advance fee scam

Nobody's Fool: Why We Get Taken in and What We Can Do About It
by Daniel Simons and Christopher Chabris
Published 10 Jul 2023

Zuckoff, “The Perfect Mark,” New Yorker, May 15, 2006 [https://www.newyorker.com/magazine/2006/05/15/the-perfect-mark]. Advance fee fraud takings: “Advance-Fee Fraud Scams Rise Dramatically in 2009,” Ultrascan AGI [https://ultrascan-agi.com/Advance-fee%20Fraud%20Scams%20Rise%20Dramatically%20in%202009.html]. A more recent estimate suggests that these scams still take in over $700,000 each year: M. Leonhardt, “‘Nigerian Prince’ Email Scams Still Rake in over $700,000 a Year—Here’s How to Protect Yourself,” CNBC, April 18, 2019 [https://www.cnbc.com/2019/04/18/nigerian-prince-scams-still-rake-in-over-700000-dollars-a-year.html]. We wrote an essay on the “Nigerian scam”: C.

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Warren, “‘Nigerian Prince’ and Online Romance Scams Raked in at Least $250,000, Slidell Police Say,” NOLA.com, January 2, 2018 [https://www.nola.com/news/northshore/article_f7f6f13d-6d5a-55de-99c8-1a3f48b46a40.html]; C. Caron, “Louisiana Man Charged in ‘Nigerian Prince’ Scheme.” New York Times, December 31, 2017 [https://www.nytimes.com/2017/12/31/us/nigerian-prince-fraud.html]; L. Vaas, “Your Nigerian Prince Is a 67 Year Old from Louisiana,” Naked Security, January 3, 2018 [https://nakedsecurity.sophos.com/2018/01/03/your-nigerian-prince-is-a-67-year-old-from-louisiana/]. A recent advance-fee fraud from the Netherlands appeals to nationalistic sentiment: If you are a Dutch “sovereign citizen,” the government is said to have put €1.5 million in trust for you, and the first step to access it is to pay €100 to join a club: A.

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In each chapter, we relate stories of crimes, cons, and scams—some famous, others obscure, and a few from our own experience—that illustrate how deception capitalizes on our cognitive habits and hooks us into accepting when we should instead have checked. Some of these scams are funny. Others are poignant. Some are victimless. Others harm us all. Some are even ironic—like a deceptive study of dishonesty, a psychic who did not predict their own downfall, or an American who was scammed into helping run a “Nigerian prince” scam.22 Throughout the book, we draw upon classic and current research in cognitive psychology and the social sciences to explain why all of us are fooled at least some of the time. We describe the science behind our cognitive habits and hooks, discuss how they usually help us, and illustrate how they can be exploited.

McMafia: A Journey Through the Global Criminal Underworld
by Misha Glenny
Published 7 Apr 2008

The possibilities would multiply with the proliferation of the personal computer around the world; cybercrime is a new type of criminal threat that assumes several different forms. But the Igbo can stake a strong claim as trailblazers in this entirely new and lucrative genre—the 419 scam or advance fee fraud. For many Nigerians the degree to which their country has become associated with and even defined by the 419 culture is both a scandal and a disaster. But according to the musician Dede Mabiaku, the 419 scams were merely the diseased chickens of colonialism coming home to roost in Europe and the United States, like some moral avian flu in the era of globalization. The huge popularity of the 419 anthem, “I Go Chop Your Dollar,” suggested that these sentiments are widely held in Nigeria: 419 no be thief, it’s just a game Everybody dey play ’em if anybody fall mugu, ha!

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He jumped over a fence and into the neighboring courtyard only to find himself cornered. He was dispatched with a few bullets. Many Nigerians will tell you that although their country is riddled with crime, it nonetheless boasts low levels of violence. And they are correct. But there are exceptions. And because Bless Okereke was involved in what became the biggest single advance fee fraud (or 419 scam, as they are also known) in history, he was one of those exceptions—a bit player in a drama that, according to the exuberant description of the EFCC website, “has all the characteristics of a successful movie: thrill, drama, sex, power, greed, suspense, tragedy and you name it [sic].” Oh, and at least two murders, as well.

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But by this time Sakaguchi was in regular correspondence with Chadwell Heath’s Federal Reserve Clearing House and similar institutions as though they were genuine. In all likelihood, he had lost any grasp of the difference between reality and illusion. He was seemingly completely trapped by the addictive fear common to victims of the 419 or advance fee fraud. The 419 scam comes in many shapes and sizes—it sometimes arrives as an appeal to rich Westerners to come to the aid of an impoverished African child; letters, faxes, and e-mail beseeching Americans in particular for funds to erect a new church or bolster a congregation are frequent—in these cases, the motivation of the victims is well intentioned and charitable.

Moneyland: Why Thieves and Crooks Now Rule the World and How to Take It Back
by Oliver Bullough
Published 5 Sep 2018

The company had no physical presence on Harley Street; the phone calls and faxes were being answered by fraudsters in the United States. The Abercias, who had wired over the second tranche of the fee, were devastated. ‘That was a lot of money,’ Ralph Sr told a local journalist. ‘We’re still paying the damgum thing back.’ It was an advanced fee fraud of elaborate brilliance. Even the location – Las Vegas – gave it the air of Ocean’s Eleven. Not only did S&N have no money, but Sir Richard Benson was an invention, played by a struggling actor called Henri Berger. He never rescued Buckingham Palace from foreclosure, had no knighthood, and even struggled to maintain a believable English accent.

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The post-independence rulers were able to use whichever form of government benefited them at any particular time, whether to enrich themselves or to punish their enemies, and to switch back and forth between them as often as they wanted. For many Westerners, or at least any Westerner with an email account, the most prevalent manifestation of this kind of corruption was perhaps the advanced fee fraud. This kind of fraud – in which you are asked to give a little money up front, on expectation of a large pay-off which never materialises, as in the Las Vegas scam that linked back to 29 Harley Street – has been around for centuries. But it really took off with the arrival of faxes and then, email.

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I wrote this book for them. INDEX Abacha, Ibrahim 132 Abacha, Maryam 129, 132 Abacha, Mohammed 132, 183 Abacha, Sani 100, 129, 132, 182, 183 Abercia, Ralph 78–9 Abercia, Ralph Jr 78–9 Ablyazov, Mukhtar 165 Abramovich, Roman 235 Achebe, Chinua 123–5, 126 Adada, Loujain 158–9, 160 advanced fee fraud 128–9 Afanasiev, Dmitry 137 Afghanistan 9, 11, 12, 269, 270 Africa 47, 120, 123, 128 see also individual countries al-Juffali, Walid 157–60, 161–4 al-Sanea, Maan 169 Alabama 95 Alamieyeseigha, Diepreye 87 Alison-Madueke, Diezani 165 Aliyev, Ilham 6 Allen, John 12 Alliance Trust Company 257–8, 262, 263–4 Allseas 80, 84 Andreski, Stanislav 122–3, 125–6 Angola 10, 11, 211–16 Anguilla 144, 145, 146–8, 276 Anthony, Kenny 161, 164 Antigua and Barbuda 154, 155, 156, 165 Anton (driver) 3–4, 8, 12 Arab Spring 7, 195 Ardern, Danielle 83 Argentina 228 arms smuggling 92, 148 asset protection 51–3, 70–1, 256–8 asset recovery 10, 182–95 Astaforova-Yatsenko, Nina 170 Astaforova-Yatsenko, Nonna 170 Astaphan, Dwyer 144, 145–6, 148 Astute Partners Ltd 76 Australia 166 Austria 149, 155 Autonomous Nation of Anarchist Libertarians (ANAL) 18 Aveiro 275 Azerbaijan 6, 11, 55, 57, 273–5 Bahamas 21, 46 Bailhache, Philip 64 Baku 6 Bank Commerciale pour l’Europe du Nord 66 Bank of New York 69 banks City of London 32–4, 36–7, 44, 45 eurobonds 39–43 eurodollars 34–5, 36 FATCA 248–9, 252–3 secrecy 245–53, 259–61, 270 and sources of funds 99–101 Switzerland 37–8, 242–9, 259–60 United States 31, 36, 44, 45 Baring, Rowland 31 Barnard, Bill 49–50 Barrington, Robert 174 Basseterre, St Kitts 56, 139 Bates, Robert 120 BBC 35 Bean, Elise 249 bearer bonds 39–43, 45 Beatles 31, 39 Beckwith, Tamara 157–8 Belgium 40 Belize 9, 148 Benson, Sir Richard 78–9 Benton, Jon 278 Berezniki 219–20 Berezovsky, Boris 169, 201, 203, 204, 205, 207 Berger, Henry 79, 80 Berger, Michael 131–2 Bermuda 186 Bhatia, Lal 80 Biden, Hunter 193 Biden, Joe 193 Bin Mahfouz, Khalid 175 Birkenfeld, Bradley 38, 242–6, 248, 253, 258, 260, 276 Blake, Mr Justice Nicholas 190, 191–2 ‘Bloody Money’ 170–2, 179, 188 Blum, Jack 55, 126–7 Blythe (Europe) Lid 76 BNP Paribas 187, 189 Bond, James 29–30, 32, 34 bonds 37, 39–43, 45 Bongo, Omar 132–3 Borisovich, Roman 17 Brantley, Mark 266–8 Brazil 9, 185, 228, 270 Bretton Woods system 27–34, 39, 43–5, 71, 272–3, 277 Brexit referendum 138, 271, 272, 278 Britain see United Kingdom British Virgin Islands 9, 19, 98, 102, 189, 214, 276 Browder, Bill 177–80 Bryant, Fitzroy 142–3, 153 Buffett, Warren 259 Burisma 188, 191, 193 Burns, George 264, 265 Caines, Richard 141 Cambridge University Press (CUP) 172–4, 179 Canada 138, 156, 178, 235 Cancer Institute, Ukraine 103–6, 108–11, 115–17 Candy Brothers 224 Cane Garden Services Ltd 19 Cantrade 61–2 Capitalism – A Love Story 237 Capone, Al 228 Cardin-Lugar amendment 277 Carter, Edwin see Litvinenko, Alexander Cash, Johnny 254 Catch-22 (Heller) 169 Cayman Islands 19, 99, 101, 102, 267 Central African Republic 165 Charles, Prince 221 Charlestown, Nevis 56–7 Chastanet, Allen 164 child abuse 62–4 Chile 240 Chiluba, Frederick 90 China 154, 231, 270 anti-corruption campaign 238, 239–40 flight capital 9, 181 and Japanese surrogacy 85–6 Christensen, John 61–2 Christian Aid 251, 252 Christophe Harbour, St Kitts 151–3 Citibank 99–100, 132–3 Citigroup 233 citizenship 20, 136–56, 251, 277 City of London 32–5, 36–7, 44, 252 eurobonds 38–42 Club K 215 Coales, Edwina 83 Cohen, Michal 216 Cole, Julia 196, 197 Colombia 228, 270 colonies 120, 122, 128, 144 Common Reporting Standard (CRS) 249–50, 251, 252, 259, 262, 264, 265, 266 companies 90–2 information on 82–3, 275–6 shell companies 10, 17, 19, 50–5, 87–97 Constitutional Research Council 272 Conway, Ed 273 Corporate Nominees 82–3, 84 corruption 7–8, 11, 15, 16–17, 121–3, 125–34, 186, 240, 269 Angola 11, 213–14 China 238, 239–40 Kenya 184–5 Nigeria 86–7, 123–6, 128–30 Russia 17 Ukraine 6–7, 11–12, 17, 20, 103–17, 170–2, 270 Corruption Watch 89 Cotorceanu, Peter 258–9, 261–3, 265 Crawford, Greg 257, 263–4 Credit Suisse 247, 249 Creer, Dean 198 Crimea 11–12, 105 Cyprus 17, 265 citizenship 136, 138, 155 and Ukraine 9, 108, 188 Daniel, Simeon 49, 51, 267 Darby, Buddy 152 Dawisha, Karen 172–4, 179 de Botton, Alain 137 de Sousa, Bornito 214–16 Delaware 19, 50, 93, 95–6, 258, 266 Deloitte 238 democracy 24, 26, 127–8 Democratic Unionist Party (DUP) (Northern Ireland) 272 Denmark 16, 276 Depardieu, Gerard 97 Diana, Princess 221 Diogo, Naulila 211–12, 214–16, 235 diplomatic immunity 157–65 Disney Corporation 271 divorce settlements 51–3 Dogs of War, The (Forsyth) 118–19 Doing Business (World Bank) 91–2 Dom Lesnika 8, 76 Dominica 143, 149, 154, 155 dos Santos, Isabel 11, 213 dos Santos, José Eduardo 213, 214 Downing, Kevin 244 dynasty trusts 256 Eaton Square, London 18–20 Egypt 9, 92 Ehrenfeld, Rachel 175 Elliott, Amy 99, 100 Equatorial Guinea 7–8, 9, 118–20, 130–2, 133, 183–4, 270 Eritrea 91 errors & omissions (E&O) 181–2 Estonia 274 Estrada, Christina 157–8, 159, 160, 161–4 eurobonds 39–43, 45, 70–1, 259 eurodollars 34–5, 36, 66 The European Azerbaijan Society (TEAS) 273–5 Evening Standard 222, 223 Extractive Industries Transparency Initiative 277 FATCA (Foreign Account Tax Compliance Act) (US) 248–9, 251, 252–3, 258, 259, 261, 262, 266 Fenoli, Randy 212 Fenwick, Edward Henry 75 Fenwick, Samuel 74–5 Feynman, Richard 20–1 Field, Mark 274 15 Central Park West 218–20, 237 FIMACO 66–8, 69 Financial Conduct Authority (UK) 89 Financial Services Authority (FSA) (UK) 100–1 Finkel, Amy 11 Finnegan, Hugh 89–90 Firtash, Dmitry 224, 235 Fisher, Jeffrey 53 flags of convenience 25, 49 Flash Crash 54 Fleming, Ian 29–30, 32, 34 Flight 714 to Sydney (Hergé) 38 flight capital 181–2, 221, 222, 223 Florent, Gerry 78–9 Florida 95, 226–30, 260–1 Foreign Corrupt Practices Act (US) 111, 213 Formations House 77–84, 276 Forsyth, Frederick 118–19 419 scams 128–9 France 37, 114, 239, 271 Fraser, Ian 39–43 Freedom House 119 Frontline Club 171–2, 179, 188 Fukuyama, Francis 5, 128 Fyodorov, Boris 67 G20 251 Gabon 132–3 Galinski, Jaime 226 Geithner, Tim 248 generation-skipping transfers 255–6 Geneva 9 Gerashchenko, Viktor 67–8 Germany 17, 271 Gherson 194 Gibraltar 19, 21, 96, 98, 276 Giles 145 Global Financial Integrity 181 Global Shell Games 95 Global Witness 89–90, 213–14 globalisation 23, 42, 273, 278 Gluzman, Semyon 113 GML 96 gold 27–8, 29–30, 43–4 Goldfinger (Fleming) 29–30, 32, 34 Goldman, Marshall 68 Goncharenko, Andrei 18, 19 Gould, Richard 189, 190–1 Government Accountability Office (US) 95–6 Grant, Valencia 140 Great Britain see United Kingdom Greenaway, Karen 92–3, 96–7, 185–6 Grenada 155 Grieve, Dominic 186–7, 191 Gross, Michael 218–19, 237 Guernsey 19 Hadid, Zaha 6 Halliburton 213 Hamilton, Alexander 56 Harley Street, London 74–84 Harper, Lenny 62–4 Harrington, Brooke 102 Harris, Robert 93–4 Harris, Timothy 149, 153, 156 Harrison, George 31 Harry Potter 271 Haslam, John 172, 173 Hayden, Justice 162 Hector, Paul 242 Heller, Joseph 169 Hello!

