In 1920 Swedish businessman Ivar Kreuger (1880-1932) controlled most of the worlds safety match production, as well as mining, timber, media, banking and construction industries. Partnoy is a Professor of Law at the University of California San Diego and a historian who has studied Kreuger extensively and written a number of books about him. Some of the businesses Kreuger founded or invested in are still standing today such as Swedish Match Company and Ericsson.
An interesting biography of one of the forgotten financial wizard's of the the nineteenth century.
Frank Partnoy, a frequent commentator on financial disaster for the Financial Times, The New York Times, NPR, and CBS's 60 Minutes, recasts the life story of a remarkable yet forgotten genius in ways that force us to rethink our ideas about the wisdom of crowds, the invisible hand, and the free and unfettered market.
Given that I hadn't heard of Ivar Kreuger before reading this book, I was shocked at the magnitude of Ivar's business empire and his effects on world events.
The reason that he needed to make these semi-moral investment transactions was because Kreuger was so good at match making that he practically put himself out of business.
It was an interesting story; I wish the author was up to the task.
Although we don't hear much about him now, Ivar Kreuger rivaled Jack Morgan in the 1920's as one of the captains of international finance. Partnoy paints his cast of characters with vibrant detail and shows us how Kreuger expertly controlled his public image (and his auditors!) to dupe America's financial class. He left an enormous physical and cultural imprint on Sweden: constructing the stadium for the 1912 Stockholm Olympics, founding Svenska Filmindustri, promoting (and dating) a young Greta Garbo, and building Stockholm City Hall (where the Nobel Prize is awarded).
His companies were listed on the Exchange even though there was little, if anything, in the way of financial information about these companies. In this day of monthly/quarterly/annual reports and yearly audits, it is amazing to learn that the most information Kreuger ever presented to stock holders, etc.
This book is fourteen chapters and a bit more than two hundred pages long, and it covers the life and times of one Ivar Kreuger, a complicated Swedish industrialist who sought to become one of the world's most powerful people, moving from the scion to a Swedish match manufacturer to an industralist and financier par excellence, who before he was ruined in the disaster of the Great Depression, had parlayed his inventive financial instruments and complicated off-the-balance-sheet transactions between a baffling array of shell companies into a multiplication of wealth for himself (and others) that included the holding of sovereign debt and the attempts to manipulate the market for matches around the world. Even with the inevitable death (likely through suicide) and financial ruin of his companies, the author finds him a sympathetic figure even if his innovative financial instruments caused havoc whenever they were used in order to hide complicated financial dealings from the scrutiny of complicit auditors, stubborn regulators, and blissfully unaware investors. Even if Ivar Kreuger was not an honest man or a heroic one, he was a man who is morally superior to most of the people on Wall Street, many of whom would look upon Kreuger as a loathsome figure, and it is that moral superiority that gives this book much of its heft and melancholy, as it appears Kreuger was most interested in cutting a fine figure and living a high life and gaining a lasting and enduring good reputation for serving the best interests of ordinary investors as well as various nations seeking to recover from the horrors of World War I.