Wall Street 2: Gordon Gekko's Secret Revealed

The funniest part of the decidedly unfunny Wall Street: Money Never Sleeps takes place in the first 15 seconds: Gordon Gekko, reclaiming his belongings upon his release from prison (“gold money clip: no money”), is handed back his cell phone, in all its football-sized, 1987 glory. It seems that Gekko, poster child of the junk bond era, is officially a dinosaur.

But director Oliver Stone then does something surprising: He reinvents and modernizes his iconic character. Stone’s new film is checkered with clichéd characters, including a cringe-inducing Susan Sarandon, enmeshed in absurd personal storylines, yet Gekko somehow gets a winningly contemporary makeover.

Gekko has resonated across three bubbles because he was authentic—the Academy agreed, awarding Michael Douglas his only acting Oscar—bringing the go-go ’80s to life. He was a small dose of Carl Icahn, a larger piece of Michael Milken, and yet another swath of Ivan Boesky, three titans from the days of high-yield bonds, hostile takeovers, and insider trading scandals whom Douglas brought to life collectively. Gekko’s “greed is good” speech was even based on an address that Boesky gave at UC-Berkeley in 1986 (“I think greed is healthy. You can be greedy and still feel good about yourself”). And as Boesky and Milken went to prison, so did Gekko.

For the 2010 version, Gekko 2.0 again embodies an era, though the real-life inspiration is less obvious, requiring a peek at the very end of the final credits, when two names anonymous to almost anyone without a Bloomberg terminal, Dan Loeb and Jim Chanos, provide a clue to who shaped Stone’s new Wall Street world view.

Loeb and Chanos are hedge fund managers who routinely made $100 million a year or more during the decade I call the Zeroes, but they both did it as swashbuckling outsiders. Loeb takes stakes in underperforming companies and then publicly berates management until they flee. Chanos short-sells, betting that a contract will go down, applying pressure if necessary, including his famous shorting of Enron. In other words, they make money on Wall Street by attacking Wall Street. Chanos, who gets a cameo in the flick, has even decried the fact that more financial rogues haven’t faced criminal charges.

Which means this pair fits Stone’s model perfectly. As with the original movie, for all his residual glorification of the financial industry, Stone is actually trying to damn it. At a screening I attended with him two weeks ago, Stone told Fortune editor Andy Serwer that he had a script for the movie in 2006, but despite Wall Street nearing its apex as the flick’s 20th anniversary approached—a pretty auspicious time to make a sequel—he had no interest in moving forward with the story until after the meltdown.

Two names anonymous to almost anyone without a Bloomberg terminal, Dan Loeb and Jim Chanos, provide a clue to who shaped Stone’s new Wall Street world view.

At that point, the gang got to work, getting Wall Street details and recent history so right that I was left squinting at the end trying to figure out which financial figures had been tutoring Stone.

Gekko’s big speech in the sequel comes near the beginning, and in two minutes, it does as good a job summarizing what went wrong with the economy as anything out there. Past “I once said greed is good…and now it seems it’s legal” that’s a staple of the film’s trailers, it lays out the case rapid fire: Greed makes my bartender buy three houses he can’t afford…my parents borrow $250,000 against a house worth $200,000…we take a buck, we shoot it full of steroids, we call it leverage…40 percent of profits come from financial institutions rather than producing things…CDOs, CDSs, they’re actually WMDs…when I went away, greed, it seems, got greedier, with a bit of envy…

None of this is breakthrough analysis, but weaved together, and emanating from Gekko’s lips, it’s a quick history lesson. Gekko, his hair feathered rather than slicked, dressed in an open collar rather than suspenders and a power suit, spends most of the movie as the astute contrarian, a seer who saw the explosion ahead of us, the man itching to make a haul, Chanos-style, zagging while the corrupt Wall Street machine zigs.

Even the cultural stuff is spot-on. The language (a “buck” is indeed a million on Wall Street), the drinks (Johnnie Walker Blue Label), the watches (IWC).

Chanos, particularly, can inspire in many ways. After his divorce some five years back, he turned his 12,000-square-foot Hamptons beach house, inspired by King George IV’s Royal Pavilion, into a party palace, importing dozens of women from the Manhattan nightclub scene for clambakes, including Ashley Dupre, the call girl who helped bring down Gov. Eliot Spitzer. (“She is one of many young ladies I have spent time with around town,” Chanos told the New York Post.) In Money Never Sleeps, Gekko’s protégé, played by Shia LaBeouf, attracts a sultry Russian by freely pouring Champagne at a club.

I lobbed in calls, but Chanos and Loeb weren’t game to discuss how much input they may have had in Gekko 2.0. They likely don’t know themselves. But whatever they did to earn Stone’s cameos and thanks, whether coaching, ideas or just inspiration, they played a part reinventing Gordon Gekko and thus likely inspired the next generation of financiers. The cult of Gekko is real on Wall Street, especially among young traders—one of Hollywood’s great ironies, as Stone intended Gekko as a cautionary villain. That explains a lot of what’s gone wrong with the financial system over the past 23 years. At least this time, the folk hero is a tad more deserving of the worshippers.

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Randall Lane is editor at large at The Daily Beast. The former editor in chief of Trader Monthly, Dealmaker and P.O.V. magazines, and the former Washington bureau chief of Forbes, he is the author of The Zeroes: My Misadventures in the Decade Wall Street Went Insane.