Number Go Up: Inside Crypto's Wild Rise and Staggering Fall
by Zeke Faux
Published 11 Sep 2023

Back then, one of the hardest parts of running a Big Store was transferring such large sums of money without arousing suspicions. It usually required the cooperation of a local banker. Con men had to find one willing to accept bribes to cash large checks from out-of-towners and to keep their mouths shut. The way Vicky approached random strangers like me also reminded me of a more recent con: the “Nigerian Prince” scams of the 1990s. In the early days of email, people posing as Nigerian royalty spammed inboxes with “urgent solicitations” seeking “honest and reliable partners” to help reclaim family fortunes. The recipients were always told that they’d first have to send money to cover expenses. But no matter how much they paid, they’d always be told that another obstacle stood in the way of their windfall.

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Gox, 48, 102 Musk, Elon, 10, 15, 22, 225 Mutant Apes Cartel, 151, 152, 153, 160 description of apes in Yacht Club, 144 Mutant Ape Planet, 238 prices of, 146–147, 152, 155 process of buying, 147–149 Stone and, 110, 155, 160, 241 Mutant Ape Yacht Club, 144, 150, 155 N Nakamoto, Satoshi basic facts about, 18 development of cryptocurrency by, 18, 21, 147 Nass, Matt, 81 NBA and non-fungible tokens, 143 Netflix, 107 The New Yorker, 22–23 The New York Review of Books, 196 New York State cryptocurrency investigation basic facts about, 59 Bitfinex as focus of, 60 questionnaire sent to thirteen largest crypto exchanges, 60 settlement of, 64–65 team members, 59 The New York Times, 49 Neymar, 142 Niagara Falls, New York, 20 “Nigerian Prince” scam, 178 Nikola, 72, 73 Noah, Trevor, 107 Noble Bank International, 56–57, 61 non-fungible tokens (NFTs). See also Bored Apes; Mutant Apes arrests for fraud and, 238 celebrity purchasers of, 141–142 costs of, 110 hacking of, 146 as intellectual property, 155 market for, 139, 142, 143–144 ownership of, explained, 142–143 process of buying, 147–149 RR/BAYC, 157 theft of, 153 Three Arrows’s ownership of, 166 North Korea hacking and, 12, 97, 127 stablecoins and, 170 Novogratz, Mike, 50, 162 Number go up mantra, 21, 22 O OHM, 110 O’Leary, Kevin, 132 Oliver, John, 162 O’Neal, Shaquille, 89, 142 OpenSea, 147, 149 Operation Bayonet, 104 Ortiz, David, 131 Oseary, Guy, 154 Oxb1, 110, 155 Oz, Yosef, 61, 62 P Paltrow, Gwyneth, 142 Paul, Logan, 201 Perpetual Action Group, 43 Perring, Fraser, 70 Perry, Katy, 129, 165 Philippines, 120–122, 123, 126–127 “Pho King Badd Bhech” (Morgan), 99 Phong Bui, 188, 189–190 Picozzi, Valentina, 205–206, 207, 239 Pierce, Brock acting career of, 32 appearance of, 27, 31 Bukele and, 201 as cryptocurrency promoter, 27 DEN and, 32, 33 EOS promoted by, 49 EverQuest and, 33 genesis of stablecoins and, 32, 36 home of, 29 IGE and, 34 MasterCoin investment of, 36 move to Puerto Rico by, 115–116 Tether and, 36, 38, 52 yacht Chakra and, 30–31 “pig butchering” Binance and, 213–214 described, 172–173 FTX and, 231 money-moving process, 180–181 organization to aid victims of, 175–176 Tether and, 175, 176–179, 185, 213–214 Vicky Ho scam, 173, 175 Pindling, Lynden, 77 Pixelmon, 143 Platinum Partners, 72 Poland, 62 pollution produced by Bitcoin, 20 Poloniex, 52 Ponzi schemes, 45, 162–163, 165, 166, 226, 238.

Immigration worldwide: policies, practices, and trends
by Uma Anand Segal , Doreen Elliott and Nazneen S. Mayadas
Published 19 Jan 2010

While violent crime, as in some other major cities of the world, constitutes a big headache to law enforcement agencies and the citizens alike, a serious crime issue for Nigeria has been the Advance Fee Scam, otherwise known as 419. This has drawn considerable adverse attention to the country, which has been making concerted efforts with foreign governments and agencies to expose the felons and their methods. The Advance Fee Scam seeks to take advantage of the greed or gullibility of foreigners, by usually promising them huge windfalls if they cooperate in bilking agencies of the Nigerian government of sums sometimes running into millions of dollars. The Bureau of Public Enterprises (October 12, 2004) clarifies the operation of Advance Fee Scam and its practice to date, as: The Advance Fee Fraud is perpetrated by enticing the victim with a bogus business proposal, which promises millions of U.S. dollars as a reward.

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Some of these companies have been known to engage in socially negative activities like drug and child abuse. Some immigrants have also been known to engage in crime such as armed robbery and fraud known as 419. The 419-fraud scheme is named after a Nigerian Decree No. 419, which deals with the eradication of fraud. Fraudsters from Nigeria have used various means to defraud people such that many Ghanaians have fallen victim to the ploy and it is generally felt that Nigerian fraudsters have been operating across the West African subregion, including Ghana. A typical 419 fraud would involve an e-mail sent to an unsuspecting victim. The e-mail would relate a story to the effect that the person sending the mail has some fortune sitting in a named bank and they need to claim the fortune by transferring it through a bank Ghana account.

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The Bureau of Public Enterprises (October 12, 2004) clarifies the operation of Advance Fee Scam and its practice to date, as: The Advance Fee Fraud is perpetrated by enticing the victim with a bogus business proposal, which promises millions of U.S. dollars as a reward. The scam letter usually promises to transfer huge amounts of money, usually in U.S. dollars, purported to be part of certain contract to the addressees’ bank account, to be shared in some proportion between the parties. A favorable response to the letter is followed by excuses why the funds cannot be remitted readily and subsequently by demands for proportionate sharing of payments for various taxes and fees supposedly to facilitate the processing and remittance of the alleged funds.

From Bacteria to Bach and Back: The Evolution of Minds
by Daniel C. Dennett
Published 7 Feb 2017

All the fables and folk tales and nostrums, all the worldly wisdom you acquired “at mother’s knee,” is supplemented by gossip and rumor, and further enhanced thanks to writing, printing, and all the high-tech media of today. This speeds up and intensifies the arms races, and complicates them with subplots and side bets as people furnish their imaginations with all the information and use it to dream up variations. It is harder today to find “marks” for the Nigerian prince scam than it was twenty years ago, because it is so well-known that it can be a reliable topic for humor (Hurley, Dennett, and Adams 2011). Why, you may wonder, does the scam survive, and why do the scammers persist in using the same old dubious tale of a Nigerian prince who wants to transfer a fortune and needs your help?

