Über die Autorin bzw. den Autor

WILLIAM (BILL) BONNER is President and CEO of Agora Inc., one of the world’s largest financial newsletter companies (www.agorafinancial.com). He is the creator of the Daily Reckoning, a contrarian financial newsletter (www.dailyreckoning.com). Bonner is also the author, with Addison Wiggin, of the international bestsellers Financial Reckoning Day and Empire of Debt.

LILA RAJIVA is a political journalist and the author of The Language of Empire, a groundbreaking study of the media coverage of the Abu Ghraib prison scandal. She is a contributor to Agora Financial(www.agorafinancial.com) and the creator of the blog, The Mind-Body Politic (www.lilarajiva.com).

Von der hinteren Coverseite

Collectively, people think and act in ways that are different from how they think and act as individuals. Understanding these differences, says William (Bill) Bonner—a longtime maverick observer of the financial world and the vagaries of the investing public—is vital to preserving your wealth and personal dignity. From the witch hunts of the early modern world to the war on terror, from the dot-com mania to the real estate bubble, people have always been caught up in frauds, conceits, and wild guesses—often with devastating results. In Mobs, Messiahs, and Markets, Bonner and coauthor Lila Rajiva show groupthink at work in an improbable array of instances throughout history and reveal why swimming against the current pays. They explain why people so often abandon good sense and good behavior to "follow the crowd" and show you how to avoid getting caught up in the public spectacles around you.

If an investor merely recognizes the way mob sentiment works, the authors point out, he is far ahead of most others. Ordinary people, for example, turn over billions of dollars' worth of their hard-earned money to brokers and mutual fund managers every day—immediate, tangible, personal money—believing that strangers will give them back even more. Whatever would make them think so?

Mobs, Messiahs, and Markets demonstrates that investors are in fact caught between a rock and a soft place—between the private world they can understand and master and the misleading public spectacle of the markets. "The further away you get from your investments, and the less you suffer the consequences if they go bad, the worse your performance will be," say Bonner and Rajiva. "That's why 'collective' investments like index-linked funds,mutual funds, hedge funds, insurance funds, and pension funds are usually so bad. The investors are too far from the facts—and the managers are too far from the consequences."

The authors' cautionary tale of the current bubble economy warns that the gush of credit let loose by Alan Greenspan is fraught with perils for the unwary—but their thoughtful and always entertaining approach also offers some sound investing principles for avoiding the pitfalls of the public spectacle, thinking for yourself, and protecting your money, your sanity, and your soul.

Aus dem Klappentext

Collectively, people think and act in ways that are different from how they think and act as individuals. Understanding these differences, says William (Bill) Bonner--a longtime maverick observer of the financial world and the vagaries of the investing public--is vital to preserving your wealth and personal dignity. From the witch hunts of the early modern world to the war on terror, from the dot-com mania to the real estate bubble, people have always been caught up in frauds, conceits, and wild guesses--often with devastating results. In Mobs, Messiahs, and Markets, Bonner and coauthor Lila Rajiva show groupthink at work in an improbable array of instances throughout history and reveal why swimming against the current pays. They explain why people so often abandon good sense and good behavior to "follow the crowd" and show you how to avoid getting caught up in the public spectacles around you.

If an investor merely recognizes the way mob sentiment works, the authors point out, he is far ahead of most others. Ordinary people, for example, turn over billions of dollars' worth of their hard-earned money to brokers and mutual fund managers every day--immediate, tangible, personal money--believing that strangers will give them back even more. Whatever would make them think so?

Mobs, Messiahs, and Markets demonstrates that investors are in fact caught between a rock and a soft place--between the private world they can understand and master and the misleading public spectacle of the markets. "The further away you get from your investments, and the less you suffer the consequences if they go bad, the worse your performance will be," say Bonner and Rajiva. "That's why 'collective' investments like index-linked funds, mutual funds, hedge funds, insurance funds, and pension funds are usually so bad. The investors are too far from the facts--and the managers are too far from the consequences."

The authors' cautionary tale of the current bubble economy warns that the gush of credit let loose by Alan Greenspan is fraught with perils for the unwary--but their thoughtful and always entertaining approach also offers some sound investing principles for avoiding the pitfalls of the public spectacle, thinking for yourself, and protecting your money, your sanity, and your soul.

Auszug. © Genehmigter Nachdruck. Alle Rechte vorbehalten.

