Jewish World Review August 1, 2002 / 23 Menachem-Av, 5762
http://www.NewsAndOpinion.com | Another American icon has landed on its keister. The banks are accused of being in on the Enron swindle. They made it possible for the company to fix their books so that loans could be listed as profits and profits could be listed as loans.
I didn't understand it when, by luck, I went into my bank and asked for a loan of $4,000 to help me buy a used Honda.
The banker replied, "We don't make loans. We arrange for people to use the money we give them so nobody can make heads or tails of it."
"I don't care what you call it as long as I get my loan," I replied.
"Now the first thing you must do is create a dummy corporation in the Cayman Islands."
"So people will think your Honda is there, when in fact it will be in your garage. Now you list your car in the books as an asset."
"That makes sense. I'll call the company Bad Apple."
"Then you borrow $4,000 from the bank across the street."
"I get it. I use that loan to pay you back, you clear your books, and I owe the bank across the street instead."
"Because you paid us back so quickly your credit rating will soar. You can then go to another bank across town and borrow $10,000. You pay off the $4,000 of the previous loan and still have $6,000 left for gas and oil."
"How much can I borrow now?"
"The banks will come to you, and since you're an offshore company, they will tailor a loan for you of $100,000."
"But I only want $4,000 for my Honda."
"You have to think big. Do you know what you can do with $100,000?"
"I could buy a Mercedes Benz."
"That would make sense, particularly since you must now move your money from the Cayman Islands to Bermuda to confuse the IRS."
"Can I quit while I'm ahead?"
"Not really," he said. "You have now reached the point where the banks are more worried about you than you are about them. They will wine and dine you and send your wife flowers."
"My wife would like that because she is against my buying a used Honda."
"The bankers are eager to throw money at you. You can buy futures in soy beans and pork bellies, sell natural gas that you don't own, and make Bad Apple one of the largest dummy corporations in the business."
"But at some time they are going to call in all my loans and I could lose my Honda."
"Not if you declare bankruptcy."
"Isn't that tacky?"
"No. Everybody's doing it."
"What do I do now?"
"Just sign this agreement. If you don't make your payment in 30 days, then we will take back the Honda."
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07/30/02: Draft all the lawyers