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M., 116–17 magic, magicians, techniques of, 318–19 malware, 304 mammals, social, 251 Manhattan Project, 71–72, 73 manifest images, 194, 198, 222, 224, 340, 365, 369, 412 of animals, 63, 123 communication and, 344 consciousness and, 336–37, 343–46 evolution of, 336, 366 meaning-concept-thing constructs in, 272–74 manifest images memes in, 287 scientific image vs., 61–63, 203, 206, 222, 287, 337, 350, 354, 355–56, 366, 367, 412 as shared ontology, 61–62, 63 as things that matter, 366 words and, 202, 203, 205, 273, 287 manipulation, in communication, 342 Markkula, Gustav, 353–54 Markov Chain Monte Carlo (MCMC) algorithm, 170n Marler, Peter, 177 Marsalis, Winton, 327 Mars Climate Orbiter, 67 Marvin, Lee, 317 Marvin, Michelle Triola, 317 Marx, Karl, 33–34, 163, 340 mass extinction, 9 Master Algorithm, 387–88, 399 Master Algorithm, The (Domingos), 384, 387–88 materialism, 19, 26, 368 conceptualization of mind and, 16, 18–19 free will and, 15 meaningfulness and, 15 scientific discoveries and, 18 Mathai, Robert, 126n mathematical proofs, computer-assisted, 386 mating displays, language and, 266 Mayer, Greg, 28 Mayr, Ernst, 235n McCarthy, John, 105, 116 McCulloch, Warren, 110, 151, 384 McFarland, David, 342–43, 344 meaningfulness, materialism and, 15 meanings: tokening of, without words, 184 words and, 272–74 Mediations (Descartes), 364, 365 medicine, expert systems and, 401–2 Melville, Herman, 328 memes, 25, 341 as affordances, 287 of animals, 282 biased transmission of, 253 coevolution of genes and, 413 and competence without comprehension, 210–11, 213–15 competition among, 235–37 comprehension and, 228 Dawkins’s coining of term, 205–6, 207, 209–10 as discrete, faithfully transmitted entities, 224–33, 236, 253n domestication of, 232–33, 310 evolution of, 255, 263–64, 330, 344, 370 in evolution of comprehension, 175, 389 examples of, 207–8 as exploiters of human vulnerabilities, 254–55 filters for, 392 genes compared to, 233–34, 242, 247 as infections, 173, 284–85 intelligent design and, 313 Internet and, 207 loci of, 235–37 in manifest images, 287 in musical composition, 326–27 natural selection and, 176, 212, 214, 310–13, 331 as nongenetically transmitted ways of behavior, 209, 224 as noninstinctual ways of behaving, 206 problem solving and, 305–6 pronounceable, see words propagation of, 225, 225–37, 254, 269, 310, 328, 330, 331 reproductive fitness of, 211, 244 routines as, 230 as semantic information, 206, 211 software apps compared to, 295, 301–4 as synanthropic, 264, 271, 285, 331 transmission errors and, 234–35 transmission of, 295 as units of cultural evolution, 205 viruses compared to, 215, 240, 254, 284–85 as ways of behaving, 295, 330 words as, 193, 194, 205–6, 207, 224–26, 263, 269–70 memes, as symbionts, 284–85, 370, 389 as commensals, 200, 215, 285 as mutualists, 193, 200, 211, 217, 232, 285 as parasites, 200, 215, 216–17, 257, 285 memetic theory: contributions to cultural theory by, 210–11, 239 depsychologizing of cultural evolution by, 239–40 as filling evolutionary gap between competent animals and intelligent designers, 241–42 as Lamarckian, 243–46 pathological cultural variants in, 240 social sciences vs., 242–43 memetic theory, criticisms of, 210, 216–17, 221–47 as adding no value to cultural theory, 237–40 by Gould, 205, 210n as not predictive, 241 by Pinker, 313, 315, 316–17 memory, personal, numbering and writing system and, 331 mens rea (guilty intention), 88 mental images, 352 Mercier, Hugo, 220 merge, in Chomskyan linguistics, 277, 279–81 meta-competences, 300–301 methodical selection, 198, 232, 272, 296, 384, 391 Michaels, Lou, 39 Mies van der Rohe, Ludwig, 321 Miller, George, 375 Millikan, Ruth Garrett, 187, 188, 273n, 289 mind, human: codependence of brain and, 413 as different from other species, 9, 11–13, 149, 335 as product of biological evolution and memetic infection, 389 as products of cultural evolution, 171 see also consciousness mind, human, conceptualizing of: difficulty of, 3–4, 10–11, 19–20 distorting fences in, 16–22 dualist, see dualism egocentrism and, 20–21 emotional investment in, 11, 12–13, 15–16, 19 first-person point of view in, 345, 364, 366 intentional stance in, 367 materialist, 16, 18–19, 368 as mystery, 9–10, 14 third-person point of view in, 366–67 mind, human, evolution of: interaction of population and technological growth in, 9 thinking tools and, see thinking tools minds, nonhuman: as Bayesian expectation machines, 170 comprehension attributed to, 86–94 human mind as different from, 9, 11–13, 149, 335 killjoy vs. romantic views of, 12, 86, 89, 90, 99–100 misinformation, 116, 117, 128, 206–7 mistakes, functions vs., 81–84 MIT, “summer vision project” at, 72 Mitchelson, Marvin, 317 Möbius, August Ferdinand, four-color theorem of, 386–87 Moby-Dick (Melville), 328 Monde, Le (The World) (Descartes), 13 Montreal Bach Festival, 384 morality, ethics, 367–69 nonhuman consciousness and, 338–39 reason-giving and, 41 More Than Nature Needs (Bickterton), 262–64 Morgenstern, Oskar, 114 morphogenesis, 131–32 morphosyntax, 267 multicellular organisms, competence of, 84–85 music, tonal: correction to the norms in, 226–27 evolution of, 226 notation of, 227 musical composition: by computers, 383–84 computers and, 322 memes in, 326–27 Musk, Elon, 400 mutations, see genetic change mutualist symbionts, 193n memes as, 193, 200, 211, 215, 217, 232, 285 mysterians, 373–75, 376, 378 Nagel, Thomas, 337 nano-intentionality, 162 nanorobots, proteins as, 383 nanotechnology, 380–81 National Physical Laboratory, 59 natural selection, 5, 336, 339 affordances and, 165–66 algorithms of, 43, 384 amplification of noise in, 241 in biological evolution, 26, 28–29, 30, 35, 40, 54, 58, 68, 76, 85, 311–12, 316–17 as bottom-up process, 74, 76, 77, 379, 382, 411 in cultural evolution, 24, 176, 210–12, 214, 244–45, 262, 309–13, 331 Darwin on, 50, 137–38, 324 de-Darwinization in, 142, 148, 331, 411 as design process, 83, 89, 93, 125 error catastrophe in, 141, 200, 227 evolution of causes into reasons in, 48–49 evolution of “how come” into “what for” questions in, 40 evolution of options into obligations in, 178, 257 in evolution of words, 187, 197 and extraction of semantic information, 118–19, 120, 150 foresight and imagination as lacking in, 399 Godfrey-Smith’s definition of, 138 as gradual process, 141–42 inheritance in, see inheritance, in natural selection just-so stories and, 121 Lamarckianism and, 244, 246 language and, 292 luck vs. talent in, 139–40, 142 memes and, 176, 212, 214, 310–13, 331 Need to Know principle in, 49–50, 71, 73, 336, 341 niche construction and, 260 Orgel’s Second Rule for, 30, 196n, 413 in origin of language, 251–52, 292 as “plagiarism,” 135–36 plasticity in, 89 potential utility in, 120–21 as R&D process, 69, 236, 254, 277 rejection of theory of, 36, 53–54, 151–52 reproduction in, 138 reproductive fitness in, 217–18 as set of processes, 37 transformation of noise into signal in, 124 variation in, 138, 139 works of genius and, 326–29 Necker cube, 20, 22 Need to Know principle, 49–50, 71, 73, 336, 341 nematode worm (C. elegans), 111 neurolinguistics, 166, 185 neuronal spike trains, 110–11, 361 neurons, neural circuits, 143, 159–60, 171, 340, 412 coalition-formation by, 160, 163, 173–74 competence of, 162 as descendents of eukaryotes, 160–61, 171 energy capture by, 162 feral, 5, 173–74, 412 idiosyncrasy of, 160, 162, 164, 174 plasticity of, 303 as selfish, 162, 163, 173 as Skinnerian creatures, 165 vision and, 347–53 von Economo, 174 neuroscience, computational, 110–11 “new math,” 57 Newton, Isaac, 13, 398 Newyorkabot (thought experiment), 165, 400 New York Times, 36 niche construction, 260–61, 335 Nietzsche, Friedrich, 340 Nigerian prince scam, 312 noise: in information transmission, 108, 111, 124, 127–28, 136 in natural selection, 241 norms, normativity: reason-giving and, 41 reasons and, 42 social vs. instrumental, 42 Nørretranders, Tor, 335n Not by Genes Alone (Richerson and Boyd), 209, 252 noticing, noticers, 395–96 “Not Waving but Drowning” (Smith), 117 novelty, in patent and copyright law, 132–33 Oak Ridge, Tennessee, 71 objets trouvés, 323 obligations, evolution of options into, 178, 257 observer bias, 238 “obvious truths”: jettisoning of, 4 see also reasoning, inversion of octopuses, as “honorary vertebrates,” 339 Odling-Smee, J., 260 Odyssey, The (Homer), 182 On Photography (Sontag), 236n On the Origin of Species (Darwin), 33, 137–38, 179, 198, 248 ontologies, 123, 340, 356, 412 of computers, 60–61 of early humans, 286–87 ontologies of elevator controllers, 65, 68 nonhuman, reasons as absent from, 170 of organisms, 60–61, 65, 79, 125 reverse engineering of, 336 semantic information and, 125 use of term, 60 see also affordances; Umwelt operant conditioning, 98 operationalism, 365 Oppenheim, Paul, 125n options, as evolving into obligations, 178, 257 Orgel’s Second Rule, 30, 196n, 382, 413 Origins of Language, The (Hurford), 266–67, 298 Oxford English Dictionary, 209 paleographers, 182 paleontologists, 79–80 palimony, 317 “Panglossian paradigm,” 29–30 parasites, 193n memes as, 200, 215, 216–17, 285 parental investment, asymmetrical, 134n Parker, Charlie “Bird,” 133 patents, 132–33, 136, 323 “patterned ground” phenomena, 44 pattern finding, 274, 275, 390–91, 393 Peirce, Charles Sanders, 182 Penrose, Roger, 77 performance models, competence models vs., 166 persistence, 47–48 reproduction and, 47, 48 phenomenology, hetero- vs. auto, 351 phenomes, in transmission without comprehension, 201–2 phenotypes, extended, 135 Philological Society of London, 248 philologists, 182 Phoenix, Joaquin, 399n phonemes: as benign illusion, 202 digitization of speech by, 199, 200, 202 as impervious to variations of tone and accent, 199–200 risks for, 267 type/token distinction and, 200 phonotactics, 267 phylogenetic diagrams (cladograms), 180 physical stance, 37 Picasso, Pablo, 149, 197, 323, 324 pidgins, 180 Pilot ACE, 59 Pinker, Steven, 246, 260, 279, 313, 315, 316–17, 323–24, 331 piping plovers, 91, 92–93, 340–41 Piraha (Amzonian language), 278 Pitts, Walter, 151, 384 Pittsburgh philosophers, 41–42 Pixar, 381, 402 plagiarism, 131, 228 natural selection as, 135–36 plane of the ecliptic, 17 Plans and the Structure of Behavior (Miller, et al.), 375 plants: cellular organization of, 150 information-transmission systems of, 150 plasticity: AI and, 164–65 of behavior, 99 of brain, 159–60, 303 Plato, 182, 299n, 300, 331 polarization, of reasoning, 25 polymerase chain reaction (PCR), 208, 381, 402 Popper, Karl, 98 Popperian creatures, 98, 99, 152, 331 “higher” animals as, 100 semantic information acquired by, 119 population, human: growth of, 9, 87, 177, 254 as percentage of total biomass, 87 Porter, Cole, 325 portmanteau words, 317 post-intelligent design, see artificial intelligence Powner, M.

Fancy Bear Goes Phishing: The Dark History of the Information Age, in Five Extraordinary Hacks
by Scott J. Shapiro

When losses were substituted for gains, participants reversed course and became risk loving. Loss aversion shows why phishing emails that promise gains—such as the Nigerian Prince scams—are less effective than those that threaten losses—like the Fancy Bear security alert. Because human beings are normally risk averse, we are less likely to take a chance for a large gain if there is a significant chance of a loss as well. In the case of the Nigerian Prince scam, most people figure out that they need to risk money up front to get the reward. At that point, most back out. Indeed, some researchers have argued that the inherent ridiculousness of these scams is a feature, not a bug.

How the City Really Works: The Definitive Guide to Money and Investing in London's Square Mile
by Alexander Davidson
Published 1 Apr 2008

The FSA has said that the legislation will help to protect certificated shareholders but will do little to protect the investors whose names and contact details are already in circulation amongst boiler room operators. Advanced fee frauds Away from investments, the boiler rooms specialise in the advance fee fraud, a spurious loan offer presented as conditional on payment of an upfront fee. There are variations on the theme but the outcome is always the same: the promoters take the fee but do not pay the loan. The 419 fraud is the best known type of this; it is named after the section of Nigeria’s penal code that addresses fraud schemes, although this scam is not exclusively from Nigeria.

