When Markets Sour, Stuff Suddenly Oozes from the Woodwork

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Share on RedditPrint this pageEmail this to someone

“The bezzle shrinks”: LendingClub, Theranos, Breitling Energy

LendingClub, the largest of the marketplace lenders, disclosed today that founder and former CEO Renaud Laplanche and his family had taken out 32 loans from LendingClub in order to inflate the company’s loan volumes – a key metric by which investors determine the company’s value – “in periods after December 2009.” It was a crucial moment: just before April 2010, when the company raised $24.5 million from investors including Foundation Capital, Morgenthaler Ventures, Norwest Venture Partners, and Canaan Partners.

While it was at it, LendingClub also said that its internal probe had uncovered that investment funds managed by a subsidiary had not followed GAAP accounting standards when valuing loans. As a result, it would reimburse $800,000 to those who’d bought the loans.

Laplanche left in May after other loan irregularities had come to light, including that employees had falsified documentation when they sold $22 million of loans to an investor. The company also found that he hadn’t disclosed his stake in a fund that LendingClub later invested in.

The disclosure at the time battered not only the company but the entire industry, which is already reeling from rising loan defaults and investors that are now shying away from buying these loans.

When it went public in December 2014, LC soared 67% from its IPO price of $15. This was meticulously hyped on CNBC. Lending Club would “transform the entire banking industry,” Laplanche explained. Shares quickly made it all the way to $27.90. Then the hot air started hissing out. In May, they plunged to a low of $3.44 before bouncing off, including today’s 7% jump, to $4.60. They’re still down 70% from their IPO price and down 84% from their peak.

So today, LendingClub announced that loan volumes in Q2 have plummeted by about a third from the $2.75 billion it had reported in Q1. Some money managers lost their appetite for LendingClub’s loans.

Oh… and, of course, it would slash up to 12% of its workforce.

To whet investors’ appetite for these loans, the company would spend $9 million in Q2 on incentives, and another $20 million on employee retention, severance, due diligence, and advisory relationships. And it would write down its 2014 acquisition of Springstone Financial by $40 million.

In boom times, none of this happens. Investors don’t care as long as the shares soar and valuations go up. Where were the auditors and corporate governance in 2014 and 2015? Why didn’t investors poke around a little more? No one knows. But when markets sour, suddenly stuff oozes from the woodwork. And stuff has started to ooze recently.

On Friday, for example, the SEC filed a lawsuit against Chris Faulkner, CEO of fracking outfit Breitling Energy, three related companies, and seven other individuals for raising funds and then cheating investors out of $80 million, starting in 2011. According to Reuters:

Based upon inflated estimates of the oil and gas that his companies controlled, the charges said, Faulkner lured hundreds of U.S. investors to back his firms. Their investments were largely used to pay personal expenses for Faulkner, his associates, family and friends, the SEC alleged.

Where were the auditors and corporate governance? No one knows. It was the fracking boom. Auditors and corporate governance just got in the way. And investors didn’t care. Everyone would get rich.

Reuters also pointed out that Faulkner “faced a spate of lawsuits in the early 2000s in connection with his previous web hosting business.”

Note the timing: both sets of legal problems came into the open after the respective booms – fracking and dotcom – had imploded.

Among the recent standouts was Theranos, the blood-testing startup once considered one of the hottest unicorns with a $9-billion valuation that in April came into the cross hairs of the SEC, the FDA, the Centers for Medicare and Medicaid Services, the US Attorney’s Office for the Northern District of California, and other federal and state regulators. Bloomberg:

Chief Executive Officer Elizabeth Holmes was profiled as a wunderkind after dropping out of Stanford University to found the company, attracting glowing media profiles that described promises to upend the medical diagnostics business with inexpensive tests using just a few drops of blood.

Turns out, that incessantly hyped miracle technology didn’t work. What worked was a whole bunch of smoke and mirrors. And the whole house of cards just collapsed.

In The Great Crash 1929, originally published in 1955, John Kenneth Galbraith calls this sort of thing – actually the amounts involved – the “bezzle.” From Chapter VIII, a passage that today is more relevant than ever (paragraph break added):

At any given time there exists an inventory of undiscovered embezzlement in – or more precisely not in – the country’s business and banks. This inventory – it should perhaps be called the bezzle – amounts at any moment to many millions of dollars.

It also varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks.

