how Wall Street supermen cashed in on pandemic misery and chaos
- Written by Carl Rhodes, Professor of Organization Studies, University of Technology Sydney
Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis[1] chronicles the cold-blooded response of Wall Street to the COVID pandemic. New York finance journalist Scott Patterson reports how savvy investors used the devastation of the pandemic to reap billions in profits.
Combining insider access with masterful storytelling, Patterson’s meticulously researched book tells the tales of the investors, scientists and mathematicians whose creativity, expertise and risk-taking created financial opportunities out of a worldwide disaster that killed millions.
Review: Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis (Scribner)
Chaos Kings is not so much about the rapacious “greed is good” mentality of the 1980s. In 2021, the prevailing attitude was more like “greed is amoral”, technical even. As the profits flowed from the COVID disaster, there was little hint of any ethical quandary. All stops were taken out in the pursuit of profit from pain.
The most disconcerting aspect of Patterson’s account is how the men who did this (they are all men) are generally presented as quite sympathetic, if flawed, characters. On the one hand, Patterson presents them as unique, each one something of a stock-market superman. On the other hand, they remain human, all too human.
The New York Stock Exchange, where the ‘chaos kings’ exploited the uncertainty of the pandemic.
Wikimedia Commons, CC BY-SA[3]
On the doorstep of doom?
Many of the chaos kings were schooled in crisis profiteering during the 2008 Global Financial Crisis. They learned, too, from the 1987 Black Monday crash. But those events were small-time in comparison to what was happening in 2020.
COVID offered an opportunity of unprecedented proportions, and the chaos kings looked at it as having even more potential upside than the Wall Street crash that spawned the great depression in the 1930s – upside for them, at least, as they were able to win while everyone else was losing.
A times, Patterson’s storytelling takes on the character of well-written objective reportage. But his book also reads, in some ways, like a set of interconnected fictional short stories, filled with thrilling twists, turns and revelations.
The plots err towards being heroic, Odyssean even. Tale after tale is recounted about the up-and-down adventures of the chaos kings, who prance around the world’s stage, from New York to London and Davos, and beyond. The Wall Street protagonists undertake epic journeys, fight mythical beasts and weather calamitous acts of nature, only to return home stronger and richer men. They are the financial victors in a world of losers.
But Chaos Kings is not fiction and Patterson does not entirely accept his own heroic narrative. He also alerts us to its tragic side, its pathos even. Beyond any putative heroism, Patterson appears keenly aware that making heroes out of a small handful of financial winners offers no salvation for the victims of the catastrophe.
He ends pessimistically, stating that we remain on the “doorstep of doom”. Between the pandemic, the climate crisis and the increasingly unpredictable geopolitics represented by the Russian invasion of Ukraine, Patterson seems resigned to our dismal collective fate. He is a keen observer of the world, deftly recording its demise with precision and panache.
Chaos Kings provides a superb, if harrowing, account of people who profit from catastrophe and the broken lives of people they will never meet or see. These are “crisis hunters” who hide behind cold computer screens, playing with other people’s lives as if they were meaningless pieces in a parlour game for the wealthy elite.
Read it and weep.
References^ Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis (www.simonandschuster.com)^ Could better regulation reconcile trading and ethics? (theconversation.com)^ CC BY-SA (creativecommons.org)
