ASSISTANT DA Exactly.
May 6th, 2008 at 6:45 am
EXT. STREET – DAY
DANNY, 25, wearing a cheap suit, steps out of an office building with his cell phone attached to his ear.
DANNY I’m not sure it went so well.
Beat.
DANNY (con’t) Yeah, they said they’re gonna make a decision later this week.
Just ahead on the street corner sits a sleeping HOMELESS MAN. Danny is about to pass him.
DANNY (con’t) They asked about derivatives.
The Homeless Man wakes up. Danny is now slightly passed the Homeless Man.
HOMELESS MAN You mean like an investment that derives its value from another more fundamental investment?
Danny stops dead in his tracks.
DANNY Hold on one second.
Danny puts his call on hold and slowly turns around.
DANNY (con’t) Where were you forty minutes ago?
HOMELESS MAN Sitting right here. Got a buck?
May 6th, 2008 at 6:58 am
INT – CYBERCAFE – HONG KONG – DAY
With his back to a monumental panorama across the chaotic harbourscape of Kowloon, JIMMY LICHTBLAU squints at…
…a COMPUTER SCREEN of tiny text beneath the heading: “STOCK MARKET TERMINOLOGY FOR DUMMIES (COMPLETE MORONS)”. Silence. Time passes.
Suddenly:
LICHTBLAU Oh…come on. “Derivatives”? (sighs) What the f* does this - (explodes) F*ing gibberish! Life’s too goddamn short.
He turns, seething to face the window across the world outside. Contemplates it. Then…
…back to the computer.
LICHTBLAU (CONT’D) Hello, YouTube, my old friend.
May 6th, 2008 at 7:48 am
PETER, 41 and as 007 as can be, shuffles hundred-dollar chips with his right hand. He rests his chin on his left wrist so his submariner watch can’t be missed.
Across the table, a WOMAN, 46, pays attention to everything in the casino but Peter. She takes a ladylike puff from her Treasurer cigarette, wearing a gown obviously intended for more than blackjack.
The DEALER, 30-ish and vaguely Asian, displays a nametag neither can pronounce. She deals, awarding herself the ace of clubs.
DEALER Insurance?
PETER Thank you, yes.
The woman rolls her eyes, snorting the silver smoke like a disappointed dragon.
WOMAN A waste of money.
PETER You think so?
WOMAN So say the experts.
PETER Are you calling me an ameteur?
The woman shrugs.
PETER If I have a natural twenty-one, I’ll make a hundred dollars. If I don’t take insurance, I have two-to-one odds of winning a hundred and fifty, or three-to-one of a push. It’s a simple derivative.
The woman glances up from her cigarette.
WOMAN You’re in finance?
Peter shrugs. Perhaps.
May 6th, 2008 at 7:50 am
INT. FRAT HOUSE – DAY
Party detritus everywhere. Trash, food, condoms. CALEB wakes up, realizes he’s tied to the couch, stark naked. RON walks down the stairs, back in his Gucci suit, cigar in hand. Miles from his toga-wearing self.
CALEB Ha ha, Ron, very funny… Can you untie me now?
RON Caleb, let’s talk about your future. Do you know what a derivative is?
CALEB Dude. I have to pee.
RON You pay cheap today for something expensive tomorrow. Listen, be quiet for a second.
Ron dials his cellphone, puts it on speaker. Two rings. Caleb is intrigued.
TESS (on phone) Hey Ron! Some party last night, huh?
RON Tess, sugar. Remind me again why you won’t have sex with Caleb?
TESS (on phone) No ring no gets. He knows that. Why? Is he complaining again?
RON Will you still be hot twenty years down the line?
TESS What?
RON Twenty years from now, will you still be hot?
TESS I don’t know. I’ll be like 40. What do you care?
Ron hangs up.
RON That’s why I’m not letting you marry her.
He walks out the door, leaves Caleb to his naked thoughts.
May 6th, 2008 at 7:53 am
JIM walks in and drops a stack of papers on JACK’s desk. While Jim smiles broadly, Jack picks them up and starts leafing through them slowly.
JIM Well?
Jack looks at him, pained, then leafs through the papers again. Jim’s exaggerated smile has not dimmed.
JIM Good, eh?
JACK I don’t know. Seems a bit… derivative.
JOE sticks his head into the office, leaning in far, his tie swinging, suit coat falling open.
JOE Derivatives? You guys playing the market?
Jim and Jack freeze staring at him.
JOE You know, derivatives? Financial instruments? Futures, options? You know, follows some other thing, spreads the risk?
Jim and Jack have not moved.
JOE Derivatives?
JACK We’re going over Jim’s wire frames.
Joe withers a bit under their hard looks.
JOE Oh. Okay.
He knocks on the door jamb.
JOE Good. Good job. Carry on. (under his breath) Fucking creatives.
May 6th, 2008 at 7:59 am
Scene Two friends Mara and Nick sit eating dinner in front of the TV. The T.V is tuned to the news station.
TV anchor: Join us at 6pm. Gas prices are up again today. Consumers say they are spending less on food.
Nick: OH NO, here we go again. Now what? Mara: All these price increase definitely is a derivative of the gas situation Nick: What? A Deri-What? Mara: Well take groceries for example- stores are paying more to hull their food. So they are passing the costs to their customers. Hence people are spend less on food Nick: So you are saying if the price of gas goes down, people will start eating again Mara: Certainly, if you want to put it that way
May 6th, 2008 at 8:18 am
INT. OFFICE – DAY AGENT sits at his desk, and MUSICIAN sits across from him. MUSICIAN flips through his contract, scratching his head impatiently.
MUSICIAN Arbitage? Derivatives? I don’t know what any of this stuff means, I sing about martinis and unicorns for Christ’s sake.
AGENT Just to make sure you stay in line.
MUSICIAN Well I’m not going to sign anything I don’t understand.
AGENT All right, take derivatives. In this contract, they’re offering you 5% of each concert ticket sold for under $20. Over $20, we’re offering you 20%. You’ve got an incentive to write good music and get those ticket prices up, see.
MUSICIAN I don’t get what’s in it for them.
AGENT If you turn out to be a bad investment, they lose less money than they would with a standard-rate contract. If you become a star, everyone wins. It’s like taking a matching test in grade school and putting the same letter for two answers you’re not sure about–you’ll get one wrong and one right, but it’s better than getting both wrong.
MUSICIAN Glad I got into music and not finance.
May 6th, 2008 at 8:19 am
INT-TENEMENT HALLWAY-NIGHT
A short, bookish looking CHINESE MAN comes barreling down a hallway with an awkward gait. He gets to a door and then pulls out a key ring attached to his belt by a retractable cord. He fumbles frantically trying to find the key. He glances down the hallway, growing increasingly nervous. Then we see why.
Another MAN, broad, tall, wearing a wife beater stained with blood, comes sprinting down after him. The Chinese man, fumbles more. The Man gets closer, closer, closer. Just then the Chinese Man finds the key and unlocks the door. He enters and is about to close it when…
The Man’s hand grabs the door preventing it to close.
MAN I don’t want to hurt you. I just need to know about the key.
CHINESE MAN You don’t understand. They’re already here. You have to go.
MAN Wait, please, they have my wife. What does it mean that the key is just a derivative?
CHINESE MAN It means that the key is only as valuable as what’s behind the door that it unlocks.
MAN Okay, but then where do I….
Just then THE BACK OF THE APARTMENT IS RIPPED OFF IN A TERRIFYING EXPLOSION OF TWISTED METAL AND BROKEN STONE. The Chinese Man gets yanked out of the gaping hole as if he was jettisoned out into the gleaming fluorescent metropolis below by some unforeseen force.
MAN Christ.
The Man takes off running down the hall as the rest of the apartment starts to crumble beneath his feet.
May 6th, 2008 at 8:24 am
INT. DIRTY APARTMENT – DAY
TOM sits on the couch, despondent. His dress clothes are wrinkled, like he’s hasn’t changed them in days.
Slam Slam Slam! POUNDING at the door jolts Tom into coherence.
On edge, he dashes to the door and looks out the peephole to see –
JACK and ROLAND,
two enforcer thugs. They both have big, shit-eating grins on their faces.
Tom steps away from the door and takes a quick breath.
Slam Slam Slam!
ROLAND (O.S.) Open the door, jim.
Tom hesitantly unlocks the door and opens it. He steps back as Jack and Roland burst into the apartment.
TOM (nervous) Hey guys, how’s it go…
Roland shoves Tom, seating him on the couch.
ROLAND That’s enough, banker.
JACK You know why we’re here, so let’s get right down to business.
Roland walks behind the couch and seizes Tom’s arms, holding him steady.
Jack pulls out his .38 REVOLVER.
JACK (CONT’D) It’s been a week, tell us you got the stolen bonds.
Tom hesitates.
TOM No, I, uh…
Jack unzips his jacket to reveal a bloody T-SHIRT. Tom gasps.
JACK We’re in a hurry and I’ve got an itchy trigger finger. So, unless you want me to make you number three for the day, you’ll cough ‘em up.
A beat. Tom hangs his head.
TOM I don’t have ‘em.
ROLAND (to Jack) I told you he was a bad investment.
Jack flips open the cylinder of the revolver.
JACK (CONT’D) OK, we’re gonna play a little game. You tell me how many more days you need to get the bonds, and that’s how many bullets I’ll keep in the cylinder.
Tom fixates on the revolver, thinking.
TOM (with a smirk) Three.
ROLAND Your funeral.
Tom watches nervously as Jack quickly removes the first, the second, then the third bullet, without incident.
Jack closes the cylinder and spins the barrel.
JACK Say when.
A nervous beat.
TOM (confident) When.
Jack quickly slams the cylinder shut, pulls the hammer, and points the gun at Tom’s face.
Click. Tom breathes a sigh of relief.
JACK No one’s ever won on three bullets.
Jack opens the cylinder and dumps the bullets into his hand. He peers at them.
JACK (CONT’D) Son of a bitch.
TOM Don’t tell me I’m a bad investment.
Jack hands two of the bullets to Roland. Roland looks them over and sees that they are SPENT SHELLS.
TOM (CONT’D) You’re gonna make me number three for the day? Not if you’re in a hurry you’re not.
Roland chucks the empty shells across the room.
ROLAND Damn bankers.
TOM Jack, you’re like any other financial derivative. You’re an option, whose value is only as good as it’s ability to reload a pistol, and to have the luck to pick the right bullets.
JACK What are you trying to say?
TOM You’re bad stock, Jack. If I was your boss, I’d dump you as fast as I could.
Roland presses the barrel of his GUN into back of Tom’s head. Tom freezes.
ROLAND That’s why our boss hedged his bet on a second gun.
Bang!
May 6th, 2008 at 8:25 am
ANGEL The Pendleton Vertex. That’s the last thing he said?
FRED Well, “gluk errk.” But I think he was choking on blood.
GUNN Whatever it is, it’s bad. Means Angel’s time is up.
WESLEY It doesn’t show up in any of the prophecies.
WOMAN’S VOICE That’s because it’s not a prophecy.
Enter LILAH MORGAN, Wolfram and Hart’s junior partner and Wes’s sometime bedmate.
LILAH The Pendleton Vertex is an instrument. We invented it.
FRED Like an evil corporate flute?
LILAH A financial instrument. A derivative. (seeing blank faces, Angel) Two hundred years on Earth and not one business class.
ANGEL Been busy saving the world.
LILAH So have we. It’s not all Armageddon, Angel. Wolfram and Hart has signifiant investments in this dimension, and the Pendleton Vertex helps offset the risk.
WESLEY (suspicious) Offset how?
LILAH We all know the vampire-with-a-soul plays a big role in the endgame, but no one’s sure how. So one of our quants in infernal securities — Pendleton — put together a package based on all the variables: Angel, Angelus, Buffy, the Gogolurn, et cetera…
GUNN What’s the Gogolurn?
WESLEY I’m more worried about “et cetera.”