After the Financial Crisis, most of the “bezzle” was studiously covered up by bailouts, QE, and free money, and so “commercial morality,” as Galbraith put it, was not “enormously improved.” On the contrary, moral hazard is what we got instead.

But now, these are smaller companies – not megabanks. There are no bailouts in sight. As money tightens and investors and perhaps even regulators start opening their eyes and look a little more carefully at the miracles being performed on a daily basis, more of these shenanigans are going to come to light. Nothing shrinks down the “bezzle” like the crash of an industry under the weight of its own hype.

Business optimism in the US is already “lowest since the height of the Financial Crisis.” Read… How Vulnerable is the Shaky US Economy to Brexit Fallout and European Bank Meltdown?

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Share on RedditPrint this pageEmail this to someone

  45 comments for “When Markets Sour, Stuff Suddenly Oozes from the Woodwork

  1. Bobo
    June 28, 2016 at 6:14 pm

    How many more companies out there like this? For that matter, how many companies will default on the loans they took out to buy back their own stock? In plain sight the capital structure of many companies went from mostly equity to mostly debt. New tricks this time around, but still tricks.

  2. Petunia
    June 28, 2016 at 6:36 pm

    While living in my rented house in Florida, with my bad credit to boot, I kept getting solicitations from companies willing to lend me a percentage of the value of the house I lived in. They assumed I was the owner and offered loans of as high as 40K on a signature. There were many such solicitations. I didn’t have enough income to support more credit, and didn’t really believe they would lend me the money, but I got a lot of offers. I wouldn’t be surprised to hear many borrowers weren’t as timid as me.

  3. Mike G
    June 28, 2016 at 6:38 pm

    “Oversight” by boards is a joke — most just appear to be grifters over-eager to get on the inside of the scam.

    Re: Theranos, a big red flag should have been the lack of technical/medical people on the board. A company with “revolutionary technology” should have a board with people who, you know, can understand the viability of the technology — unless they’re running a confidence scam and don’t want anyone who can blow the whistle. WTF was Henry Kissinger doing there, other than cashing in — was genocide part of their core business? Did they book a lot of sales with dictators?

    • Boatwright
      June 28, 2016 at 7:14 pm

      And I always thought Theranos was the planet where L. Ron Hubbard now lives.

      Seriously folks: This is the same kind of openly fraudulent crap that was floating down the river in 2007, and 1999. I am amazed that someone isn’t peddling radio stocks or Confederate money.

      Grifters, touts and thieves.

      • illumined
        June 28, 2016 at 11:08 pm

        I found it hard to believe a startup could earn enough revenue to justify the $9 billion valuation, that the tech didn’t work also was just icing on that cake.

        • Jungle Jim
          June 28, 2016 at 11:45 pm

          Because of the Fed’s QE and interest rate fantasies, there was an awful lot of money sloshing around and few places to park it. Under those conditions, investors held their noses and put the money anywhere that looked promising. That led to the asset price inflation which is popularly known in Washington as “wealth effect”. Simple really.

      • frederick
        June 29, 2016 at 10:08 am

        Yup and you can add Northwest territorial Mint to your list of grifters They declared bankruptcy and are stiffing alot of poor unsuspecting customers out of their wealth and they thought they were doing the right thing by buying physical precious metals How ironic and pathetic is that?

  4. Humpty Dumpty
    June 28, 2016 at 7:45 pm

    Theranos is a strange case. The technology was believed top to bottom. In a scam, someone inside knows what is going on; in Theranos, no one did. It is unusual for something to grow to that size with everyone believing their own bs – usually it is caught early on and the mastermind is exposed as a dupe or a charlatan. I suspect the lab techs knew but they were mainly H-1 B visa conscripts with zero experience. In India a giant pharma generic group with 2000 employees ran a complete scam and every employee was in on it – not so at Theranos – no one bothered to cross a T or dot an I – it was just magical thinking and zero skills and oversight. Top heavy with board elites and status hounds, it imploded on the routine work. The fundamental things apply and investors rarely have the skills sufficient to question what is really going on in tech companies. The magic thinking will end, and badly for many of these enterprises oozing from the woodwork.
    Good stuff, Wolf

    • polecat
      June 28, 2016 at 8:09 pm

      Unicorn logic………………………………

      • polecat
        June 28, 2016 at 8:12 pm

        It’s Skittles for EVERYONE!!…..