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Index 419 fraud 204 9/11 terrorist attacks 31, 218, 242, 243, 254, 257 Abbey National 22 ABN AMRO 103 accounting and governance 232–38 scandals 232 Accounting Standards Board (ASB) 236 administration 17 Allianz 207 Alternative Investment Market (AIM) 44–45, 131, 183, 238 Amaranth Advisors 170 analysts 172–78 fundamental 172–74 others 177–78 Spitzer impact 174–75 technical 175–77 anti-fraud agencies Assets Recovery Agency 211–13 City of London Police 209 Financial Services Authority 208 Financial Crime and Intelligence Division 208 Insurance Fraud Bureau 209 Insurance Fraud Investigators Group 209 International Association of Insurance Fraud Agencies 207, 210, 218 National Criminal Intelligence Service 210 Serious Fraud Office 213–15 Serious Organised Crime Agency 210–11 asset finance 24–25 Association of Investment Companies 167 backwardation 101 bad debt, collection of 26–28 Banco Santander Central Hispano 22 Bank for International Settlements (BIS) 17, 27, 85, 98, 114 bank guarantee 23 Bank of Credit and Commerce International (BCCI) 10, 214 Bank of England 6, 10–17 Court of the 11 credit risk warning 98 framework for sterling money markets 81 Governor 11, 13, 14 history 10, 15–16 Inflation Report 14 inflation targeting 12–13 interest rates and 12 international liaison 17 lender of last resort 15–17 Market Abuse Directive (MAD) 16 monetary policy and 12–15 Monetary Policy Committee (MPC) 13–14 Open-market operations 15, 82 repo rate 12, 15 role 11–12 RTGS (Real Time Gross Settlement) 143 statutory immunity 11 supervisory role 11 Bank of England Act 1988 11, 12 Bank of England Quarterly Model (BEQM) 14 Banking Act 1933 see Glass-Steagall Act banks commercial 5 investment 5 Barclays Bank 20 Barings 11, 15, 68, 186, 299 Barlow Clowes case 214 Barron’s 99 base rate see repo rate Basel Committee for Banking Supervision (BCBS) 27–28 ____________________________________________________ INDEX 303 Basel I 27 Basel II 27–28, 56 Bear Stearns 95, 97 BearingPoint 97 bill of exchange 26 Bingham, Lord Justice 10–11 Blue Arrow trial 214 BNP Paribas 145, 150 bond issues see credit products book runners 51, 92 Borsa Italiana 8, 139 bps 90 British Bankers’ Association 20, 96, 97 building societies 22–23 demutualisation 22 Building Societies Association 22 Capital Asset Pricing Model (CAPM) see discounted cash flow analysis capital gains tax 73, 75, 163, 168 capital raising markets 42–46 mergers and acquisitions (M&A) 56–58 see also flotation, bond issues Capital Requirements Directive 28, 94 central securities depository (CSD) 145 international (ICSD) 145 Central Warrants Trading Service 73 Chancellor of the Exchequer 12, 13, 229 Chicago Mercantile Exchange 65 Citigroup 136, 145, 150 City of London 4–9 Big Bang 7 definition 4 employment in 8–9 financial markets 5 geography 4–5 history 6–7 services offered 4 world leader 5–6 clearing 140, 141–42 Clearing House Automated Payment System (CHAPS) 143 Clearstream Banking Luxembourg 92, 145 commercial banking 5, 18–28 bad loans and capital adequacy 26–28 banking cards 21 building societies 22–23 credit collection 25–26 finance raising 23–25 history 18–19 overdrafts 23 role today 19–21 commodities market 99–109 exchange-traded commodities 101  fluctuations 100 futures 100 hard commodities energy 102 non-ferrous metals 102–04 precious metal 104–06 soft commodities cocoa 107 coffee 106 sugar 107 Companies Act 2006 204, 223, 236 conflict of interests 7 consolidation 138–39 Consumer Price Index (CPI) 13 contango 101 Continuous Linked Settlement (CLS) 119 corporate governance 223–38 best practice 231 Cadbury Code 224 Combined Code 43, 225 compliance 230 definition 223 Directors’ Remuneration Report Regulations 226 EU developments 230 European auditing rules 234–35 Greenbury Committee 224–25 Higgs and Smith reports 227 International Financial Reporting Standards (IFRS) 237–38 Listing Rules 228–29 Model Code 229 Myners Report 229 OECD Principles 226 operating and financial review (OFR) 235– 36 revised Combined Code 227–28 Sarbanes–Oxley Act 233–34 Turnbull Report 225 credit cards 21 zero-per-cent cards 21 credit collection 25–26 factoring and invoice discounting 26 trade finance 25–26 credit derivatives 96–97 back office issues 97 credit default swap (CDS) 96–97 credit products asset-backed securities 94 bonds 90–91 collateralised debt obligations 94–95 collateralised loan obligation 95 covered bonds 93 equity convertibles 93 international debt securities 92–93  304 INDEX ____________________________________________________ junk bonds 91 zero-coupon bonds 93 credit rating agencies 91 Credit Suisse 5, 136, 193 CREST system 141, 142–44 dark liquidity pools 138 Debt Management Office 82, 86 Department of Trade and Industry (DTI) 235, 251, 282 derivatives 60–77 asset classes 60 bilateral settlement 66 cash and 60–61 central counterparty clearing 65–66 contracts for difference 76–77, 129 covered warrants 72–73 futures 71–72 hedging and speculation 67 on-exchange vs OTC derivatives 63–65 options 69–71 Black-Scholes model 70 call option 70 equity option 70–71 index options 71 put option 70 problems and fraud 67–68 retail investors and 69–77 spread betting 73–75 transactions forward (future) 61–62 option 62 spot 61 swap 62–63 useful websites 75 Deutsche Bank 136 Deutsche Börse 64, 138 discounted cash flow analysis (DCF) 39 dividend 29 domestic financial services complaint and compensation 279–80 financial advisors 277–78 Insurance Mediation Directive 278–79 investments with life insurance 275–76 life insurance term 275 whole-of-life 274–75 NEWICOB 279 property and mortgages 273–74 protection products 275 savings products 276–77 Dow theory 175 easyJet 67 EDX London 66 Egg 20, 21 Elliott Wave Theory 176 Enron 67, 114, 186, 232, 233 enterprise investment schemes 167–68 Equiduct 133–34, 137 Equitable Life 282 equities 29–35 market indices 32–33 market influencers 40–41 nominee accounts 31 shares 29–32 stockbrokers 33–34 valuation 35–41 equity transparency 64 Eurex 64, 65 Euro Overnight Index Average (EURONIA) 85 euro, the 17, 115 Eurobond 6, 92 Euroclear Bank 92, 146, 148–49 Euronext.liffe 5, 60, 65, 71 European Central Bank (ECB) 16, 17, 84, 148 European Central Counterparty (EuroCCP) 136 European Code of Conduct 146–47, 150 European Exchange Rate Mechanism 114 European Harmonised Index of Consumer Prices 13 European Union Capital Requirements Directive 199 Market Abuse Directive (MAD) 16, 196 Market in Financial Instruments Directive (MiFID) 64, 197–99 Money Laundering Directive 219 Prospectus Directive 196–97 Transparency Directive 197 exchange controls 6 expectation theory 172 Exxon Valdez 250 factoring see credit collection Factors and Discounters Association 26 Fair & Clear Group 145–46 Federal Deposit Insurance Corporation 17 Federation of European Securities Exchanges 137 Fighting Fraud Together 200–01 finance, raising 23–25 asset 24–25 committed 23 project finance 24 recourse loan 24 syndicated loan 23–24 uncommitted 23 Financial Action Task Force on Money Laundering (FATF) 217–18 financial communications 179–89 ____________________________________________________ INDEX 305 advertising 189 corporate information flow 185 primary information providers (PIPs) 185 investor relations 183–84 journalists 185–89 public relations 179–183 black PR’ 182–83 tipsters 187–89 City Slickers case 188–89 Financial Ombudsman Service (FOS) 165, 279–80 financial ratios 36–39 dividend cover 37 earnings per share (EPS) 36 EBITDA 38 enterprise multiple 38 gearing 38 net asset value (NAV) 38 price/earnings (P/E) 37 price-to-sales ratio 37 return on capital employed (ROCE) 38 see also discounted cash flow analysis Financial Reporting Council (FRC) 224, 228, 234, 236 Financial Services Act 1986 191–92 Financial Services Action Plan 8, 195 Financial Services and Markets Act 2001 192 Financial Services and Markets Tribunal 94 Financial Services Authority (FSA) 5, 8, 31, 44, 67, 94, 97, 103, 171, 189, 192–99 competition review 132 insurance industry 240 money laundering and 219 objectives 192 regulatory role 192–95 powers 193 principles-based 194–95 Financial Services Compensation Scheme (FSCS) 17, 165, 280 Financial Services Modernisation Act 19 financial services regulation 190–99 see also Financial Services Authority Financial Times 9, 298 First Direct 20 flipping 53 flotation beauty parade 51 book build 52 early secondary market trading 53 grey market 52, 74 initial public offering (IPO) 47–53 pre-marketing 51–52 pricing 52–53 specialist types of share issue accelerated book build 54  bought deal 54 deeply discounted rights issue 55 introduction 55 placing 55 placing and open offer 55 rights issues 54–55 underwriting 52 foreign exchange 109–120 brokers 113 dealers 113 default risk 119 electronic trading 117 exchange rate 115 ICAP Knowledge Centre 120 investors 113–14 transaction types derivatives 116–17 spot market 115–16 Foreign Exchange Joint Standing Committee 112 forward rate agreement 85 fraud 200–15 advanced fee frauds 204–05 boiler rooms 201–04 Regulation S 202 future regulation 215 identity theft 205–06 insurance fraud 206–08 see also anti-fraud agencies Fraud Act 2006 200 FTSE 100 32, 36, 58, 122, 189, 227, 233 FTSE 250 32, 122 FTSE All-Share Index 32, 122 FTSE Group 131 FTSE SmallCap Index 32 FTSE Sterling Corporate Bond Index 33 Futures and Options Association 131 Generally Accepted Accounting Principles (GAAP) 237, 257 gilts 33, 86–88 Giovanni Group 146 Glass-Steagall Act 7, 19 Global Bond Market Forum 64 Goldman Sachs 136 government bonds see gilts Guinness case 214 Halifax Bank 20 hedge funds 8, 77, 97, 156–57 derivatives-based arbitrage 156 fixed-income arbitrage 157 Hemscott 35 HM Revenue and Customs 55, 211 HSBC 20, 103 Hurricane Hugo 250  306 INDEX ____________________________________________________ Hurricane Katrina 2, 67, 242 ICE Futures 5, 66, 102 Individual Capital Adequacy Standards (ICAS) 244 inflation 12–14 cost-push 12 definition 12 demand-pull 12 quarterly Inflation Report 14 initial public offering (IPO) 47–53 institutional investors 155–58 fund managers 155–56 hedge fund managers 156–57 insurance companies 157 pension funds 158 insurance industry London and 240 market 239–40 protection and indemnity associations 241 reform 245 regulation 243 contingent commissions 243 contract certainty 243 ICAS and Solvency II 244–45 types 240–41 underwriting process 241–42 see also Lloyd’s of London, reinsurance Intercontinental Exchange 5 interest equalisation tax 6 interest rate products debt securities 82–83, 92–93 bill of exchange 83 certificate of deposit 83 debt instrument 83 euro bill 82 floating rate note 83 local authority bill 83 T-bills 82 derivatives 85 forward rate agreements (FRAs) 85–86 government bonds (gilts) 86–89 money markets 81–82 repos 84 International Financial Reporting Standards (IFRS) 58, 86, 173, 237–38 International Financial Services London (IFSL) 5, 64, 86, 92, 112 International Monetary Fund 17 International Securities Exchange 138 International Swap Dealers Association 63 International Swaps and Derivatives Association 63 International Underwriting Association (IUA) 240 investment banking 5, 47–59 mergers and acquisitions (M&A) 56–58 see also capital raising investment companies 164–69 real estate 169 split capital 166–67 venture capital 167–68 investment funds 159–64 charges 163 investment strategy 164 fund of funds scheme 164 manager-of-managers scheme 164 open-ended investment companies (OEICs) 159 selection criteria 163 total expense ratio (TER) 164 unit trusts 159 Investment Management Association 156 Investment Management Regulatory Organisation 11 Johnson Matthey Bankers Limited 15–16 Joint Money Laundering Steering Group 221 KAS Bank 145 LCH.Clearnet Limited 66, 140 letter of credit (LOC) 23, 25–26 liability-driven investment 158 Listing Rules 43, 167, 173, 225, 228–29 Lloyd’s of London 8, 246–59 capital backing 249 chain of security 252–255 Central Fund 253 Corporation of Lloyd’s 248–49, 253 Equitas Reinsurance Ltd 251, 252, 255–56 Franchise Performance Directorate 256 future 258–59 Hardship Committee 251 history 246–47, 250–52 international licenses 258 Lioncover 252, 256 Member’s Agent Pooling Arrangement (MAPA) 249, 251 Names 248, one-year accounting 257 regulation 257 solvency ratio 255 syndicate capacity 249–50 syndicates 27 loans 23–24 recourse loan 24 syndicated loan 23–24 London Interbank Offered Rate (LIBOR) 74, 76 ____________________________________________________ INDEX 307 London Stock Exchange (LSE) 7, 8, 22, 29, 32, 64 Alternative Investment Market (AIM) 32 Main Market 42–43, 55 statistics 41 trading facilities 122–27 market makers 125–27 SETSmm 122, 123, 124 SETSqx 124 Stock Exchange Electronic Trading Service (SETS) 122–25 TradElect 124–25 users 127–29 Louvre Accord 114 Markets in Financial Instruments Directive (MiFID) 64, 121, 124, 125, 130, 144, 197–99, 277 best execution policy 130–31 Maxwell, Robert 186, 214, 282 mergers and acquisitions 56–58 current speculation 57–58 disclosure and regulation 58–59 Panel on Takeovers and Mergers 57 ‘white knight’ 57 ‘white squire’ 57 Merrill Lynch 136, 174, 186, 254 money laundering 216–22 Egmont Group 218 hawala system 217 know your client (KYC) 217, 218 size of the problem 222 three stages of laundering 216 Morgan Stanley 5, 136 multilateral trading facilities Chi-X 134–35, 141 Project Turquoise 136, 141 Munich Re 207 Nasdaq 124, 138 National Strategy for Financial Capability 269 National Westminster Bank 20 Nationwide Building Society 221 net operating cash flow (NOCF) see discounted cash flow analysis New York Federal Reserve Bank (Fed) 16 Nomads 45 normal market share (NMS) 132–33 Northern Rock 16 Nymex Europe 102 NYSE Euronext 124, 138, 145 options see derivatives Oxera 52  Parmalat 67, 232 pensions alternatively secured pension 290 annuities 288–89 occupational pension final salary scheme 285–86 money purchase scheme 286 personal account 287 personal pension self-invested personal pension 288 stakeholder pension 288 state pension 283 unsecured pension 289–90 Pensions Act 2007 283 phishing 200 Piper Alpha oil disaster 250 PLUS Markets Group 32, 45–46 as alternative to LSE 45–46, 131–33 deal with OMX 132 relationship to Ofex 46 pooled investments exchange-traded funds (ETF) 169 hedge funds 169–71 see also investment companies, investment funds post-trade services 140–50 clearing 140, 141–42 safekeeping and custody 143–44 registrar services 144 settlement 140, 142–43 real-time process 142 Proceeds of Crime Act 2003 (POCA) 211, 219, 220–21 Professional Securities Market 43–44 Prudential 20 purchasing power parity 118–19 reinsurance 260–68 cat bonds 264–65 dispute resolution 268 doctrines 263 financial reinsurance 263–64 incurred but not reported (IBNR) claims insurance securitisation 265 non-proportional 261 offshore requirements 267 proportional 261 Reinsurance Directive 266–67 retrocession 262 types of contract facultative 262 treaty 262 retail banking 20 retail investors 151–155 Retail Prices Index (RPI) 13, 87 264  308 INDEX ____________________________________________________ Retail Service Provider (RSP) network Reuters 35 Royal Bank of Scotland 20, 79, 221 73 Sarbanes–Oxley Act 233–34 securities 5, 29 Securities and Futures Authority 11 self-regulatory organisations (SROs) 192 Serious Crime Bill 213 settlement 11, 31, 140, 142–43 shareholder, rights of 29 shares investment in 29–32 nominee accounts 31 valuation 35–39 ratios 36–39 see also flotation short selling 31–32, 73, 100, 157 Society for Worldwide Interbank Financial Telecommunications (SWIFT) 119 Solvency II 244–245 Soros, George 114, 115 Specialist Fund Market 44 ‘square mile’ 4 stamp duty 72, 75, 166 Sterling Overnight Index Average (SONIA) 85 Stock Exchange Automated Quotation System (SEAQ) 7, 121, 126 Stock Exchange Electronic Trading Service (SETS) see Lloyd’s of London stock market 29–33 stockbrokers 33–34 advisory 33 discretionary 33–34 execution-only 34 stocks see shares sub-prime mortgage crisis 16, 89, 94, 274 superequivalence 43 suspicious activity reports (SARs) 212, 219–22 swaps market 7 interest rates 56 swaptions 68 systematic internalisers (SI) 137–38 Target2-Securities 147–48, 150 The Times 35, 53, 291 share price tables 36–37, 40 tip sheets 33 trading platforms, electronic 80, 97, 113, 117 tranche trading 123 Treasury Select Committee 14 trend theory 175–76 UBS Warburg 103, 136 UK Listing Authority 44 Undertakings for Collective Investments in Transferable Securities (UCITS) 156 United Capital Asset Management 95 value at risk (VAR) virtual banks 20 virt-x 140 67–68 weighted-average cost of capital (WACC) see discounted cash flow analysis wholesale banking 20 wholesale markets 78–80 banks 78–79 interdealer brokers 79–80 investors 79 Woolwich Bank 20 WorldCom 67, 232 Index of Advertisers Aberdeen Asset Management PLC xiii–xv Birkbeck University of London xl–xlii BPP xliv–xlvi Brewin Dolphin Investment Banking 48–50 Cass Business School xxi–xxiv Cater Allen Private Bank 180–81 CB Richard Ellis Ltd 270–71 CDP xlviii–l Charles Schwab UK Ltd lvi–lviii City Jet Ltd x–xii The City of London inside front cover EBS Dealing Resource International 110–11 Edelman xx ESCP-EAP European School of Management vi ICAS (The Inst. of Chartered Accountants of Scotland) xxx JP Morgan Asset Management 160–62 London Business School xvi–xviii London City Airport vii–viii Morgan Lewis xxix Securities & Investments Institute ii The Share Centre 30, 152–54 Smithfield Bar and Grill lii–liv TD Waterhouse xxxii–xxxiv University of East London xxxvi–xxxviii 

