Six people who single-handedly made six global economic disasters.
What can one person do in the endless, complex and confused world of the international economy? None of the billionaire will have enough money to seriously affect the global economic situation. Even if Bill Gates suddenly falls asleep and decides to arrange a crash on the stock exchange, other billionaires, banks or governments, of course, will stop him.
Still, sometimes the stars converge in such a way that a single person manages to arrange a real economic catastrophe.
1. Steve Perkins and his half a billion crap
Who: Plain, but very drunk oil broker.
What I did: In a drunken fit of shopping enthusiasm, I provoked the biggest jump in gasoline prices in 2009.
What is so terrible can be learnedafter drinking too much? Spoil the party? Wake up in a ditch a hundred kilometers from home? Or at the police station? Or maybe buy a third of the world oil market, and thus cause a jump in fuel prices for millions, if not billions of people?
Steve Perkins, a 34-year-old oil broker, spent a weekend on the corporate golfing trip, which his employer, PVM Oil Futures, fully paid for. Weekend was a success, but, like all good things, quickly ended. Perkins' soul demanded the continuation of the banquet, so he continued to drink on Monday, and in the pre-dawn hours Tuesday was completely insane. If you think that this prevented him from starting work - you are deeply mistaken. Although, it would be better for him to be affected by the sick.
Although oil brokers are supposed to make deals with the permission of their clients, but here Perkins decided to take the initiative. In a drunken stupor, he bought 7.13 million barrels of Brent oil worth about $ 520 million. For everything about everything, it took him 19 hours, starting from the middle of the day on Monday until midday on Tuesday.
If this amount seems to you to be just solid, let us try to explain this way - drunk Perkins bought up 69 percent of the total Brent oil volume traded at that moment.
Having taken this height, the broker, satisfied with himself, went to sleep, having considered his mission on this accomplished.
As a result, at the peak of a drunken / merry fun, oil prices jumped more than a half a dollar per barrel in less than half an hour, which happens only in times of global disasters.
The story ended with Perkins being fined £ 72,000 and suspended from trading on the stock exchange for five years.
2. David Lee Deals a Crush on Economics with Mathematics
Who: A mathematician who derived a formula that makes it possible to make money easily and in unlimited quantities.
What I did: The global recession in which we all now live. By the grace of this particular person, some people have to sit on pasta today.
Everyone knows that gambling is dangerous. As a proof, each of us can give many instructive examples of their fiction or history, and from the lives of friends or acquaintances.
But imagine that one bright head brought out a simple formula that deprives any game of chance of an element of chance. You hammer information into a special calculator,and he gives out all your risks on a silver platter. That is, you get a guarantee that in the long run you will get a big win.
Imagine how with such guarantees your rates will soar! How many people would rush to play, if that were possible - no risks and a guaranteed win. No one would resist.
Now imagine that all this happens within five years. Everyone wins. All the time. Then the smart formula announces that this year the Super Bowl will go to the Detroit team. Everything, of course, put all their money on “Lviv of Detroit” - trillions of dollars. And take the guys from Detroit and lose!
In fact, something like this happened.
Only in reality, the magic formula was called the Gaussian function of the copula and was derived by mathematician David Lee, who was hired specifically for this purpose - to calculate the likely risks of investors.
Formula Lee showed such a brilliant result that the entire stock market literally began to worship her, like a golden calf, and even covered with a thick layer of cocaine for loyalty. About David Lee began to talk as about one of the most worthy applicants for the Nobel Prize.
Once investors were afraid that their calculations might be erroneous. Lee's invention untied his hands - rivers of securities began to flow into a gigantic money sea, called bonds, secured by debt obligations, as the magic formula claimed that it was absolutely safe.
As in the example of gambling, everyone wanted to be in share - Lee's discovery allowed investors to put more money and get more profit without straining the gray matter.
The volume of money supply was incomprehensible. Before the advent of the Li formula, $ 270 billion was invested in bonds. In 2006, the total amount of transactions in the market reached an astounding amount of 4.7 trillion dollars. The amount invested in the credit default swap, that is, essentially, the rate that the company will be able to repay the loan, has increased from 920 billion to 62 trillion.
And here comes the aforementioned “football team from Detroit”, the one that spoiled the whole raspberry. In our case, this is the housing market and hundreds of billions of dollars invested in real estate, for which its owners could not pay.
All of the loans that Lee considered the “right deal” category to be turned out to be unpaid, people rushed to sell their bonds, and what’s the matter over, everyone knows.
3George Soros or "The Man Who Broke the Bank of England"
Who: American currency speculator and billionaire.
What happened: The British currency suddenly fell by a quarter.
In order to understand the scheme that allowed George Soros to earn a billion dollars in one day and, incidentally, to devalue the national currency of Great Britain by a quarter, it is necessary to grasp the essence of the operation called “short sale”.
Short selling is a way to make money on securities (or currency, or something else), which, in your opinion, is about to fall in price. You buy shares, but you will pay for them later, and as much as they will be at the time of payment.
After that, you can immediately sell these shares, at the price that is now. If you are right, and the prices of these shares are really falling, then by the time you pay for the aforementioned shares, you give them less than you gained from the sale, that is, you make a profit. But if you are mistaken, and the price rises, you pay more than the proceeds from the sale, and find yourself at a loss. This is your risk.
One day George Soros felt that the British pound was about to go down.
At that time, the British government successfully kept the pound at a fairly high level compared to other European currencies, although the British economy was not in such good condition as, say, the German one. It was possible to do this by buying billions of units of its own currency.
And here Soros arranged one of the largest adventures in the history of the currency market: on September 16, 1992, he spent a short sale of ten billion pounds. This day went down in history as Black Wednesday.
