Among the many overused clichés that have been dusted off to describe the chaos in financial markets over the past few months is the observation that this is ‘a crisis like no other’. Yet in one rather dark respect, it is following convention to the letter. As losses pile up and billions evaporate, an increasing number of financiers have decided to take their own lives rather than face up to the scale of the catastrophe.
In Germany, the billionaire Adolf Merckle threw himself under a train as one of Europe’s greatest family fortunes unravelled. In this country, Kirk Stephenson took the same way out after his private equity firm ran into trouble. The French investment adviser Thierry Magon de la Villehuchet, whom Taki described recently as ‘an aristocrat, a gentleman and an honest man’, but who had placed hundreds of millions of his clients’ money with the hedge-fund fraudster Bernard Madoff, locked himself in his office, took some sleeping tablets and slashed his wrists.
Christen Schnor, HSBC’s head of insurance, hanged himself in a suite at London’s Jumeirah Carlton Tower hotel, while Bear Stearns’ research supervisor Barry Fox took the most traditional way out by jumping from the 29th floor. Last week, Irish property tycoon Patrick Rocca, whose companies owned a number of prominent office buildings in London, shot himself while his wife was out on the school run.
When markets turn against them, it seems, financiers are swift to contemplate the ultimate closing out of their personal positions. Psychologists have even devised a word for them: ‘econocides’, people who take their own lives as a result of losing lots of money.
And yet when you pause to think about it, of all the possible responses to financial mayhem, suicide is one of the strangest. Killing yourself is not a normal way of dealing with professional failure. Football managers don’t opt for that ultimate early bath when their team gets relegated — although, it has to be said, Arsene Wenger looks increasingly swivel-eyed as Arsenal unravel. Political leaders don’t respond to by-election defeats or bad election results by taking a bottle of whisky and a revolver into the billiard room — although we’ve yet to see how Gordon Brown takes the Tory landslide of 2010: ‘doing the decent thing’, as it used to be called, may be preferable to facing a jeering crowd of old Etonians on the government benches.
True, the Japanese have always regarded ritual suicide as a traditional, even honourable, response to personal shame or disaster: the number of Japanese suicides has exceeded 30,000 a year for the past decade — including, in the aftermath of corruption scandals, numerous government officials. In the West, however, the only group of people who appear to think that taking your own life is a rational way of dealing with a really bad day at the office are bankers and fund managers.
In part, that might be historical. The abiding image of the worst ever Wall Street crash is of brokers jumping from windows. Actually, that’s a bit of a myth. As the economist J.K. Galbraith pointed out in The Great Crash, 1929, some enthusiastic journalists spotted a pair of window cleaners high up on a ledge, and decided they must be brokers since it made a better story. The myth was a good one, and has stuck ever since.
Like all urban myths, however, there is a grain of truth behind it. As long ago as 1881, a trader called Attilio Guinio poisoned himself after losing $200 on Delaware and Lackawanna Railroad shares, the dotcom bubble of the day. Every market panic since then has been marked by incidents of high-profile suicides. The events of 1929 may have been mythologised, but four actual or attempted suicides in New York in the latter part of that year were connected to the crash. In 1987, one enraged investor took the concept a step further, shooting first his Merrill Lynch broker and then himself. The interesting question is why they do it when, on the whole, other professions don’t.
One explanation is that finance is an industry that generally sticks with the herd. What counts for the vast majority of participants is not so much whether what you are doing makes sense, but that you are doing the same thing as everyone else. That’s why you get crashes in the first place: everyone climbs onto the same bandwagon, until the whole thing gets overloaded and blows up spectacularly. Then they kill themselves because over the decades it has become the accepted thing to do.
Another explanation is that huge financial losses carry with them a very personal sense of shame. Rich people are rich in part because they value material possessions, and the world’s opinion of what those possessions represent, much more than the rest of us. That’s why they devote so much energy to accumulating wealth in the first place. And while the rest of us might just trade down to shopping at Aldi and driving a Hyundai until we get back on our feet, the mega-rich find the prospect of poverty quite literally unbearable. It breaks them in a way that it doesn’t break ordinary people.
Lastly, suicide is a way of taking responsibility. A banker might be able to live with the thought of ruining himself and his own family. Often, however, a few bad calls on the market will ruin the lives of hundreds or thousands of families. Suicide, in the minds of the moneymen, might seem the only act of grave enough significance to atone for what they have done.
The trouble is, it doesn’t actually fix anything. No stocks start going back up. The losses are no less real. Nor is the task of sorting through the debris made easier by the gesture. De la Villehuchet’s clients might have preferred some advice on how they could get some of their money back. It is hard to imagine any of them really felt better about the situation for the fact that their adviser had killed himself. For the families and close associates of Adolf Merckle and Patrick Rocca, there is surely no consolation in the suicide. Their load has been made heavier by a sense of guilt that they were unable to help, in addition to the pain of their financial losses.
Perhaps Harvard Business School should add classes on personal resilience to its finance module. It is almost impossible to imagine the inner turmoil that drives someone to take their own life — but if nothing else comes out of this crash, perhaps a few bankers could learn that the truly decent thing to do is to stick around to help clear up the mess they’ve created.
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