Mobs, Messiahs, and Markets

John Wiley & Sons

Chapter One

All reformers are bachelors. -George Moore

It is a shame that the world improvers don't set off some signal before they go bad, like a fire alarm that is running out of juice. Maybe some adjustment could be made. Instead, the most successful of them-such as Benito Mussolini and Adolf Hitler-actually gain market share as they get worse. Their delusions are self-reinforcing, like the delusions of a stock market bubble; the higher prices go, the more people come to believe they make sense.

The do-gooders who never catch on, of course, are hopeless from the get-go. Take poor Armin Meiwes. The man thought he had a solution to the problems of poverty and overpopulation. He was, no doubt, discussing his program with Bernard Brandes just before the two cut off Brandes' most private part and ate it. Then, wouldn't you know it, Brandes died, either as a result of blood loss from the butchering or as a consequence of Meiwes slitting his throat. And then the press made a big stink about it, branding Meiwes the "Cannibal of Rotenburg." But Meiwes was not merely a pervert; he was an activist.

"We could solve the problem of overpopulation and famine at a stroke," said he, according to testimony in the Times of London. "The third world is really ripe for eating." But wait, a fellow omnivore thought he saw a flaw in Meiwes' utopia: "If we make cannibalism into the norm, then everyone will start eating each other and there will be nobody left." "That's why I'm not keen on eating women," replied Meiwes.

It seems never to have occurred to either of them that just perhaps not everyone would want to be eaten. Or that maybe people would find being eaten even less desirable than having to stand in line or drive around looking for a parking space or the other symptoms of what they took to be planetary overcrowding. Still, anthropophagy might have solved the problems of overpopulation and undernourishment in a single slice. And if his recipe for planetary improvement had not been interrupted by the polizei, who knows what might have happened?

But now the poor fellow is in the hoosegow making do with hamburger. The same thing happened to another of the world's do-gooders gone bad, Saddam Hussein. We don't know much about the Butcher of Baghdad, but his defense was little different from that of all ex-dictators-he thought he was building a better world. Iraq is, after all, a wild and wacky place, with different tribes and religious groups ready to cut each other's throats. At least that was Saddam's story. Without his firm leadership, he claimed, the country would have been a mess. We think of another great world improver, Il Duce, a clown who thrashed around in typical do-gooder claptrap, looking for a theme that would bring him to power. When he finally got into office, he found a new program better suited to his ambitions: Put on silly uniforms. Strut around telling the masses that you're recreating the glory of ancient Rome. Spend a lot of money. So many people came to admire the man that he began to think himself admirable and to believe that his program might actually work as advertised. Then, he invaded Abyssinia ... and the bull market in Benito Mussolini was over.

BLUE BLOODS IN BLACK SHIRTS

But while Mussolini's star was on the rise, it claimed some strange followers. One of the strangest was carried away, with thousands of other old people, in the unusually long, hot summer of 2003-Diana Mitford. She was the woman who married Oswald Mosley, and at their wedding in 1936 were some of the most important people of the age, notably Adolf Hitler and Joseph Goebbels.

Of all the stupidities into which a man can fall, the stupidity that Oswald Mosley launched headlong into was one that was especially vile. With money supplied by Mussolini, he organized Britain's "Blackshirts," an organization much like the Nazis in Germany. National Socialism was supposed to be the wave of the future, but Mosley's group couldn't seem to come up with anything more original than going into London's East End and beating up Jews. Most Englishmen were appalled. When World War II broke out, the Mosleys were interned as security risks. Though they were set free after the war was over, they were told to get out of town. They then joined their best friends, the Duke and Duchess of Edinburgh, in France, where they lived out their remaining days. Diana herself lasted into her 90s.

Diana was not only smart; she was among the world's great beauties. She was said to be the prettiest of the Mitford sisters, which was tough competition, and even in her 90s, she posed for Vogue magazine and she still looked good. She was "the most divine adolescent I have ever beheld: a goddess, more immaculate, more perfect, more celestial than Botticelli's sea-borne Venus," wrote a friend.

Really, it is almost too bad she wasn't dumb. She might have glided through life and been a joy to all who saw her. Instead, she married badly ... which is to say, she fell in love with Mosley, who was an idiot, and threw her lot in with him. Later, British counterespionage agents came to see her as the greater threat. "The real public danger is her," said a report. "She is much more intelligent and more dangerous than her husband."