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The Washing Machine by Nick Kochan, Gerald Duckworth, 2006, is an entertaining guide to how money laundering works today. The book is in some respects more cynical than Lilley’s. The author, an investigative journalist, gets under the skin of the anti-money-laundering bravado, demonstrating how ineffectual much of it is. Index 419 fraud 204 9/11 terrorist attacks 31, 218, 242, 243, 254, 257 Abbey National 22 ABN AMRO 103 accounting and governance 232–38 scandals 232 Accounting Standards Board (ASB) 236 administration 17 Allianz 207 Alternative Investment Market (AIM) 44–45, 131, 183, 238 Amaranth Advisors 170 analysts 172–78 fundamental 172–74 others 177–78 Spitzer impact 174–75 technical 175–77 anti-fraud agencies Assets Recovery Agency 211–13 City of London Police 209 Financial Services Authority 208 Financial Crime and Intelligence Division 208 Insurance Fraud Bureau 209 Insurance Fraud Investigators Group 209 International Association of Insurance Fraud Agencies 207, 210, 218 National Criminal Intelligence Service 210 Serious Fraud Office 213–15 Serious Organised Crime Agency 210–11 asset finance 24–25 Association of Investment Companies 167 backwardation 101 bad debt, collection of 26–28 Banco Santander Central Hispano 22 Bank for International Settlements (BIS) 17, 27, 85, 98, 114 bank guarantee 23 Bank of Credit and Commerce International (BCCI) 10, 214 Bank of England 6, 10–17 Court of the 11 credit risk warning 98 framework for sterling money markets 81 Governor 11, 13, 14 history 10, 15–16 Inflation Report 14 inflation targeting 12–13 interest rates and 12 international liaison 17 lender of last resort 15–17 Market Abuse Directive (MAD) 16 monetary policy and 12–15 Monetary Policy Committee (MPC) 13–14 Open-market operations 15, 82 repo rate 12, 15 role 11–12 RTGS (Real Time Gross Settlement) 143 statutory immunity 11 supervisory role 11 Bank of England Act 1988 11, 12 Bank of England Quarterly Model (BEQM) 14 Banking Act 1933 see Glass-Steagall Act banks commercial 5 investment 5 Barclays Bank 20 Barings 11, 15, 68, 186, 299 Barlow Clowes case 214 Barron’s 99 base rate see repo rate Basel Committee for Banking Supervision (BCBS) 27–28 ____________________________________________________ INDEX 303 Basel I 27 Basel II 27–28, 56 Bear Stearns 95, 97 BearingPoint 97 bill of exchange 26 Bingham, Lord Justice 10–11 Blue Arrow trial 214 BNP Paribas 145, 150 bond issues see credit products book runners 51, 92 Borsa Italiana 8, 139 bps 90 British Bankers’ Association 20, 96, 97 building societies 22–23 demutualisation 22 Building Societies Association 22 Capital Asset Pricing Model (CAPM) see discounted cash flow analysis capital gains tax 73, 75, 163, 168 capital raising markets 42–46 mergers and acquisitions (M&A) 56–58 see also flotation, bond issues Capital Requirements Directive 28, 94 central securities depository (CSD) 145 international (ICSD) 145 Central Warrants Trading Service 73 Chancellor of the Exchequer 12, 13, 229 Chicago Mercantile Exchange 65 Citigroup 136, 145, 150 City of London 4–9 Big Bang 7 definition 4 employment in 8–9 financial markets 5 geography 4–5 history 6–7 services offered 4 world leader 5–6 clearing 140, 141–42 Clearing House Automated Payment System (CHAPS) 143 Clearstream Banking Luxembourg 92, 145 commercial banking 5, 18–28 bad loans and capital adequacy 26–28 banking cards 21 building societies 22–23 credit collection 25–26 finance raising 23–25 history 18–19 overdrafts 23 role today 19–21 commodities market 99–109 exchange-traded commodities 101  fluctuations 100 futures 100 hard commodities energy 102 non-ferrous metals 102–04 precious metal 104–06 soft commodities cocoa 107 coffee 106 sugar 107 Companies Act 2006 204, 223, 236 conflict of interests 7 consolidation 138–39 Consumer Price Index (CPI) 13 contango 101 Continuous Linked Settlement (CLS) 119 corporate governance 223–38 best practice 231 Cadbury Code 224 Combined Code 43, 225 compliance 230 definition 223 Directors’ Remuneration Report Regulations 226 EU developments 230 European auditing rules 234–35 Greenbury Committee 224–25 Higgs and Smith reports 227 International Financial Reporting Standards (IFRS) 237–38 Listing Rules 228–29 Model Code 229 Myners Report 229 OECD Principles 226 operating and financial review (OFR) 235– 36 revised Combined Code 227–28 Sarbanes–Oxley Act 233–34 Turnbull Report 225 credit cards 21 zero-per-cent cards 21 credit collection 25–26 factoring and invoice discounting 26 trade finance 25–26 credit derivatives 96–97 back office issues 97 credit default swap (CDS) 96–97 credit products asset-backed securities 94 bonds 90–91 collateralised debt obligations 94–95 collateralised loan obligation 95 covered bonds 93 equity convertibles 93 international debt securities 92–93  304 INDEX ____________________________________________________ junk bonds 91 zero-coupon bonds 93 credit rating agencies 91 Credit Suisse 5, 136, 193 CREST system 141, 142–44 dark liquidity pools 138 Debt Management Office 82, 86 Department of Trade and Industry (DTI) 235, 251, 282 derivatives 60–77 asset classes 60 bilateral settlement 66 cash and 60–61 central counterparty clearing 65–66 contracts for difference 76–77, 129 covered warrants 72–73 futures 71–72 hedging and speculation 67 on-exchange vs OTC derivatives 63–65 options 69–71 Black-Scholes model 70 call option 70 equity option 70–71 index options 71 put option 70 problems and fraud 67–68 retail investors and 69–77 spread betting 73–75 transactions forward (future) 61–62 option 62 spot 61 swap 62–63 useful websites 75 Deutsche Bank 136 Deutsche Börse 64, 138 discounted cash flow analysis (DCF) 39 dividend 29 domestic financial services complaint and compensation 279–80 financial advisors 277–78 Insurance Mediation Directive 278–79 investments with life insurance 275–76 life insurance term 275 whole-of-life 274–75 NEWICOB 279 property and mortgages 273–74 protection products 275 savings products 276–77 Dow theory 175 easyJet 67 EDX London 66 Egg 20, 21 Elliott Wave Theory 176 Enron 67, 114, 186, 232, 233 enterprise investment schemes 167–68 Equiduct 133–34, 137 Equitable Life 282 equities 29–35 market indices 32–33 market influencers 40–41 nominee accounts 31 shares 29–32 stockbrokers 33–34 valuation 35–41 equity transparency 64 Eurex 64, 65 Euro Overnight Index Average (EURONIA) 85 euro, the 17, 115 Eurobond 6, 92 Euroclear Bank 92, 146, 148–49 Euronext.liffe 5, 60, 65, 71 European Central Bank (ECB) 16, 17, 84, 148 European Central Counterparty (EuroCCP) 136 European Code of Conduct 146–47, 150 European Exchange Rate Mechanism 114 European Harmonised Index of Consumer Prices 13 European Union Capital Requirements Directive 199 Market Abuse Directive (MAD) 16, 196 Market in Financial Instruments Directive (MiFID) 64, 197–99 Money Laundering Directive 219 Prospectus Directive 196–97 Transparency Directive 197 exchange controls 6 expectation theory 172 Exxon Valdez 250 factoring see credit collection Factors and Discounters Association 26 Fair & Clear Group 145–46 Federal Deposit Insurance Corporation 17 Federation of European Securities Exchanges 137 Fighting Fraud Together 200–01 finance, raising 23–25 asset 24–25 committed 23 project finance 24 recourse loan 24 syndicated loan 23–24 uncommitted 23 Financial Action Task Force on Money Laundering (FATF) 217–18 financial communications 179–89 ____________________________________________________ INDEX 305 advertising 189 corporate information flow 185 primary information providers (PIPs) 185 investor relations 183–84 journalists 185–89 public relations 179–183 black PR’ 182–83 tipsters 187–89 City Slickers case 188–89 Financial Ombudsman Service (FOS) 165, 279–80 financial ratios 36–39 dividend cover 37 earnings per share (EPS) 36 EBITDA 38 enterprise multiple 38 gearing 38 net asset value (NAV) 38 price/earnings (P/E) 37 price-to-sales ratio 37 return on capital employed (ROCE) 38 see also discounted cash flow analysis Financial Reporting Council (FRC) 224, 228, 234, 236 Financial Services Act 1986 191–92 Financial Services Action Plan 8, 195 Financial Services and Markets Act 2001 192 Financial Services and Markets Tribunal 94 Financial Services Authority (FSA) 5, 8, 31, 44, 67, 94, 97, 103, 171, 189, 192–99 competition review 132 insurance industry 240 money laundering and 219 objectives 192 regulatory role 192–95 powers 193 principles-based 194–95 Financial Services Compensation Scheme (FSCS) 17, 165, 280 Financial Services Modernisation Act 19 financial services regulation 190–99 see also Financial Services Authority Financial Times 9, 298 First Direct 20 flipping 53 flotation beauty parade 51 book build 52 early secondary market trading 53 grey market 52, 74 initial public offering (IPO) 47–53 pre-marketing 51–52 pricing 52–53 specialist types of share issue accelerated book build 54  bought deal 54 deeply discounted rights issue 55 introduction 55 placing 55 placing and open offer 55 rights issues 54–55 underwriting 52 foreign exchange 109–120 brokers 113 dealers 113 default risk 119 electronic trading 117 exchange rate 115 ICAP Knowledge Centre 120 investors 113–14 transaction types derivatives 116–17 spot market 115–16 Foreign Exchange Joint Standing Committee 112 forward rate agreement 85 fraud 200–15 advanced fee frauds 204–05 boiler rooms 201–04 Regulation S 202 future regulation 215 identity theft 205–06 insurance fraud 206–08 see also anti-fraud agencies Fraud Act 2006 200 FTSE 100 32, 36, 58, 122, 189, 227, 233 FTSE 250 32, 122 FTSE All-Share Index 32, 122 FTSE Group 131 FTSE SmallCap Index 32 FTSE Sterling Corporate Bond Index 33 Futures and Options Association 131 Generally Accepted Accounting Principles (GAAP) 237, 257 gilts 33, 86–88 Giovanni Group 146 Glass-Steagall Act 7, 19 Global Bond Market Forum 64 Goldman Sachs 136 government bonds see gilts Guinness case 214 Halifax Bank 20 hedge funds 8, 77, 97, 156–57 derivatives-based arbitrage 156 fixed-income arbitrage 157 Hemscott 35 HM Revenue and Customs 55, 211 HSBC 20, 103 Hurricane Hugo 250  306 INDEX ____________________________________________________ Hurricane Katrina 2, 67, 242 ICE Futures 5, 66, 102 Individual Capital Adequacy Standards (ICAS) 244 inflation 12–14 cost-push 12 definition 12 demand-pull 12 quarterly Inflation Report 14 initial public offering (IPO) 47–53 institutional investors 155–58 fund managers 155–56 hedge fund managers 156–57 insurance companies 157 pension funds 158 insurance industry London and 240 market 239–40 protection and indemnity associations 241 reform 245 regulation 243 contingent commissions 243 contract certainty 243 ICAS and Solvency II 244–45 types 240–41 underwriting process 241–42 see also Lloyd’s of London, reinsurance Intercontinental Exchange 5 interest equalisation tax 6 interest rate products debt securities 82–83, 92–93 bill of exchange 83 certificate of deposit 83 debt instrument 83 euro bill 82 floating rate note 83 local authority bill 83 T-bills 82 derivatives 85 forward rate agreements (FRAs) 85–86 government bonds (gilts) 86–89 money markets 81–82 repos 84 International Financial Reporting Standards (IFRS) 58, 86, 173, 237–38 International Financial Services London (IFSL) 5, 64, 86, 92, 112 International Monetary Fund 17 International Securities Exchange 138 International Swap Dealers Association 63 International Swaps and Derivatives Association 63 International Underwriting Association (IUA) 240 investment banking 5, 47–59 mergers and acquisitions (M&A) 56–58 see also capital raising investment companies 164–69 real estate 169 split capital 166–67 venture capital 167–68 investment funds 159–64 charges 163 investment strategy 164 fund of funds scheme 164 manager-of-managers scheme 164 open-ended investment companies (OEICs) 159 selection criteria 163 total expense ratio (TER) 164 unit trusts 159 Investment Management Association 156 Investment Management Regulatory Organisation 11 Johnson Matthey Bankers Limited 15–16 Joint Money Laundering Steering Group 221 KAS Bank 145 LCH.Clearnet Limited 66, 140 letter of credit (LOC) 23, 25–26 liability-driven investment 158 Listing Rules 43, 167, 173, 225, 228–29 Lloyd’s of London 8, 246–59 capital backing 249 chain of security 252–255 Central Fund 253 Corporation of Lloyd’s 248–49, 253 Equitas Reinsurance Ltd 251, 252, 255–56 Franchise Performance Directorate 256 future 258–59 Hardship Committee 251 history 246–47, 250–52 international licenses 258 Lioncover 252, 256 Member’s Agent Pooling Arrangement (MAPA) 249, 251 Names 248, one-year accounting 257 regulation 257 solvency ratio 255 syndicate capacity 249–50 syndicates 27 loans 23–24 recourse loan 24 syndicated loan 23–24 London Interbank Offered Rate (LIBOR) 74, 76 ____________________________________________________ INDEX 307 London Stock Exchange (LSE) 7, 8, 22, 29, 32, 64 Alternative Investment Market (AIM) 32 Main Market 42–43, 55 statistics 41 trading facilities 122–27 market makers 125–27 SETSmm 122, 123, 124 SETSqx 124 Stock Exchange Electronic Trading Service (SETS) 122–25 TradElect 124–25 users 127–29 Louvre Accord 114 Markets in Financial Instruments Directive (MiFID) 64, 121, 124, 125, 130, 144, 197–99, 277 best execution policy 130–31 Maxwell, Robert 186, 214, 282 mergers and acquisitions 56–58 current speculation 57–58 disclosure and regulation 58–59 Panel on Takeovers and Mergers 57 ‘white knight’ 57 ‘white squire’ 57 Merrill Lynch 136, 174, 186, 254 money laundering 216–22 Egmont Group 218 hawala system 217 know your client (KYC) 217, 218 size of the problem 222 three stages of laundering 216 Morgan Stanley 5, 136 multilateral trading facilities Chi-X 134–35, 141 Project Turquoise 136, 141 Munich Re 207 Nasdaq 124, 138 National Strategy for Financial Capability 269 National Westminster Bank 20 Nationwide Building Society 221 net operating cash flow (NOCF) see discounted cash flow analysis New York Federal Reserve Bank (Fed) 16 Nomads 45 normal market share (NMS) 132–33 Northern Rock 16 Nymex Europe 102 NYSE Euronext 124, 138, 145 options see derivatives Oxera 52  Parmalat 67, 232 pensions alternatively secured pension 290 annuities 288–89 occupational pension final salary scheme 285–86 money purchase scheme 286 personal account 287 personal pension self-invested personal pension 288 stakeholder pension 288 state pension 283 unsecured pension 289–90 Pensions Act 2007 283 phishing 200 Piper Alpha oil disaster 250 PLUS Markets Group 32, 45–46 as alternative to LSE 45–46, 131–33 deal with OMX 132 relationship to Ofex 46 pooled investments exchange-traded funds (ETF) 169 hedge funds 169–71 see also investment companies, investment funds post-trade services 140–50 clearing 140, 141–42 safekeeping and custody 143–44 registrar services 144 settlement 140, 142–43 real-time process 142 Proceeds of Crime Act 2003 (POCA) 211, 219, 220–21 Professional Securities Market 43–44 Prudential 20 purchasing power parity 118–19 reinsurance 260–68 cat bonds 264–65 dispute resolution 268 doctrines 263 financial reinsurance 263–64 incurred but not reported (IBNR) claims insurance securitisation 265 non-proportional 261 offshore requirements 267 proportional 261 Reinsurance Directive 266–67 retrocession 262 types of contract facultative 262 treaty 262 retail banking 20 retail investors 151–155 Retail Prices Index (RPI) 13, 87 264  308 INDEX ____________________________________________________ Retail Service Provider (RSP) network Reuters 35 Royal Bank of Scotland 20, 79, 221 73 Sarbanes–Oxley Act 233–34 securities 5, 29 Securities and Futures Authority 11 self-regulatory organisations (SROs) 192 Serious Crime Bill 213 settlement 11, 31, 140, 142–43 shareholder, rights of 29 shares investment in 29–32 nominee accounts 31 valuation 35–39 ratios 36–39 see also flotation short selling 31–32, 73, 100, 157 Society for Worldwide Interbank Financial Telecommunications (SWIFT) 119 Solvency II 244–245 Soros, George 114, 115 Specialist Fund Market 44 ‘square mile’ 4 stamp duty 72, 75, 166 Sterling Overnight Index Average (SONIA) 85 Stock Exchange Automated Quotation System (SEAQ) 7, 121, 126 Stock Exchange Electronic Trading Service (SETS) see Lloyd’s of London stock market 29–33 stockbrokers 33–34 advisory 33 discretionary 33–34 execution-only 34 stocks see shares sub-prime mortgage crisis 16, 89, 94, 274 superequivalence 43 suspicious activity reports (SARs) 212, 219–22 swaps market 7 interest rates 56 swaptions 68 systematic internalisers (SI) 137–38 Target2-Securities 147–48, 150 The Times 35, 53, 291 share price tables 36–37, 40 tip sheets 33 trading platforms, electronic 80, 97, 113, 117 tranche trading 123 Treasury Select Committee 14 trend theory 175–76 UBS Warburg 103, 136 UK Listing Authority 44 Undertakings for Collective Investments in Transferable Securities (UCITS) 156 United Capital Asset Management 95 value at risk (VAR) virtual banks 20 virt-x 140 67–68 weighted-average cost of capital (WACC) see discounted cash flow analysis wholesale banking 20 wholesale markets 78–80 banks 78–79 interdealer brokers 79–80 investors 79 Woolwich Bank 20 WorldCom 67, 232 Index of Advertisers Aberdeen Asset Management PLC xiii–xv Birkbeck University of London xl–xlii BPP xliv–xlvi Brewin Dolphin Investment Banking 48–50 Cass Business School xxi–xxiv Cater Allen Private Bank 180–81 CB Richard Ellis Ltd 270–71 CDP xlviii–l Charles Schwab UK Ltd lvi–lviii City Jet Ltd x–xii The City of London inside front cover EBS Dealing Resource International 110–11 Edelman xx ESCP-EAP European School of Management vi ICAS (The Inst. of Chartered Accountants of Scotland) xxx JP Morgan Asset Management 160–62 London Business School xvi–xviii London City Airport vii–viii Morgan Lewis xxix Securities & Investments Institute ii The Share Centre 30, 152–54 Smithfield Bar and Grill lii–liv TD Waterhouse xxxii–xxxiv University of East London xxxvi–xxxviii 