LILAH The derivative is like a hedge: if Angel stays good, we gain. If Angel goes bad, we still gain.
ANGEL If that were true, you wouldn’t be here.
LILAH See, you do have a business instinct. The Vertex has been stable for decades. Now suddenly, someone’s been selling the security short, betting the farm that you don’t live until sunrise. Which, given our position, could be…expensive.
ANGEL So you’re here to protect me?
LILAH I’m just here to cover our assets.
May 6th, 2008 at 8:58 am
INT. WINE AND COCKTAIL BAR – NIGHT
[SEB, 32, handsome, sits opposite an attractive woman - CATE, 29. Both have extraordinarily colourful drinks with pineapple slices clinging to the sides of the glass. They are 'Speed-Dating'. A bell rings to signal the start of the next round.]
SEB: So, [Looks at badge on CATE'S chest] Cate, what do you do for a living?
CATE: I’m a model.
SEB: Bet you get to hang out with the all top designers?
CATE: Sorry?
SEB: What’s the gossip from the catwalks?
CATE: I’m not that sort of model. I don’t wear clothes.
SEB: Whoa! I knew this evening would be a good investment of my time, and money. I turned down a lot of options to be here tonight.
CATE: I model for an art class at the University.
SEB: Inspirational.
CATE:[Shrugs] Has it’s ups and downs. What about you?
SEB: I’m in banking.
CATE: Oh. [BEAT] Doing what?
SEB: Derivatives.
CATE: Come again?
SEB: Derivatives.
CATE: Erm… You gotta help me out here, Seb.
SEB: How long you got?
CATE: I think we’ve got 22 seconds left.
SEB: It’s like I pan for gold. Except the global economic riverbed isn’t yielding any treasure at the moment.
CATE: That’s a tough gig.
SEB: But don’t let me drive you so wild with excitement you decide to hail a cab and we wind up back at my chic bachelor apartment and fall into bed… Purely to help take my mind off my fluctuating, highly-pressurised career. So, do we have a date?
CATE: Sorry. I’m looking for a man with prospects.
May 6th, 2008 at 9:10 am
Kurt Godel: I bet you that this sentence is a derivative.
Bertrand Russell: Hey man, no dice. I’m not going to let fall for that textually self-referential, incompleteness tripe again.
Kurt Godel: The joke’s on you Bertrand! It really is a derivative.
May 6th, 2008 at 9:50 am
INT. CLASSROOM-DAY
Max looks around the room. Books, papers everywhere. Large charts hang on the wall defining various financial terms. SHEILA his potential witness seems unconcerned that a police officer wants to talk to her. She is attractive like if he actually had a life he’d bang her in a minute.
MAX Professor, you worked with the victim Pete Meyers?
SHEILA (laughs) Not exactly.
MAX Then he?
SHEILA I paid him to be a derivative.
MAX Derivative?
SHEILA (smiling at her own joke) I’m an economics nerd, Officer. Some women have boy toys I have–had– a derivative.
MAX I’m not following. You had a relationship with this guy?
SHEILA He was my option, insurance against some future event–a derivative.
MAX And you paid him for what?
SHEILA To be available. If I needed to use him I could. Depending on a future event. A derivative.
MAX Uh huh. (then getting it) A derivative is a economic term?
SHEILA It’s a financial instrument. It has no value of its own only from something else. That something else being a future event.
MAX Sounds like Pete–no value on his own. When did you last see him?
SHEILA Tuesday. I had four lectures that day. I got bottled up that day so I sent him–
MAX To the Fourth Street bridge to buy drugs?
SHEILA (not expecting that) I get high from reading stock reports.
MAX He was a drug addict, Professor.
SHEILA Every investment has a risk.
May 6th, 2008 at 10:12 am
INT. NYC — PARK AVE — TOWNHOUSE — LIVING ROOM — DAY
Two yuppies, MOMMY and DADDY, perch on a sofa in their light, airy “parlor,” addressing their seven-year-old GIRL, who sits in a chair, opposite.
DADDY Sweety, the reason Mommy and I called this family meeting is because there are going to be a couple changes around here, which–we’re not afraid of change–
MOMMY It’s for the better–
DADDY –change is great. But the important thing is, it’s not your fault.
(Beat. The GIRL’s way ahead of them; she’s not an idiot.)
GIRL So you’re getting divorced.
DADDY Oh, no no, God no, nobody’s getting divorced.
MOMMY We love you too much to do that.
DADDY That’s right.
GIRL So, then… what?
(Tiny beat.)
MOMMY Honey, your Daddy is going away for a bit.
GIRL Going away?
DADDY Now, it’s just for a little while, so don’t you worry.
GIRL Where are you going?
DADDY Well, it’s actually a very special secret. It’s for the government, special government business–
MOMMY Honey, have you ever heard of minimum-security prison?
DADDY That’s enough, Mommy.
GIRL You’re a criminal?
DADDY Honey, trust me, you don’t want to listen to everything Mommy says.
MOMMY Oh, don’t lie to the her. (To her GIRL.) Yes, honey, Daddy has been convicted of white-collar crime.
DADDY Sweety, have you ever heard of entrapment?
MOMMY Oh, sweet Jesus, not this again.
DADDY Entrapment is when somebody tries to get you to play, say, derivatives markets–
MOMMY –just tune Daddy out when he does this, sweety–
DADDY –with money you’ve borrowed, on a temporary basis, from your company.
GIRL You stole your company’s money?
MOMMY That’s right, and then he lost his company’s money just like he lost ours.
(Beat.)
GIRL How?
DADDY Well, um… I made some investments in derivatives markets, which I thought would work out, and I’d pay back all the money, you know, but…
GIRL What’s “derivatives markets”?
DADDY What’s–uh. Good question. Well…
MOMMY Honey, you know when two people get married, and they promise to stay married for richer or for poorer, for better or for worse…
GIRL “Till death do us part.”
MOMMY That’s right. And you hope that that person will end up being a profitable earner, a father for your children–
DADDY –a caring partner, an understanding spouse–
MOMMY –but instead sometimes they’re a petty thief–
DADDY –or the embodiment of human greed–
MOMMY –or a paunchy, balding loser?
DADDY Or your friends call her “Loose Lucy”?
MOMMY And you have do what you said anyway, for the good of your child, and stay married? That’s derivatives.
DADDY It is amazing what truly shitty luck I have in that department.
(END SCENE.)
May 6th, 2008 at 11:10 am
EXT. LAS VEGAS – NIGHT
Two young men are crossing the street towards a night club. One, APEX (nickname) is an alpha male in a flashy suit, the other one, STEVE, a geek out of water. Steve is visibly nervous.
STEVE I’m not sure about this. Talking to women I just – I freeze up.
APEX We’re gonna change all that. Do the stuff I told you – the opener, the negs, the freeze out – you’re gonna get laid in no time. I’ll wing you all the way.
STEVE But what if I don’t? It’s the rejection that kills me. I don’t know how much more I can take.
APEX I’ll get you a derivative. You can’t lose.
STEVE A deriwhat?
Apex waves for Steve to follow him. They approach a scantily clad prostitute working the street. Her name is BLOSSOM.
Apex pulls pulls out a wad of money from his pocket and displays it.
APEX Hey, honey. This is for two o’ clock tonight. If this guy right here doesn’t get lucky, he’s your date. If not, you and me get busy. Deal?
BLOSSOM Nothing weird. I don’t do weird.
She grabs for the cash, but Apex withholds it.
APEX Two o’ clock.
Apex grabs Steve by the arm and steers towards the nightclub.
STEVE You’re teaching me to pick up prostitutes?
APEX No, it’s a derivative. You don’t score, you get laid anyway.
STEVE That’s a derivitive?
APEX Yeah, sort of. Better if you score, obviously, but either way you don’t go home alone. Come on.
They walk up to the doors of the nightclub.
May 6th, 2008 at 12:34 pm
A dank cellar dimly lit by rusted fluorescent light fixtures. To one corner GABIR, an Arab soldier in his mid 30s, sterilizes medical equipment.
GABIR Did you know that I studied finance before the war? In many ways it is a far more cutthroat profession.
Gabir holds a small medical handsaw up to a fluorescent light and examines the sharpness of the teeth…
Behind the blade we see RAHEEM, a beaten, bloodied yet determined man gagged and bound to a metal chair.
GABIR But my Father always taught me that a man who does not understand the complicated world of finance, is a man who shall never be able to truly provide for his family.
Gabir places the handsaw on the bench and paces across the room…
GABIR For instance, derivatives. It can be confusing to the average person. But essentially it is an asset, one that derives its value from another initial asset.
Gabir wrestles open a massive steel door revealing –
A terrified TWELVE YEAR OLD GIRL strapped to a wooden chair.
Raheem thrashes in his chair.
GABIR Now if that initial asset pays off, the derivative becomes valueless and can be… released. However, if the initial asset should falter, well then I could at least take comfort in knowing that I have a security, which while may pay off less, shall still yield benefits.
Gabir smiles charmingly at Raheem, who hangs his head in defeat sobbing.
He slides the steel door closed, steps back to the bench and picks up a pair of pliers, which he examines in the light…
GABIR Shall we begin?
May 6th, 2008 at 12:58 pm
INT. BEDROOM – NIGHT In the huge king sized bed. Emily straddles John below her. They are naked and covered in sweat. She moves her body up just a few inches and holds that position…
EMILY Tell me about your job again.
JOHN My job?
Emily slides back down.
EMILY Yes. Your job.
Back up again.
JOHN Derivatives?
Down. This time faster and harder.
EMILY Yes.
JOHN Now?
Emily rolls her eyes and rolls off of John.
JOHN First one places an order.
Emily is back on top of john in a heartbeat.
EMILY (Sultry) An order for what?
She slowly slides down again.
JOHN Could be a lot of different things. Could be a Stock.
She arches her back and begins moving faster.
JOHN (CONT’D) Uh, could be a foreign currency. You, uh, place the order with a sort of deadline.
Emily grabs the hair on John’s chest in her fist like Lady Godiva grabbing the mane of her galloping horse. She intensifies her thrusts.
JOHN (CONT’D) Ow! Then you… you…
Emily slaps him.
EMILY Concentrate!
JOHN You place the order and specify the amount and the time table with whom you conducting the transaction.
EMILY Details!
Emily pins Johns wrists to the bed and turns it up to 11.
JOHN If it is a future and not an option you have to take delivery if you cannot execute the order. Oh, god!
EMILY And?!?! Tell me!
John and Emily are both close to the event horizon.
JOHN At the predetermined time, you execute the trade! Jesus!
Emily screams out in ecstasy and collapses next to John on the bed. John is breathing hard. Emily just smiles and looks unfazed.
JOHN (CONT’D) Why did you want to know all that right then?
EMILY I have some wall street guys I have to meet tomorrow. Plus, you lasted more than a minute that time.
She winks at john, climbs out of bed and heads for the bathroom.
JOHN (after Emily) Wall Street guys? Emily?
May 6th, 2008 at 1:22 pm
INT. FBI OFFICES, FINANCIAL DIVISION – 7AM
KINGSWELL is an FBI Division Head. JACKS is a mid-thirties field agent with a hangover — think Bruce Willis in Die Hard.
On DISPLAY SCREENS we see photographs of 7 MURDER VICTIMS. All distinguished men in their 50s and in their beds.
KINGSWELL These seven men all woke up to a bullet in the head exactly eighty-two minutes ago.
JACKS And I thought I was having a bad morning.
KINGSWELL Spread across the country. Single shot sniper bullets. All within three minutes of each other. This was a coordinated attack. These men were assassinated.
JACKS So what do they have in common? Besides being dead.
KINGSWELL (pointing at pics) CEO of Walmart. CEO of Coca-Cola. CEO of IBM. You’ve heard of the Fortune 500. These were seven of the Fortune 10.
JACKS I guess Biggie was right, mo’ money, mo’ problems.
KINGSWELL You realize what this means for the financial markets.