The financial boat overflowed faster than the British government managed to respond. The pound exchange rate went down, and fell until the moment when the UK had to withdraw from the European Monetary System. (EMU is a mechanism that existed in 1979-1999 and was designed to maintain monetary stability in Europe and promote the economic integration of European countries; prior to the introduction of the euro, the system was based on maintaining the exchange rates of member countries relative to each other within specified limits; comment mixednews )
On this adventure Soros earned 1.1 billion, and from that time they began to call him “The Man Who Broke the Bank of England”
four.William Paterson is ruining Scotland
Who: The man who wanted to take possession of one of the most tidbits of the world.
What he did: He squandered a fifth of all the money in Scotland, which forced her to unite with England in order to form the UK.
The tiny strip of land connecting North America with South (this is where the Panama Canal is now) is considered one of the most strategically important places on earth. This is the only place where you can quickly get from the Pacific to the Atlantic and vice versa. This was true even before the channel appeared.
That is, if you control the Isthmus of Panama, you control global trade. One of the first to understand this was an enterprising Scotsman named William Paterson and suggested to his government that they establish a colony there. The Scots took the idea with delight, especially since the situation in the Scottish economy was far from excellent.
Flowed money from investors. All managed to collect about 400 thousand pounds. If it seems to you that this is not so much, let's say otherwise: it was the fifth part of all the money that was in circulation in Scotland by that time.
In July 1698, the first expedition went to the Isthmus of Panama. It consisted of 500 people, among them Paterson himself, his wife and child. After arriving, the settlers first built a fortress and set up 50 cannons. It would seem, here it is, happiness!
And then people started to die. Heat combined with a tropical disease emptied a colony, and food was scarce. In the end, it all ended in flight. Paterson himself, too, almost died of fever.
Meanwhile, the authorities of Scotland, without knowing anything, sent a second expedition. She was bigger than before - 1200 people on four ships. Arriving at their destination, the new colonists, to their great surprise, found that: a) the previous colony retreated and b) their plans became known to Spain, which sent its military ships to the Isthmus of Panama.
So Scotland learned that Paterson let down a fifth of the national wealth.
A few years later, an act of unification with England was signed. Only in this way was it possible to patch the hole that was formed thanks to Patersen and his plan.
5. Thanks to one informant, almost the entire world supply of LSD was destroyed.
Who: A chemist who produced almost the entire world supply of LSD of his time. In a nuclear bunker. Until he was caught.
What happened: About 90 percent of LSD was destroyed overnight.
The production of LSD requires expensive laboratory equipment, in-depth knowledge of chemistry and the availability of chemicals that are not so easy to get.
From 1991 to 2000, almost all LSD in the world was produced by one chemist respected in scientific circles by the name of William Picard. He led the Los Angeles Drug Research Program and supervised research at the University of California at Berkeley.
Picard treated LSD with religious trepidation and even, they say, offered up prayers every time before proceeding to the production of the next portion of the drug.
Over time, the weed trader Gordon Skinner joined Picard’s company. Skinner had his own, bought on the occasion of an old nuclear bunker, which was turned into an elite post-apocalyptic shelter, equipped with a speaker system for 80 thousand dollars and a marble jacuzzi.
Skinner's goal was to create a kind of hippie paradise, where it was possible to produce LSD on an industrial scale and have a good time, if that ...
Skinner provided Picard with his bunker as a safe drug preparation lab, and in addition promised to donate several hundred thousand dollars to clinical studies of hallucinogens at Harvard.
Everything was fine until Skinner, playing in a casino, for some reason did not try to impersonate an Interpol agent. He was arrested. The most annoying thing was that he was lucky that day, and he constantly won.
Picard realized that it was time to do the legs, and decided to withdraw all the drugs from the bunker. However, since Skinner began to testify, as soon as the handcuffs clicked on his wrists, Picard did not have time to go far. He was arrested on the road with all laboratory equipment and a supply of chemicals sufficient to produce 15 million doses of the drug.
William Picard received a life sentence, and the government proudly announced the destruction of 90 percent of the world's supply of LSD.
As for Gordon Skinner, he came out unscathed. Although he still had to sell the bunker.
6. Augustus Heinze arranges a bank scare
Who: Owner of several copper mines in Montana.
What happened: The rapid collapse in the stock market nearly paralyzed the American economy.
It was 1906.Entrepreneur Augustus Heinze, who made his fortune on copper in Butte (Montana), decided to try his luck in banking.
Heinze was doing well for a while. He quickly figured out what was happening, and fit perfectly into the existing financial system at the time. But then Heinze and his brother Otto developed a plan. Idiotic plan.
The brothers chose a strategy known as “squeezing short positions”. First, the shares are actively dumped in order to create the illusion of a fall. Having caught the trend, unsuspecting ordinary traders are accepted in droves to open short positions. At the next moment, the “squeezers” begin to quickly buy up shares, which leads to lightning-quick price hike and the forced closing of all short positions. The massive closure of short positions, in turn, leads to an even higher price increase, which plays into the hands of the “squeezers”.
In general, the plan worked. Shares of the company brothers rose from $ 39 to 60.
But they did not take into account that someone else could use their “ingenious” plan. October 15, 1907 unknown force appeared on the marketwhich, with the help of the same short sales and unlimited cash, effortlessly brought down the shares of the Heinz company.
Shares fell 85 percent, to ten dollars apiece. The brothers went bankrupt, and the American economy survived the story as hard as the Lehman Brothers bankruptcy in 2008.
The gamble of Augustus Heinze launched a chain reaction of bankruptcies, which went down in history as the Banking Panic of 1907. The index of the New York Stock Exchange collapsed to a level just above 50 percent of the previous year's peak.