An analyst at an investment bank (think Goldman Sachs) builds a model suggesting that their portfolio of securities is essentially worthless. The firm ends up selling the assets to other sophisticated firms whose models place different valuations on them.
For some reason, however, the protagonist wrestles with his conscience before deciding to fulfill his fiduciary responsibility to shareholders. And this takes up the bulk of the movie.
When they sell the assets, price drops by about 35% as other firms realize that their models must be wrong.
The happy ending is predictable: price adjusts to reflect the real value of the assets. Future investors are protected from losses that would have been incurred had they purchased over-priced securities. And the firm survives because they were the first to realize that their securities were mis-priced. Other firms presumably failed. Performance is rewarded: the analyst who built the model makes a lot of money, while the other analysts are fired.
All my friends who voted for President Obama are raving about the movie. I suspect they see it as an expose of the inherent corruption of Wall Street and a cause for the rebels who are occupying it.
Here is a question for my economically challenged friends. Would the ethical issues raised by the movie have been any different if the firm had been buying rather than selling securities, i.e., how is searching for under-valued securities to buy any different from searching for over-valued securities to sell?
The movie is playing at the Belcourt in Nashville and On-Demand on Comcast.