When Steve Wynn was 36, he had big plans, lots of debt, but little cash. He needs $ 100 million for his dream of several casinos in Atlantic City. A relative got in touch with a tip: he should meet Michael Milken, the man even collects money for people who couldn’t even get through the door of banks.
So Wynn makes an appointment with the man who so many talk about on Wall Street but who hardly anyone has ever seen. It was a hot summer’s day in 1978 when he entered Milken’s Los Angeles employer, Drexel Burnham Lambert, an investment bank. Immediately a young assistant rushes over, asks for drinks and disappears to get a Coke.
They’re nice here, Wynn thinks. Not as aggressive as everyone says. How then is the great Milken himself? He asks his companion. “But Steve, that was just Michael Milken,” he replies.
Milken is 32 years old, but looks like 20 – also thanks to a toupee that suggests lush black hair. In general, the banker seems to be someone who likes to apply something thicker. He should rather plan on a larger scale right away, he advises Wynn. “If you think you need $ 100 million because you have a good idea, why don’t you record 140?” Asks Milken.
More of everything, that was Milken’s business for 20 years: trading in so-called junk bonds. He raised money for people who couldn’t get anywhere else. To do this, he sold bonds to investors who were keen on returns and created a very special investment segment: that of junk bonds. Milken’s business has always been marginalized, sometimes it went breathtakingly well, sometimes it crashed.
In 1986 he made around $ 550 million in a single year. Four years later he was in prison filling up salt shakers.
For some, Milken embodies the amorality and greed in the financial markets of the 1980s. For others, he is still a savior today, who helped companies get money and who owed millions of jobs. Both sides are probably right: in his book about the biggest financial scandals, US author Scott MacDonald writes that behind financial crimes there are always people who test the limits. The limits of the market, the laws, the unwritten rules.
Milken has not only tested these limits. Instead, it defines what is acceptable: in terms of salaries, fees, the level of corporate debt, and creditworthiness.