When Wall Street was released in December 1987, America was still reeling from Black Monday: on 19 October, the Dow Jones Industrial Average had plunged 508 points in a single session, marking a -22.6% fall and recording the worst single-day loss in the history of the US stock market. The timing was involuntarily perfect: Oliver Stone’s film arrived as a dramatic X-ray of a hypertrophied financial system, grown in the shadow of Reaganite deregulation, and capable of self-feeding speculative bubbles entirely disconnected from the real economy.

Oliver Stone, Finance as a Personal Wound

The genesis of the film has intimate roots: Oliver Stone was the son of Louis Stone, a real stockbroker who worked for Hayden Stone & Co. during the 1950s and 1960s. Having experienced first-hand the implosion of the family’s financial dream, the director sought to portray that “dual American economy”, where industrial production and workers (symbolised in the film by Carl Fox, the trade unionist) are supplanted by the logic of the financialisation of the economy, where value is no longer created by producing, but by speculating.

Gordon Gekko, Between Insider Trading and LBOs

The character of Gordon Gekko is a distillation of the era’s financial predators: Ivan Boesky, Carl Icahn, T. Boone Pickens, Michael Milken. His activity is founded on hostile M&A operations, with high financial leverage (leveraged buyouts) and systematic use of junk bonds (high-yield, high-risk securities issued by companies with low credit quality).

Gekko acquires distressed companies, “dismantles” them by selling assets at market value (thereby realising capital gains) and cuts the workforce to increase EBITDA and justify speculative valuations. This approach represents a classic asset stripping strategy, facilitated in those years by the weak regulatory protection afforded to stakeholders other than shareholders.

The privileged information obtained by Bud Fox (concerning the Bluestar airline) is a textbook case of insider trading, formally prohibited by the Securities Exchange Act of 1934, but prosecuted with greater incisiveness only after the Boesky scandal (1986) and with the subsequent intensification of SEC activity under the leadership of John Shad.

A Technically Accurate Film: Jargon, Dynamics and Instruments

Unlike many films in the genre, Wall Street makes extensive use of authentic technical language:

  • Arbitrage: Gekko references it in the context of mergers.
  • Greenmail: the practice of hostile share acquisition to force the target company to repurchase them at an inflated price (a strategy Gekko employs).
  • Low float and high volatility: crucial elements for speculative raids.
  • Call options and margin trading: derivative instruments and leverage that Bud Fox uses for high-risk operations.
  • Positive real interest rates: contextualised in a post-Volcker era, with Fed Funds Rate in double figures in the first half of the 1980s, then gradually falling under Reagan.

The precision of the references is no accident: Oliver Stone availed himself of consultancy from former traders, hedge fund managers and real NYSE operators, including Asher Edelman. The result is a film that, despite its dramatic licences, captures with surgical precision the speculative practices of the era.

Macro Context: Reaganomics, Deregulation and Distorted Growth

The 1980s were marked by a series of structural reforms and deregulatory measures that transformed the face of American finance:

  • Reaganomics: massive tax cuts (primarily for higher incomes), reduction of public spending and deregulation of the financial industry. The top marginal tax rate fell from 70% to 28% in fewer than ten years.
  • Banking deregulation: from the Depository Institutions Deregulation and Monetary Control Act of 1980 to the Garn-St Germain Act of 1982, the barriers between commercial and investment banks began to crumble.
  • Growth of private debt: facilitated by falling real rates and the liberalisation of credit, it fuelled the exponential growth of corporate bonds and the OTC derivatives market.
  • Rising P/E ratio: the S&P 500 moved from an average P/E of 7–8 in 1980 to over 17 in 1987, a signal of overvaluation fed by euphoria and leverage.

The Savings and Loan crisis (which began precisely in 1986–87) and the surge in corporate failures linked to junk debt made that financial world ever more closely resemble the casino Stone wished to denounce.

The Paradox of the Negative Hero Turned Myth

Oliver Stone wanted to make a film of denunciation, a warning about the danger of a system that rewards profit above all ethical considerations. Yet Gordon Gekko became a cultural icon. In a kind of ethical short-circuit, finance students began quoting “Greed is good” as a motivational motto, not as a critique.

In a 2009 interview, Stone declared:

“Gekko was the villain. Instead they took him as a mentor. I had not anticipated how alluring immorality would become, when well acted.”
The effect is similar to that of The Godfather on the Mafia: the fascination with power overrode the moral condemnation.

Conclusion: A Film That Speaks to the Present

In the age of retail traders on Reddit, bitcoin, SPACs and leveraged ETFs, Wall Street remains a thoroughly contemporary warning. Technology has changed the forms, but not the logic: greed is still there, more sophisticated, more algorithmic, perhaps less noisy, but still “good” in the eyes of those who profit from it.

Gordon Gekko today would in all likelihood be running a quantitative fund headquartered in the Bahamas, quoted by Bloomberg and idolised on YouTube. But the substance does not change: “information is the most valuable commodity” — and Wall Street remains a surgical operation on the heart of contemporary capitalism.