The Match King: Ivar Kreuger, The Financial Genius Behind a Century of Wall Street Scandals

Construction firms had not been willing to take on the risk associated with delays; instead, they put that risk on their clients. But Ivar understood a fundamental proposition about the allocation of risk: both parties to a deal can gain when the party in the best position to bear a risk takes on that risk. Construction firms, not clients, were in

Throughout this time, Ivar appeared entirely without concern. Although he sensed the increasing panic, along with everyone else, he didn’t want anyone in New York to see him falter, particularly given the market’s decline. He knew markets reflected emotions and perception. In finance, there was no such thing as reality. There was only, as Pierpont

Human beings inevitably overestimated the probability of success. Too many young men thought they could become the next Babe Ruth;

From the moment the two met, the power balance shifted, just as it had with Donald Durant in 1922. Ivar charmed Marcosson like no foreign leader or movie star ever had. Marcosson found Ivar soft and persuasive in speech, modest and unostentatious in manner. He was utterly without vanity, almost self-effacing. He seldom spoke of himself, and Marcoss

As Ivar explained, the desires of the three parties were clear: American investors wanted high returns, European governments wanted US dollars, and the match industry wanted monopoly power. The resources also were clear: American investors had dollars, European governments had the power to grant monopolies within their territories, and the match in

The lesson of Ivar Kreuger is not that his businesses were illegal. It is that they were alegal.

While the factories of Europe worked overnight to produce war materials, Ivar quietly purchased match factories throughout Sweden.13 He was a pioneer of vertical integration, buying timber tracts and chemical factories to secure the raw materials needed to make matches. Finally, he merged the leading Swedish competitors to form Swedish Match, a sin

Jack Morgan might have the minds of other American bankers, but Ivar had the hearts of American investors, and those investors now had the power. Ivar didn’t need to lend his own money to France. Instead, he could act as an intermediary, raising money from the Americans and lending their money.

When formal charges were read in the Second Chamber of the Riksdag, just before midnight on April 5, they seemed indisputable. Investigators estimated the loss at 2 billion kronor, more than Sweden’s national debt.8