Come back, Gekko - all is forgiven

Michael Douglas and Shia LaBeouf in Wall Street: Money Never Sleeps, which opens in New Zealand this weekend. Photo / Supplied

Oliver Stone's anti-hero is out of prison and out of the big league, surveying a poison landscape dominated by a vastly richer breed of megabank bosses and hedge-fund billionaires, feasting off a nation unhinged by debt. Sometimes, Gekko says, jail is the only place to stay sane.

Gekko being Gekko, he wants back in. As for the audience, one just feels nostalgic for the days when Wall St villains were playing by the rules and only did the dirty on their own.

As the curtain came down on the star-studded premiere of Money Never Sleeps in Manhattan on Monday, it was tempting to call out: bring back the old Gordon Gekko, all is forgiven.

All of the eighties seemed to be summed up in Michael Douglas' red-braced portrait of the triplicitous corporate raider, whose encomium to greed ("for lack of a better word") has been replayed a thousand times.

The real Gekkos, the handful of personalities from that period on whom Stone based the character, are gone or bit players on Wall St these days. They are small-time now.

But 23 years on from the original a new financial crisis has persuaded Stone to reanimate his creation and set him loose in a new landscape. It sounded like such a good idea. But Gekko's character is made to fall apart, becoming inconsistent and implausible . It's as if he had to be sliced and diced on the cutting-room floor into multiple personalities. Why?

Perhaps because of our split response to the man. Stone professes himself amazed at the number of people who tell him Gekko inspired them to make a career on Wall St. That was not the intention.

"I am against the Gekkos, I am for manufacturing, not speculation," he said at the time.

In Money Never Sleeps, Stone appears to take the opportunity to put ambiguity to rest. Betraying his own daughter, Gekko is made irredeemably despicable - only to be inexplicably redeemed in the movie's closing scenes. It seems the moral is there is no emotional feud that US$100 million of laundered money cannot fix.

"Have I redeemed him? It's up to you," Stone said. "It's nuanced."

How much easier when we could just love to hate him. Gekko Mk I was an amalgam of several of the biggest swinging dicks of the eighties, and his story was one of those most intricately tied to an insider trading scandal that rocked Wall St in 1985. Even some of his best lines were theirs.

"Greed is all right, by the way, greed is healthy," Ivan Boesky said in a university speech in 1985. "You can be greedy and still feel good about yourself." Boesky, a stock trader whose successes made him feted by the press and courted for speaking engagements, was preaching the gospel of greed to a receptive audience in Ronald Reagan's America (with equally eager ears in Thatcherite Britain).

Too much money was tied up in ossifying old industries and companies where leaden managements and Luddite unions were standing in the way of change. Japan was rising.

Corporate takeovers funded by junk bonds - a new, cheap kind of debt - were the best way to bring in an aggressive new owner, who would bash workers into shape and strip the company to its competitive core.

"Imagine $500 million in a pile of silver dollars," Boesky once said. "I wonder how tall that would be. It would be like Jacob's ladder, wouldn't it? Imagine - wouldn't that be an aphrodisiac experience, climbing to the top of such a ladder?"

Rudy Giuliani spotted it, as the then-US Attorney in New York pulled on the threads of his insider trading investigation, which centred on the investment bank Drexel Burnham and Michael Milken, the "junk bond king". Milken was the highest-paid banker on Wall St. There was hardly a single forthcoming takeover deal that he or his subordinates weren't working on.

Boesky would be jailed in the very week Wall Stwas released. Milken would admit to securities and reporting violations and serve almost two years. Since then, Milken has reinvented himself as a respectable philanthropist, ploughing his US$2 billion fortune into cancer research. Boesky has never resurfaced. Levine tried it, with a bleating apologia of a book. When Boesky was arrested on November 14, 1986, the Dow Jones fell 43 points, then the fourth-largest drop on record. If all the corporate raiders were exposed in criminal dealing, investors reasoned, who would buy all these companies at their inflated prices?

As Stone worked on Wall Street in 1987, after the Black Monday stock-market crash, it appeared an era was ending. It had been a period of excess, and Wall Street, set two years earlier, already looked like a period piece. But we know now it was just a warm-up for the vast credit-funded blow-out to come. Many of the real-life characters who went into Gekko were not only not cowed by the scandal and the crash, they were emboldened by them.

In Wall Street, Gekko tells his corrupted protege Bud Fox, played by Martin Sheen: "If you're not inside, you are outside, okay?" This was Stone's error - and the reason that Gekko rose to lure a generation of viewers to jobs in finance.

As Irwin Jacobs, a corporate raider from the period said of the market manipulation depicted in the film: "This is not a form of business, this is a form of sickness."

