Real Heroes

The Daily Reckoning PRESENTS: Dying is easy for brave men. It is living that is hard…living with dignity and courage. It doesn’t take a lot of courage to give up a seat on the subway…but there are times when the tests are more important and the stakes are much higher. Bill Bonner explores…


And one was a soldier, and one was a priest,
And one was slain by a fierce wild beast…
they were all of them saints of God;
and I mean, God help me to be one too.

-A hymn we used to sing in church

Life is not like school. In real life you never know when the tests will come…or what form they will take. They come upon you unannounced and unlabeled. You don’t even know when you are being tested.

We watched a scene in an immigration line recently. From near the end of the line, we saw a very pregnant woman – she looked as though she might have been from the Middle East – with two small children, one in a stroller, the other tugging at her hand. The poor woman was having a time of it. The line advanced very slowly. The children were tired. She had more than she could handle. We hoped an agent would step forward and take her to the head of the line. But none came. Nor did anyone in the line help. It wasn’t clear how they could help. DO NOT USE CELL PHONES, said the posters. DO NOT TAKE PHOTOS. Could the woman leave the line? People were timid, a bit embarrassed. Most merely looked away. Finally, a young man with a bright smile and blond dreadlocks, near the front, signaled to her to come ahead and take his place.

Another time on the subway in Paris a plump woman of about sixty years of age came into the car. A man has to be careful about giving up his seat to a woman. He never knows whether she is old enough to appreciate the gesture. Unless the old girl is ready to fall down, she is likely to be insulted at being taken for an older woman. Besides, people don’t want to give up their seats. So they tend to keep their heads down, pretending not to notice.

After only a moment of hesitation a young man got up and offered her a seat, which she gratefully accepted.

Neither of these small acts of kindness will make the history books. We call attention to them today not for their grandeur, but for the grace of them. Today, we do not pause in sorrow and silence over the depths of darkness in man; no, we rejoice in his rare moments of dignity and courage.

If life were like school, George W. Bush would have known that Iraq would test him and his administration. He might have done a little study before getting involved in the area. He could have begun, we would suggest, by reading our own book – The Essential Classics – [from Les Belles Lettres available from There, he could have begun his research with the life of one of the world’s most successful men of action – Alexander the Great. Alexander conquered the entire ‘known’ world. But even Alexander couldn’t survive Iraq. He died in Babylon in 323 AD.

Or maybe he could have boned up on the history of the greatest empire ever – Rome. He could have read about Emperor Septimius Severus’s attack on Ctesiphon, near present day Bagdad. At least, Severus had a plan. He captured 100,000 prisoners – whom he sold into slavery. Back then empire was not only a source of glory…but of profits.

But glory is our subject today, not profits. We wonder who gets it and who deserves it. Generally, we note, they are not the same people.

In retrospect, George W. Bush might have spent a few hours studying more recent conflicts between Christendom and the Muslim world. Just as Lyndon Johnson could have taken a little insight from France’s war in Indo-China (later known as Vietnam)…America’s current president surely could have learned something from reading a little about France’s war in Algeria. The French are always ahead of us; no military campaign or political project is so stupid that the French haven’t already tried it.

It was after World War II that an independent movement in Algeria took hold. France sent its brave young men to put down the uprising, but after fighting for a few years, the French had had enough. They could win the battles, but they could never win ‘hearts and minds’ by killing Algerians. Only when the French had withdrawn, did the real killing begin and the real heroes appear.

Hundreds of thousands of local Algerian soldiers had fought next to the French. These ‘Harkis’ had been loyal to the French for many years. But when the time came for the French to leave, the Harkis were to be left behind. What awaited them was vengeance.

An article in Le Point from February 2002 noted that were 200,000 Muslim Harkis who had fought with the French. And after the French left, approximately 50,000 of them – including many entire families as well as civilian authorities that had cooperated with the French – were murdered. Whether the French saw it coming or not, we don’t know. But a few officers realized that their men – if they were left behind – would be massacred.

The killing was often barbaric. Victims were crucified. Their limbs were torn off. They were butchered, mutilated…tortured in ways that plumb the darkness of the human spirit. A mayor was buried up to his neck; honey was smeared on his head. He suffered hours of agony, being eaten by flies and ants, before finally passing out and dying.

