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Film review: Wall Street

Andrew Williams, founder of Oxbridge Group, pays homage to the film that made banking cool.
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"Greed is good!" So says Gordon Gekko in Oliver Stone's film "Wall Street" and his words might as well be written on the gravestone of the corpses from the financial crisis that has engulfed the world 20 years after Wall Street was released.

Excessive greed and risk taking on behalf of traders, investment banks and hedge funds have been blamed for the recent crisis and the morality of greed is the central theme of the greatest business film of all time.

'Wall Street' is the story of a young stockbroker, Bud Fox (played by Charlie Sheen) and his attempts to win the patronage of a powerful trader and investor, Gordon Gekko (played by Douglas who won the Oscar for Best Actor). Fox's greed is tested as Gekko schools Fox in the arts of insider trading.

Fox's Faustian pact with Gekko has consequences for his personal relationships and he is soon thrust into conflict with his father who plays an airline Union rep, played in the film by Sheen's real life father, Martin. Like in many of Oliver Stone's films, the father-son relationship serves as a moral compass with the father setting out the ethical boundaries.

For those trying to understand the banking backdrop to the plot, Fox initially starts out selling bonds and options to wealthy private clients. He courts Gekko as one but pitches him equity tips. Once in bed with Gekko he becomes involved in M&A arbitrage, betting on the outcome of takeover bids. Finally, he becomes a kind of one man private equity firm, trying to take over a company.

The film was released in 1987 around the time of the infamous 'Black Monday' when world stock markets recorded their (then) biggest ever one day falls and the indictment of a number of high profile investment bankers for insider trading and securities fraud.

The trials, prosecuted by future New York Mayor and Presidential Nominee Rudolph Guilliani, saw M&A arbitragers Ivan Boesky and Drexel Burnham; Lambert bankers Martin Siegel and Denis Levine and junk bond king Michael Milken all convicted for fraud. Drexel Burnham Lambert went bust shortly afterwards due to their loss of reputation, while the junk-bond funded LBO of RJR Nabisco, famed in the book "Barbarians at the Gate", started to unwind.

The man who initially pitched the idea of a LBO to RJR, Jeff Beck, plays himself in the 'Wall Street' film, while the idea for the story played out in Wall Street is brilliantly told in print in the book "Den of Thieves" by James B. Stewart.

"Greed, for want of a better word, is good, greed is right, greed works. Greed cuts through, clarifies and captures the essence of the evolutionary spirit. Greed in all of its forms - greed for life, for money, for love, knowledge - has marked the upward surge of mankind."

How many financial careers have been owed to this film? My own certainly has. I watched it in Weston-super-Mare Playhouse, aged 16, and immediately decided I wanted to work in finance. A few weeks later I was trading shares underage on the phone in my school hallway.

There are, therefore, two important long-term legacies of 'Wall Street':

1. The general excitement and uplifting spirit of ambition, work in general and banking and finance in particular that has inspired a generation to seek employment in investment banking and financial markets and has more lately found new projection on TV in programmes like 'The Apprentice' and 'Dragons Den'; the adoration of the investment banker akin to a rock star.

2. A questioning of the morality of financial markets, whether greed really is good. This question is expressed in the contrast between Bud Fox - the whizz-kid trader and his Dad who works in old-economy airline maintenance. As such, the moral hazard faced by traders taking excessive risks in the lead up to the credit crunch was foreshadowed in the film.

Other films have paid homage to Wall Street. In particular, 'Boiler Room' (1991) makes no secret of the debt it owes to Oliver Stone's picture. A sequel to 'Wall Street' is due to be released soon. The original is essential viewing for movie buffs and future investment bankers alike. And for those who have already seen it, let me say to you "Blue Horseshoe luuurrrrvvveees...." well, shhh.


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