Think Like a Freak
by Steven D. Levitt and Stephen J. Dubner
Published 11 May 2014

The scammer pretended to be a wealthy person who’d been wrongly jailed and cut off from his riches. A huge reward awaited the hero who would pay for his release. In the old days, the con was played via postal letter or face-to-face meetings; today it lives primarily on the Internet. The generic name for this crime is advance-fee fraud, but it is more commonly called the Nigerian letter fraud or 419 fraud, after a section of the Nigerian criminal code. While advance-fee fraud is practiced in many places, Nigeria seems to be its epicenter: more e-mail scams of this sort invoke Nigeria than all other countries combined. Indeed, the connection is so famous that if you type “Nigeria” into a search engine, the auto-fill function will likely supply you with “Nigerian scam.”

…

Index The pagination of this electronic edition does not match the edition from which it was created. To locate a specific entry, please use your e-book reader’s search tools. Abdul-Jabbar, Kareem, 173 abortion, legalization of, 40, 69, 93 Abraham, story of, 187 Adam and Eve, story of, 187 adoptions, in Japan, 1n adults: dumbing down, 103 and magic, 102–3 advance-fee fraud, 156 advertising: awards programs as, 46–47 effectiveness of, 36–38 Africa: corruption in, 74 ethnic strife in, 74 independence in, 74 African-Americans, heart disease of, 75, 77 airline deaths, 179, 180 Ally Bank, 26–27 al Qaeda, 28 altruism, 121, 130 Amazon, 130 anecdotes, 181–82 Arai, Kazutoyo “the Rabbit,” 54 Arista Records, 208 Asiana Airlines, 179 attention, 102, 183 authority-figure relationships, 125 avatars, 63 Ayalon Institute, The, 152 bacteria: and chickens, 80 fecal transplants, 84–86 gut, healthy, 84–85 Helicobacter pylori, 80–83 hereditary, 83 in human body, 83 spread of, 28 transplantation of, 84–86 and ulcers, 80–86, 95 bank accounts: and life insurance, 163–65 prize-linked savings (PLS), 98–99 savings rates, 97–99 and terrorists, 161–65 Bathsheba, 187 beliefs, 21 Bertoletti, Patrick “Deep Dish,” 60–61 biases, 205 absent in children, 87–88 and opinions, 10, 172 right vs. wrong, 31–32 status-quo, 206 Bible, stories in, 185–88 big thinkers, 89 blind spots, 172 blockbuster drugs, 79 Bloomberg, Michael, 192–93 Bohr, Niels, 23 Bolivia, slavery in, 74 Bolt, Usain, 55 Borody, Thomas, 85–86 brain, as critical in sports, 63 brainstorming, 193 bread baking, 34–35 bribes, 105–6 Buffett, Peter, 119–20 bullet factory, Israeli, 152–54 burglar alarms, 158 Byrds, 138 Cain and Abel, story of, 187 California, electricity use in, 112–15 Cameron, David, 11–16 Cameron, Ivan, 14–15 Camping, Harold, 30 Campylobacter, 80 cancer, false positives, 158 carbon credits, 131–33 Caribbean blacks, 77 cash bounties, 133 causality and correlation, 8–9 cause and effect: in advertising, 36–38 in economics, 26–27 measuring, 26–27, 35, 39 obvious cause, 65 root causes, 66–70, 82–83, 85 Challenger, 197–98 change, bringing about, 90 charity, 117–25 conscience laundering via, 120 fund-raising success, 122 Italian philanthropy, 73 “once-and-done,” 121–24, 130 Operation Smile, 118–19 raising money for, 99–100 relationship with donor, 125–36 Smile Train, 119–24, 130 social-gaming sites for, 100 social pressure in, 121 chatbots, 160–61 Chekhov, Anton, 188 Chestnut, Joey “Jaws,” 60 chickens, and bacteria, 80 children: bribing, 105–6, 130 cash for grades, 109–10 generating ideas, 88 hard to fool, 102–3 having fun, 96, 100 and magic, 101–4 plastic surgery for, 117–24 preconceptions absent in, 87–88 questions answered by, 19–20 questions asked by, 87 reading books, 104, 110 thinking like, 87, 92, 95, 100 in traffic accidents, 178 vision problems of, 91–92 writing for, 104 China: diplomatic relationship with, 126–27 pollution in, 132 store opening in, 196–97 Chiyonofuji “the Wolf,” 52 Churchill, Winston, 189–90, 210 Cialdini, Robert: and California energy study, 112, 113 and Petrified Forest study, 115–16 civic institutions, trust in, 73 civil-rights lawsuits, 40 Clash, The, 208 climate change, 168–71 cobra effect, 133 Cold War, 126 collaborative relationships, 125, 130, 134 collective good, private benefit vs., 7, 29 college applications, 150 Colombia, slavery in, 74 communal incentive, 7, 29 compass: magnetic reading of, 32 moral, 31–34 complexity, seduced by, 94 Concorde fallacy, 191 concrete costs, focus on, 191 conventional wisdom: blind acceptance of, 8 in education reform, 91 running with the herd, 10, 112–15, 172 Cops, 207 core ideas, 8–9 correlation and causality, 8–9 corruption, 66–67 in post-colonial Africa, 74 crime: and abortion, 69, 93 and the economy, 68, 208 and environment, 69 and gun laws, 68 “present-tense” factors, 68–69 root causes of, 67–70 Cultural Cognition Project (CCP), 168–71 curiosity, 87 customers, incentives of, 128–30 Cutler, David, 76 CXO Advisory Group, 24 data, use of, 9 David, King, 138, 187–88 Davis, Clive, 208 Dawkins, Richard, 191 Deane, Geoff, 193–96 decency, treating others with, 134 decision making: coin flips in, 41, 201–5 economic approach in, 9 Freakonomics Experiments, 200–205 soccer penalty kick, 3–7 tradition-based, 39, 78 devil belief, 21 diplomacy, 126–27 DNA sequencing, 83 dogmatism, 25, 102, 171–72 driverless car, 174–77 drug war, 173 drunk walking, 90–91 Dubner, Stephen J., as quitter, 208–9 eating competitions, 53–61 economic approach, 9 economics: cause and effect in, 26–27 free disposal in, 88 Nobel Prize for, 25n predictions in, 25–27 economy: and crime, 68, 207 and religion, 72–73 education: and poverty, 75 and terrorists, 171 education reform, 50–52, 91 Einstein, Albert, 93 Eisen, Jonathan, 83 embezzlement, corporate, 90 Emperor’s new clothes, 88 Encyclopedia of Ethical Failure, The (Epstein), 184–85 energy conservation, 112–15 “entrepreneurs of error,” 22 environment, and crime, 69 Environmental Investigation Agency (EIA), 132 Epstein, Steve, 184–85 error, entrepreneurs of, 22 ethics, failures in, 184–85 Europe, capitalism in, 73 evanescent field effect, 195 excellence, practice leading to, 96 expectations, 8, 63–64, 67, 102 experiments: artificial nature of, 40–41 and brainstorming, 193 in cause and effect, 35–37, 39 evanescent field effect in, 195 expert knowledge in, 39 extrapolation algorithm in, 24 feedback in, 38–47, 192–93 field, 41 Freakonomics, 200–205 on human beings, 81–82 in Intellectual Ventures, 193–94 laboratory, 40–41 in microbes, 84–86 natural, 40 on potential inventions, 193–96 randomized control trials, 37, 39 in social issues, 39–40 wine quality, 42–47 experts: dart-throwing chimps vs., 24 outside their fields of competence, 27–28 practice to become, 96 predicting the future, 23 in scientific experimentation, 39 seriousness of, 96 extrapolation algorithm, 24 eyeglasses, 92n facial hair, 204 facts, opinion vs., 20 failure: celebrating, 193, 195–96 ethical, 184–85 feedback from, 192–93 forecasting, 198–99 of O-rings, 197, 198 premortem on, 199 as victory, 194 false positives, 158–59, 161, 162 famine, causes of, 66–67 fat, eating, 182–83 fecal transplants, 85–86 feedback: bread baking, 34–35 in experiments, 38–47 gathering, 35–38, 62 and learning, 34–38 voting, 35 financial relationships, 125–26, 130 focus, 102 folklore, 78, 80 food prices, 107–8 fortune-tellers, 31 Franklin, Aretha, 208 Freakonomics, 67, 69 Freakonomics Experiments, 200–205 Freaks: becoming, 211 having fun, 95 free disposal, 88 Fryer, Roland, 75–77 fun, 95–98 and children, 96, 100 of Freaks, 95 in music, 208–9 trickery as, 152 work as, 97, 109, 129, 206–8 writing books, 209 gambling, online, 99–100 game theory, 142–43 gamification, 96 gaming the system, 135 genetic racial differences, 77 Germany: Nazi Party in, 73n religion in, 70–73 schoolteachers in, 180–81 Glaeser, Edward, 22 Glewwe, Paul, 91 global warming, 168–71 goals, unattainable, 199–200 “go fever,” 197 Goldstein, Robin, 43–47 golf, 205–6 Good Samaritan laws, 108 Google, and driverless car, 174–76 Great Recession, 68 greenhouse gases, 131–33 guilt, test of, 144–49 gullibility, 102, 159–61 gun laws, 68 hacking, 177 Haganah, 152 “hammers,” 102 happiness: and marriage, 8–9 and quitting, 201, 204–5 HCFC-22, 132 health care: in Britain, 14–16 causes of illness, 83, 85 and folklore, 78, 80 and poverty, 75 ulcers, 78–86 heart disease, blacks with, 75, 77 hedge funds, and taxes, 70 Helicobacter pylori, 80–83 herd mentality: and conventional wisdom, 10 and incentives, 113–15, 172 Herley, Cormac, 157, 159–61 Herron, Tim “Lumpy,” 206n Hitler, Adolf, 189, 210 homicide rates, falling, 67–69 hot-dog-eating contest, 53–61 Hseih, Tony, 151 human body: as a machine, 95 complexity of, 78, 94–95 Hussein, Saddam, 28 hydrofluorocarbon-23 (HFC-23), 131–33 ideas: cooling-off period for, 88 generating, 87–88 junkyard as source of, 94 sorting bad from good, 88 ideology, 172 “I don’t know”: cost of saying, 29 entrepreneurs of error, 22 extrapolation algorithm, 24 and impulse to investigate, 47–48 reluctance to say, 20, 28, 39 as war prevention, 28 ignorance, 168–69 incentives, 105–35 backfiring, 131–34 bribes, 105–6 cash bounties, 133 charity, 117–25 communal, 7, 29 of customers, 128–30 designing, 115, 135 herd-mentality, 112–15, 172 and lying or cheating, 143 as manipulation, 134 money, 107–11, 113, 133 moral, 112–16, 135 for predicting the future, 29–30 social, 112, 113 true, 111–15 understanding, 8 at work, 108–9 income gap, 72–73 India: cobra effect in, 133 pollution in, 132 indulgences, sale of, 70 Industrial Revolution, 13 inmates, freeing, 40 innovation, risks in, 193 insults, 180–81 Intellectual Ventures, 193–94 Internet: predictions about, 26 scams on, 156–58 inventions, 193–95 investigation, impulse of, 47 Iraq War, 28 Israel, bullet factory in, 152–54 Italy, philanthropy in, 73 Janus, Tim “Eater X,” 61 Japan: adoptees in, 1n eating contests in, 55–56 manners in, 57 Jewish Brigade, 153 job application process, 149–52 “Jump” (Van Halen), 138 Kahneman, Daniel, 172 Keegan, John, 210 Kissinger, Henry A., 127 Klein, Gary, 199 knowledge: dogmatic, 25 faking, 22–26, 28–29, 47 and feedback, 34–38 “I don’t know,” 20, 28, 29, 47–48 learned from parents, 50 opinion vs., 20 Kobayashi, Takeru “Kobi,” 52–64, 140n Kobayashi Shake, 59 Krugman, Paul, 25 Langley, John, 207n learning, and feedback, 34–38 Leeson, Peter, 146–47 Lester, David, 33–34 letting go, 210 Levitt, Steven D., as quitter, 205–8 licensing, 51 life insurance, and terrorists, 163–65 limits: accepting or rejecting, 62, 63–64 artificial, 63, 64 lottery: no-lose, 98–99 state monopolies, 99 loved-one relationships, 125–26 Luther, Martin, 70–72 M&M’s: bribing a child with, 105–6 in contract clause, 141–42 magic: and adults, 102–3 and children, 101–4 double lift, 101–2 and perception, 101 watching from below, 103–4 manipulation, 134 Mao Tse-tung, 127 marathons, 204–5 marriage, and happiness, 8–9 Marshall, Barry, 79–83, 84–85, 94–95 MBA, cost of, 191 McAfee anti-virus software, 159 McAuliffe, Christa, 197 McDonald, Allan, 197–98 measurement, 8 medicine: blockbuster drugs, 79 causes of illness, 83 and folklore, 78, 80 heart disease, 75, 77 tradition in, 82 ulcers, 78–86, 94–95 memories, negative, 180 Meng Zhao, 91 Metcalfe’s law, 26 Mexico City, pollution in, 131 microbial cloud, 83 middle ground, choosing, 7 milk necklace, weight of, 107 money: as incentive, 107–11, 113, 133 saving, 97–99 spending, 98–99 throwing good after bad, 191 monopolies, lotteries as, 99 moral compass, 31–34 and suicide, 32–34 moral incentives, 112–16, 135 Morton Thiokol, 197–98 Moses, story of, 187 Mullaney, Brian, 117–25, 130 Myhrvold, Nathan, 195 name-calling, 180–81 NASA, 197–98 Nathan (prophet), 187–88 Nathan’s Famous Fourth of July International Hot Dog Eating Contest, 53–61 National Health Service (NHS), 14–16 natural experiments, 40 negative memories, 180 negative thinking, 64 Newton, Sir Isaac, 89 New York Times, 209 Nicklaus, Jack, 205 Nigerian scam, 154–61, 162 Nixon, Richard M., 127 Nobel Prizes, 25n, 83 no one left to blame, 33–34 “nudge” movement, 172 obesity, 107–8, 182–83 obvious, 65, 92–93, 100 Ohtahara syndrome, 14–15 online gambling, 99–100 Operation Smile, 118–19 opinion, 10, 20, 171–73 opportunity cost, 191–92, 199 overthinking, 103 Palestine, and bullet factory, 152–54 parents: and crime prevention, 70 learning from, 50 and traffic accidents, 178 Park, Albert, 91 patents, 193 Peace of Augsburg, 71 penalty kick (soccer), 3–7, 29 perception, 101 peritonitis, 79 perspective, 104 persuasion: difficulty of, 167–73 it’s not me, 173 name-calling, 180–81 new technology, 174–77 “nudge” movement, 172 opponent’s strength, 177–79 perfect solution, 173–74 storytelling, 181–88 Peru, slavery in, 74 Petrified Forest National Park, Arizona, 115–16 philanthropy, 73 Ping-Pong, 127 planos (glasses with plain lenses), 92n policymakers, 97 political predictions, 23–24, 171 pollution, 131–33, 176 pooling equilibrium, 143 Porter, Roy, 78 postmortem, 199 poverty: causes of, 66 health and education, 75 practice, importance of, 96 predictions: accuracy of, 24 difficult, 23, 176 dogmatism in, 25 economic, 25–27 end of the world, 30 inaccurate, punishments for, 30–31 incentives for, 29–30 in politics, 23–24, 171 of stock markets, 24–25, 29–30 of store opening, 196–97 by witches, 30–31 preferences, declared vs. revealed, 112 premortem, anonymous, 199 pretense, 104 priestly rigging, 146–47, 148–49, 152, 154 private benefit vs. greater good, 7, 29 private-equity firms, 70 prize-linked savings (PLS) account, 98–99 problem solving: asking the wrong questions in, 49–50, 62 attacking the noisy part, 51 barriers to, 63–64 in complex issues, 23, 35, 66–67, 89–90 difficulty of, 2 in eating contests, 53–61 economic approach to, 9 education reform, 50–52 experiments in, see experiments generating ideas, 87–88 incentives understood in, 8 and moral compass, 31–34 negative thinking in, 64 obvious cause, 65, 92–93 “perfect” solution, 173–74 redefining the problem, 52, 61–62 “right” vs.