Some of the French military officers were outraged that they had been ordered to abandon their men under these circumstances. Brave men follow orders. But braver ones have the courage to disobey.

We recall our neighbor, Francois, who fought in Algeria telling us:

“One colonel didn’t want to abandon his men. He marched them up to Oran where the ships were taking the French back to France. He went up to the ship’s captain and demanded that he load on his troops – who were not French, but local Harkis…you know, Arabs. The captain of the ship said he was not authorized to take the Harkis. The colonel pulled out his pistol and put it up to the captain’s head. ‘Take them all, or I’ll blow your brains out,’ he said. He got them back to France. But I think the colonel was arrested. And the Harkis were sent back.”

Still a few officers – such as Daniel Abolivier – were able to organize an underground railway to get the Harkis to France. A few survived. The others were lucky if their throats were cut.

George W. Bush likes to be thought of as a man of action. But there is a time for thought…and a time for action. A married man who has fallen in love with his secretary, for example, has already gone too far. He should have thought about it earlier. And when George W. Bush decided to invade Iraq, too, a crucial opportunity for reflection, for study and for preparation was missed. Now, he has to wonder what will happen to his own Harkis when he leaves.

In the Vietnam War, Johnson and McNamara sent hundreds of thousands of brave young men on a fool’s errand. More than 58,000 of them didn’t make it back alive. They all got medals and were all called ‘heroes’ by their families and by the politicians. But the rest of the nation didn’t quite believe it. Those who served in Vietnam were certainly brave…a man has to be brave to face death. John Kerry certainly wanted voters to see him as a war hero when he showed off his medals. But the medals sagged a bit when they were hung around John Kerry’s neck.

Dying is easy for brave men. It is living that is hard…living with dignity and courage. It doesn’t take a lot of courage to give up a seat on the subway…but there are times when the tests are more important and the stakes are much higher.

When asked to serve his country in Vietnam, Muhammed Ali famously said “No”. The media branded him a coward. But Ali faced no threat in going into the army in 1967. It had already offered him a cushy job teaching boxing and acting as a PR man for the Pentagon. The war in Vietnam was already very unpopular. Ali could have served his time in relative safety and luxury…making appearances for the cameras and the clowns…talking up the war effort.

On the other hand, if he didn’t go…the punishment would be severe. He would be stripped of his boxing title. He wouldn’t be able to box; he would have a hard time earning a living, let alone paying the legal fees that would be needed to keep him out of jail. Plus, he would be called a traitor.

But Ali still said “No”. It was against his Black Muslim religion. And he added: “I ain’t got nothin’ against them Viet Cong…” and “No Viet-Cong ever called me a nigger.”

No medals were pinned on Muhammed Ali. They give you medals for helping the politicians with their public spectacles. They don’t give you medals for standing in their way. Sophie Scholl and her brother stood up to Adolph Hitler. They were among the few in Germany to protest the Nazi’s campaign of conquest and extermination. They were hanged for it.

Most brave Germans did their duty and won their medals. In his book Ordinary Men, Christopher Browning tells the story of the Hamburg Policemen who were sent to Poland to round up and murder Jews. At first, the men were reluctant to carry out their mission. Some were sickened by it. And at least one man refused – Lieutenant Heinz Buchmann. He announced that “in no case would he participate in such action, in which defenseless women and children are shot.” The others considered him ‘too weak’ to do the work that had been given them. They saw him as a shirker…and a coward.

We don’t know what happened to Lieutenant Buchmann. The record says only that he was ‘re-assigned.’ We only regret that there weren’t more like him.

Of course, not all heroes are in the military.

On January 13, 1982 at 3:59 in the afternoon, Air Florida Flight 90 took off in heavy snow from Washington’s National airport, now known as Reagan National Airport. The pilots were not accustomed to snow. One had failed a flight simulator test earlier in the year. The plane’s wings had been de-iced. But there was a long line waiting to take off from the airport that day. The wings should have been de-iced again, but the pilots decided not to spend the time. Instead, they took off. Heavily. A few minutes later, the black box recorded this brief conversation in the cockpit:

“Stalling…we’re falling…”

“Larry, we’re going down Larry.”

“I know it.”