        ..until the Grift materializes………….

    • economicminor
      June 28, 2016 at 9:02 pm

      Group Think or The Power of Positive Thinking or The Faithful True Believers… It has been decades of follow the leader and nod or wink but never ever ask an awkward question. Anyone who says anything contrary to the song being played is justly and rightly discharged. If you follow the crowd, you can never be held responsible. If you think for yourself, well, you may be responsible for the tipping over of the apple cart..

    • MC
      June 29, 2016 at 5:48 am

      I recently had to undergo some corrective surgery and hence had the occasion to “discuss” Theranos with medical personnel.
      The general attitude at the moment is “Can’t we just forget about it and pretend it never happened?”.

      The big problem with Theranos is the “gut feeling” of healthcare professionals was it was a scam but Elizabeth Holmes’ company managed to rake so much support (see the board members) and so much capital many started having doubts that may be, just may be, Theranos really had managed to stumble upon some revolutionary technology. Never mind Philips, Siemens, Fujirebio, GE, Ajinomoto etc have sunk billions and countless hours by the brightest minds in the field to get that revolutionary technology.

      I honestly believe Theranos to be an extremely elaborated scam of which Elizabeth Holmes is but an accomplice or merely the image girl. It was simply too elaborated and too well put together for a single person, no matter how smart, to come up with: it required the work of a well oiled team specializing in fields as diverse as psychology and pharmaceutics. It required people with the connections to convince people like Kissinger to hop on board.
      I honestly doubt the SEC and FDA investigations would get that far: remember Enron? I only hope Elizabeth Holmes will be back at modelling bikinis or something along those lines rather than joining Kenneth Lay in the ranks of those dying of “natural causes” during a massive financial scandal.

      • nhz
        June 29, 2016 at 6:53 am

        There was plenty of ‘corporate governance’ at Theranos, from a very specific group of people. I doubt many of the big internet companies and recent medical startups are very different. I have seen the same in my country during the tech boom, when the money is sloshing around even the most silly ideas get millions or billions of money, everyone goes along with the group think and all critical thinking goes out the window. Even more so if you know (everyone knows after 2000 and 2008) there will be at most a slap on the wrist for the fraudsters while outsiders (taxpayers etc.) will get stuck with the bill.

        Lawsuits against the Theranos board? Don’t think so …

        BTW, the recent lawsuit from China CITIC against a Chinese Vancouver resident is another great example of stuff oozing from the woodwork at a certain moment. When you see one cockroach there are usually a lot more…

        • Ptb
          June 29, 2016 at 7:32 am

          Yes, in my high tech career in software start ups I saw many scams that were financed by such lofty venture capital firms as kleiner Perkins. I still remember having a beer with a CEO who laughed that a very large bank had bought our software for a couple of million $ and never got it implemented. All our customer “success stories” we’re total fabrications. Not one was reference able.
          I’m pretty sure VC money totaled over $50M in two,years with almost a total loss.

    • JimTan
      June 29, 2016 at 3:57 pm

      Think i’ve posted this before, but there is some background on public record about how Elizabeth Holmes raised initial money for Theranos. Her father held senior positions in Washington, worked for Enron, and then the United States Agency for International Development. Her mother was a congressional aide to Representative Charlie Wilson (see movie – Charlie Wilson’s War).


      “But when it came to fund-raising, Ms. Holmes had an ace up her sleeve: family connections. Timothy Draper, the well-known venture capitalist, had been a neighbor when the Holmeses lived in California. The children played together. “I gave her her first million bucks to get the business going,” Mr. Draper says.”

      “Another anchor investor was Don Lucas. Mr. Lucas is a godfatherlike figure in Silicon Valley who built his reputation by investing in a little start-up called Oracle. To get to Mr. Lucas, Ms. Holmes relied on an introduction from a former top banking executive who went to school with her father at Wesleyan. Mr. Lucas, who wasn’t available for an interview, served as chairman of the Theranos board for a time and brought in Lawrence Ellison, the founder and chief executive of Oracle, as another investor. In short order, Theranos raised more than $400 million, giving it, at one point, a valuation of $9 billion.”

  5. michael
    June 28, 2016 at 8:24 pm

    This was a brilliant post Wolf. Thanks. The primary message to investors is caveat emptor because no one has your back.

