the official site of Michael Shermer

How we can avoid falling prey to con men such as Bernard Madoff

On a Los Angeles street corner in 2000, I was the “inside man” in a classic con game called the pigeon drop. A magician named Dan Harlan orchestrated it for a television series I cohosted called Exploring the Unknown (type “Shermer, con games” into Google). Our pigeon was a man from whom I asked directions to the local hospital while Dan (the “outside man”) moved in and appeared to find a wallet full of cash on the ground. After it was established that the wallet belonged to neither of us and appeared to have about $3,000 in it, Dan announced that we should split the money three ways. (continue reading…)

How would the average investor know that
Bernie Madoff was running a Ponzi scheme?

Here’s a supreme irony for you. About six months ago a colleague of mine named Stephen Greenspan, a psychiatry professor at the University of Colorado, sent me a book manuscript to review and blurb for him (a blurb is one of those back jacket endorsements from someone who hopefully knows something about the subject of the book). Greenspan’s book is called Annals of Gullibility (Praeger, 2009, due out in January), and it includes chapters on gullibility in literature and folktales (Pinocchio, Gulliver), in religion (end-of-the-world predictions), in war and politics (the Trojan Horse), in criminal justice (child witnesses), in science (cold fusion), and in finance (Ponzi schemes). It’s a great read and an excellent reference source that, as I wrote in my blurb, “belongs on the bookshelves of skeptics and scientists, not to mention politicians and policy analysts, especially before they go to war.”