Of course, she was not the only one of the Mitford sisters to go bad. They were almost all too smart for their own good. Their synapses fired right, left, and overtime ... and took them in strange directions. Sister Unity, like Diana, took up with the Nazis. Sister Jessica took an equally radical course, but in a different direction; she became a Marxist. It seems as though a smart person will go along with almost anything, no matter how preposterous. "I don't understand," said Lord Redesdale, father of the Mitford girls. "I am normal, my wife is normal, but my daughters are each more foolish than the other."

While Hitler was praising Diana and Unity as "perfect specimens of Aryan womanhood," the other sister, Jessica, known in the family as Decca, was plotting to buy a handgun with which to kill the Fhrer. But it was Unity who actually used a pistol-on herself. She shot herself in the head and died in 1948. What had become of the sweet little girls raised in Swinbrook? How could normal people produce such extraordinary characters? How could such divine little angels turn mad?

We have no ready answer. But a friend tells us of a book by Riccardo Orizio, an Italian journalist, who hunted down and interviewed former dictators. Dead ones, of course, did no talking, but a surprising number seem to remain among the quick. His book, Talk of the Devil: Encounters with Seven Dictators, includes conversations with Idi Amin; Jean Bedel Bokassa; Wojciech Jaruzelski; Nexhmije Hoxha (who, with her husband Enver, ruled Albania for nearly 50 years until his death); Jean-Claude (Baby Doc) Duvalier; and Mengitsu Haile Mariam, the Marxist-Leninist dictator of Ethiopia.

What is clear from the conversations is that they are all as mad as Diana and Oswald Mosley. Yet they all insist that whatever evil they may have done-mass murder, starvation, grand larceny-they were only making the world a better place. And none of them regretted or repented anything, except for the tactical "mistakes" that got them booted out of their countries eventually.

At least Diana Mitford Mosley had no blood on her hands. And, after four decades of peer pressure, she did finally admit that her wedding guests were not the nicest folks you could have to a party. "We all know he was a monster, that he was very cruel and did terrible things," she said of Hitler in 1994. "But that doesn't alter the fact that he was obviously an interesting figure. No torture on Earth would get me to say anything different."

Diana Mitford Mosley-may she Rest In Peace...

WORLD IMPROVERS

The trouble with the big wide world is that it is never quite good enough for some people. They keep trying to improve it. No harm in that; you should always try to make your world a better place. Wink at a homely girl, perhaps, or curse a bad driver. But the world improvers are rarely content with private acts of kindness. Instead, they want gas chambers and Social Security-vast changes almost always brought about at the point of a gun. Thus it was that central banks were set up and given the power to control what doesn't belong to them-your money. Thus it came to be that we got regularly felt up by strangers at airports-and thought it normal.

Today's newspapers ooze world improvements. A single day's issue of the New York Times-an especially earnest journal-brings forth a plague of them. On the editorial page one day is "A Proposal to End Poverty." The proposal is made by world-class world improver, Jeffrey Sachs, who urges rich nations to rob their own citizens so that the money might be turned over to poor nations.

While the New York Times merely dreams of ending poverty, our favorite columnist, Thomas L. Friedman, joins our president in wanting to "rid the world of evildoers." We are not making this up; this was George W. Bush's own line. Bush, Tony Blair, and Friedman are hoping that the forced conversion of the Iraqis-to democracy-will squeeze out a little more evil from the planet.

When it comes to resisting the temptations of world improvement, married men, especially those with teenage children, have a great advantage. They are too busy trying to earn a living to pose much of a threat to anyone. And when they are not actually working, they have family tensions to arbitrate, tempers to calm, lightbulbs to change, and doorknobs to fix. There is something about domestic life that tames a man ... brings him down to earth ... and keeps him tethered and modest. If he is ever tempted to think he knows something, he has his wife and children to remind him how wrong he is.

The single man, on the other hand, is a desperado. Adolf Hitler and Joseph Stalin were, effectively, single. So was Alexander the Great. They had no private lives; they had perforce to make public spectacles of themselves. The single man still feels the need to be a conqueror-of women or of men-by seduction or by brute force. That is why the public generally elects family men to high office; they don't trust the lone wolf. That may be one reason why George W. Bush-a married man-is likely to be denied the success that more notorious, and single, world improvers have had.