DarkMarket: Cyberthieves, Cybercops and You
by Misha Glenny
Published 3 Oct 2011

They are virtually indispensable for individuals and groups involved in the distribution of child pornography, for example, and the RBN was known to include such clients on its books, as several security companies’ research departments have identified. These hosts have also proved invaluable for people distributing spam email, as these operations require huge, secure capacity in order to spew forth their billions of dubious adverts and viruses. Nigerian 419 scams, counterfeit medicines, the now-fabled penis enlargers and many other products (real or imaginary) are dumped on the world from bulletproof hosts. Many spam messages conceal viruses or links to infected websites, which, if activated, may turn a computer into a single footsoldier in a botnet army.

…

He then either milks his victim for more money or simply disappears with the first tranche. While possible in Elizabethan times, it was a laborious business. The Internet has made it extremely lucrative because, using spam emails, the criminal can reach an audience of tens of millions. The chances of finding a sucker are very greatly enhanced. The 419 scam comes in many shapes and sizes. It sometimes arrives as an appeal to rich Westerners to come to the aid of an impoverished African child. Letters, faxes and emails beseeching Americans in particular for funds to erect a new church or bolster a congregation are frequent – in these cases, the motivation of the victims is well intentioned and charitable.

The Infinite Machine: How an Army of Crypto-Hackers Is Building the Next Internet With Ethereum
by Camila Russo
Published 13 Jul 2020

One of his students was Li Xiaolai, a Chinese English teacher and author who had cashed out shares of the company he was working at when it went public and bought thousands of bitcoin at less than a dollar. By 2013 he was a multimillionaire and had opened a cryptocurrency fund. One day, Charles got a message from Li that said something like, “Hey, I love your class. I’ll invest $500,000 for you to start another crypto project.” Charles thought it was the Chinese version of the Nigerian prince scam and forgot about it. But a few days later, Li messaged him again. This time Charles looked him up and saw that he was an actual person and a supposed heavyweight in China’s Bitcoin community. He responded that he would have to think about what he wanted to do, and messaged his students saying, “I have an opportunity to create a new venture.

Accelerando
by Stross, Charles
Published 22 Jan 2005

A parasitic organism that infects, well, we ran across something not too dissimilar to Economics 2.0 out at the router and beyond, and it's got parasites. Our hitcher is one such creature – it's nearest human-comprehensible analogy would be the Economics 2.0 equivalent of a pyramid scheme crossed with a 419 scam. As it happens, most of the runaway corporate ghosts out beyond the router are wise to that sort of thing, so it hacked the router's power system to give us a beam to ride home in return for sanctuary. That's as far as it goes." "Hang on." Sirhan's eyes bulge. "You found something out there? You brought back a real-live alien?"

…

Manfred declines a refill, waiting for Gianni to drink. "Ah, the simple pleasures of the flesh! I've been corresponding with your daughter, Manny. She loaned me her experiential digest of the journey to Hyundai +4904/-56. I found it quite alarming. Nobody's casting aspersions on her observations, not after that self-propelled stock market bubble or 419 scam or whatever it was got loose in the Economics 2.0 sphere, but the implications – the Vile Offspring will eat the solar system, Manny. Then they'll slow down. But where does that leave us, I ask you? What is there for orthohumans like us to do?" Manfred nods thoughtfully. "You've heard the argument between the accelerationistas and the time-binder faction, I assume?"

Future Crimes: Everything Is Connected, Everyone Is Vulnerable and What We Can Do About It
by Marc Goodman
Published 24 Feb 2015

BRUCE SCHNEIER Cyber security is a people problem, not just a technical one. No matter how strong your computer password is, if you write it down on a yellow sticky and attach it to the front of your computer screen so that you can remember it, all walking by will have access to your digital life. For the tens of thousands of people losing money to Nigerian prince scams every year, their problem is not a technical one but the ever-present human characteristics of hope and avarice. When you post your vacation plans on social media and burglars pay a visit, it was your decision to share that helped facilitate their criminal activity. And for each and every person who clicks on that link from his bank telling him his password has expired and he needs to change it, the challenge isn’t that his computer has been hacked per se but rather that he fell victim to a socially engineered phishing attack.

Halting State
by Charles Stross
Published 9 Jul 2011

He looks at you suddenly, and there’s nowt of the public-school boy in his eyes. “We’re not playing games anymore.” EPILOGUE: Banker Martin Mase Mail-Allegedly-From: Martin.Mase@NNPB.co.ng Subject: URGENT FINANCIAL INFORMATION SOLICITED REGARDING OVERDUE SUSPENSE ACCOUNT Auto-Summary: Typical 419 scam. Spam-Weighting: 95% probable, don’t waste your time. Dear Mr. Hackman, I fervently pray that this letter soliciting for your kind assistance will not cause any embarrassment to you. I am aware that we have never seen each other before, neither have we exchanged any form of formal contact or correspondence before.

Stealth of Nations
by Robert Neuwirth
Published 18 Oct 2011

The machines they have are often unnamed brands, with innards assembled from various sources, the USB ports may not work or may be infected with a virus, there may be no CD/DVD player, the image on the monitor may flicker between garish oversaturated tones and dusty gray scale that matches the sky outside, but you can browse, chat, update your Facebook page, or check on your favorite star’s latest tweet. In one of the Internet centers I frequented, many of my fellow browsers were carefully copying and pasting the same letter into hundreds of e-mails: they were the foot soldiers of Nigeria’s famous 419 Advance Fee Fraud (the name refers to section 419 of the Nigerian penal code, which deals with financial malfeasance), firing off e-mail scam letters that promise a huge block of money from a frozen foreign bank account if you forward your personal and financial info to a complete stranger. If I didn’t remember to dump the cache and reset the memory protocols of the machine every time I browsed, these savvy Nigerian netizens could ensure that I started receiving new spam messages almost immediately after I left the café.

