My, How Wall St. Has Changed Since the '80s

Laurie Kulikowski TheStreet.com September 24, 2010

NEW YORK (TheStreet) -- The 1980s was a decade signified by opulence and nowhere was the American dream more present at the time than on Wall Street.

As the U.S. inches its way out of the most horrific three-year financial crisis since the Great Depression, the legendary director Stone revisited the inner workings of Wall Street with a sequel dubbed Wall Street: Money Never Sleeps set to be released today. Stone sought to imitate life in art and sets the movie in 2008, some 23 years after the first movie, and at the height of the crisis, between the bailout of AIG (AIG) and Citigroup (C) by the government, JPMorgan Chase's (JPM) takeover of Bear Stearns' and Washington Mutual, and the failure of Lehman Brothers, among others. In the 1980s the fashion was bold, the hair was high, technology was beginning to get its footing, you were elite if reached "yuppie" status and "I Want My MTV" was what all the cool kids watched. But more than 20 years later, while the fashion styles changed (thankfully), technology became lightening speed fast (also better) and the young generation slowly turned to YouTube to watch videos, things on Wall Street have stayed frighteningly similar. "In the big picture, I don't think things have necessarily changed that much," says Todd Houge, a lecturer in department of finance at the University of Iowa's Tippie College of Business. "There are regulations that reacted to situations and events, but the core of what the first movie was about, greed in the sense of chasing returns, that's still what the investment world is about - trying to find higher returns while managing risk. That's what makes capital markets function and with that you're always going to have cycles," Houge says. Wall Street in the 1980s was signified by increasing leveraged buyouts, particularly of manufacturing and consumer goods companies that had large amounts of cash on their balance sheets and generally undervalued, experts say. The 1989 takeover of RJR Nabisco by Kohlberg Kravis Roberts, then a much less known private equity firm, was the largest leveraged deal of its time and chronicled in the book Barbarians at the Gate: The Fall of RJR Nabisco. 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