Take Alexander the Great, for instance. The American public learned all it needed to know about Alexander in 2004, when the Oliver Stone film first hit the screen. The scenery is fabulous-mountains, deserts, the Hanging Gardens of Babylon. There are extravagant battle scenes, Persian war chariots running through the Greeks' battle squares, elephant charges in the Indus valley.... Oliver Stone has done what we thought almost impossible. Using all of this and all the tricks of the filmmaker's art, he has produced a boring film. Not that it is a bad flick. Not at all. It would take a new script, a new cast, and a whole new shooting to get the level up to "bad." As it stands, it is merely pathetic. The only thing impressive about it is the ability of two of the leading actors to say the most absurd things without smiling. Alexander, for example, looks up toward the heavens and dreamily explains that he is conquering the whole Middle East in the name of "liberty." Readers will remark that George W. Bush does and says similar things. Neoconservatives even think they see a bit of Alexander in the American president-perhaps the curl of his hair, the cut of his jaw, or the humbug of his palaver. Maybe so. But we had hoped for more. Art should never be as dull and dim-witted as real life.

Invading Afghanistan and Iraq, Americans are following in the Macedonian's footprints. In fact, it is hard to go anywhere in the Middle East without tramping on one of Alexander's trails. In the spring of 334 B.C., for instance, Alexander's army crossed the Hellespont into what is today Turkey. What an adventure! Battles, jewels, women, strong drink, new and exotic places-what man could ask for more? The route was long-all the way to Libya and then over to the Indus river. But the poor man died less than 10 years after leaving Greece, brought down not by the Iraqis or the Afghanis of the time, but by fever. Alexander had won every major battle, but he was a dead man at 33.

In the scene that is most memorable-because it is so bad-this ersatz Alexander turns his face to the sky and dreams of a better world ... while his friend dies on the bed next to him. Like all world improvers ever since, the only better world Alexander could see was the reflection of his own face.

Just as Alexander wanted to remake Babylon into a Greek city, the new conquerors, two millennia later, try to turn Baghdad into an Anglo-American one. They want the Iraqis to "reform" their government. What the do-gooders mean is they want it made more like theirs. Private acts of charity or innovation that might actually make the world better are of little interest to the world improvers. They propose a ban on world hunger-without planting a single turnip. They take up the cause of "freedom" in other countries-and force the liquor store next door to close on Sunday. They insist so strongly on better treatment for women in the Islamic world, they forget to kiss their own wives.

Another New York Times columnist, David Brooks, is not content with poverty eradication and forced conversion to democracy. From this day forward, said Brooks, just after a State of the Union address in which George W. Bush had announced his aim of "ending tyranny in our world," the American president "will not be able to have warm relations" with dictators.

We don't know what air Mr. Brooks breathes, but we suggest he open a window. He may be in need of oxygen. Already the U.S. president has sworn off drinks; if he swears off dictators as well, he will be as worthless, indeed as positively dangerous, in foreign affairs as Woodrow Wilson was. As for ending tyranny, Mr. Bush might just as well have pledged to ban bad taste ... or ugliness ... or death itself. In the contest between tyranny and George W. Bush, we have seen no odds. But we wouldn't put our money on the president. Mr. Bush has had only seven years of practice in high office. Tyranny has been rehearsing for centuries.

But while the President and his merry band of freedom fighters may claim they are jousting on behalf of democracy, it is not really the vote that they want to spread so much as their own favorite vision. After all, Hitler won elections. So did Mussolini. And Genghis Khan ... and even Montezuma. No, what the world improvers want is a globe as familiar as their own boudoirs. If other people have other tastes and other ideas, well, they must be uneducated ... or evil. Brooks claims, "It's the ideals that matter." He means his own ideals, of course. What he objects to are other people's ideals ... and, as long as he has more firepower on his side, he doesn't mind forcing the issue.

Of course, ideals do matter. Honesty, integrity, honor, love, service, dignity, frugality, industry, self-discipline, charity-these are the qualities that make the world a better place. Brooks' ideals, on the other hand, are merely excuses for vain meddling. If an election is held in Iraq, will the world be a better place? No one knows. What really moves the world improvers is vanity; and what makes them odious is that they give in to it so readily.

STILL TRYING TO HUSTLE THE EAST

But, even in a whole nation of hallucinators, the grandeur of New York Times editorialist Thomas L. Friedman's follies stand out. Take that column in which he complained about "America's Failure of Imagination." In it, Friedman imagined Osama bin Laden as "a combination of Charles Manson and Jack Welch"-an evil personality, but with organizational skills. "We Americans can't imagine such evil," said Friedman. "We keep reverting to our natural, naively optimistic selves."

(Continues...)

Excerpted from Mobs, Messiahs, and Marketsby William Bonner Lila Rajiva Copyright © 2007 by William Bonner . Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.