    • June 28, 2016 at 8:46 pm

      “BRILLIANT”?!?!?! Ha, Michael, you just made (what’s left of) my day!!! Cheers!

      • Awakenedivyleaguemba
        June 28, 2016 at 9:18 pm

        Wolf, in addition to your great published material, you have the best comments section of the major finance blogs and publications.

        Besides the usual mix of industry professionals, your site seems to attract a great mix of people from all walks of life and the commonality is that there are always insights to be gained from reading the comments (and it never seems to devolve into the useless name calling or dogma proclamations).

        Grateful for your hard work and invaluable thoughts, keep on fighting the good fight!

        • June 28, 2016 at 11:41 pm

          Thanks! Yes, I’m very proud of the commenters here, and of the quality of the comments they post, and I’m very thankful that they’re gathering around my humble site.

  6. wholy1
    June 28, 2016 at 8:36 pm

    “The bezzle shrinks” and the ooze really STINKS!

  7. chris Hauser
    June 28, 2016 at 9:28 pm

    but elizabeth holmes looks so big blue eyes and blond hair and lab coat.

    kissinger, indeed.

    • marty
      June 29, 2016 at 5:15 am

      Even her hair color is fake.

  8. OutLookingIn
    June 28, 2016 at 10:26 pm

    The entire market is a “bezzle”!

    Think about what these so-called ‘hotshot’ companies produce?

    Do they manufacture something of actual tangible value? Can you buy it, take it home and use it in an operation of actual construction? Short answer No. They put together greed dreams made of smoke, mirrors and delusions of get-rich-quick schemes, made especially for the greedy.

    There are companies still around that believe in their product, their work force and their share holders. Although, they are now becoming few in number. Its these square deal companies that get hurt in the spill over from the putrid cesspool of fraud, malfeasance, hubris and any other number of crimes in the “bezzle”.


  9. Gregg Armstrong
    June 29, 2016 at 1:29 am

    Con Street is one yuuge bezzle. The S&P 500 almost perfectly tracks the yuuge expansion of the Feral Reserve’s balance sheet. Almost all corporate borrowing goes towards either the share buyback or dividend scams. IBM and Hewlett-Packard are perfect bad examples of how American corporations have been looted by C-suite insiders to fund their bonuses. The United States Scammers Exchange Commissariat exists solely to give the Con Street criminals the Feral government’s seal of approval. The US SEC has absolutely no intention of ever protecting the investing public. How many times was the United States Scammers Exchange Commissariat given convincing documents and analyses showing that Bernard Madoff was running a Ponzi-Musk scheme? Half a dozen? More? But every US SEC investigations gave Bernard Madoff the Feral government seal of approval. Con Street is one yuuge scam and the Feral government is part and parcel to the scams.

    • Meme Imfurst
      June 29, 2016 at 10:47 am

      When LTCM went belly up, it should have been left alone. Instead the beginning of bailouts began over what was nothing that would have crash any market. Once Wall Street realized that ….socialism…. had found a new home, all bad bets became good bets for them. When Clinton repealed Glass-Segal Wall Street fell all over the source of untapped funds…consumer savings accounts ripe for gambling. This is what TWO branches of our government did. (Remember too that Congressmen are exempt from laws on trading with insider information).

      As a result of all that, the market moved into a higher gear, and along comes CNBC with cheerleaders hyping some hot stock at lunch time. Between the Money Honey for the men and Mr. Hair for the gals, CNBC became the church of “Hope and Security” for novice investors. Fast track into web based brokerage and now you have instant volatile price and volume spikes…and big commissions.

      What a great set up. And with a history of friends gathered around the water cooler making bucks ‘playing the game’ with zero knowledge of stocks, the rush to speculate was like the open door to Tiffanies that said “help yourself its all free”. Text me some inside info., skip the facts please.

      The day I began to hear NPR give stock numbers as if at a ball game and not just once but at the beginning and last of the 3 minute ‘news segment’ I knew that investors were being ‘farm raised’ for harvest.

      Where are the government watchdogs? Why they are stuck in the revolving door trying not to get their fingers crushed while rushing back and forth between industry and so called ‘responsibility to the people’.

      The expectation that answers are forthcoming to put Humpty Dumpty back together again is futile. The investment scams are in plain sight, not just the ones Wolf mentions, but all the ones playing games in plain sight of regulators and nothing happens. A fine, a 5% fee for theft and no prosecution thus ‘saving’ the tax payers money.