JACS Stocks are going to fall?
KINGSWELL No, stocks are going to crash, burn and never walk again. We’re about to see a bloodbath that’s going to make this (points to photos) look like The Hannah Montana Show.
JACKS Who the hell is Hannah Montana?
KINGSWELL It’s a kid thing. Like The Cheetah Girls.
JACKS Who the hell are The Cheetah Girls?
KINGSWELL Field teams are working the scenes. What we need you for… we need you to do what you did on the Kleinhardt case.
JACKS I got lucky on the Kleinhardt case.
KINGSWELL Okay… then we need you to get lucky.
Jacks stares at the photographs for a long moment. Thinks.
JACKS We start with a list of people who are going to gain from this. What’s that thing you can do where you make money when the company doesn’t? An opposite stock.
ALEXIS It’s not called an opposite stock.
The men turn to see ALEXIS MCGRATH enter the room. Mid-twenties, smart and beautiful… emphasis on beautiful.
KINGSWELL Alexis works fraud. She’s your partner on this.
JACKS Beautiful.
Awkward pause. Alex blushes. Jacks realizes how that sounded.
JACKS I mean beautiful… to have a partner. Not that you’re not– okay, you know what, I know it’s not called an opposite stock.
ALEXIS You’re thinking of a put option. It’s a financial derivative — which means it’s not the stock, but its price is tied to the value of the stock. In the case of a put, inversely tied.
JACKS The stock crashes, the put goes up?
ALEXIS Way up. Like “buy an island” up.
JACKS So we just need a list of everyone who has bought put options recently.
ALEXIS So far ahead of you.
Assistants wheels in THREE CARTS stacked to capacity with PRINTOUTS. There must be a hundred-thousand pages on these carts.
ALEXIS Start with the A’s, shall we?
May 6th, 2008 at 1:42 pm
INT. EMPTY ROOM – DAY
Nerdy THEO cowers against the back wall as the horde of WHITE COLLAR ZOMBIES converge on him. A CCTV camera is perched on the ceiling, watching.
ZOMBIES (moaning) BRAAAAIIINNNSSSS!!!
THEO No, you want derivatives!
The zombies stop, a glint of recognition in their eyes.
ZOMBIES DEERRIIVATIIIVES?!
THEO Yeah, you know, the financial instrument? Its value changes according to changes in its correlating variable.
The zombies all tilt their heads in unison, confused.
THEO For example, a gas derivative would change in value depending on the changing price of oil.
ZOMBIES OOOOOHHHHHHHH!
THEO Yeah! It’s sort of like a hedge, if you will. A derivatives contract can minimize the risk for both parties. If you and I enter a futures contract, we both minimize risk by avoiding the future uncertainty of price and supply since we’ve agreed to a deal before the price or supply changes!
ZOMBIES EXCHAAANGE CAASH FLLLOOOWW?
THEO Yes, excellent! That’s a swap derivative, exchanging cash flow. There are also optional derivatives where I can buy the right to buy or sell an asset at some time, and future derivatives where we agree to buy or sell an asset at a given time.
ZOMBIES FINAANCIAL WIN-WIN SITUATIIOONN!
THEO Exactly! See, you guys don’t need brains, you’ve already got plenty!
The zombies perk up simultaneously.
ZOMBIES BRAAIINNSS!!!!!!
INT. MONITORING ROOM – DAY
JOHN AUGUST watches the monitors as the zombies chomp into Theo’s juicy head. He shakes his head, scribbling in a notebook.
JOHN Dammit! (sigh) I am going to train this army of zombie stock traders if it’s the last thing I do.
He slams his fist down on a large red button in front of him.
JOHN NEXT!!
INT. EMPTY ROOM – DAY
A grate in the ceiling opens. Nerdy JERRY falls from the ceiling and lands on the floor. He clutches his briefcase and peers down his glasses. The zombies turn towards him.
JERRY Uh, do you guys know what a derivative is?
The zombies stop and tilt their heads in unison.
THE END.
May 6th, 2008 at 2:00 pm
INT. GARAGE. DAY.
Two men, IZZO and RICARDO, stand near an old beater Buick. The garage is abandoned and in disrepair. Izzo holds Ricardo at gunpoint, a .9 millimeter chrome plated revolver at Ricardo’s temple.
IZZO You know why we’re here, don’t you?
RICARDO I could take a guess.
IZZO You ain’t got time for a guess. We’re here to talk about derivatives.
RICARDO Jesus, can you just do this?
IZZO I’m gonna to put something into that brain of yours before I blow it out.
RICARDO Look, I know this is what you do — you torture people with mundane bullshit before you ice them because you’re a sick fuck. But let’s just skip ahead to the part where you–
IZZO Shut the fuck up and listen.
Izzo pulls two matchbox cars out of his pants pocket. One is painted red and the other green. He dusts off a spot on a nearby work table and sets the cars at right angles to each other.
IZZO (Continues) These are two cars. Call them commodities.
RICARDO Jesus, can you just pull the trigger?
IZZO In a minute. Say this car here (points to the green one) is mine and that one there (nods at the red one) is yours. You fuck my wife.
RICARDO I never fucked your wife!
IZZO I’m makin’ an example here!
Izzo pistol whips Ricardo into silence. Blood purls around his eye socket.
IZZO PRETEND you fucked my wife. I know you been fantasizin’ about it for years so it shouldn’t be hard. Now I got something on you, right? You gone against the code we live by. If I want, I could kill you and Don Rudy wouldn’t have nothin’ to say about it. But no. I do this. I say, “Someday I will call upon you to do a job for me, a favor, and you must do as I say.”
RICARDO Ain’t that from ‘The Godfather’?
Izzo makes like he’s going to give Ricardo a mouthful of chrome, and Ricardo shuts up.
IZZO As I was sayin’, you got to do me a favor. If circumstances change, if, say, I don’t know, I’m involved in a heist and my car wheels get blown out and I got to hoof it across Bensonhurst to Flatbush, then I might call you up halfway there and tell you to come give me your fucking Maserati. See, my circumstances changed and the underlying asset, your guinea rocket I know you palmed off that Turkish cargo ship last week, becomes mine in the swap. My wife’s honor, your silence, and I get the car. We’re square. See? That’s called a derivative. Now let’s talk about types of derivatives. First, there’s futures. Futures are–
Ricardo lunges for the gun, there’s a struggle, and Ricardo points the gun at his head and pulls the trigger, ending the torture. He falls to the ground.
IZZO Class dismissed.
May 6th, 2008 at 2:03 pm
INT. LARGE AUDITORIUM STYLE CLASSROOM
A Ben-Stein-type professor is rattling on about derivatives with varying degrees of volume.
PROF. STEIN Wikipedia defines derivatives as…
Seated in the upper row is TERRI, a pretty red head. HARRY, a scruffy classmate makes eye contact, gets a smile, and sits next to her.
TERRI Hi.
HARRY Hi.
Terri scribbles on her paper and breaks her pencil.
TERRI I’m such an idiot. Can I borrow your–
Prof. Stein has a temporary increase in volume.
PROF. STEIN … financial instrument…
HARRY (beat) Sure, but its–
PROF. STEIN …value changes in response to underlying variables…
TERRI (nervous laugh) We could just–
PROF. STEIN … take the opposite position…
Harry’s cheeks are noticeably red as the professor dips continues inaudibly.
HARRY Would you like to borrow my pencil?
With a blush of her own, Terri takes the pencil and begins writing. Very, VERY gently.
TERRI Thanks. I always snap mine in half.
PROF. STEIN This technique is commonly used when speculating….
Terri buries her face in her hands, as Harry shakes his head in disbelief. With a light bulb moment, Harry scribbles something on a piece of paper and holds it up for Terri.
ANGLE: ON THE PAPER. IT READS:
Coffee house? Noon?
WIDEN TO SEE: SCRIBBLINGS ON THE CHALKBOARD RIGHT NEXT TO HARRY’S PAPER. THEY READ:
er. Where the two parties agree to exchange flows and exotic options.
END
*NOTE: Prof. Stein’s dialogue comes entirely (slightly edited) from the wiki entry on derivatives.
May 6th, 2008 at 2:06 pm
Intercut: DAN on one of the last 7-11 pay phones, with ERNIE, desk-bound stockbroker, but with blond dreads and rainbow hemp T-shirt.
Dan forgets to look over his shoulder as he hears Ernie’s news.
Dan: You did what?
Ernie: I put it all into derivatives.
Dan: The money I stole?
Ernie: On the phone, Jesus!
Dan: Derivatives of what?
Ernie: You’ll like this. Microware.
Long strangled beat.
Dan: You put my money into derivatives of Microware.
Ernie: (grinning) Yeah.
Dan: Microware. The company I’m going to drive into bankruptcy for stealing my patent.
Ernie: I know. It’s beautiful.
Dan: Microware isn’t going to exist in six months. How the hell am I going to –
Ernie: Credit derivatives, dude. They pay you when the company goes under.
Longer beat. Digesting.
Dan: How illegal is that?
Ernie: Nah, man, totally legit. Even if – Even if… You’ll get ten years for the original fraud, out in six. You hafta give back everything you stole there though. This way – if they even twig to it – you still come out with… three or four billion.
Dan: Six years for … four billion dollars.
Ernie: Insurance industry, man. The mafia wishes they had a racket like this. (Ernie thinks of something else… just now) You just better hope the government doesn’t bail Microware out.
Dan: We are so screwed.
Ernie: Who’s ‘we’, dude? I took my commission already.
May 6th, 2008 at 2:54 pm
Int. FORTUNE TELLER’S PARLOUR – NIGHT
PERKINS, 30 and slick, enters the dark room.
KITTIE, 25, dressed gypsy-chic, indicates a chair across the felt-covered table opposite her.
Perkins sits, surveys the room.
KITTIE: Momentarily, I shall fall into a trance. If the worst happens, press here (indicates an intercom button) and my assistant will rush in to pull me back from the Beyond. How did you hear about my work, Mr?
PERKINS: Perkins. I got a coupon on my car. I’m a curious guy, a curious thinker. It seemed like a hot deal. I’ve got a smart nose for a hot deal.
KITTIE: Yes. My gift has been newly given. I’m just starting my business and coupons seemed the right step. After consultation with the Beyond.
PERKINS: So what do I do? Ask you questions?
KITTIE: We wait. I will be overcome with the wisdom of the Other Realm. The spirits will reveal their Truths through me.
Kittie shudders and slips into trance.
KITTIE: The amulet!
Her gaze is glazed. She produces an amulet from a felt bag, places it on the table.
PERKINS: Listen, is my wife cheating on me? Ask them.
KITTE (in a possessed voice): No. You’ve just had a wonderful vacation…Aruba. Aruba!
PERKINS: Not bad, that’s right. I thought she was flirting with the chef.
KITTIE: No. You. It’s always been you. Ever since Br…Brow…
Perkins hangs on her every word now.
KITTIE: Brown!
PERKINS: Shit. Yes, Brown. She was a TriDelt. The future? What about the future?
KITTIE: Another child…a boy-child. Another boy-child.
PERKINS: Yeah, yeah…(suddenly) What about soy?
KITTIE: Soy? The spirits! Confused…soy?
PERKINS: Will soybeans go up or down? Soy beans, dammit!
Kittie sways in her chair.
KITTIE: Fading…
Kittie blinks and looks at Perkins.
KITTIE: What happened? The spirits screamed of soy. Why? What did you ask?
PERKINS: I’m a derivatives trader. For soy beans.
KITTIE: My incorporeal contacts were confused. They fled. Next time bring a palm frond to make amends. What’s a derivatives trader?
PERKINS: I lock in a price now for an option to buy soy beans in the future. If soy goes up, I trade the locked low price. I want to know where soy prices will go.
Kittie throws her head back and grunts. Her eyes glaze again.
KITTIE: The market will…will…will…soy!
She collapses on the table.
KITTIE: It’s gone. So close to revealing something…something big.
