Huiying

Zhao
ENGW 3315
Prof. Christen Enos
Unit 4

Context Note


This article is written to analyze financial terms in a film named Wall Street (1987). Wall Street is a
1987 American drama film, directed and co-written by Oliver Stone, which stars Michael Douglas, Charlie
Sheen, Daryl Hannah and Martin Sheen. The film tells the story of Bud Fox (Sheen), a young stockbroker who
becomes involved with Gordon Gekko (Douglas), a wealthy, unscrupulous corporate raider. This article is going
to be published on Buzzfeed.

The purpose of this article is to explain the financial terms mentioned in the movie. The idea came up
to me because when I first watched this movie, there were so many financial related knowledge that I dont
understand made me so confused. In order to get a better understanding of the movie, I did a lot research and
dug into details. Thus, I assume there are many people like me, dont fully understand those financial
knowledge and are still confused about it. After reading this article, they should get a general idea of how Wall
Street worked in 1980s.
The audience of this article should be people who are confused after watching this movie and people
who are planning to work on Wall Street someday. They like to know how Wall Street works and how those
plots connected. In fact, it is hard to fully understand every plots and characters if people dont understand
what they are actually doing. However, although the title is Financial Encyclopedia, it doesnt mean it should
be professional as a textbook. The audience may not acquire that high level of financial knowledge and if it is
too hard to understand, they will just stop reading. In order to hook my audience, I made a beautiful design,
which makes it comfortable to read. I hope it is not too much.

Financial
Encyclopedia

New York Stock Exchange

Intercontinental Exchanges diverse markets span futures and
options on interest rates, commodities, indexes and FX, as well as
equities and equity option.

Wall Street is a 1987 American drama film, directed and co-written by

Oliver Stone, which stars Michael Douglas, Charlie Sheen, Daryl Hannah
and Martin Sheen.
On the Wall Street of the 1980s, Bud Fox (Charlie Sheen) is an
ambitious stockbroker who is doing whatever he can to make his
way to the top of the world. He admires the power of the
unsparing corporate raider Gordon Gekko (Michael Douglas), and
Gekko considers Gekko as a mentor by providing insider trading.
As Bud becoming more and more greedy and ambitious, his
decisions eventually threaten the livelihood of his father (Martin
Sheen). Encountered with this dilemma, Bud starts questioning his
loyalties to Gekko. Wall Street is a really amazing movie with
interesting plots and vivid characters. It is also considered by
Harvard Business School as a must-watch movie for students
before entering the real finance world by showing tons of finance
related details to audience without any mistakes. For people who
watched this movie or who are going to watch this movie, they
might find it is hard to understand all of financial terms in the
movie. To help people get a better understanding of Wall Street,
this article is going to introduce and explain the financial
knowledge mentioned in the movie.

When the movie starts, a close-up of the trading center brings the
audience back to the specific time: 1985. There are plenty of big-
headed computers showing market information in green in a
trading center. Someone is busy with filling out forms, and
someone is chatting about which stocks are worth investment. It
just takes few seconds, but it is enough to introduce the most
important finance center in the United States the New York
Stock Exchange (NYSE), which was established in 1817. The
tradition of all the traders sitting together to make deals has been
preserved until today.

A stockbroker is a regulated
professional individual, who buys
and sells stocks and other
securities for both retail and
institutional clients, through a
stock exchange or over the
counter, in return for a fee or
commission.

Bud Fox (Charlie Sheen) is a stockbroker for a second-tier Wall

Street firm. He works the phones, soliciting new clients, offering
second-hand advices, buying and selling and dreaming. He desires
to work with his hero Gordon Gekko (Michael Douglas). And
Gordon Gekko is a millionaire and a Wall Street shark. He is
marking millions behind the desk in his skyscraper office, lighting
cigarettes, checking stock prices on a bank of computers, barking
buy and sell orders into a speaker phone. Bud wants to sell Gekko
stock because he wants to get into that circle, be like Gekko.

Bud Fox
Working as a junior stockbroker as Jackson
Steinem & Co., desires to be successful.

One day, Bud has a crappy day and meets with his father (Martin
Sheen) who is an aircraft mechanic and union leader. His father
complains about Bud entering wrong industry to become a
salesman. However, Bud is young and ambitious, so he denied and
lied to his father he is going to get a promotion soon. On Wall
th
Street, until 20 century 80s, stockbrokers were considered as
despised position. The reason why people think this way is the job
responsibilities were simple and didnt require high education
level. A typical image of stockbroker is short, alcoholic, and loud. It
has become a special broker culture. However, along the economy
developing, bonds and other financial products are rising, brokers
are eventually stepping in a million club. Like Gekko mentioned
in movie, Junk Bond department in Jackson Stein is pretty good.
Junk Bond is one of the most popular financial products in 1980s.
The most common function of Junk Bond is leverage buyout.
During that time, thousands of students from Harvard and
Wharton are becoming stockbrokers.

Gordon Gekko
Corporate raider
A legendary Wall Street player.

Corporate raider is an investor who buys a large number of shares in a
corporation whose assets appear to be undervalued.

On the other hand, Gekkos occupation is the most popular

position in 1980s Corporate Raider. Corporate raiders are
investors who buy a large number of shares in a corporation
whose assets appear to be undervalued. Basically, they buy
underperforming companies and break them up and sell for profit.
In 1980s in the United States, acquisition is the most profitable
trade. The profit is usually ten times even hundreds times of the
investment. When Gekko first meets with Bud, he is on the phone
and making acquisition of Teldar Paper Company. In the movie,
there are at least two other acquisitions. One is Whiteman buying
Anacott Steel, because Bud knows White mans plan of meeting
with Anacott, Gekko raises the stock price in order to make a huge
profit out of it. The other one is Bud persuades Gekko to make
acquisition with Bluestar, because his father is working as a
mechanic at Bluestar and has the connections. Gekko is found
doing dirty trades and Bud helps Whiteman get back the control of
Bluestar in the end.
The whole Wall Street is like a brief print of 1980s Wall Street
finance world. It explains the complicate relationship among
economy, money, power and morality. The climax of the whole
movie is when Gekko making speech in the meeting of
shareholders of Teldar Paper, he said:

I am not a destroyer of companies. I am a liberator of

them! The point is, ladies and gentleman, the greed, for
lack of a better world, is good. Greed is right, greed
works. Greed clarifies, cuts through, 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. And greed, you
mark my words, will not only save Teldar Paper, but that
other malfunctioning corporation called the USA. (Wall
Street, 1987)

This is a perfect speech because he is not hiding his greed and
ambition. He believes in greed. He uses greed to guide his
behavior and choose his path of life. He uses business rules and
finance rules to satisfy the endless desire of greed. In the end, Bud
asks Gekko: How much is enough? There will never be enough
because greed is like an endless hole. In real world, people like
Gekko act reckless caused lots of people loosing jobs, such as
Dennis Levine and Ivan Boesky. Turns out, greed is not good;
people like Gekko are all ended in prison. However, corporate
fraud still exists among us. And those people who are causing it
should be punished.