      Folks his mess is decades in the making, dirty hands everywhere to look, and November may be the day we see oceans of party balloons.

  10. Anthony
    June 29, 2016 at 1:46 am

    Congratulations on exposing a little talked about aspect of the markets.
    A very good friend , passed away many years now that I knew who was a receiver taught me many facts about small businesses that went bust.
    He told me that over 70 % that he liquidated out of hundreds in his lifetime, defrauded only the last weeks day and months, many were false invoice fraud, falsified loan applications outside their usual sources, friends and family conned into advancing cash with false promises.
    Of course, share fraud, the biggest fraud of all today in buybacks and with Govt collusion didn’t apply with small businesses he dealt with, but you can be sure the “bezzle” is ramping up right now as desperation is rising in the C suites as investors walk and scrutiny rises.

    When the crash is in free-fall, I think that the understatement of the potential of a 70 % plus potential of corporate fraud compounding the problems that are already worse than at any time since 1928 on top of the insane leverage. non GAAP and other dodgy banking, loan stretching and collateral abrogation will make really open investors eyes.

    But 7 years of unbridled greed and stupidity, believing such garbage as trotted by central banks and forgetting the core values of fundamentals is going to now wipe them out.

    Keeping your powder dry now and waiting it out will produce some of the biggest bargains to had in over 100 years.

  11. night-train
    June 29, 2016 at 3:02 am

    I agree with most of the comments above. The rats have most assuredly been at the cheese. The US is, and has been for many years, at the level of a shady fly-by-night carnival.

    But, let me pose this question. If there was a serious upright political candidate dedicated to reforming the system; and this candidate told the voters how bad things are and that things would have to get worse, possibly much worse, before finding stable economic bedrock; could this candidate be elected?

    • Agnes
      June 29, 2016 at 3:25 am

      I voted for Ron Paul twice…so No. His -End The Fed- was pretty good too.

      Curiously, silver had a period today of going up faster than Gold. Hardly ever happens.

      • night-train
        June 29, 2016 at 5:01 am

        Agnes: I voted for Ross Perot in 1992. That was my last foray into third party candidates.

        Interesting about silver. My coin collection may soon be my strongest asset.

        • ERG
          June 29, 2016 at 8:05 am

          This time around the third party candidate is running as a Republican.

      • Alistair McLaughlin
        June 29, 2016 at 8:37 am

        So did platinum this morning.

    • nhz
      June 29, 2016 at 7:05 am

      could this candidate be elected? probably not …

      Just look at Europe, e.g. the rise of Podemos in Spain seems to have been stopped in its tracks because ultimately most voters voted for their own pockets and chose the same corrupt politicians that made a mess of everything (more EU subsidies and ZIRP/NIRP forever, so much of the general public can keep living above their means). How many real reforms has Syriza in Greece accomplished, has the Greek elite started paying any taxes? What will the new parties in Italy really change?

      It may have to get far worse, both in Europe and even more so in the US, before people value rights and morals above direct financial profiting.
      When the middle class has been eliminated the elite will continue with plundering the lower classes; by that time it might be too late for change – both in the US and Europe (which in fact is already one super-state under US/NWO supervision).

  12. Chicken
    June 29, 2016 at 7:39 am

    Theranos – Was this another of Frederick Wilson’s insanely valued IPO’s which are actually money holes? Somewhere I heard San Fransiscans could get free booze (delivered!) in one of these scams, seems sales growth was more important than profits.

    • June 29, 2016 at 8:26 am

      I don’t know about the “free” part, but I know the “booze” part is true. I get the ads (glossy paper in snail mail) all the time. These startups, which burn a ton of cash every month, are now seeing their funding sources lose interest. Some of them are already folding.

  13. Mike R.
    June 29, 2016 at 7:54 am

    No signficant reform will occur until the great crash occurs. Humans by nature will deny, postpone, extend and pretend until they can’t.

    The great bailout in ’07/’08 and still continuing is the moral hazard setup of the ages. Look at the apartment boom financed by Fannie/Freddie. Developers continue to fall all over themselves to build these things; primarily because they know they’ll be saved when the vacancy rate soars. That is just the tip of the iceberg.