Where they were going down was right onto Washington’s busiest highway, U.S. 395, and just at the 14th Street Bridge. The plane smashed into the bridge and bounced into the Potomac River. Most of the crew and passengers were killed immediately, but seven survived and were thrown into the river…then, icy cold. They couldn’t last long – a fact that must have been obvious to Roger Olian, who jumped from his truck, into the water to try to save them. Unfortunately, Olian wouldn’t last very long either. He had almost stopped breathing and turned blue by the time a helicopter came to his rescue.

It was a bad day in Washington. The snowstorm had caused a train wreck too. And traffic was gridlocked. Emergency services had a very hard time getting to the scene. Helicopters, trying to operate in the heavy snow, were having a rough time too. People on the bridge saw the plane go down. They saw the survivors in the water. But what could they do? They fashioned a line out of scarves and belts and tried to get it to those in the water…but it didn’t work. Olian jumped in. But that didn’t work either. Finally, a helicopter arrived…and began to pluck the passengers out of the water. But by that time, the survivors were barely alert.

Then, one of them took the lifeline, wrapped it around himself, and was pulled to safety. Coming back for other passengers, the line came to Arland D. Williams, Jr. Arland had not expected a test that day. But he passed with glory. Instead of taking the line himself, he gave it to flight attendant Kelly Duncan. Then, on the next trip, he passed it to Joe Stiley, who was severely injured…and to Priscilla Tirada and Patricia Felch. Ms. Tirada’s husband and baby had just been killed in the crash. She was so hysterical she fell back into the water…too weak to hold onto the line. And here, another hero appeared. Lenny Skutnik took off his coat and boots and swam out to help her. The two were rescued.

That left the sixth passenger, Arland D. Williams Jr., still in the river. The helicopter rushed back to get him. But he had been in the freezing water too long. When the helicopter got there…he had slipped into the river’s icy embrace forever.

Skutnik, Olian, and Williams (posthumously) were given the Coast Guard’s Gold Lifesaving medal.

Bill Bonner

The Daily Reckoning

January 5, 2007

Editor’s Note: Bill Bonner is the founder and editor of The Daily Reckoning. He is also the author, with Addison Wiggin, of The Wall Street Journal best seller Financial Reckoning Day: Surviving the Soft Depression of the 21st Century (John Wiley & Sons).

In Bonner and Wiggin’s follow-up book, Empire of Debt: The Rise of an Epic Financial Crisis, they wield their sardonic brand of humor to expose the nation for what it really is – an empire built on delusions. Daily Reckoning readers can buy their copy of Empire of Debt at a discount – just click on the link below:

Empire of Debt

And you thought 2006 was hot! Well, 2007 could be even hotter. The Dow is hitting new records already. Private equity is announcing even bigger numbers. Derivatives are still swelling up…and then there’s Miss Nevada!

And now come British meteorologists predicting that this year will be the hottest ever recorded! You’ll recall that the United States of America was never hotter than the first six months of last year. We’re talking temperatures!

But the same might have been said for the financial markets – with new records set in almost every sector.

Well, hold onto your hats…and get your air-conditioning system tuned up…because this year is heating up already.

We pause a minute to remind readers that we don’t care how hot it gets; we’re short the whole damn capital structure. We don’t own expensive stocks (well, we’ve got a few quirky, contrarian shares). We don’t own bonds. We don’t own any more residential housing than we think we live in. And we don’t hold any more dollars than those with which we need to pay our bills. We don’t own a Picasso…a Pollack…a Klimt…or even a baseball signed by Mickey Mantle. In other words: we are short, short, short.

But that doesn’t mean we are fool enough to think we can tell when this ‘wave of liquidity’ might finally wash up. By the look of things, it might go on for another year – or more. Which would mean, of course, that we’re missing some opportunities to make money. All right by us. We’ll take the risk!

As recently as the 1960s…this kind of liquidity bubble could never have gotten out of hand. Then, the surplus dollars spent by Americans on overseas purchases would come back to the U.S. Treasury, where they would be redeemed by gold. The Treasury – watching its gold carried off – would be forced to take action. It would have to turn off the taps!

