DownWithTyranny!: Capital Crimes: The Banking and Corporate World Returns to Its Roots

Was Bernie Madoff just a sideshow distraction?

by Noah

I have a confession to make. I, Noah, have a family member, a cousin, who is in the banking business.

There, I’ve said it; full disclosure. He even looks a lot like me. It’s a tough thing to live down, but during my life I have saved up -- you might say banked -- more than my fair share of humility, if not greenbacks. Anyway, needless to say, we have had some interesting e-mail conversations lately. My cousin, being on the inside, tries mightily to convince me that not everyone in his chosen field is a sleazebag. Oh well, who am I to talk, after a lifetime in the music business?

Now, in the famous words of one of America’s bigger sleazebags, Richard M. Nixon, let me make one thing perfectly clear: My cousin is no sleazebag; just as I am no sleazebag (no matter how I might try, in an effort to get along). Still, with yesterday’s news about the arrest of six, count ‘em six, “former” executives from brokerage house Sky Capital, it’s beginning (well, actually, it began long ago) to look like, when it comes to Wall Street and the banking gang, not only can’t my cousin see the forest for the trees, but there may be hope that at least some of these dream-snatchers may get at least a tiny bit of what they deserve.

In the recent past -- OK, all of my life -- I have been called cynical. I prefer the term realistic. When it comes to Wall Street and banks, I have never bought into the “it’s just one, or a few, bad apples” misdirection play. They would like you to believe that old Bernie Madoffwithyourcash was just a lone gunman, an isolated case. To them, Bernie was a gift, a big fat attention magnet that served as a media-served distraction while they continued their mega-fleecing of the taxpayer. (That would be us.) The whole Bernie thing has always been a case of “Hey, look over there!”

This whole thing about the financial sector of our country is looking like the local scoutmaster that says there’s only one dead boy in his basement, and when the authorities show up with the backhoe and tear up the garden, lo and behold, he was telling the truth: There was only one in the basement; the rest were pushing up daisies in the back yard. The Sky Capital arrests are welcome, and you can bet many, many more are way overdue.

These worm-infested doggie turds have been accused of conspiracy and securities fraud having to do with the manipulation of shares in two Sky Capital companies. The alleged crimes took place mainly through their firm’s plush New York offices. The SEC alleges that the gang raised more than $61 million in a scheme that restricted their investors from selling their shares. When trading in their stocks was suspended in London, the investors were left with nothing but air. Call it a Ponzi scheme or a sting; the result is the same. I wonder where da money went.

I guess it’s just another one of those seemingly endless “isolated cases.” In my dream world, the feds would fill up the New York Mets' new Citi Field with all of these “isolated cases” in one big irony Irony Fest! Then, we can bring in my all-volunteer army of gladiators to dispatch them all to Dante’s Seventh Circle of Hell.

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And now a word about the next step in asset management: Last Friday, Reuters, a news organization that wipes the floor with most of its American counterparts, ran a story that was headlined: “Would You Pledge Your Soul As Loan Collateral?” Feel free to go back and read that headline again if it sort of stunned you into a state of WTF-ness.

It seems that Latvia, the EU nation that has been hit the hardest by the current economic crisis is home to a loan company named Kontora. This company even dares to have a public face, a straight one at that, named Viktor Mirosiichenko. I kid you not; clients have to sign a contract that states that the collateral for their loan is “my immortal soul." I checked the byline for the story. It wasn’t Rod Serling, although we have obviously entered a twilight zone.

Mirosiichenko promises no violence. “If they don’t give it back, what can you do? They won’t have a soul, that’s all,” he told Reuters. His office, in a basement, consists of a desk, a computer, and three chairs, and yes, the company name is on the door. I’m not sure how hot it might be in the basement. So far, though, Kontora has given out loans to 200 people.

Hey, at least, one company is giving out loans, stimulus money or no! What is your Soul Credit Score? What I have to wonder is: Is Kontora just a Latvian wing of some American company like Chase or Citibank? Is this all a test-market program to check out the viability of the idea before they bring it to America and start advertising it on TV? Will I be getting an offer in the mail from Chase soon? Is it just that financial folks have no souls left, so now they want yours or mine?

I have felt for a long time that the goal of the corporate masters was to herd us back into a medieval society of lords and serfs. This kind of soul-taking thing is just more evidence in support of my clairvoyance. It’s really old school. Can the debtors' prisons that Charles Dickens not only described in his iconic works but actually lived in as a 12-year-old be returning?

Think about it. What will they do once they have taken everything?

They will take away our jobs and our homes and our health. They will shatter our American dreams of upward mobility and a dignified retirement by stealing our 401(k)s. What will be left then other than selling our children like the Chinese, and then our very souls? The only way a guy can make a dollar will soon be to sell his blood to a blood bank and his sperm to a sperm bank, like homeless people and artists have for years. They won’t even wait until we're dead to remove the gold from our teeth. MAKE BIG CASH NOW! At least the old business model was fun for someone, and everybody got paid.