PERKINS: Listen. I want a weekly consult. You’re good.
KITTIE: The spirits tell me what they will. I’m just a vessel.
PERKINS: Well, whatever. I want a standing weekly appointment.
Kittie produces a contract.
KITTIE: Every Tuesday at ten. Sign here. $75 a session.
Perkins signs.
Smiles glibly.
PERKINS: See what I did there is a derivative deal. I’m buying the right to access your information at a set price speculating that the value of the information is going to increase as word gets out how able you are to access the spirits.
KITTIE: You possess a keen business mind, Mr. Perkins.
PERKINS: Yes. Yes, I do. Very keen.
He pays and exits.
Kittie presses the intercom button.
KITTIE (into intercom) Put Mr. Perkins down at $75 weekly, Tuesdays at ten. And make a note in the file to keep reading his blog.
May 6th, 2008 at 3:47 pm
WOMAN AT BAR You got fired for trading derivatives at work?
MAN AT BAR No, I got fired for demonstrating how they work.
WOMAN That doesn’t sound like something you’d get canned for.
MAN Actually, I was trading grades for blowjobs.
(beat)
WOMAN How’d you get caught?
MAN At the end of the semester, I forgot to change a student’s grade from a D to an A. And she told the dean.
WOMAN Would you like to come back to my place and look over my portfolio?
May 6th, 2008 at 5:17 pm
INT. KITCHEN – DAY
BUDDY sits at the kitchen table, hunched over his calculus homework. He scrawls integration symbols, graphs, and sine waves all over his notepad.
He doesn’t notice his DAD walk in behind him. Buddy SIGHS, exasperated, and tosses his pencil down.
DAD What’s the matter, Buddy?
BUDDY This stupid math homework. I don’t understand it at all. What’s the point to derivatives, anyway?
DAD Derivatives are very important. They’re a way of managing risk in an uncertain economy. Instead of investing in a company directly, you hedge your bets against future losses.
Buddy stares at his math book.
BUDDY (baffled) That doesn’t sound like what the teacher explained at all.
Dad ruffles his kid’s hair.
DAD Well, son, your teacher doesn’t work in the real world.
He walks off, satisfied with a fathering job well-done. Buddy drops his head in his hands, more confused than ever.
May 6th, 2008 at 5:18 pm
INT. BRANT BUILDING LOBBY – DAY
Eckes and Rosenfeld are walk-and-talking to Rosenfeld’s office.
ECKES Stop, you lost me. What was Laszlo dabbling in?
ROSENFELD Weather derivatives. Let’s say you’re Gruber Foods. Your bottom line depends on a good wheat harvest, there are any number of things that can mess that up, and you want to hedge your bets. So you buy up some weather futures.
ECKES Okay. Wait, what?
ROSENFELD Weather futures. They’re like an insurance policy on the weather, only no insurer would be crazy enough to put money on the weather. So you go to an options exchange and find someone who’ll sell you a contract that guarantees you a payout if certain things that aren’t likely to happen do happen.
ECKES Like a snowstorm in the middle of Kansas in July?
ROSENFELD Well…I’m sure they were thinking more along the lines of a few days of extra rainfall over a 60-day period. But yeah, pretty much. It’s all about variations from the norm. The seller’s taking a calculated risk that their forecasts will be close enough to accurate that they’ll get to keep all the money from the sale.
ECKES So Laszlo was buying insurance policies which paid out if the weather did something unexpected?
ROSENFELD Precisely. It’s a great investment opportunity if you just happen to be able to control the weather.
ECKES Yeah, well, something tells me the folks in the derivatives market don’t know about super powers yet.
May 6th, 2008 at 6:32 pm
INT. OFFICE CUBE
MATT, 35, confused and sloppy-looking, stops surfing the internet and picks up his phone.
MATT Hey, dad?
INTERCUT WITH:
INT. OFFICE
FATHER, 60, who looks like he could own the Harvard Business School, puts down the latest issue of Vanity Fair.
FATHER Are you at work?
MATT I’m taking a break.
FATHER I swear if Mr. Cramer fires you, I’m kicking you out.
MATT I need to know what a derivative is.
FATHER What the fuck for? I’m busy.
MATT There’s this screenwriter, John August, and he’s having a contest.
FATHER John August? Who the fuck is that? You know son, if you put as much time into getting a girlfriend as you did into your failed dreams, you’d be dating Miley Cirus right now.
MATT If I were dating Miley Cirus, I’m be in Fed Pen right now. Actually, I need to know because I want to sell my soul and join the family business.
FATHER Listen carefully cause I’m not repeating this. Stocks and bonds are real things. A derivative is a secondary transaction on that real thing. For example, if I were to buy stock in you moving out of the house in the next ten years – that’d be a futures contract. That’s a derivative. And if I did buy that stock, I’d go broke.
MATT Fuck you. I’m moving out.
FATHER Yeah. Yeah. Mom’s making meatloaf. Be home by seven.
May 6th, 2008 at 6:34 pm
MAN: What’s a deriative?
WOMAN: What’s it to you?
MAN: I’d like to know.
WOMAN: You are a curious man.
MAN: I am indeed.
WOMAN: Well I wish I had an answer for you.
MAN: But you do not.
WOMAN: I wish I did.
MAN: You said that already.
WOMAN: I love you.
MAN: I love you too, derivative.
May 6th, 2008 at 6:46 pm
INT. HOME OFFICE – NIGHT
Neat yet tiny – maybe six feet across – with the glow of a computer screen providing the room’s only light.
JOHN And…begin.
Eyes bloodshot and face unshaven, JOHN grudgingly taps ‘return’ on his aging MacBook, submitting his post and cementing the notion that he’s officially lost the plot.
MALE VOICE (O.S.) Hold up there, Johnny Boy. They’re aspiring screenwriters, not CFA’s.
Startled, John spins around, only to find his den as empty as the overturned bottle of Jack nestled snugly between a carton of Zantac and a six-pack of PBR.
JOHN Who’s there!?!
MALE VOICE (O.S.) Easy John. Your house isn’t haunted in real life.
In a poorly executed bit of stealth, John eases his left arm across the desk, reaching for his letter opener.
JOHN Then where are you?
MALE VOICE (O.S.) You can lose the dagger, man. I’m up here.
John looks up to see a RAVEN, dark and brooding, perched atop his marble bust of Terrence Malick.
JOHN (sotto voce) Mike was right. I do need some time off.
His sotto needs work. The Raven chuckles, amused. John… not so much. He curls up in the fetal position and begins tugging at his bare scalp as if pulling out imaginary tufts of hair.
RAVEN (MALE VOICE) Alright, John-John. We’re gonna need to calm down and work through this. Can we do that?
John nods reluctantly.
RAVEN Okay. So what’s with this challenge?
Hesitating…
JOHN Well, Alex Young wanted this on his desk last Monday. And I’m fresh out of ideas.
RAVEN Honestly John, who writes their ‘first-dollar gross’ spec about financial analysts?
JOHN I thought they were due. Come on Raven, you gotta help me.
RAVEN Haven’t you asked any of your friends in the biz? You know, the professionals?
JOHN Think I didn’t try that already? Ted and Terry lectured me about how the world of finance isn’t ‘high concept’ enough, the Wibberley’s teased me that they’d fix it in the rewrite, and Craig just kept ranting about how all writer’s block can somehow be traced back to Patric Verrone.
RAVEN Wow, tough crowd.
JOHN So what am I gonna do, man?
RAVEN Okay, John. Just use this.
The Raven flutters down, landing on John’s shoulder. He pokes his beak into John’s ear and begins whispering.
RAVEN (inaudible) Psst, psst, psst.
This continues for some thirty seconds, before the Raven inches backwards from John’s ear and returns to his perch.
JOHN Wow, did you just think of that now? How’d you come up with that so quick?
RAVEN Well, I am a talking Raven, after all.
JOHN Hmmmmm. A hedge, eh? So that huge holding deal from FOX that she turned down? They were hedging against her becoming a gi-normous star, which would have cost them a fortune per picture?
RAVEN You got it.
JOHN Ha! I bet Tara Reid is kicking herself now.
RAVEN You’re assuming she’s in a state where she can stand…
JOHN Oh, Raven. Well, that’s pretty good. Thanks.
But then John pauses. A worried look creeps across his face.
JOHN Wait, you’re not thinking of becoming a screenwriter, are you?
RAVEN Well, the thought had crossed my mind.
Then, a sparkle forms in John’s eye.
JOHN Oh? (into the hallway) Puggies. Attack!
From out of nowhere,
A PAIR OF VICIOUS PUGS
leap into the air, catching the Raven by surprise. The larger of the two snatches him off of his perch and drags him down to the hardwood.
To John’s delight, the dogs proceed to eviscerate the poor bird, leaving nothing but a pile of bloody entrails for Monday’s visit by Molly Maid.
JOHN Quoth the Raven? (* evil laugh *) Nevermore!
FADE OUT.
May 6th, 2008 at 6:54 pm
[Dowder is a middle-aged suit, he has a cockney accent which coincidently accents his suit very nicely, and a slight shadow of a beard. He holds a cup of whiskey in his hand, half full, 3 ice cubes. Pip is a noticeably meeker than Dowder, but by no means sheepish in his intent. Arrogance fuels Dowder, confidence in his abilities fuels Pip. A third man stands by the lamp in the room, he wears a mediocre suit elegantly and seems nervous, he too holds a cup of whiskey, his hand shakes. All are seated in a office.]
Third Man: Nothing now is what I got — nothing. Wheres the money she’ll say, where’d it all go man? She’ll ask — thats exactly what she’ll ask (takes long sip from the cup and gags a little) that bitch, she knows, I’m sweating bullets, everyone’ll know!
Pip: Man lets take a step back, we can bounce back, no problem at all. This is the reason we set-up derivatives, instances like these (opens a folder). Take a look at the Zemmer Account, will you —
Dowder: Pip. Man. I think we’re making a large ordeal out of very little.
Third man: A big deal!? A big deal out of nothing he says (another long sip). We got nothing to make a big deal out of, cause thats what we got Dowder, nothing!
Dowder: Thats what we have? What you have.
Pip: Dowder?
Dowder: Look here man, take a seat. Pour yourself another drink. Better yet stand up — stay standing. Leave the drink alone and listen, listen for a goddamn second. You need to calm down a second, you ready? Good, now —
Third Man: What (mumbles, shrugs)
Dowder: Man! You like jokes? On second thought take the seat, your knees are wobbling. You look like tree in the wind, jesus.
Third Man: Alright then, alright. (shakes less)
Dowder: Did I say joke? I meant stories. Everyone likes stories, allegories. Three guys walk into a bar, normal guys y’know. Its a hole in the wall place, shady, musky, dank — criminal, and you can smell it. The first of the three walks to the bar and the bartender asks “what’ll I be gettin’ ya?” putting a cup on the counter, and the guy says “a beer.” Bartender reaches under the counter and in a flash (opens a closed fist to a five finger display) plugs this guy one in the chest. Second guy sits on a stool and the bartender repeats “what’ll I be gettin’ ya?” gruff as hell, y–
Pip: What the hell is this Dowder, you know what this is, this is a joke. And we don’t have time for jokes Dowder, we don’t have a minute. The Zemmer–
Dowder: You’re ruining my rhythm Pip. Mans gotta finish a story — gruff as hell I said, raspy voice “what’ll I be gettin’ ya?” Same cup. Second guy says, “a beer.” Wouldn’t you know it though, bartender puts one right between this ones eyes. Third man — thats you — walks up to the bar, same routine as the last three, only this time the bartender takes a cup from him and fills it up, laughs a little even.
(beat)
Dowder: What’d he do different, what’d the third man do different?
(beat) (everyone looks un-enthused and mislead)
Dowder: He handed the bastard his cup upside down! Ha, how’s that for a kicker. Little humor saves your life. No way you could’ve known that though, not one bit. Point being, is the — (waves hand in the air in ciruclar motion)
Pip: The Zemmer Account —
Dowder: The Zemmer Account, is our upside down man. You don’t have to worry. The upside down is our derivative. Our back up plan. Its a retirement fund with a party hat, you know?