But in 1971, Richard Nixon was saddled with the spending of his predecessor – Lyndon Johnson – and confronted by a group of Europeans lined up in front of the Treasury. They had dollars. Nixon did the dishonorable thing; he reneged on a centuries-old promise – that the U.S. Treasury would redeem its paper with gold. Instead, he closed the ‘gold window’ at the Treasury. Thenceforth, the world’s financial system has been faith-based. As long as people have faith that somehow, some way…some time…it will all work out okay, everything will be fine.

What we are wondering now…indeed, what is the whole mission of these Daily Reckonings…is how much faith is there? When do the world’s moneymen run a little low on faith…and begin to want something a little firmer, a little heavier, a little more solid in their vaults?

Also in the International Herald Tribune this morning is word that Americans are not particularly concerned about global warming. What Americans are worried about is terrorism. The French, and most Europeans, on the other hand, have the opposite concern. It’s global warming that makes their palms sweat…not Osama. In the United States, 48% of respondents rate terrorism as the biggest challenge facing the globe. In France, only 26% think so. In France, 54% of respondents think the warming up of the planet is the greatest challenge; in America only 32% think so.

To Each His Own Delusions, we say.

Delusions must be cyclical, like crops. Urged on by the press…amplified by TV blabberers…shaped by their own unique historical conditions…people can come to believe almost anything.

Europeans are not especially interested in terrorism, war, or military glory. They’ve already been through their imperial epochs. Now, they are softer, more mature, more rigid and arthritic…with their marshal glories inscribed in granite on monuments throughout the continent.

By contrast, America is a younger society. Our friend Nicholas Nassim Taleb, born in Lebanon and educated in Paris, tells what is good about the United States.

“Whenever you hear or read a snotty European presenting his stereotypes about Americans, he will often describe them as ‘uncultured’, ‘unintellectual’ and ‘poor in math’ because, unlike [their] peers, they are not into equation drills and the constructions middlebrow people call ‘high culture.’ Yet the person making these statements will likely be addicted to his iPod, wearing t-shirts and blue jeans, and using Microsoft Word to jot down his ‘cultural’ statements on his (Intel) PC, with some Google searches on the Internet here and there interrupting his composition. Well, it so happens that the [United States] is currently far, far more tinkering an environment than that of these nations of museum goers and equation solvers…

“[America] fosters entrepreneurs and creators, not exam takers, bureaucrats or, worse, deluded economists. So the perceived weakness of the American pupil in conventional and theoretical studies is where its very strength lies – it produces ‘doers’, Black Swan [exceptional results] hunting, dream-chasing entrepreneurs, or others with a tolerance for risk-taking, which attracts aggressive tinkering foreigners. And globalization allowed the [United States] to specialize in the creative aspect of things…

“The world is giving us more ‘cheap options’, and options benefit principally from uncertainty. So I am particularly optimistic about medical cures…People are starting to realize that a considerable component of the gravy in medical discoveries is coming from the ‘fringes’… It is not just that hypertension drugs lead to Viagra…but that even discoveries that we claim to come from research are themselves highly accidental, the result of tinkering narrated ex post and dressed up as design. The high rate of failure should be sufficiently convincing of the lack of effectiveness of design.”

Yes, dear reader, we still fly ‘Ol Glory down at the courthouse. We still invent things. We still celebrate our heroes…we still long for glory on the battlefield…we still send our troops to the Middle East. We are only a middle-aged society…not a geriatric one. We still have time to make fools of ourselves. More below…

After more news:


Chuck Butler, reporting from the EverBank world currency trading desk in St. Louis…

“Funny, isn’t it, that I want the Japanese consumers to spend, but want the U.S. consumer to stop spending and save? Well, these two are on opposite ends of the spending spectrum, and if they could meet in the middle, wouldn’t that be a grand?”

For the rest of this story, see today’s issue of The Daily Pfennig


And more thoughts:

*** Sometimes the news is just too much like an episode of Rocky and Bullwinkle…

According to the New York Post, a ring of Russian fraudsters “brokered $200 million in bogus home loans using phony buyers and identity theft, and pocketed more than $4 million in ill-gotten commissions, prosecutors charged yesterday.”

The group, made up of Aleksander “Shorty” Lipkin, Igor “Ryzhiy” Mishelevich, Alex “Lyosha” Gorvitz, operated out of AGA Capital, a Brooklyn mortgage firm and paid straw buyers to pose as legitimate applicants.

