There have been a few stabs already at films about the financial crisis that hit America in 2008 and 2009, but so far none have really done a great job of simultaneously explaining what happened, while also expressing the white-knuckle fear that gripped the country during that time.We finally have a winner: “The Queen of Versailles.”
The film is a documentary directed by Lauren Greenfield, who started the film to tell the story of David Siegel and his much younger wife Jackie (a former Miss Florida), who were in the middle of building the world’s most expensive private home in America: A $90 million palace in Orlando Florida modelled after the palace of Versailles.
That might have made for an interesting movie, but Greenfield got incredibly fortunate during the shooting.
See, David Siegel is the country’s chief timeshare kingpin, whose Westgate Resorts sells middle class Americans the opportunity to buy a chunk of time in a luxury unit in places like Las Vegas, Park City Utah, Miami, and Orlando.
In addition to building “Versailles,” Siegel is also building the crown jewel of his empire, the PH Tower Westgate in Las Vegas, which is designed to be Vegas’ first big-time timeshare residence.
Then the credit crisis struck, and this wreaked havoc on Westgate. See, when the company sells a timeshare, it does so just like any other real estate sale: The buyer gets what is essentially a mortgage or instalment plan, paying, say, 1/10th the cost of the total cost upfront. Westgate doesn’t wait around for the buyer to pay the other 9/10ths. It immediately flips that mortgage to the bank so it can get its cash and start investing in new properties and make payroll.
David Siegel’s life is a testament to leverage. His business is all built on flipping these mortgages and investing more. The house he and his wife live in is mortgaged, and he even took out a mortgage against his unfinished palace, despite the fact that he initially bought the land and did the construction in cash.
As he put it in the film: There’s no reason to have an un-mortgaged asset when you’re in the business of using money to make more money.
The inability to flip mortgages back to the banks was devastating.
In the blink of an eye, Westgate was forced to lay off over 7,000 workers, and his own personal finances deteriorated to the point where Jackie Siegel is shopping at Wal-Mart, and David is whining about kids leaving the lights on.
Throughout it all, the viewer gets access to David’s thoughts, as he complains about the banks getting him addicted to cheap money during the boom days, and the banks unwillingness to deal with him during the down days. He’s convinced that the Las Vegas project is still a viable business, but that the bank is eager to foreclose on it so that it can snap up this cherry of an asset, after he and his company put over $350 million into building it.
The film is better than any other credit crisis film because it shows the relationship between credit availability and the real economy in a way that’s never been done nearly as clearly before. It’s also kind of terrifying to watch a family see its fortunes dwindle so fast in such a short period of time.
The star of the film is Jackie, who, from the title, and her blonde hair and enhanced chest, might at first come off as something of a superficial gold digger, but who is actually anything but. Instead she’s a former engineer, a loving mother of 8 (!) that can’t get enough of her kids, and the one in the family who maintains a sense of humour throughout it all. Near the end, she says she wouldn’t even mind if they had to move to a tiny place and have all the kids sleep on bunk beds. It’s an impressive show of character at a time when her husband is cracking under the pressure.
If you can catch it in theatres, it’s well worth it, as director Greenfield makes it a visually compelling story to watch on the big screen.
The trailer is below.
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