Frank Partnoy is the author of F.I.A.S.C.O.: The Inside Story of a Wall Street Trader and Infectious Greed: How Deceit and Greed Corrupted the Financial Markets. He has worked as an investment banker at Morgan Stanley and a corporate lawyer, and has testified as an expert before both the United States Senate and House of Representatives. A graduate of Yale Law School, he currently teaches law at the University of San Diego. His new book is The Match King: Ivar Kreuger, The Financial Genius Behind a Century of Wall Street Scandals.For the Wall Street Journal, Partnoy named a five best list of books on financial schemes.
One title on the list:
Memoirs of Extraordinary Popular Delusions and the Madness of CrowdsRead about another book on Partnoy's list.Are crowds wise or mad? Witnesses to witch hunts, religious crusades or investment bubbles tend to vote for madness. Charles Mackay certainly did. Mackay (1814-89) compiled this treatise on a wide variety of mass delusions, including the belief in alchemy, the enthusiasm for dueling and the appetite for Nostradamus’s prophecies. But the book is most memorable for its discussion of financial lunacy, such as those two infamous 17th-century bubbles, the tulip mania in Holland and the South Sea Co. frenzy in England. “Men, it has been well said, think in herds,” Mackay writes. “It will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” Some of his stories might be apocryphal, but all are entertaining, particularly the one about the poor sailor who ate a prized tulip bulb, thinking it was an onion.
Extraordinary Popular Delusions and the Madness of Crowds also appears on Jonah Lehrer's list of the five best books on irrational decision-making.
The Page 99 Test: The Match King.
--Marshal Zeringue
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