In the vast, infinitely complex world of the international economy, what difference can one man really make? Even billionaires don't have enough cash to really make a difference -- if Bill Gates went nuts and tried to crash the stock market somehow, other billionaires, banks and world governments would be there to stop him.
Yet throughout history there have been times when everything came together just right for one single person to ruin everyone's shit.
The Man: A random oil trader who got really, really drunk.
The Impact: Single-handedly raised the price you pay for gasoline in a drunken bout of trading.
There's a fridge full of booze behind every great financial disaster.
What's the most damage you've ever done while drunk? Maybe ruined a party? Or woke up in a ditch three states away? Or got arrested? Or sent shock waves through the worldwide petroleum market that raised the price of fuel for millions if not billions of people?
If you did that last one, your name is probably Steve Perkins.
Above: Perkins, his features and preferred brand obscured to protect the exceedingly guilty.
The 34-year-old Perkins was an oil trader who got to spend a weekend on a fully funded golfing retreat, paid for by his employer, PVM Oil Futures. So there he was, drinking and schmoozing to his heart's content. But then the weekend ended.
Perkins, however, chose to extend his bender with additional alcohol, starting his binge midday Monday and continuing into the wee hours of Tuesday morning. Oh, he didn't call in sick to work -- he went right back to trading, drunk off his ass.
"You're a cute-lookin' little oil future. Let's do it."
Although oil brokers are only supposed to make trades on behalf of clients, Perkins wanted to try it out for himself. He bought 7.13 million barrels of Brent oil, with a value of $520 million, over a 19-hour period between Monday afternoon and Tuesday morning in a drunken blackout. If those sound like big numbers, try this: Perkins' drunken trading was responsible for up to 69 percent of the volume of Brent oil being traded globally. After reaching that percentile, he presumably belched for a few minutes and slowed down his trading, satisfied that his mission had been accomplished.
At the peak of his trading/drinking binge, oil prices fluctuated upward by more than $1.50 per barrel in less than 30 minutes, something that typically never happens barring some sort of global catastrophe.
Or a truly exceptional martini.
In the end justice was not even close to being served, and Perkins was fined 72,000 pounds in damages and banned from participating in any regulated market activity for five years. People have lost their license for longer for getting drunk and crashing their car. Perkins did the same with the global economy, though we guess he probably indirectly prevented people from driving drunk, or at all.
The Man: A mathematician who came up with a cheat code for making infinite money.
The Impact: The worldwide recession you're living through right now.
If you're eating dog food right now, it might be this man's fault.
Most of you probably don't gamble, or at least don't gamble a lot, for fear of losing your rent money on a single bad hand or blown point spread.
But imagine somebody came up with a simple formula that took the guesswork out of it. You could punch the information into a calculator and it would tell you your risks with any given hand or sports team. It guarantees that over the long run, you'll come out ahead. Think about how it would streamline gambling -- hell, you could create a computer program to play blackjack for you. Think about how many more people would gamble if this existed -- it'd make gambling a reliable, safe way to make some extra cash. All the risk would be gone. Everybody would do it.
"Keep dealing 'til I have yacht money."
So now imagine that this goes on for five years, everybody winning, all the time. Then the formula told everyone that the Detroit Lions were going to win the Super Bowl, and everybody bet all of their money on them -- to the tune of trillions of dollars. And then the Lions started losing. And losing. And losing.
It may be hard to imagine.
In the real world, the formula was called the Gaussian copula function and it was created by David Li, one of many mathematicians hired by the markets to do just that -- come up with formulas to take the guesswork out of investing. It worked so amazingly well that the entire securities market leaped on Li's formula like it was a solid gold pork chop dusted with cocaine. Everyone started using it -- investors, banks, regulators. Li was considered a favorite for a Nobel Prize.
"You're like the Martin Luther King Jr. of money."
Investors had once been limited by the sheer complexity involved in calculating risk. But Li's formula allowed them to bundle dozens of bonds together into giant, pulsing money piles called collateralized debt obligations (CDOs), with his magical formula convincing them their money was safe. Just like in our gambling analogy, everybody wanted in -- Li's breakthrough made it possible for investors to bet more money faster and with less "thought" required than ever before.
The dollar amounts are impossible to comprehend. Prior to Li's formula, the market had $275 billion sunk into CDOs. By 2006, speculation had increased to $4.7 trillion. Credit default swaps, essentially "bets" that a company would be able to pay back its loan, grew from $920 billion to $62 trillion. Can you picture 62 trillion dollars? Don't bother. You can't.
But then along came the proverbial Detroit Lions, the one bet that would break the formula: the housing market, and hundred of billions of dollars worth of houses that their owners could not afford. All of those "sure thing" loans went into default, all of those losing bets came due at once, and the rest is history.
Way to be a dick, math.
The man: An American currency speculator and billionaire.
The Impact: Caused British money to lose a quarter of its value, in one shot.
We're also pretty sure he tried to kill James Bond.
To understand the scheme that made George Soros a billion dollars in one day and nearly caused the value of British money to collapse, you have to understand a practice called short selling. So for the few of your in our readership who don't have vast and extensive investment portfolios, allow us to explain.
Short selling is a way to bet against stocks (or currencies or whatever) that you think are about to go down in value. You're allowed to basically buy shares with an agreement to pay for them in the future, at whatever the prices are in the future. Then you can go ahead and sell them now, at whatever the prices are now. So if the price of the thing goes down like you think, when it comes time to actually pay you'll have to pay less than what you sold them for, and you'll have made a profit. If the price goes up, you'll have to pay more than what you sold them for, and you'll lose your ass. That's the risk you take.
"Short selling" can also refer to a very specific sort of pimping.
George Soros had a feeling the British pound was about to drop in value.
At the time, the British government was trying to keep the pound's value up in comparison to the currencies of other European countries, despite the fact that their economy wasn't doing as well as, for instance, Germany's. It was doing this by buying up billions of units of its own currency.
And storing them in very large hats.
Soros, meanwhile, made one of the biggest gambles in the history of money: he short sold fucking $10 billion worth of currency on September 16, 1992, a day that would become known as Black Wednesday. This flooded the currency boat faster than the British government could bail it out. The value of the pound started dropping, to the point that the U.K. was forced to withdraw from the European Monetary System. Over the next three months, the value of the pound would drop by 24 percent.
Soros pocketed a cool $1.1 billion, and from then on became known as "The Man Who Broke the Bank of England."
George Soros, seen here not giving a fuck.