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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (64759)	7/17/1999 12:13:00 PM
From: phbolton	Read Replies (1) \| Respond to of 132070

'Devil Take the Hindmost' By ADAM SMITH A look at more than three centuries of financial speculation and the foolishness it has inspired. The first chapter is on the NY Times web site, first few paragraphs follow nytimes.com It was a prosperous country, the richest in the world at the time, seized by a mania: tulips! At the height of the boom, a single tulip sold for 10 times the price of a town house. After the crash in the Dutch tulip market in 1637, tulips became the symbol of extravagance, mania and folly in a school of Dutch paintings. We all know the story, but what we may have forgotten is that no real tulips were delivered in this mania. The bulbs were snug in the ground. It was tulip futures -- promises to deliver in the spring, financed with ample credit -- that were bid up and up. The Dutch are still big in tulips, and financial futures are still with us. So are manias. Edward Chancellor, a freelance contributor to The Financial Times of London and The Economist, walks us through a number of speculative fevers. Here is the South Sea bubble of 1720, the enthusiasm for ''emerging markets'' in the London of the 1820's and the British railway boom of the 1840's. Much of this is familiar. Indeed, Chancellor tips his hat to, and takes some of his tone from, Charles Mackay's 1841 classic, ''Extraordinary Popular Delusions and the Madness of Crowds.'' He has Daniel Drew and Jim Fisk, the 19th-century American speculators, and even Michael Milken and Ivan Boesky, who were around just yesterday. He seems to have read everything. What makes this account entertaining is the social context: ballads, newspaper accounts, gossip. Sir Richard Steele complains about the ''ciphering cits'' with new wealth, buying new houses, new coaches and gold watches for both wives and mistresses. In the 1980's, Chancellor finds Susan Gutfreund, wife of the C.E.O. of Salomon Brothers, spending $20 million redecorating her apartment and booking two seats on the Concorde to fly a cake to her husband's birthday party in Paris.