In some cases, the ring stole people’s identities and submitted loan applications on their behalf – without their knowledge, of course.

“Profits were jacked-up by obtaining artificially inflated appraisals that made it seem as though the homes were worth more than their actual sales prices. The ‘buyers’ then defaulted on their loans, forcing banks and other lending institutions to either foreclose on the properties or re-purchase the homes at rock-bottom prices.”

As Boris would say, “Raskolnikov!”

*** When hedge funds stop hedging they become just like every other pool of money looking for a hot return. That is, they cease positioning themselves to take advantage of mob sentiment and the errors of the masses. Instead, they begin to make the same errors themselves. Instead of profiting from crowd psychology, in other words, they have come to reflect it.

But are all hedge funds losers? Not at all. Some use very detailed, very smart methods to beat the crowd.

One of the original hedgers, for example, figured out that he could make a better guess about cocoa crop yields than most investors were getting. He studied the meteorological data…and sent his own agents out into the cocoa fields to gather data. The result – he had a better idea of how good the crop would be earlier than most other investors. His fund did well.

We know of another hedger who realized that the crowds do not respond very quickly to company ‘earning surprises.’ The new data eventually works its way into the price…but not immediately. Analysts need to study it. And then it is presented to investment committees. The whole process can take a few weeks…or months. So, this hedge fund merely reacts to earnings’ adjustments more quickly than the great mass of investors. Result: better performance.

There are many, many other hedge funds that have found little niches like these to exploit. Probably hundreds of them. But probably not thousands. And surely not 8,000.

*** We already miss our mother, who returned to the United States before Christmas in order to be closer to her doctors and the rest of the family. She would sit in the corner…working on her crossword puzzles. She loves crossword puzzles and does them in French. She doesn’t really speak French, but thinks the challenge of doing crossword puzzles in another language is good for her brain.

We would turn to her often, while writing this column. “What’s another way to say ‘idiot’?” we would ask.

“Bete…un peu limite…pas un lumiere…”

“No, no…in English.”

“Moron, dimwit, dumkopf, dumbbell, lunkhead, woodenhead, knucklehead, numbskull, dullard…” the words tripped out with amazing speed.

We don’t know how we will do The Daily Reckoning without her.

*** An interesting letter from a reader:

“Howdy Editors,

“I appreciate the Daily Reckoning and your book, Empire of Debt. I read it this past summer. It has had a huge influence on my world-view…

“I am especially intrigued by your decision to invest in a ranch property in Argentina. My wife and I are cattle ranchers in southwestern Colorado, and we own a small business that organizes and leads groups of progressive ranchers on ranch tours to several countries in the southern hemisphere… My wife is from Argentina, which is one of our main destinations…

“I am becoming very intrigued by the possibilities offered by Patagonia, and we are in the process of researching a possible ranch investment project in Santa Cruz, in the Andean foothills… Our area of expertise is restorative land management, using well-managed livestock as the primary tool to realize improvement of the resource base.

“Ecologically and economically viable ranching is an incredibly interesting, complex, and satisfying business. One of my clients is a large organic farming corporation, and one of their executives (who used to manage a huge Pepsi plant) recently commented to me that grass-based livestock production involves orders of magnitude more complex than running a Pepsi plant.

“Here in Colorado, we have an influx of new ranch owners that have absolutely no idea what they’ve purchased… These guys are primarily “amenity buyers”, the amenities being scenery, wildlife, water, and lifestyle assets. They typically have no knowledge whatsoever of the complex biological communities with which they are now entrusted, and have no idea how to sustainably manage these communities…

“You stated that your ranch foreman (I think he is your foreman, and I think his name is Jorge) is a man of few words and has a very simple outlook on life. If you knew the right questions to ask, you’d actually find that many guys like Jorge are pretty deep and interesting characters with a lot to share… You don’t need to have a telephone, TV, and Internet access to be “on top of things”.

“Just wanted to share those thoughts with you. I look forward to hearing more news about the ranch and how things are progressing…”

*** And finally, this quote from Isaiah…for no particular reason:

“Woe to the multitude of many people, which make a noise like the noise of the seas; and to the rushing of nations, that make a rushing like the rushing of mighty waters!”

The Daily Reckoning