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The Match King

Thursday, May 07, 2009

From the 1920's through the Great Depression, Ivar Kreuger made a fortune selling matches. His matchstick monopoly was one of the rare success stories of the period— but his business practices were more than questionable: shell companies, fudged accounting figures, off-balance-sheet accounting and even forgery. Frank Partnoy shows how Kreuger’s business methods were precusors to the financial instruments wreaking havoc today in The Match King.


Comments

  • [1] Phil Henshaw from NYC May 07, 2009 - 01:31PM

    One thing implied by Frank Partnoy's observation that most of history’s great financial frauds 1) come from very successful businesses that get in trouble, and 2) it's something we see repeated over and over and don't learn from... does point to something that comes naturally to most people but they don’t realize. To me it looks like what one naturally does when it seems you have a sure bet, and are allowed to keep adding your own winnings to your bets... a sure formula for dramatic failure. It's odd that the response of the financial system regulators to that hazard is to try to really really guarantee sure bets... instead of noting when escalating them naturally becomes dangerous.


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