Third Man: You really need to tell that whole story?
Dowder: Little humor saves your life.
Third Man: (Small laugh) Alright Dowder, alright (third man exits, noticeably more calm, sets down cup on desk before leaving)
Pip: I’m actually glad you pulled that shit, I didn’t even think about going into derivatives (rubs eyes). For such a bastard you’re quick on your feet.
Dowder: Derivatives? The guy needs to calm down is all, the stock’ll bounce back.
Pip: You didn’t know the Zemmer account was back up?
Dowder: I’m not even sure what a derivative is. Thats why I work for shaky assholes like this guy (cocks head). Little humor saves your life.
May 6th, 2008 at 7:17 pm
INT. OUTER OFFICE – DAY
Quietly understated furnishing and a view from full length, high rise window speak of money, lots of money.
The door to the inner office is open. There is a hub-hub from the inner office and an occasional FLASH. A broken COFFEE CUP sits in a BROWN STAIN at the threshold.
Not quite model beautiful and obviously upset, JANE HELPFUL sits at a desk, not really seeing the COMPUTER MONITOR in front of her.
DAN GUMSHOE, a police detective in a rumpled suit, enters from the inner office, stepping neatly to avoid the spilled coffee. He pulls out a NOTEPAD and addresses Jane.
DAN GUMSHOE Can you answer a few questions?
JANE HELPFUL I…I don’t know…it’s a real shock.
DAN GUMSHOE You’ll have to talk eventually, better to get it over now.
JANE HELPFUL Yeah…I guess so…
DAN GUMSHOE You found the body when you came in this morning?
JANE HELPFUL Yes. He usually gets in before me, but I always get his coffee the first thing.
Dan looks over at the BROWN STAIN and nods his head.
DAN GUMSHOE That was about eight fifty?
JANE HELPFUL Yes, I called the police right away.
DAN GUMSHOE What did he do exactly?
JANE HELPFUL He was a stock derivative trader.
DAN GUMSHOE Some kind of stock broker?
JANE HELPFUL Not exactly. (beat) How do you make money on Wall Street?
DAN GUMSHOE Ah…buy low and sell high.
JANE HELPFUL Suppose you thought the stock price would go down. How would you make money then?
DAN GUMSHOE Ah…I don’t know.
JANE HELPFUL What if you could bet on the price?
DAN GUMSHOE Huh?
JANE HELPFUL Let’s say you could buy the right to sell the stock later at a set price. (beat) Well, if the price went down you could buy at the market and sell for a profit.
DAN GUMSHOE Why would anyone agree to buy the stock later at a fixed price?
JANE HELPFUL What is it that makes a horse race?
DAN GUMSHOE Huh. (beat) Oh, wait…a difference of opinion. Ah, they would if they didn’t think the price would go down.
JANE HELPFUL Right. Someone’s always willing to take the other side of a bet…for the right price, like setting the odds in Vegas.
DAN GUMSHOE Yeah, but how do you make money at that?
JANE HELPFUL By winning more bets than you lose.
May 6th, 2008 at 7:20 pm
INT. OFFICE — NIGHT
Amid a vast, dimly lit labyrinth cluttered cubicles, two haggard figures sip coffee from styrofoam cups and stare intently into the glow of computer screen.
JOE Stocks, junk bonds. Wow. This guy has his fingers in a lot of pies.
TRAVIS (frustrated) There’s gotta be something we’re missing.
JOE Yeah… Look… Derivative contracts… Jesus… Look at this. This guy made a killing.
Joe perks up, starts flipping through the screens with increasing interest.
For Travis, the remaining traces of youthful confidence and intensity on his tired face finally droop to a confused gaze at the numbers flashing by on the screen.
TRAVIS Derivative what?
JOE Contracts. C’mon Elliot Ness, didn’t they teach you that in college?
TRAVIS Elliot who? I was an English major.
JOE (laughing a bit) Your car, kid.
TRAVIS What?
JOE Your car. You buy it or lease it?
TRAVIS Lease.
JOE Imagine at the end of your lease contract the car was actually worth a lot more than the residual value of the car stated in the contract.
TRAVIS That’s how they work?
JOE Close enough… That’s how they worked for this guy anyway. (a beat) A little too often I’d say.
May 6th, 2008 at 9:16 pm
Mark and Simon are at the kitchen table. Simon is playing with his GI Joe. Mark is flicking through a collectors magazine.
Mark (putting down the magazine) I’ll buy that GI Joe off you.
Simon With what? You don’t have any money.
Mark Okay. In ten years I’ll give you 20 bucks for it.
Simon You’re crazy, in ten years it will be worthless.
Mark (getting up and walking away) Or it might be worth 1000
Dissolve to : Int. Trading floor Mark (shouting) I’ll buy a 1000 barrels of 2020 oil at 150 spot 75
May 6th, 2008 at 9:26 pm
INT. MANSION – DAY
JOHN AUGUST relaxes in his bubble bath jacuzzi, surrounded by adoring STARLETS who massage him and feed him grapes. John’s ACCOUNTANT sits next to him in the jacuzzi, wearing a 3-piece suit, soaking wet.
JOHN Diversify my portfolio! I’m making zillions off “The Nines” and I can only buy so many mansions.
ACCOUNTANT Very good, sir. We’ll purchase some derivatives.
JOHN Derivatives? Is that some sort of Hebrew delicacy? Clarify.
ACCOUNTANT Why don’t you just ask your blog readers to explain it for you?
JOHN I’ve already tried that. You should have seen the dreck they wrote back. Besides, what do I pay you for?
ACCOUNTANT (sighing) When a studio wants to buy your script, but doesn’t want to risk all their money, what do they do?
JOHN They option the script, so they can buy it at a future date. Crafty devils.
ACCOUNTANT Your perspicuity is matched only by your beauty, sir. I’m wiring millions from your Swiss bank account as we speak.
JOHN Top dollar! Then let’s away to my hydrofoil. The Peter Stark Alumni Coalition is having a meeting in our secret fortress. Soon, all Hollywood will cower at our feet!
May 6th, 2008 at 9:42 pm
INT. STUDIO APARTMENT – NIGHT DARRELL, mid 20’s, plays Sudoku while taking a dump. He rolls up his shirt and tosses his tie over his shoulder. EUGENE, mid 20’s, kicks a beer can across the living room as he plays Guitar Hero in his boxers.
EUGENE: If you want me to start paying rent I need to sound smart in my interview tomorrow. DARRELL: Alright. Let’s say in a perfect world you could walk up to Natalie’s door right now, knock, hand her a dozen roses, and she’d sleep with you. EUGENE: Oh man. Get me in that world. DARELL: Yah. Or, you could pay someone fifty bucks to guard her door. EUGENE: That way no one else can knock? DARELL: Right. Then you wait to see if she ends up in that new Adam Sandler Judd Apatow movie. If she does, the guard lets you knock first with your roses. EUGENE: So I can knock now, or pay and potentially knock on a movie star’s door? I think I hire the guard and wait. DARELL: Well my friend, you just bought yourself a derivative
Eugene hits the wrong note and loses.
DARELL: Hey wasn’t your interview today. EUGENE: OH SHIT!
May 7th, 2008 at 12:40 am
INT. DINER – 1930
Typical “greasy spoon”, jam-packed with the lunch crowd.
IN A BACK BOOTH
OLIVE, string-bean skinny, her raven-black hair tied tightly at the base of her neck, gazes adoringly at her sailor boyfriend, POPEYE, while she strokes his massive forearm.
She leans in for a kiss…
A COUGH from across the table causes them both to look up, but their companion’s face hides behind his open newspaper, whose headline reads:
PRICE OF BEEF EXPECTED TO PLUMMET BY THE END OF THIS WEEKEND
The newspaper lowers to reveal WIMPY, his yellow top-hat perched precariously on his fat head, his already thin mustache stretching even further when he shoots a sh*t-eating grin at the approaching WAITRESS…
WIMPY I’ll gladly pay you Tuesday, for a hamburger today.
May 7th, 2008 at 1:07 am
INT/DAY BROADWAY RESTAURANT ON THE 8TH AV & 86TH
KNOWITALL,32,tall American Psycho looking with 8000 dollars Armani suit, swallows red thuna sashimis LAYMAN, 33, Steve Buscemi face, 30 dollars suit, loosely playing with Knowitall s Blackberry, finaly opens his mouth
LAYMAN So you re in business stuff and all now huh?
KNOWITALL Yep. Somehow, the future is my business. I buy it and resell it to those who can wait for it, and take my cut now. Unemployement rates, war & peace, Katrina… We bet our investors ‘big money on what s gonna happen in the world, so we cant afford to loose
LAYMAN (smiles) You hire psychics?
KNOWITALL (grin) I said we can’t loose. We use derivatives.
LAYMAN Ah, I see. It s..When… Hm…What is it?
KNOWITALL Well… Right : We turn the world into maths, then we use probabilities and shit to predict the next figures
LAYMAN Wow, like in this Asimov book, Foundation? Guys predicting stuff to save civilisation?
KNOWITALL Yeah why not… So we call or put our eggs accordingly with contracts compensating our loss above or under thresholds we have forecasted. Forward rate agreement, capfloor, rate swaps, stuff like that…
LAYMAN That works?
KNOWITALL (same grin) Look at my pants, look at yours. I give you one: Lower temperatures in Norway means more profits for the local gas Company, for heating, right? . If our stats nerds calculated that for next winter, temperatures will be low, we invest in the Gas company with a contract stating that above, say 08 degrees celsius average, the contract is cancelled or that we get a conpensating fee. But there s a prettier girl…
LAYMAN Prettier than betting for sure??
KNOWITALL Yep. We derivate time, future profits, to suck em back to now. We lend 100 at 10% for 10 years to someone who, say, wants to buy a house. But we don’t wait the 10 years, we sell the loan NOW as a derivative product that WILL worth 100+ 10 of interests in 10 years to another lender for a lil’ less than 110, say 105. We get our 100 back, plus the extra 5 without waiting 10 years nor lending anything.
LAYMAN Wow. Your fancy pants look like it s more than 5.
KNOWITALL Hm.. Actually the same day we get those 105, we lend them again at 10% and sell this new loan to another bank for a little less than 105+10% and…
LAYMAN… …And so on?
KNOWITALL Yup. Derivative allows some kind of leverage. The same day I can make our 100 become 105,107,109..Without waiting a second nor actually lending any of our 100… Just need to find someone who want to do that. (laugh) The all of you lil’ share holders do! Not us.
layman put his chinese sticks down, rubbing his chin.
LAYMAN But…What if the original borrower eventually fails to refund the whole first 10%, not to mention the 100? Everybody will need to cash in what they expected from the stuff you sold?
KNOWITALL Wow , credit crunch! But our stats nerds never fail… 29,73 and 87 were bad luck… Anyway the Fed & the tax payers would cash in to save us cuz they need us for loan or for their savings
LAYMAN Basically you never wait and you never risk anything. You let that to others… It s like they d have to refund now what you earned earlier!
KNOWITALL Hm. But look at my pants again, I would have spent my cut for ages already! How could I pay all that by myself? Plus, others ‘future is none of my business. You eat those?
Layman s busy thinking. Knowitall picks his avocado sushi up.
May 7th, 2008 at 5:25 am
DR. PAPERWEALTH
INT. PRESIDENTIAL SITUATION ROOM. [The President, the Cabinet and Joint Chiefs of Staff are gathered around a conference table. There’s a large LED screen in the background displaying a stock ticker, a real-time graph of the Dow Jones Industrials plummeting, and a video screen of a talking head reporting from Mad Max-style scene of Armageddon-like destruction in downtown Manhattan.]
[Dr. Paperwealth, a wild-eyed, wheelchair-bound scientist, spins about from the screen to face the camera.]