But wait, there’s more! And it’s not all bad. In the city of Amsterdam, Holland, there's something called Project 1012, being pushed by key business powers. It’s a plan to get previously denied banking and credit services for prostitutes who can’t get accounts from the usual mainstream institutions, even though in Holland, a more enlightened country than ours, prostitution is legal. So, if it’s legal (and really, even if it weren't), why not extend services to sex workers? They have a job that pays well, and they have talents that are always in demand.

To date, the world’s oldest profession has gotten the shaft from financial institutions just like the rest of us (hey, I couldn’t resist, and I coulda said it much more graphically), and I suspect that bankers have often been their customers. Clearly, financial institutions in other countries are looking for more ways to make money other than demanding cash from taxpayers as they do here. Maybe now they’ll actually start dressing like pimps.

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A company called Worldwide Entertainment has now been charged with financing professional celebrity and exhibitionista Paris Hilton’s film Pledge This with a Ponzi scheme. It’s The Producers come to life! Most of us took The Producers to be a great movie and then a great play. Apparently others took it to be a “how to” instructional tool.

Is this the future for Hollywood? Corporate types like to throw around the word innovation. Can’t meet the quarterly numbers? Maybe a nice shiny Ponzi scheme is the solution for your company! IT’s NEW! IT’S EXCITING! IT WILL SAVE YOUR ASS! Right up until the day that it crumbles and you go to jail and meet your new love interest.

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So what do we have here? What have we learned today? What questions remain?

Do we all become hookers or gigolos? I think that ship has sailed for me. Sell my blood? I don’t think so. A platoon of doctors has pumped so much crap into mine to keep me going in the last couple of years that I doubt that it has much resale value. I do have some nice gold inlays, though. But what of those who sell their immortal souls for a loan? What if someone has already sold their soul? Is it over for them?

And think of this: How long is it before the financial institutions that procure your soul take your soul and bundle it with other souls and use them as securitized collateral in a mortgage deal? It will be Fannie Mae and Freddie Mac all over again, or worse, the alleged much bigger real culprit, Countrywide. (Is it derivatives or money from nothing but thin air?)

Foreclosures were up a staggering 844,389 during the first quarter of this year. That’s up 73 percent from the first quarter of a year ago. With banks and lenders about to get a second (!) welfare handout, er, stimulus check, paid out from our money, it would make sense to give money to borrowers, but then it would have made sense the first time too, and they just pocketed the cash. The operating phrase, of course, is: “it would make sense.” If the various lenders are concerned about defaults, why not give those who borrow more help in the first place? Ah, but if, at the end of the day, you really just want the real estate, or better yet the borrower’s soul…

It looks, however, like banks will soon have more homes than they can possibly sell, because no more than a few people will have enough money to buy them. Termites everywhere will rejoice. Genius! By the way, Big Oil has been buying up watersheds in anticipation of the day when the oil fields run dry. They’ll just convert the gas pumps to water pumps. Can the air be far behind? Oh, that’s right. Gas stations already sell air.

Shylock! Scrooge! The moneychangers! These are apt role models for most of today’s bankers and lenders. Follow the money! In God We Trust! The very word credit comes from the Latin credo, which translates to "I believe." Kinda Tinkerbell-ish, isn’t it? Do you believe? Start clapping.

We’re going back to the past. Maybe the real question is: What will we do when they've taken everything? Ask the ghosts of the French aristocracy from circa 1790. An economic bubble burst then too, and the “Let them eat cake” set met their well-earned demise. The financial and corporate worlds are heading back to their roots from hundreds of years ago. It’s Shakespeare’s Shylock demanding a pound of flesh (and he really did mean ‘flesh’). The Merchant of Venice -- anyone notice the irony that the whole city of Venice is sinking?

Shakespeare’s Venice can now be seen as a metaphor. The roots of our banking system began there back in the 1300s. Glub. Glub. How about Dante’s depiction, in the great Divine Comedy, of a special portion of that Seventh Circle of Hell, which I mentioned earlier? In Dante’s work, in the inner ring of the Seventh Circle we find usurers, who sit for eternity (as Wikipedia puts it) "in a desert of flaming sand with fiery flakes raining from the sky," with their necks weighed down by bulging purses.

Not bad, but I also like an idea from one of my favorite spaghetti Westerns, Death Rides A Horse. In it the bad guys have a penchant for burying the good guys in the sand in the desert. Before they ride away to their next bit of mayhem, one of the gang of ne’er-do-wells is chosen for the honor of “serving the salt” to the victim, thus hastening the victim’s thirst and agony. They even place a bowl of water, glistening in the hot sun, in front of the victim, just out of reach, of course.