Betting On a Sure Thing
Money for Nothing, and Your Debts for Free

By: Bryan Zepp Jamieson

A few weeks ago, some 17 year-old-kid from the San Diego area got popped by the SEC for running an investment scam on the internet. He supposedly took in some $900,000 from avid investors on an incredibly hokey sports betting scheme, and didn't pay out a nickel. As Kenneth Lay might say, "Sweeeet!".

The marketing plan was that the kid assured investors that he had a formula, and only bet on sure things, and guaranteed a return on betting on college and professional football games, college and pro basketball and hockey of between 250% and 25,000%. Anybody who believed such a claim might stop to wonder why Vegas wasn't a smoking ruin already, but I suppose people who would believe something like that don't stop to ask themselves many questions. P.T. Barnum did say "there is one born every minute", but he was talking about suckers, not abject fools. People who believe in Reaganomics, televangelists, Capricorn One and pro wrestling would dismiss such a claim with a dismissive snort.

So how did this kid rope in enough people to rack up $900K?

It seems that there are people out on the web who keep an eye peeled for new Ponzi and/or pyramid schemes. With both, if you are one of the first in – "on the ground floor" as they say – then you can expect a fair-to-middling return on your investment before the scheme collapses. People running such schemes tend to make pay outs to the first set of suckers in order to keep the scheme going till it makes it into the third, fourth, and fifth tiers of investors, which are much more lucrative.

In other words, these "investors" were, for the most part, thieves who weren't bright enough to set up their own scams, but piggy backed on the scams of others. It's possible that some were gullible enough to get roped in for less criminal reasons, and I hope they learned a lesson about the disadvantages of having too much money and a room-temperature IQ.

What made this scam a bit different was that the kid wasn't running anything as sophisticated as a Ponzi scheme. His business strategy seems to have been "take the money and run". He didn't bother with second, third, or fourth tiers. He just raided that first tier. (He really should have at least given out "golden vulture" pins to those investing $25,000 or more. Just a thought.) The first tier, frustrated wanna-be "free marketeers" whined to the feds, and the feds popped the kid. The kid pled guilty, and since he was white collar, got a slap on the wrist. The "investors" didn't get punished, except for a rude kick to their egos. I hope it hurt.

Investment in America, which Wall Street regales us as being "the driving force that made America great" is getting to be more and more as fixed a game as the scam the San Diego kid was pulling.

The big players, more and more, have taken the attitude that their wealth and power make them pretty much unassailable, and they are free to essentially plunder the American economy.

As an example, in 1999, there was a big push by investment houses and brokerages to get NASDAQ stock out to "the common man", aka: the small investor. It was all dressed up in verbiage about democratization of capital and so on, but basically, it boiled down to "find some suckers and unload". By the hundreds of thousands, small investors snapped up stocks with P-to-E's of 40 or greater, and in the case of dot coms, the "E" part of the ratio – earnings – simply didn't exist. Most of the big players got out before the NASDAQ bubble burst, leaving people with small nest eggs holding the bag – and this bag held a spectacularly dead cat. NASDAQ dropped 60% in value, and it's still overvalued today.

We've seen this before. The Hunt brothers cornered the market on silver, which pushed bullion prices through the roof. Gold hit $800, and suddenly a push was one to "democratize" gold holdings, and people watched the value of their investment drop from nearly $900 an ounce to $400, and then down to $250. Even now, fifteen years later, the stuff is going for $340 an ounce.

It must be getting ready to go up more: I'm not seeing the ads on the trash cable news networks to "invest in gold now!". Those ads are for the marks; the players have different advisors.

The "whatever it takes" mentality that infests such creatures as Kenneth Lay may have finally caused Americans, brainwashed for years with the notion that Wall Street is our best friend and will take good care of us, to take another look. The only thing unique about Lay is the scale of his thievery and fraud, and I strongly suspect the new standards he set will be eclipsed soon enough, doubtlessly by other corporations with a keen interest in our electoral process.

The people who run these inhuman entities have decided that in the name of efficiency and for the sake of profits, labor should be reduced, wages cut, jobs shipped to third world countries, and now, it seems, that they be allowed to gouge both their customers and investors as far as is inhumanly possibly. Certainly, that's what Enron did under the beaming approval of the Putsch administration, first in the phony California "energy crisis" and then in the stock manipulation/insider trading debacle that is unfolding now.

It doesn't help that what is supposedly "our" government is so beholden to Enron through the system of legalized bribes known as campaign contributions that its very ability to prosecute Enron and entities like Enron is compromised.

It doesn't help that auditing firms, which are supposed to provide independent analysis so brokers and investors can make accurate and informed choices, are also compromised, to the point where they aggressively destroy evidence and cover up criminality, both that of the entities they are supposed to monitor and their own. (Go ahead, Arthur Anderson: I just bluntly called you dishonest thieves who cheated the public, lied, and conducted a criminal coverup. Sue me.)

It doesn't help that the media is compromised, and has been trying to soft-pedal the Enron collapse. In terms of financial loss and lives ruined, it rivals the collapse of the WTC, but they are trying to pass it off as just a normal business fluctuation, one with no political ramifications, even though Enron all but owned the White House.

The system is on the verge of self-destructing. One thing that the Kenneth Lays of the world can never figure out is that once they've wiped out all the jobs, all the investors, all the customers, there's nobody left who can buy their shit.

The major multinationals, and the cold, imperious bastards who have effectively seized control of America's money machine are incapable of recognizing the power consumers have to withhold. They don't understand that you can only cheat investors so many times before they either run out of money, or get tired of being cheated. And with less consumers and less investors, companies tend to implode like Enron did, only faster.

Unfortunately, we have an administration that believes, with all its heart, that there is a system that can give returns of 250% to 25,000% on football game bets, and is so convinced that this is what capitalism stands for that they eagerly jostle to be first in line to invest in it.

Only they are using the American public as their stake.