PAPERWEALTH Mr. President, we may have an opportunity here to replace the entire financial system with…heh heh…derivative contracts. The sub-prime mortgage catastrophe, the financial engineering that jammed the system with hundreds of billions of fraudulent securities, the ensuing damage to banks and funds around the globe—all of this has left the old system in complete disarray. Traditional investments are in tatters. The world is looking for something better than [snickering, belittling] stocks, bonds, loans and savings accounts.
PRESIDENT OILSHALE Dr. Paperwealth, you know I always respect your ideas. But didn’t derivatives and financial engineering get us into this mess?
PAPERWEALTH On the contrary, Mr. President. The problems is that we didn’t have enough conviction about using derivatives. There are still people out there who insist on antiquated financial planning techniques. They buy stocks and bonds with their…heh…own money. They reduce their risks by [stifling a chuckle] selling their investments and putting their money in the bank.
SIMPLESWORTH (smallish, bespectacled cabinet member) I do that…
PAPERWEALTH (dismissively averting from Simplesworth) The world needs to recognize the potential of derivatives! [Getting evangelical now.] They need to know they’re as simple as making bet! No money down, and all profit if you’re right! Why buy an investment…when you can MAKE A BET on an investment?
GENERAL CIGARELLO But isn’t that just like borrowing money to buy something? Don’t derivatives just increase risk? What do they call that…
SIMPLESWORTH (schoolmarm-ishly disdainful) Leverage.
GENERAL CIGARELLO Yeah, that’s it. Leverage. Are you talking about [as if he were a Red-baiter talking about communism] LEVERAGE?
PAPERWEALTH No, no. Derivatives are a bet. You can bet against an investment as well. You can hedge your risk. Of course, that’s not nearly as exciting as the fun upside adventure thrill of [evangelical again] TAKING RISKS!
PRESIDENT OILSHALE So exactly are you recommending, Dr. Paperwealth?
PAPERWEALTH Mr. President, we will build a state-of-the-art derivatives trading room in the vaults of one of our now-defunct money-center banks, deep in the granite bedrock of Manhattan. We will staff it with the best traders, the buccaneers who profited from the current financial crisis—Paulson, Dimon, Griffin, and so on. We will hire a support staff of shapely female Ivy League graduates. They will be selected for their appearance in a sheer wrap dress and stiletto heels, and their willingness to undergo cosmetic surgery. This will keep the room’s level of testosterone appropriately elevated. As a precaution, we will strike sexual harassment laws from the books.
SIMPLESWORTH Maybe this is a good idea after all…
PAPERWEALTH And we will keep a steady flow of delivery boys to the floor bringing pizza and White Castle hamburgers.
[getting excited now, starting to make buy and sell gestures like a trader in the futures pit]
Mr. President, this central trading room will enable the free flow of financial risk throughout the world. All kinds of derivatives will trade seamlessly, and risk will be distributed efficiently. Without the burden of cash investments to slow the work of the markets, all risks—interest rate risk, credit risk, stock risk, commodity risk—all of them will flow to the people best able to take them.
And there will be no cash involved! [shifting into sotto voce now to inject some mumbleswerve] At least not initially. There will be profits and losses later of course.
PRESIDENT OILSHALE I like that. I might want to select the traders based on campaign contribution histories. We could work something like that couldn’t we, Dr. Paperwealth?
PAPERWEALTH [blurting out now, as if he had Tourette’s syndrome]
Six bid for twenty! Bought ‘em! Seller at eight! YOURS!
[now rising out of his wheelchair]
Mr. President! I’M LIQUID!!
END
May 7th, 2008 at 5:46 am
@RS (#52):
That was chucklesome and brilliant.
May 7th, 2008 at 5:59 am
INT. FARMHOUSE – KITCHEN – CENTRAL IOWA – DAY
JOHN (76) sits slumped in a chair at the table. His son, TODD (45) sits across from him and next to BILLY (50), the family banker.
TODD So, do you understand pop?
JOHN No, I surely don’t. I got a record crop and I can get $5.58 a bushel today and you’re sayin’ I have to sell it all to them for $3.95? No, I surely don’t understand them numbers.
TODD Remember last year, when prices were down under $3, and there were all those other farms losing their crops and going out of business? Well, were looking at losing a lot of money if the price kept spiraling down and they were going to lose money if there wasn’t enough corn available and they had to buy exclusively from us. So I put us into a derivative contract, a futures contract to be specific, to sell 150,000 bushels at $3.95 for this year. It was a win-win for both of us at the time.
JOHN So you did this to me?
TODD I did it for you. It was to reduce risk and make sure you were okay in the future.
BILLY John, I know it doesn’t make sense to you now. But at the time, it seemed like the right thing to do. There’s always that chance things could improve – we were just betting against that. It just worked out better for them this time.
JOHN I been workin’ this farm for almost 50 years. And I ain’t once never sold my entire crop at market price. Not once. I didn’t need you to reduce my risk. I didn’t ask you too.
He shakes his head in digust. Lights a cigarette.
TODD Pop, I’m sorry. I did what I thought was right.
JOHN No, you did what you thought was right for you. As usual.
TODD Pop…
John ignores him.
JOHN Billy, you just show me where to sign and I’ll honor our promise. At least I can hold onto my pride and reputation, even if I am in the poorhouse.
Billy slides the documents over to John. He signs them, shakes Billy’s hand – not Todd’s – and heads out to the fields.
May 7th, 2008 at 7:10 am
Michael: “Doesn’t it both…?”
Chaz taps the accelerator of his XKR and feels a reassuring jolt power: “Sorry man, you cut out.”
Michael: “I said, doesn’t it bother you that you’ve done so well in the last year at the expense of…”
Chaz cuts him off: “you mean, do I care that I’ve made mountains of money for myself AND Farmer Joe”
Michael, insistently: “You’re not listen…”
Chaz cuts him off again: “You’re not listening to ME! Everybody saw the price of corn going up, I just made some good bets.”
Michael: “But your bets are short changing farmers who could be making a lot more if they hadn’t optioned to you.”
Chaz relaxes his tone, knowing he’s about to win the argument: “C’mon, I was giving them a fair price at the time. It’s just, those breadbasket hicks can’t see past their bibles”
Michael: “Don’t forget, you’re talking about mom and dad.”
Chaz: “Wuh? They didn’t sell to anybody else, did they.”
Michael, quite flatly: “No, brother, they didn’t.”
Chaz, relieved: “Good…[slips into his salesman tone] I can get them a great price on their wheat.”
May 7th, 2008 at 7:54 am
INT. AUCTION HOUSE A pair of fuzzy dice from a former member of Two Live Crew is up for auction. Surprisingly, there is plenty of action for this item with several paddles up in the air at once.
One frenzied bidder is rapper CHUK.L.HED, outfitted with the latest bling but looking like something closer to a Jamie Kennedy parody than P. Diddy.
Chuk.L.Hed raises his paddle as the AUCTIONEER acknowledges.
AUCTIONEER 300 to the man with 4 medallions around his neck! Do I hear 350?
SAM, Chuk.L.Hed’s ultraconservative pal, sits next to him, confused why anyone is bidding on this stuff. Sam has been mistaken for Michael J. Fox more than once, and the sight of Sam and Chuk.L.Hed together make Oscar and Felix look like two peas in a pod.
SAM Why do you want these stupid dice?
The auctioneer points to the back of the room.
AUCTIONEER 350 in the back!
CHUK.L.HED Bullshit. (loudly) 375!
Chuk.L.Hed whispers to Sam.
CHUK.L.HED This is part of my heritage, Sammy. I gotta represent.
AUCTIONEER 375 to medallion man. Do I hear 400 anyone?
SAM How can you spend that kind of money on this crap? You’ve sold a grand total of 5,748 albums in your career.
CHUK.L.HED Relax dude. I’m raking it in. I gots real estate deals popping and I’m rolling in the market right now – derivatives and shit.
Another bid comes from the back of the room.
AUCTIONEER 500 from a new bidder in the back!
Chuk.L.Hed fires back immediately.
CHUK.L.HED 750!
SAM Derivates? Chuk, I’m your accountant and I don’t even understand derivates.
CHUK.L.HED Y’know my hangout on the West Side?
Sam sheepishly acknowledges the place.
SAM Ho Village?
CHUK.L.HED Yeah. Anyway, the top flight hos are a TWO hundred a pop, while the average hos are a hundo.
SAM Ok…?
The auctioneer is still bidding up the fuzzy dice, now at $1,200.
CHUK.L.HED I give PIMP.E an extra couple hundo at the beginning of every month. Then he lets me have anyone in the place for one-fiddy each time, no matter how many times I come in and no matter how many times I land a top flight ho. As long as I grab a top flighter more than four times a month, I’m making out. And Sam, you KNOW I’m making out. That’s derivates!
Chuk.L.Hed focuses his attention on the auctioneer.
CHUK.L.HED (cont) 2,000!
AUCTIONEER Going once, going twice, sold for 2,000 dollars!
CHUK.L.HED Hell yeah!
SAM Why is it always about the hos?
CHUK.L.HED It just is, Sam. It just is.
May 7th, 2008 at 8:35 am
INT. GYMNASIUM – DAY
Inside a YMCA gymnasium, underneath a banner that reads “Five-Minute Meet-Ups,� a long table of men and women chat with each other in their best I’m-not-psycho voices.
In a middle seat sits a balding, bespectacled Indian man: GIRISH, 32, plainly labeled by his name tag.
Across from Girish is an empty seat. He takes a look at the basketball scoreboard, which counts down the time: 2:30, 2:29, 2:28 . . .
TARA, 35, wearing pink lipstick and pleather, takes the seat opposite Girish.
TARA Sorry. I had to pee. So, what were you saying about Riverdance?
GIRISH Derivatives.
TARA Oh, right. And you buy soybeans or something?
GIRISH Something–
TARA (interrupting, looking away) God, that guy there is so hot. I would totally hook up with him.
GIRISH (pauses, clearly annoyed) Okay.
Tara notices her faux pas and re-focuses on Girish, trying to make amends.
TARA Oh. So what do you do again? You’re a farmer?
GIRISH No. Not a farmer. A speculator. I make bets on the future prices of agricultural commodities, and I buy and sell those contracts without ever taking delivery of the goods.
Tara sighs and tilts her head, eyes unfocused – unhappy with life.
CUT TO:
Girish, mid-explanation, tries again, girl now unseen.
GIRISH –making assumptions about the market direction of certain assets and asset classes with uncertain future value. . . .
Girish looks up hopefully.
CUT TO:
Next date: Girish looks off to the side and sighs woefully, just as Tara did.
CUT TO:
Next date: Girish is animated. He holds a coffee cup and moves it around the table as he speaks.
GIRISH Say there is a farmer growing coffee beans in Karala. It’s late July and harvest is still six months away. The problem is that market prices for coffee go up and down for reasons out of his control. In six months, prices could be higher than they are now, which would be lovely. But if prices are lower, he stands to lose his farm. In order to protect himself, he gets together with other farmers in the same position and signs a contract to sell tomorrow’s beans for today’s prices. He gets a little money now, and then when the contract comes due, he sells the beans to the buyer for the agreed-upon price.
Girish pauses, then speaks with emphasis.
GIRISH Betting that prices will rise, I am that buyer.
It is revealed that the entire room of would-be daters has crowded around Girish to listen to his explanation. They break into applause. Girish smiles in satisfaction.
May 7th, 2008 at 9:17 am
INT. JENKINS’S OFFICE – DAY
Jenkins and Steve sit, examine a small record book.
STEVE What happened to the money?
JENKINS He lost it all on derivatives.
Steve stares.
JENKINS It’s an investment vehicle.
STEVE Like stocks?
JENKINS Not really. Stocks are assets, while derivatives are contracts to exchange payments linked to the prices of underlying assets.
Steve stares.
JENKINS It’s like betting on a football game, except instead of hoping the cowboys cover the spread, you’re hoping the price of pork bellies goes up. Generally riskier than stocks.
