In a situation like this, sleep is for the weak. We had work to do. So I stopped at local shop, bought an espresso machine. Got it up to speed, dropped in four capsules of some substance Jon swore was like high powered adrenalin with a long standing kick. Washed it all down with three fingers of Bushmills and went to work.
As Jon and Kat did the foot work I opened a google search in my room. The governor was a wealthy man. The question was which bank did he rob to get his money?
Well the initial short answer was his dads. His father had built a business in manufacturing parts for car makers. It had taken off when Japan had opened plants in the US. As the company reached it's apex Dad had the good sense to die of a heart attack in a hotel with a woman who was certainly not his wife and who apparently got charitable donations for her time spent helping men to relax after hours. Not that I saw anything wrong with that, we all have our ways of dealing with stress and compared to his sons activities this was fairly mild and normal.
Junior had decided to sell off the company the first chance he got. Which made him a small mint, he then invested that mint in various schemes that were gift wrapped to him by his dads old cronies. Real estate, commodities speculation, the burgeoning Native American casino market. All of these had yielded him large dollars in returns.
When he turned his eye to politics the same cronies ponied up massive amounts of cash to help his campaign, as he was clearly their kind of guy.
This was interesting. His holding company made money in 2008.
Taking a deep sip of whiskey I read his companies prospectus. 2008 had been a banner year for the company. While the whole economy tanked they managed to make over %500 in profits from investments in real estate.
This made no sense at all. Unless...
Allow me to take a moment to explain to you the classic scam that created the disaster of 2008. Don't worry it's just as surreal as anything else that will take place in this whole story.
By 2005 banks were working overtime to write loans for anyone who wanted to buy a house. Now prior to the 90's if you wanted a mortgage a bank frisked you pretty good to make sure you could pony up the money.
But then some genius had the idea that if you took a whole bunch of mortgages and bundled them together as a security you had the best of both worlds. First you sold off the mortgages which earned you quick short term money, while pocketing even more short term cash from the fees you would collect for doing the bundling and maintaining the mortgages you didn't own.
Investors would collect the combined house payments of thousands of people and make their money back. If they made the payments.
Of course in the process of writing all this paper banks got desperate for short term cash so they hunted down anyone with a pulse to give them a mortgage. Toward the end there the people they had got to sign on the dotted line were given mortgages that were effectively time bombs. Linked to their ability to pay which would get trashed the first time interest rates rose.
Now to cover themselves the investors and banks would buy forms of investment insurance. The infamous CDO's and CDS's. Which basically was buying a policy to insure the worth of the investment if it tanked. Which a lot of these were designed to do.
Now why would someone decide to make an investment designed specifically to tank? Glad ya asked.
That form of investment insurance was unregulated. So it was entirely possible dare I say likely that someone could read that the investment they bought was a ticking time bomb so they'd buy paper to protect it.
Except that due to the lack of regulation they wouldn't buy one piece of paper, they'd buy multiple pieces of paper on a security. Insuring it for massive amounts above its actual worth. And as there was no rule saying you couldn't you could buy these instruments for investments you don't even own.
So let's make a comparison. How safe would you feel knowing ten people have bought multiple pieces of life insurance on you? Yeah? Not very? Good then you have an ounce of sense.
Meanwhile the people who sold the CDO's weren't obligated to set any of the money they made aside to cover any of the bets they were making. So in 2008 when this whole house of cards imploded they had no cash to pay back the losses they had been asked to insure against. Which caused the nightmare of September.
Now it seemed to me like the governor had cleaned up in this market. Especially on one investment for a whole neighborhood his company had built up two years before. Five square miles of housing in...
I read the address and looked it up on google street view.
There was nothing there. It was a big wide empty plain of deserted field.
Reaching over I grabbed the phone and called a cab as my two trusty help mates were out, and frankly as wired and drunk as I was being behind the wheel of a car struck me as being a series of disasters waiting to happen.
Which to be honest was my life in a nutshell.
The cab was waiting for me at the lobby and we drove off to the outskirts of town.
"Why ya wanna go out there?" the Cabbie asked.
"I'm looking into a land investment." I said.
"Shit aint not much there, not since they moved the chemical plant." The driver said.
"Really? when did they do that?"
"Bout twenty years ago, they had the property but couldn't move it because of all the toxic shit left over." He said.
We pulled up by the address we were given and I stepped out.
It was barren expanse of land with pieces of scrub grass, tumbleweeds and a stray cat chasing a squirrel. Not a single house to be found.
"So whatcha gonna do with the land?" The driver asked as I got back in.
"Use it for a burial plot."
"Seems like that might be all it's good for." The driver said.
"Oh you have no idea." I said, then sat back and smiled.
No comments:
Post a Comment