Most of the real-life raiders channelled by Stone to create Gekko were never involved in insider trading, and are still doing their thing today. They have been rebranded; they call themselves activist shareholders. But the impulses remain: a joy in the things and the influence that money brings, a thirst for battle and the thrill of outfoxing a rival, and the gripping certainty of the good of the market.

If you win, you were right, and if you were right because you are allocating capital most efficiently, which means the economy advances, prosperity increases for all. Greed, for lack of a better word, is good.

Carl Icahn, whose hostile takeover of airline TWA was the inspiration for Gekko's battle over Bluestar in the first movie, clashes with his rivals on the stock-market stage still, at the age of 74. Icahn has honed his metaphor for corporate management. "If you're a survivor, you never have someone beneath you who's smarter than you. So you eventually work your way to CEO. You have someone a little dumber than you underneath, and eventually we'll have morons running everything."

Another Gekko archetype, Asher Edelman, whose chauffeur-driven Jeep would rock up outside SoHo galleries in the eighties to transport his new works for a collection studded with Miro or Basquiat, has turned to the art world, offering loans to fund bidders at auctions.

Let's say Gordon Gekko is 20 per cent Boesky (illegal), 80 per cent Icahn (triumphant). The intelligence and the wit of the real Gekkos, the acceptance of their model of capitalism, and, yes, the lure of their lifestyles - of course they won.

That is the Gekko we remember fondly. In 1987, Wall Street was pure seduction: breathtaking views from an apartment bought with a single bonus. Weekends in the Hamptons. Art. A sushi machine! Daryl Hannah! It is the same with Money Never Sleeps: fast cars, glamorous women, more art, a new breathtaking apartment!

There is a new villain in the new film, investment bank boss Bretton James, played by Josh Brolin, is the character that Wall St's in-crowd will be deconstructing, to see on whom he has been based. He's majority Jamie Dimon, no doubt, since he shares the JPMorgan Chase chief's looks and ruthless exploitation of the recent credit crisis to expand his own company. Similarities between James' bank, Churchill Schwartz, and Goldman Sachs argue for a sliver of Lloyd Blankfein, the Goldman boss who ill-advisedly joked his firm had been doing "God's work".

Stone has said he was thinking, too, of Robert Rubin, the despised former treasury secretary, who went on to enrich himself as a director of Citigroup as it collapsed.

There is no danger of Bretton James becoming a hero to a generation of wannabe Wall Streeters. He is too implausibly stupid. A bank boss, trading shares secretly on his own account? No one in a position of authority on Wall St would really do that. But he does at least win the "greed is good" line. Asked how much money is enough, he replies: "More."

The real 80s Gekkos are small-time compared with these new titans, who - despite the credit crisis - rule still, untouched at the centre of a tornado of their own making.

Today's Gekkos don't need to bother themselves with anything so grubby as buying and running an actual company. The masters of the universe now are hedge-fund managers, whose only business is the moving around of money. John Paulson, in bed with Goldman Sachs, constructed a bet on subprime mortgages that netted him a billion in a single trade, when Lehman Brothers' employees took their belongings home in boxes.

George Soros, who "broke the Bank of England" with his self-fulfilling bet the pound would fall out of the European Exchange Rate Mechanism in 1992, is still earning 10-figure sums annually.

Steven Cohen's hedge fund has reaped billions, harvesting pennies at a time in uncountable numbers of trades executed by a computer, allowing him to build up perhaps the biggest private art collection in the world, with Picassos and Warhols. They have their "greed is good" philosophy, too, the new Gekkos - and they act entirely within the law.

Their speculation, their constant churning of the great financial market, it all adds to "liquidity", which means that those quaint, old-fashioned corporate raiders can more easily get into and out of their positions, and capital can be allocated not just efficiently, but quickly.

When Gekko is reunited with his money (which has been stashed safely for the duration of his incarceration in a Swiss bank account), he makes a beeline for the hedge fund honey pot.

It is his triumphant return from exile, for which he slicks his greying hair back into its eighties style, and dons Savile Row suits.

Don't ask too much about the plausibility of all this. Just wallow in a brief moment of nostalgia, the familiarity before the contempt. Gordon Gekko is back, but not really.

Today's real Gordon Gekkos
* John Paulson in bed with Goldman Sachs, constructed a bet on subprime mortgages that netted him $1 billion. That was a single trade.
* George Soros "broke the Bank of England" with his self-fulfilling bet the pound would fall out of the European Exchange Rate Mechanism in 1992. Still earning 10-figure sums annually.
* Steven Cohen whose hedge fund has reaped billions, allowing him to build perhaps the biggest private art collection in the world, with Picassos and Warhols.

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