Unless memory fails me, we have never before discussed on this blog the crash of something-or-other at a ranch near Roswell, New Mexico on July 7, 1947. I bring it up now only to say that Roswell, and the much-discussed theory that the crash was of an alien flying saucer, makes a brief appearance in the recent book by Guy Lawson: Octopus: Sam Israel, the Secret Market, and Wall Street's Wildest Con. The gist of Lawson's book is difficult to explain, but I'll dive in anyway. Sam Israel was one of the three principals of a high-flying hedge fund in the early years of the 21st century, a hedge fund called Bayou Capital, though it was run out of Fairfield County, Connecticut. It was called Bayou in recognition of Israel's renown Louisianan family. In 2005, CNN Money described Bayou's collapse as "one of the most bizarre hedge fund blowups in recent years." But they didn't know the half of it. What Lawson focuses on is the strange confidence th...