Wall Street could not funnel all this fresh cash into producing company stocks or soon the company valuations would be far above the underlying company’s ability to produce goods and services.

Alongside these rule changes, the Reagan administration’s deregulation policies in the 1980s and Alan Greenspan’s tenure as Fed chairman in the 1990s allowed financial institutions to create complex financial products known as derivatives. Banks and investment firms were granted unprecedented freedom to trade these derivatives with the growing pool of 401(k) funds. Mutual funds exploded in popularity during this time.