    Even if Trump gets elected, he doesn’t have the grasp to really fix things and won’t have the support if things haven’t gotten bad enough. It was only several years into the Great Depression that Roosevelt was able to garner the support to do the things he did. Not all worked or solved the depression but some were effective and quite radical.

  14. JoePlateau
    June 29, 2016 at 8:08 am

    Theranos was much hyped in the financial press, but one of medical research’ most famous skeptics, John Ioannidis wrote a very critical piece on the firm in JAMA early 2015:


    Despite its ‘paradigm-changing technology’ no scientific papers had yet appeared in the peer-reviewed medical literature.

    In this piece Ioannidis wondered how one could assign $ 9 Billion value to a company whose technology no one had ever tried to verify.

    • nhz
      June 29, 2016 at 2:12 pm

      On the other side, it COULD have been a useful technology if they had chosen a different approach, take the time to develop mature technology and start with the right kind of tests (where small blood volumes are less of a problem etc).

      Compared to the many multi-billion dollar valuations of recent internet startups that only know how to burn money and do nothing really useful for society, that $ 9 billion was probably ‘conservative’ …

  15. Alistair McLaughlin
    June 29, 2016 at 8:35 am

    This is why regular business contractions – i.e. recessions – are so necessary. They squeeze the excess out of the system and allow it to self-correct. Among that excess is a fair amount of fraud. That fraud is exposed when the easy credit and steady investor inflows suddenly stop.

    When central banks bailed out the financial system in 2008, they no doubt covered up a lot of what was going on. That was bad enough. But when they implemented 8 years of ZIRP/NIRP, they removed that essential corrective mechanism on a semi-permanent basis. This left us with an economy more susceptible than ever to capital misallocation and outright fraud.

    Thus far, ZIRP/NIRP have done exactly what they were supposed to do – prevent that corrective mechanism of recession and contraction from taking place. But unless one believes in free lunches (I don’t), there will be one hell of a price to pay for this. That price gets higher with each day we put the reckoning off.

    • ERG
      June 29, 2016 at 9:37 am

      “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of the voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” – Von Mises

  16. c smith
    June 29, 2016 at 8:56 am

    “It also varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful.”

    I would argue that because the Fed has created $4 trillion in new money out of thin air over the past 8 years, the size of the current “bezzle” is especially prodigous, and therefore the hits will keep on coming. Basically a variation on the idea that bad money drives out good.

    • Captain KurtZ
      June 29, 2016 at 12:32 pm

      Since 2009 its all been bad money. This epic malinvestment period has seemed to revisit the same said scams and areas where financialization can do its basic dirty work – not the pump-n-dump outfits, that’s only the initial part of the ‘bezzle, but the chop shops where they can make bond offerings out of it…..

      They then build the CDOs, the MBSs, and the synthetic bets on top of those.

      That’s where the real wealth generation has occurred in the 21st century.

      They have gone from billions to trillions to quadrillions in a short time.

      When this bezzle blows…….

      From the street level, as I went beggaring after funds to start up whatever idea I was pitching at the time, I figured I was getting nowhere for this reason.

      Somebody said to me that people with money would rather get fleeced by the same scammers that stole from them last time, then go in a new direction, or let somebody else into the club.

      In this upside down world, a felonious record is better than no record at all.

      • night-train
        June 30, 2016 at 3:13 am

        Captain: “In this upside down world, a felonious record is better than no record at all.”

        During my career in the oil business, I saw the same thing. Every boom brought the same cockroaches crawling out of the woodwork.
        I saw people who, if hadn’t gone to jail, should have, right back at the trough.

  17. realist
    June 29, 2016 at 10:52 pm

    NHZ: “the recent lawsuit from China CITIC against a Chinese Vancouver resident is another great example of stuff oozing from the woodwork at a certain moment. When you see one cockroach there are usually a lot more”
    Actually, as a resident of Vancouver, I sense it is not merely “a lot more”, rather closer to “nothing but”. It is sobering that it is the financial arm of a Communist regime that is trying to enforce rule of law and rein in the rampant money laundering. Canada is reluctant to admit the very existence of such goings on, and its elites have no interest in diminishing it.

    • roddy6667
      July 3, 2016 at 7:59 am

      China is cracking down on corruption and emphasizing the rule of law. A lot of activities that would be crimes are just the normal of doing things in America and Canada.
      Activities in Washington DC that are just part of the everyday law making process would get you life in prison or a bullet in the head in China.

Comments are closed.