Steve ponders this a second.
STEVE My father wasn’t like that. To him, having a savings account was a high risk investment. It doesn’t make sense.
JENKINS Seems you didn’t know your father as well as you think.
Steve gets up from the chair, throws on his coat.
JENKINS Where are you going?
STEVE Someone messed with my dad’s money. I’m gonna find out who.
Steve grabs the record book from Jenkins.
STEVE I’m taking this.
Jenkins doesn’t protest.
May 7th, 2008 at 9:19 am
INT. SPACESHIP – NIGHT
MERGUNFLAB and SWARGAR stare at each other intently across the table through their collective, thirty-one eyes.
Mergunflab raises a claw SLAMMING it down. A miniature, nodding Jesus wobbles.
MERGUNFLAB It is merely a matter of derivatives Swar!
SWARGAR I am not following… Is this one of THEIR terms?
Mergunflab slides out of his chair, squelches across the room to a stone trough, and buries his face in the yellow liquid contained within.
Rising, he licks his face clean and turns.
MERGUNFLAB You can not have Earth yet but we shall agree upon the transaction now. That way we safeguard our assets…
You may have it in ninety-nine thousand suns, for one hundred bakkucha.
If Earth is worth more than that in ninety-nine thousand suns, you have a bargain. If it is worth less…
He pokes the nodding Jesus with a claw, feigning nonchalance.
MERGUNFLAB Well, you get the idea.
Swargar scratches his third nostril and ponders. beat.
SWARGAR In ninety-nine thousand suns all of the cows will be dead and humans will have no limbs.
I really wanted that Bush guy for my nephew’s intergalactic anomaly project too…
MERGUNFLAB I will send him as a gift if we reach an agreement. They will not miss him.
…and you’re forgetting the monkeys!
SWARGAR Ahhh the monkeys…
He leans back in his chair with a dreamy smile. A little snot dribbles down his face.
May 7th, 2008 at 10:34 am
INT. CRUMMY APARTMENT – DAY
Scrawny BILL GATES (19) signs a contract in black ink.
BILL GATES We’re in the 70s. Nobody signs in blood anymore.
He smirks at SATAN (∞), who fidgets nervously.
SATAN I don’t get it.
BILL GATES It’s basic finance. Derivatives. By the time you get my soul, it could be worth a lot more.
SATAN Or a lot less.
BILL GATES But you’re getting it cheap now. Look, either way you get it. You’re covered.
SATAN Erm… I don’t know…
BILL GATES Tell you what. I’ll throw in some stocks to sweeten the deal.
BILL GATES offers him the pen. Satan hesitates.
SATAN Ah, fuck it.
He signs, and at that very moment, a new Circle is carved into Hell.
May 7th, 2008 at 11:02 am
Danny: “You sent Ace in to help them negotiate? He’s a fucking nutcase whose idea of compromise is the opposing party meeting every one of his demands or he rubs his nuts on their cold, dead faces.”
Mr. Company Man: “These people don’t see compromise as good faith, they see it as weakness- so just tell me, Danny, how’d you walk reasonable into that room full of killers and not end up dead, or better yet with our clients stuck in a treatise where they’re forced to live on the harshest, poorest part of the country for the next 100 years. We owe them better.”
Danny: “Better might be a civil war.”
Mr. Company Man: “Blood now or blood later. All they can produce on Mars is hate. We negotiate them a nice piece of Old California and perhaps they can learn to – I, dunno- grow oranges there again.”
Danny: “Millions of lives on the line can’t shake you? Then tell me about the cash. A Civil War means we don’t have sole buyer rights to the colonialists’ research into space grown bio-chips.”
Mr. Company Man: “Don’t worry, Danny. I negotiated a derivative of sorts with Mr. Arms Dealer, 2 million star rifles bought at today’s low price, to be delivered in two months- just in time for things to fuck up. If Ace fucks up, it’ll drive up the price of guns, and we’re hedged our loss with all those shiny new guns to sell- not bad.”
Danny: “You sold this deal to the company as an investment in peace.”
Mr. Company Man: “No, that’s how I sold this to you. I sold this to the company as a profit opportunity. But, positive thinking, Danny. Think of the oranges.”
May 7th, 2008 at 1:11 pm
INT. FINANCIAL EXCHANGE – NIGHT
ESTABLISHING SHOT:
A giant transparent tube (like an inverted wineglass) inside a huge dark room. Inside the tube, under bright fluorescent lights, we see office chairs, tables, flatscreen monitors…
CUT TO:
Along the glass wall comes CORY, followed by a MIME. They’ve been here for quite a while.
When Cory stops, the Mime stops. When Cory walks, the Mime walks. By now, Cory is not even bothered.
CORY (reading from the flatscreen) Index, Agricultural, Metals, Rate derivatives… What’s derivatives?
The Mime thinks, a finger to his temple. The finger goes up – an idea! With a flourish, he produces a coin from thin air.
Holds it for Cory to see. Hides his hands behind his back. Brings up two closed fists.
CORY Okay. This hand.
The Mime gives him the coin. Good job!
CORY (re: the coin) Is this Japanese? (re: the glass around them) Are we in Japan?
The Mime shrugs, materializes another coin, repeat the procedure.
CORY That hand.
Nope! The fist is empty. The Mime points at the coin in Cory’s hand.
CORY You want it back? Okay.
The Mime nods, takes the coin, not even bothers to hide his hands behind him this time, shows Cory the fists.
CORY This hand.
Naturally, there’s a coin. The Mime shrugs, shows him the second coin in the other hand.
CORY (holding the coin) And that’s a derivative?
The Mime nods like crazy.
CORY Great. Now can you tell me who are you, what is this place and how the hell did I get here?
May 7th, 2008 at 1:15 pm
INT. FINANCIAL EXCHANGE – NIGHT
ESTABLISHING SHOT:
A giant transparent tube (like an inverted wineglass) inside a huge dark room. Inside the tube, under bright fluorescent lights, we see office chairs, tables, flatscreen monitors…
CUT TO:
Along the glass wall comes CORY, followed by a MIME. They’ve been here for quite a while.
When Cory stops, the Mime stops. When Cory walks, the Mime walks. By now, Cory is not even bothered.
CORY (reading from the flatscreen) Index, Agricultural, Metals, Rate derivatives… What’s derivatives?
The Mime thinks, a finger to his temple. The finger goes up – an idea! With a flourish, he produces a coin from thin air.
Holds it for Cory to see. Hides his hands behind his back. Brings up two closed fists.
CORY Okay. This hand.
The Mime gives him the coin. Good job!
CORY (re: the coin) Is this Japanese? (re: the glass around them) Are we in Japan?
The Mime shrugs, materializes another coin, repeat the procedure.
CORY That hand.
Nope! The fist is empty. The Mime points at the coin in Cory’s hand.
CORY You want it back? Okay.
The Mime nods, takes the coin, not even bothers to hide his hands behind him this time, shows Cory the fists.
CORY This hand.
Naturally, there’s a coin. The Mime shrugs, shows him the second coin in the other hand.
CORY (holding the coin) And that’s a derivative?
The Mime nods like crazy.
CORY Great. Now can you tell me who are you, what is this place and how the hell did I get here?
May 7th, 2008 at 2:08 pm
@#56 There’s your winner. Well done.
May 7th, 2008 at 4:53 pm
An ORGASMIC MOAN takes us to
INT BATTERY PARK CONDO BEDROOM – NIGHT
CHELSEA HASSLER rolls over naked next to gruff JIM KRUCK. She pulls of the top-sheet, using it like a robe, and fixes her eyeliner at her mirrored armoire. Jim counts money.
JIM So what d’you when you ain’t riding the meat pole?
CHELSEA Oh…finances, derivatives, blah, blah, blah…
JIM Uh…
She spins around in her chair.
CHELSEA Derivates, they’re like…
She notices a USED CONDOM on the ground.
CHELSEA (CONT’D) That little itch on your crotch? It’s fine now, but you wear a condom in case it turns into something worse. Your investment in that condom saves me from the sinking stock of chlamidia.
JIM Does “chlamdidia” stock sell higher than Apple’s?
Chelsea SIGHS.
CHELSEA Please go home.
May 7th, 2008 at 6:15 pm
INT College classroom, early fall beginning of first semester Students shuffle in to CALCULUS ONE
PROFESSER MUKERJEE Good morning to you class. Today we will be discussing the meaning of dewivitives and how they can be integrated into the core theowies of the modewn matematics. We can approach the definition as geometwical…
SUSAN stares out the window. The room is hot.
PROFESSOR MUKERJEE Oaw we can appwoach the definition as as a wate of change. We use pawabalas to show…
SUSAN rummages through her bag and finds some candy. She starts arranging them by colors on her desk and absent mindedly sticks a piece in her mouth.
PROFESSOR MUKERJEE starts writing on the board….He writes: DERIVITIVE. “Susan, can you pwease explain this definition fow me and give us an example?”
SUSAN looks up as if out of a fog. UM, ah, yes, I can. A derivitive is a futures contract in which the value is dependant on the performance of an underlying asset. For example, Necco Wafers have been around for many years, and are an established candy. They should keep their value should the candy market fluctuate.
PROF. MUKERJEE No, I asked you to define a dewivative.
SUSAN Ohhhhh…a dewivitive is either a geometrical rate of change or…
May 7th, 2008 at 6:40 pm
INT. LIVING ROOM – DAY
JENNY, 34, sits on the couch with her head in her hands. Her sister MONA, 38, returns to the room with two cups of tea and Jenny looks up – her face is pretty but ashen. Her eyes are red. She accepts one of the steaming cups. Silence.
MONA (carefully): Do you know who the father is?
Jenny blows on her tea and looks off, her face a mask. She finally nods.
JENNY: Yeah, this guy Mike. I met him in a bar a few months ago.
MONA: What does he do?
JENNY: I think he said he works with derivatives…
MONA: What’s that?
Jenny sobs – suddenly and loudly. She puts her tea on the coffee table and buries her face in her sister’s shoulder.
JENNY: Oh God, Mona. It doesn’t matter.
May 7th, 2008 at 9:51 pm
JENKINS, a stuffed suit executive munching a Cuban cigar, leans forward. He bellows out a cloud of smoke from his yellow grin. It engulfs the thin, bookish MAX. Jenkins gesticulates with his cigar like an orchestra conductor, pushing Max farther back into his chair with each sweeping gesture.
JENKINS Your pointless pontifications on pricing parameters and rates of change and rates of change of rates of change are boring me, Max. Buy low, sell high. It’s simple, Max. Even a genius like you can see that, no?
MAX But, Mr. Jenkins, we can’t just —
JENKINS Come now, Max. It’s like the man once said. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multi-variate, multi-national dominion of dollars. It is the international system of currency that determines the totality of life on this planet! The world is a college of corporations, inexorably determined by the by-laws of business. That is the natural order of things today! Am I getting through –
Max’s chair crashes to the ground as he jumps up. He grabs Jenkins’ arm in mid-swing. Plucks the cigar from his hand.
MAX You foolish old fossil!
As Max rants he shoves the cigar an inch closer to Jenkins’ nose with each outburst.
MAX Don’t you understand? There is no IBM or ITT or AT&T, no DuPont, Dow, Union Carbide or Exxon. There are only equities and commodoties, rates and trends, arbitrage and triage, speculation and hedging, OTCs and ETCs. The future is forwards, the forwards, our future! You think your cozy little world of petro-dollars and electro-dollars and multi-dollars is what George Soros talks about in his board meetings? You stand here and howl about dollars and cents. There are no dollars and cents. Dollars and cents are but a dot on a chart, a moment in time, the input to the next output, the second when the future becomes the present, before it becomes the future again! And with arbitrage, we always live in the future. You’re reading a dysfunctional function. Look deeper. Can’t you see it, Jenkins? The future? — Is knowing the future! The almighty dollar is dead. There are only arbitrage positions and speculation markets, equity swaps and back-to-backs, forward rate agreements and interest rate caps, swaptions and options and futures and turbo warrants. Long-term positions? Profitability? And, for Heaven’s sake — dividends? Yesterday’s news, Jenkins. There are no more straight bets, no more original positions. No, Jenkins. Everything is derivative now.
