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I enjoyed this use of the phrase cited in the OED: ' Cloud mountains, and fatamorgana cities' (2) from 1829 by a T. Carlyle in Foreign Rev.
Interesting to note during the filming of the Herzog's Fata Morgana (1971) Herzog and the crew encountered many problems, most notably being imprisoned because cameraman Schmidt-Reitwein's name was similar to the name of a German mercenary who was hiding from the authorities and had recently been sentenced to death in absentia. Also; Herzog contracted bilharzia, a blood parasite sometimes refered to as 'snail fever' (3).
(2) "fata Morgana, n.". OED Online. September 2011. Oxford University Press. 5 December 2011
(3) Fata Morgana (1971) Trivia: http://www.imdb.com/title/tt0067085/trivia