…

Schott’s Sons, 5.1 Budweiser, 6.1 Buffett, Warren, 9.1 bus system, Lagos, 3.1–3.2 description of CMS station of, 10.1–10.2 business child labor in, 12.1 credit-based, 2.1 crime in, 12.1–12.2 growth in, 10.1 labor issues in, 10.1–10.2, 12.1–12.2 profit motive in, 5.1–5.2, 5.3, 9.1 regulation of, 12.1, 12.2 software piracy in, 5.1 System D–generated profit for, 7.1, 7.2, 7.3, 7.4, 7.5, 7.6 System D interaction with, 1.1, 1.2–1.3, 1.4, 2.1–2.2, 2.3, 4.1, 5.1, 7.1–7.2, 8.1–8.2, 11.1–11.2, 12.1–12.2 tax deals for, 10.1–10.2, 11.1, 11.2–11.3 Western model of, 7.1, 9.1, 9.2, 10.1, 11.1–11.2 see also economics Business Day (Lagos), 3.1 Business Software Alliance, 5.1 Canton Fair, 4.1, 5.1 CAPDAN, 10.1 capitalism, 5.1–5.2 Carcopino, Jérôme, 3.1 Caribbean Discourse (Glissant), 9.1 cassava, 3.1–3.2, 12.1 catadores, 1.1, 12.1–12.2 Caveat or Warning for Common Cursitors, A (Harmon), 8.1–8.2 CDs, pirated, 1.1, 6.1 charlatans, 12.1–12.2 Chayanov, Alexander, 12.1 Chemonics, 11.1 Chen, Linda, 4.1–4.2, 4.3, 5.1, 5.2, 10.1, 12.1 Chen, Martha, 11.1, 11.2 Chicago, Ill., street market in, 8.1–8.2 children, 2.1, 8.1, 12.1–12.2, 12.3 China African smuggling from, 4.1, 10.1–10.2 African trade with, 4.1, 4.2, 4.3–4.4, 4.5, 4.6, 4.7, 5.1, 10.1–10.2, 12.1–12.2 child labor in, 12.1 consumerism in, 4.1, 5.1, 6.1 corporate crime in, 12.1 dominant business model in, 5.1–5.2 economic policy in, 5.1, 5.2 employment in, 2.1 factory work in, 4.1 high-end brand production in, 5.1 language in, 6.1 mobile phone exports from, 5.1 Nigerian trade with, 3.1, 3.2, 4.1–4.2, 4.3, 4.4, 4.5, 4.6–4.7, 4.8, 5.1–5.2, 5.3, 5.4, 10.1–10.2 piracy in, 5.1, 5.2–5.3, 5.4–5.5, 5.6, 5.7, 5.8 public health system in, 4.1 recycling industry in, 12.1 Rua 25 de Março merchants from, 1.1–1.2 smuggling from, 6.1–6.2 smuggling into, 6.1–6.2 System D’s role in, 2.1 tax paying in, 4.1, 4.2–4.3, 4.4, 5.1 technology retailing in, 6.1, 6.2 toxic dumping in, 12.1 2008/2009 financial crisis effects in, 5.1, 5.2 U.S. trade with, 4.1 see also specific cities China Plaza, 5.1, 5.2 China Southern Airlines, 4.1 Chinee Water, 3.1 Chinese University of Hong Kong, 6.1 Chintan, 12.1 cigarettes, smuggling of, 6.1 Ciudad del Este, Paraguay, 6.1–6.2, 6.3–6.4 business formalization in, 11.1, 11.2–11.3, 11.4 computer and electronic trade in, 6.1, 11.1–11.2, 11.3–11.4, 12.1 crime in, 12.1, 12.2, 12.3 currency trading in, 6.1–6.2 economic activity in, 6.1, 6.2, 6.3–6.4, 11.1, 12.1 Lebanese community in, 12.1, 12.2, 12.3, 12.4 money transfers in, 12.1 policing in, 6.1–6.2, 6.3 street market in, 6.1 System D in, 2.1 taxation in, 6.1, 11.1–11.2 terrorism allegations against, 12.1–12.2 Clinton, Hillary, 12.1 Computer and Allied Products Dealers Association of Nigeria, 3.1 computer industry Chinese trade in, 6.1–6.2 falling prices in, 6.1, 11.1 illegal dumping in, 12.1–12.2 Nigerian trade in, 3.1–3.2, 10.1 Paraguayan trade in, 6.1–6.2, 11.1–11.2, 11.3–11.4 poor workmanship in, 4.1 smuggling in, 6.1–6.2, 6.3, 6.4–6.5, 11.1–11.2, 11.3, 11.4, 11.5 see also Ikeja Computer Village computer software, piracy of, 5.1–5.2 conflict resolution, 12.1–12.2 Connecticut Courant, 12.1 construction industry, 8.1 cooperative development, 12.1, 12.2, 12.3–12.4 limits of, 12.1 criticism of, 9.1 Cooper-Glicério, 12.1–12.2 copyrights, 8.1 Correct Technologies, 3.1, 3.2 Cotonou, Republic of Benin, 3.1, 4.1, 5.1, 10.1, 10.2, 11.1 courts, as an institution in street markets, 12.1–12.2 crime, 2.1, 2.2, 12.1, 12.2, 12.3, 12.4, 12.5, 12.6, 12.7, 12.8–12.9 Cross, John, 9.1–9.2 Crusades, 4.1 currency, see exchange rate Dairo, Ogun, 3.1–3.2 danfo, see bus system, Lagos Dattora, Édison Ramos, 1.1–1.2, 1.3, 1.4, 1.5, 7.1 Davidson, Basil, 3.1–3.2 débrouillards, 2.1 Deleuze, Gilles, 11.1 de Soto, Hernando, 11.1–11.2, 11.3, 11.4, 11.5, 11.6 Deutsche Bank, 2.1 developed world economic inequality in, 9.1 economic model in, 3.1, 7.1, 9.1, 9.2, 9.3, 9.4, 11.1–11.2 developing world business model in, 7.1–7.2, 10.1, 10.2, 11.1 economic growth of, 9.1–9.2, 9.3, 9.4, 11.1, 12.1–12.2 infrastructure in, 9.1, 12.1 System D growth in, 2.1, 2.2 water shortage in, 7.1 wealth gap in, 9.1–9.2, 9.3, 12.1 see also Africa; Asia; Latin America; specific countries Devil’s Dictionary, The (Bierce), 5.1–5.2 Diamond Bank, 7.1 Dias, Sonia Maria, 12.1 Diggers, 9.1 Digital Millennium Copyright Act, 8.1 dollar, as global currency, 4.1–4.2 Domestic Workers’ Bill of Rights, 12.1–12.2 Donizetti, Gaetano, 12.1 Downy, 7.1–7.2 Drake, Francis, 5.1, 5.2 drugs discount, 6.1–6.2 illegal, 12.1 DVDs, pirated, 1.1–1.2, 1.3–1.4, 1.5, 6.1 eBay, 8.1 Ebeyenoku, John, 12.1, 12.2 economic development, 2.1, 2.2 as a human right, 12.1 redefinition of, 9.1–9.2 economics Aristotle’s definition of, 5.1 efficiency in, 9.1, 9.2 80/20 conundrum in, 5.1 modern definition of, 2.1 wealth gap in, 9.1–9.2, 9.3, 12.1 see also business; free market system Economic Times, 12.1 economists, System D’s assessment by, 1.1, 2.1–2.2, 3.1, 7.1, 9.1, 9.2, 10.1, 11.1, 12.1 education, 10.1, 12.1, 12.2 “Eighteenth Brumaire of Louis Bonaparte, The” (Marx), 9.1 Eleazars, Ugochukwu, 3.1 electricity, 4.1, 4.2, 12.1–12.2 electronics industry gray-market, 8.1 Nigerian trade in, 3.1–3.2, 3.3–3.4 smuggling in, 6.1, 11.1–11.2, 11.3, 11.4, 12.1 see also computer industry; mobile phone industry Eleshin, Omotola, 3.1–3.2, 7.1 Emirates, 4.1 employment business tax breaks and, 10.1 System D’s provision of, 2.1, 9.1, 9.2, 9.3, 12.1–12.2, 12.3 21st century, 2.1 Encore Technical Sales, 11.1 Encyclopedia Britannica, 5.1 entrepreneurialism, 2.1, 2.2, 2.3, 12.1 environmental issues, 3.1, 3.2, 3.3, 12.1, 12.2–12.3 Enzensberger, Hans Magnus, 5.1 Ethiopian Airlines, 4.1 Europe literacy growth in, 5.1 Nigerian trade with, 3.1 post–World War II economic development in, 11.1–11.2 16th-century economic transition in, 8.1, 8.2–8.3 smuggling into, 6.1 System D in, 2.1, 3.1, 8.1–8.2 2008/2009 financial crisis effects in, 2.1–2.2 see also specific cities and countries EVGA, 11.1 e-waste, 12.1–12.2 exchange rate importance to System D trade, 4.1–4.2, 12.1 Eze, Sunday, 3.1 Ezeagu, Charles, 2.1 Ezeifeoma, James, 4.1, 4.2, 7.1, 9.1–9.2, 9.3, 12.1 Fable of the Bees, The (Mandeville), 5.1, 5.2 Fanon, Frantz, 9.1 fashion industry, 4.1–4.2, 4.3–4.4 labor issues in, 7.1, 12.1–12.2 piracy in, 5.1, 5.2–5.3, 7.1–7.2 Fashola, Babatunde, 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7 Feiyang, 5.1–5.2 Festac Town, Lagos, Nigeria, 3.1, 3.2, 3.3 Festac United Okada Riders, 3.1 feudalism, 8.1 financial crisis of 2008/2009 in China, 5.1, 5.2 System D resilience to, 2.1–2.2 in United States, 8.1, 8.2 Financial Mail, 12.1 flea market, 8.1, 12.1 Fontaine, Laurence, 6.1 food industry formalization in, 8.1, 8.2–8.3, 8.4, 8.5, 12.1 street peddling in, 1.1, 1.2, 1.3, 3.1, 3.2, 8.1–8.2, 8.3–8.4, 12.1 System D producers in, 8.1–8.2, 8.3–8.4 formal businesses, relationship with informal firms, 1.1–1.2, 7.1–7.2, 7.3–7.4 formalization bureaucracy in, 8.1, 8.2, 8.3, 11.1 in computer industry, 11.1, 11.2–11.3 costs and benefits of, 11.1–11.2, 11.3, 11.4, 11.5 degrees of, 12.1–12.2, 12.3 effects of, 11.1–11.2 in food industry, 8.1, 8.2–8.3, 8.4, 8.5, 12.1 obstacles to, 11.1, 11.2 419 Advance Fee Fraud, 3.1, 10.1 Fox, Paul, 7.1 Foz do Iguaçu, Brazil, 6.1, 6.2, 6.3, 6.4, 12.1 France, System D in, 8.1 “Fraternity of Vagabonds, The” (Awdeley), 8.1 free market system, 2.1–2.2, 9.1, 9.2, 9.3, 12.1, 12.2 Gafunk Nigeria Limited, 3.1 Gala sausage roll, 7.1 Galatzer, Natalie, 8.1 Galeria Pagé (Ciudad del Este), 12.1–12.2 Galeria Pagé (São Paulo), 1.1, 1.2, 10.1 garage sales, 8.1 garbage recycling, in Brazil, 12.1–12.2 in China, 9.1–9.2 in Nigeria, 3.1, 3.2–3.3 gasoline, smuggling of, 6.1 Gates, Bill, 5.1, 9.1 General Theory of Employment, Interest and Money, The (Keynes), 9.1 generators, 4.1 George II, King of England, 9.1 Germany, System D in, 8.1 Gesell, Silvio, 9.1 Glissant, Edouard, 9.1 globalization, 4.1–4.2, 12.1 peddlers as agents of, 4.1–4.2 see also System D, global trade in Gomorrah (Saviano), 5.1 Gonçalves, Reginaldo, 1.1 Goodluck, Akinwale, 7.1, 7.2, 7.3, 7.4 Gould, Jay, 9.1 government economic regulation by, 2.1 privatization in, 2.1 System D interaction with, 3.1, 3.2, 3.3, 3.4, 3.5, 4.1–4.2, 4.3–4.4, 5.1–5.2, 6.1, 6.2, 10.1–10.2, 11.1, 12.1, 12.2, 12.3, 12.4, 12.5, 12.6, 12.7, 12.8, 12.9–12.10, 12.11–12.12, 12.13–12.14 use of pirated software in, 5.1 Gramsci, Antonio, 2.1 Granta, 5.1 gray market, 2.1 Great Britain historical conflict resolution in, 12.1–12.2 historical wealth gap in, 9.1–9.2 System D criticism in, 8.1–8.2 see also London, England Great Transformation, The (Polanyi), 2.1–2.2 Greece, ancient, conflict resolution in, 12.1 Grimmelshausen, Hans Jakob Christoffel von, 5.1–5.2 growth, 2.1, 2.2, 2.3, 9.1–9.2, 10.1–10.2 Grumbling Hive, The (Mandeville), 5.1, 5.2 Guangzhou, China, 2.1 African traders in, 4.1, 4.2, 4.3–4.4, 4.5–4.6, 4.7, 4.8, 5.1–5.2, 5.3, 12.1–12.2 business regulations in, 4.1, 4.2 international population in, 4.1 policing of, 5.1, 9.1, 12.1, 12.2 recycling in, 9.1–9.2 smuggled computers in, 6.1 Guangzhou Dashatou Second Hand Trade Center, 5.1, 5.2–5.3 Guarda Municipal, 1.1, 1.2 guarda-roupas, 6.1–6.2 Guattari, Félix, 11.1 Gudeman, Stephen, 9.1–9.2 gun running, 2.1 Guys and Dolls, 8.1 Gypsies, 8.1 Hammoud family, 12.1, 12.2 Hancock, John, 12.1 Harare, Zimbabwe, 12.1 Harlem, N.Y.

Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy
by Francis Fukuyama
Published 29 Sep 2014

The concrete hardened in the ships’ holds, and many of them had to be scuttled in place, clogging the harbor for years to come.9 Corruption at a high level filters down and affects all segments of Nigerian society. The only thing many Westerners know about Nigeria is that it is the source of e-mail scams offering bogus windfalls. This is a variety of what in Nigeria are known as 419 frauds, named after a section of the Nigerian penal code. Reflecting Nigeria’s weak protection of property rights, middle-class Nigerians often paint large signs on their houses stating that they are not for sale. The reason for this is that they could go away on a vacation and return to find their house occupied by a stranger who had stolen the legal title from them.10 In a country with so much poverty and corruption, it is not surprising that there is also a lot of violence.

Engineering Security
by Peter Gutmann

Attackers are taking advantage of this ability to link accounts across multiple sites through techniques such as scanning online auction sites for sellers of high-value items and trying to contact them at the same account name on Gmail, Hotmail, Yahoo, and other widely-used email providers for advance-fee scams and similar types of auction-related fraud. This type of fraud is quite effective because the contact appears to have come via the auction site in regard to a currently-active auction that the victim is running rather than being the usual out-of-the-blue phishing scam. If the attackers manage to compromise the account that’s used for the single sign-on process then the damage is even more severe, since they’ve now compromised every single other account that it’s used with.