The cigar is almost touching Jenkins’ nose. He nervously pushes it aside.
JENKINS (uncertain) What does it mean, Max?
MAX Your future has no options, Jenkins. I’m shorting you.
Max stuffs the cigar into Jenkins’ suit pocket. Struts out the door.
May 7th, 2008 at 9:59 pm
INT. THE BASEMENT OF BURGER’S MEATS. NIGHT. A man, FRANK, 33, is tied with twine to a metal chair in the middle of the room. He wears a rumpled pinstriped suit. His mouth is gagged with twine, his drool bloody, one eye swollen shut. A small metal table on wheels rests in front of him.
NEMO, 28, the silent muscle, sits behind Frank in an XL black wifebeater that strains to contain him. He ices his right hand with a stiff T-bone. Next to him, stacked cardboard boxes read: BURGER’S MEATS. Nearby, a spool of packing twine.
BURGER, 45, a meatball in brown pants, donning a brown fedora and an old blood-stained apron that says “Fuck the Cook,� lumbers down the stairs with a large Burger’s Meats cardboard box. As he descends:
BURGER You are a derivative, Frank. You don’t know what that is. I know you don’t know cause I see you not readin’ the Business Weeks I get you.
Frank fidgets, moans.
BURGER It’s like: If someone needs a shakedown, I call you. If Christopher goes crazy, you take him to the titty bar. If Mikey comes up short on whatever the fuck, you go knock off the Starbucks.
Burger arrives in front of the table, speaks directly to Frank.
BURGER It’s a risky business. You reduce the risk for me. That is the whole fuckin’ raison d’keepin’ you around.
Burger throws the box down on the table in front of Frank and it rolls toward Frank and bumps into him gently. Burger removes his apron and hangs it up on a hook on the wall.
BURGER I’d rather you be stocks or bonds like; somethin’ I can count on. That’s why I got you subscriptions to the Business Weeks. But you don’t wanna be an asset to me. You wanna be a liability.
Burger rolls the table away from Frank him so that nothing stands between Burger and Frank. Burger pulls a meat cleaver out of the box. Frank moans and shakes his head.
BURGER Where is my money, Frank? I want you to think real hard before you start lyin’ to me. Cause you got more to lose than just your life.
Frank quiets.
Burger turns around, puts down the cleaver and pulls a stuffed rhino out of the box and throws it in Frank’s lap. Burger then pulls out some women’s underwear and smells them.
BURGER Lavender. Very nice.
He throws them at Frank. Frank stares in horror at his child’s rhino and wife’s underwear. Burger nods to the Thug. The Thug approaches and cuts the twine from Frank’s mouth. There is silence.
FRANK I didn’t take the money.
BURGER Wrong answer.
FRANK I swear.
BURGER Your word is no good, Frank.
FRANK Burger, it wasn’t me, I fuckin’ swear.
BURGER That your final answer?
FRANK I swear to God, Burger! On my dead mother!! On my WIFE!!! PLEASE!
Burger is silent, staring at Frank. Decisively, he picks up the cleaver, turns around, grabs his apron off the wall and pushes his way through a set of double doors at the other end of the room. Frank watches the doors flip-flap closed, staring at them. There are muffled voices in the other room, vague chopping sounds and low grunts. Several silent moments later, Burger, mouth agape, chest heaving, storms back in, apron and cleaver dripping with fresh blood. As Burger approaches Frank, Frank can see Burger is holding a HAND. There is a WEDDING RING on it. Frank screams in agony, recognizing it.
FRANK (sobbing) AAAAAH!! Oh God! Oh fuck! YOU FUCKING MONSTER! YOU FUCK!
Burger slaps Frank brutally with his wife’s disembodied hand.
BURGER I’m a fuck? I’m a fuck? (Punctuating each word with crushing forehands and backhands) THIS. IS. WHAT. YOU. GET. WHEN. YOU. STEAL. FROM. ME.
He throws her hand on the floor, now a twisted wreck of broken fingers. Frank rocks gently, sobbing softly. Burger leans against the table, catching his breath.
BURGER There are four kinds of derivatives, Frank. Forwards, which is the direction we can move in now. Options, which you’re running out of. Futures, a couple of which you can decide now. And finally: swaps. As in: You give me my money and, in exchange, you get the rest of your wife.
May 7th, 2008 at 11:02 pm
INT. MR. CHELSEA’S OFFICE A circular couch and countless movie posters adorn the luxurious office room like virgin trophies: they’ve never been touched. Mr. CHELSEA(40) nervously taps his foot with the ferocity of a cocaine addict. CHELSEA He made his millions in video game design. He’s a little young. And short. But Asians are short. And young. So, just be aware… Maybe, slouch a little so he’s not overwhelmed. JASON (35), stands at six foot five. He mimics Chelsea’s motions with his thumbs. A VOICE comes over the intercom. VOICE (O.S.) Mr. Chelsea, Mr. Iziko and his assistant Mr. Ichiko have arrived. MR. CHELSEA Wonderful, send them in. Mr. IZIKO (19), walks in confidently. His white suit meshes with his white skin to create one gaunt mass, five feet five inches tall. Mr. ICHIKO (30) trails behind him. CHELSEA Mr. Iziko! Pleasure to see you again! MR. IZIKO (in Japanese) Tell him I’m in a hurry, his client has three and a half minutes. MR. ICHIKO Very…busy…quick please. Jason sprints into action. He slouches awkwardly. JASON It’s a superhero movie, kinda like an inverted Superman. He starts out a big finance guy, you know, metaphorically he has all the power in town, CFO type, and then bam! He’s hit by a meteor. MR. ICHIKO (in Japanese) It’s an instructional video of a stock broker super hero. MR. IZIKO (in Japanese) What’s the point? MR. ICHIKO More…broker. JASON Well, technically he’s not a broker, but he has all the power, he trades derivatives, buys options, all that stuff ‘cuz it’s an indictment of our consumer culture…until he– MR. ICHIKO (in Japanese) The video explains how to make money with derivatives. I think it would be very useful for first year students at the Iziko school. MR. IZIKO (in Japanese) What’s it called? MR. ICHIKO Name? JASON Oh, well he has two. By day he’s Adam Smith, derivative trader. By night, he’s The Ice Pick. He gets– MR. ICHIKO (in Japanese) The Derivative Man. MR. IZIKO (in Japanese) Derivative? That’s his name? MR. ICHIKO (in Japanese) No. That’s what he teaches. Mr. Iziko is dumbfounded. MR. IZIKO (in Japanese) What is a derivative again? MR. ICHIKO (in Japanese) It’s how we make money. We pay him a little for his instructional video now, just enough so that if we make the video later, he won’t be disappointed by the shit we’re paying him then. MR. IZIKO (in Japanese) His job security derives from my financial sucess. Mr. Iziko starts laughing. Then Mr. Ichiko starts laughing. Quickly, Chelsea laughs hysterically and taps Jason who also starts laughing. Mr. Iziko stops abruptly. MR. IZIKO (CONT’D) (in Japanese) Does he take me for some type of fool? I don’t want to give away my secrets in some stupid instructional video! Is he trying to drive me out of business?! Mr. Iziko storms out, Mr. Ichiko follows. FADE OUT.
May 8th, 2008 at 3:31 am
[I just noticed that I didn’t answer the prompt in John’s original post—“Have a character EXPLAIN derivatives, as used in the financial industry.� Allow me a brief revision of my submission in comment #47.]
WOMAN AT BAR You got fired for trading derivatives at work?
MAN AT BAR No, I got fired for demonstrating how they work.
WOMAN That doesn’t sound like something you’d get canned for.
MAN Actually, I was trading grades for blowjobs.
WOMAN (beat) So how does that explain derivatives?
MAN Students who took me up on my offer entered into a contract with a mutually-beneficial payoff at the end of the semester. And here’s the real kicker—the payoff is guaranteed, regardless of everyone’s performance in class.
WOMAN But how’d you get caught?
MAN I forgot to change one student’s grade from a D to an A, and she told the dean. Derivatives are risky. A lot can go wrong.
WOMAN Would you like to come back to my place and look over my portfolio?
May 8th, 2008 at 5:21 am
INT. WEDDING SHOP -DAY
An eager bride, HAYLEY, is trying on a pitch perfect dress for the big day. Her mother, LUCE, is having
LUCE I’m really having difficulty coming to terms with your decision to marry this boy Derryk; he seems to be lacking…prospects.
HAYLEY I know what you’re thinking but I love him. Anyway he’s an investment. A derivative.
She goes behind a screen and gets changed into her jeans and jumper.
Derryk arrives outside the shop and gives them both a geeky but heartfelt wave. They wave back.
LUCE A derivative? Well he seems nice and I’m sure he loves you. He just seems a bit out of your league. Is he really the one?
HAYLEY Think of it this way. Sure we’re both broke now. But he happens to be a very talented artist and I’m telling you in ten years I’ll be set up for life.
LUCE Mmm really? And if he doesn’t become successful?
HAYLEY (with a wink) I’ll divorce him.
May 8th, 2008 at 5:22 am
**Her mother, LUCE, is having trouble finishing her sentences!
May 8th, 2008 at 5:52 am
Joe pointed to the black mare ambling gently toward the paddock entrance.
JOE:That’s your stock, right there.
JOE:And this (holding up his stub) is a derivative. The horse can win, lose or fall and break it’s leg, but someone, somewhere can still make a buck.
FRANK:And that’s how Dad made all his money?
JOE:Yeah, and how he lost it. Gambled away everything he’d ever worked for and all the money a thousand folks planned to retire on.
FRANK:Should have stuck to cards huh?
JOE:Yeah, but then we’d be down there with those mopes, hustling for tips, putting their grocery money on the back of a horse cause it’s named after a song they danced to once. No-one likes to be told they’ve handed their future over to a bookie, but give it a fancy name, call yourself a stockbroker and it’s always someone else’s fault.
FRANK:The market’s always right, Joe.
JOE:The market’s always right!
May 8th, 2008 at 6:57 am
INT. IRISH PUB – SOUTH PHILADELPHIA –LATE MONDAY EVENING
Two transit workers, Mike and Bobby, both 30s, are drowning in Bushmills and Yuengling. Other than these two, the bar is a cemetery of pint glasses. The Eagles-Cowboys game commands their attention from above the whiskey lineup. The Cowboys have run away with the game, much like the other patrons have run away from the bar.
MIKE (transfixed by the game) I can’t believe they passed up Tony Kornheiser for this guy. He’s awful.
BOBBY (equally transfixed) Who, Dennis Miller? He ain’t that bad.
MIKE No way, just listen to him.
After a brief commercial, Dennis Miller returns to grace us with his color commentary for the game.
DENNIS MILLER (o.s.) …the Eagles have to throw up a Hail Mary, it’s their only chance…and they do…ooohhh! Hail Mary denied…separation of church and state.
BOBBY (beat) Haha, that’s kinda funny.
DENNIS MILLER (o.s.) At this point, Jerry Jones runs the Cowboys like your financial advisor. He knows that the free agent pickups he made this offseason have favorably impacted the derivative that is the success of his team…
Mike looks over at Bobby with a look that is begging for agreement.
DENNIS MILLER cont. (o.s.) But he’s got to worry about what assets he puts into those variables. Those Cowboys buy more snow than Seward did when he bought Alaska from the Russians.
Bobby doesn’t say anything. He’s piss drunk and trying to figure out who the hell Seward is.
DENNIS MILLER (o.s.) But then again, you can’t really judge the Cowboys based on how they play Philly. That Eagles defense provides worse coverage than a Guatemalan HMO.
MIKE (beat) COME ON!!!
BOBBY Haha, ok fine.