Strange, penumbral, characters roam the boardrooms of banks in the countries in transition. Some of them pop apparently from nowhere, others are very well connected and equipped with the most excellent introductions. They all peddle financial transactions which are too good to be true and often are. In the unctuously perfumed propinquity of their Mercedesed, Rolex waving entourage - the polydipsic natives dissolve in their irresistible charm and the temptations of the cash: mountainous returns on capital, effulgent profits, no collaterals, track record, or business plan required. Total security is cloyingly assured.
These Fausts roughly belong to four tribes:
The Shoppers
These are the shabby operators of the marginal shadows of the world of finance. They broker financial deals with meretricious sweat only to be rewarded their meagre, humiliated fees. Most of their deals do not materialize. The principle is very simple:
They approach a bank, a financial institution, or a borrower and say: "We are connected to banks or financial institutions in the West. We can bring you money in the form of credits. But to do that - you must first express interest in getting this money. You must furnish us with a bank guarantee / promissory note / letter of intent that indicates that you desire the credit and that you are willing to provide a liquid financial instrument to back it up.". Having obtained such instruments, the shoppers begin to "shop around". They approach banks and financial institutions (usually, in the West). This time, they reverse their text: "We have an excellent client, a good borrower. Are you willing to lend to it?" An informal process of tendering ensues. Sometimes it ends in a transaction and the shopper collects a small commission (between one quarter of a percentage point and two percentage points - depending on the amount). Mostly it doesn't -and the Flying Dutchman resumes his wanderings looking for more venal gulosity and less legal probity.
The Con-Men
These are crooks who set up elaborate schemes ("sting operations") to extract money from unsuspecting people and financial institutions. They establish "front" or "phantom" firms and offices throughout the world. They tempt the gullible by offering them enormous, immediate, tax-free, effort-free, profits. They let the victims profit in the first round or two of the scam. Then, they sting: the victims invest money and it evaporates together with the dishonest operators. The "offices" are deserted, the fake identities, the forged bank references, the falsified guarantees are all exposed (often with the help of an inside informant).
Probably the most famous and enduring scam is the "Nigerian-type Connection". Letters - allegedly composed by very influential and highly placed officials - are sent out to unsuspecting businessmen. The latter are asked to make their bank accounts available to the former, who profess to need the third party bank accounts through which to funnel the sweet fruits of corruption. The account owners are promised huge financial rewards if they collaborate and if they bear some minor-by-comparison upfront costs. The con-men pocket these "expenses" and vanish. Sometimes, they even empty the accounts of their entire balance as they evaporate.
The Launderers
A lot of cash goes undeclared to tax authorities in countries in transition. The informal economy (the daughter of both criminal and legitimate parents) comprises between 15% (Slovenia) and 50% (Russia, Macedonia) of the official one. Some say these figures are a deliberate and ferocious understatement. These are mind boggling amounts, which circulate between financial centres and off shore havens in the world: Cyprus, the Cayman Islands, Liechtenstein (Vaduz), Panama and dozens of aspiring laundrettes.
The money thus smuggled is kept in low-yielding cash deposits. To escape the cruel fate of inflationary corrosion, it has to be reinvested. It is stealthily re-introduced to the very economy that it so sought to evade, in the form of investment capital or other financial assets (loans and credits). Its anxious owners are preoccupied with legitimising their stillborn cash through the conduit of tax-fearing enterprises, or with lending it to same. The emphasis is on the word: "legitimate". The money surges in through mysterious and anonymous foreign corporations, via off-shore banking centres, even through respectable financial institutions (the Bank of New York we mentioned?). It is easy to recognize a laundering operation. Its hallmark is a pronounced lack of selectivity. The money is invested in anything and everything, as long as it appears legitimate. Diversification is not sought by these nouveau tycoons and they have no core investment strategy. They spread their illicit funds among dozens of disparate economic activities and show not the slightest interest in the putative yields on their investments, the maturity of their assets, the quality of their newly acquired businesses, their history, or real value. Never the sedulous, they pay exorbitantly for all manner of prestidigital endeavours. The future prospects and other normal investment criteria are beyond them. All they are after is a mirage of lapidarity.
The Investors
This is the most intriguing group. Normative, law abiding, businessmen, who stumbled across methods to secure excessive yields on their capital and are looking to borrow their way into increasing it. By cleverly participating in bond tenders, by devising ingenious option strategies, or by arbitraging - yields of up to 300% can be collected in the immature markets of transition without the normally associated risks. This sub-species can be found mainly in Russia and in the Balkans.
Its members often buy sovereign bonds and notes at discounts of up to 80% of their face value. Russian obligations could be had for less in August 1998 and Macedonian ones during the Kosovo crisis. In cahoots with the issuing country's central bank, they then convert the obligations to local currency at par (=for 100% of their face value). The difference makes, needless to add, for an immediate and hefty profit, yet it is in (often worthless and vicissitudinal) local currency. The latter is then hurriedly disposed of (at a discount) and sold to multinationals with operations in the country of issue, which are in need of local tender. This fast becomes an almost addictive avocation.
Intoxicated by this pecuniary nectar, the fortunate, those privy to the secret, try to raise more capital by hunting for financial instruments they can convert to cash in Western banks. A bank guarantee, a promissory note, a confirmed letter of credit, a note or a bond guaranteed by the Central Bank - all will do as deposited collateral against which a credit line is established and cash is drawn. The cash is then invested in a new cycle of inebriation to yield fantastic profits.
It is easy to identify these "investors". They eagerly seek financial instruments from almost any local bank, no matter how suspect. They offer to pay for these coveted documents (bank guarantees, bankers' acceptances, letters of credit) either in cash or by lending to the bank's clients and this within a month or more from the date of their issuance. They agree to "cancel" the locally issued financial instruments by offering a "counter-financial-instrument" (safe keeping receipt, contra-guarantee, counter promissory note, etc.). This "counter-instrument" is issued by the very Prime World or European Bank in which the locally issued financial instruments are deposited as collateral.
The Investors invariably confidently claim that the financial instrument issued by the local bank will never be presented or used (which is true) and that this is a risk free transaction (which is not entirely so). If they are forced to lend to the bank's clients, they often ignore the quality of the credit takers, the yields, the maturities and other considerations which normally tend to interest lenders very much.
Whether a financial instrument cancelled by another is still valid, presentable and should be honoured by its issuer is still debated. In some cases it is clearly so. If something goes horribly (and rarely, admittedly) wrong with these transactions - the local bank stands to suffer, too.
It all boils down to a terrible hunger, the kind of thirst that can be quelled only by the denominated liquidity of lucre. In the post nuclear landscape of this part of the world, a fantasy is shared by both predators and prey. Circling each other in marble temples, they switch their roles in dizzying progression. Tycoons and politicians, industrialists and bureaucrats all vie for the attention of Mammon. The shifting coalitions of well groomed man in back stabbed suits, an hallucinatory carousel of avarice and guile. But every circus folds and every luna park is destined to shut down. The dying music, the frozen accounts of the deceived, the bankrupt banks, the Jurassic Park of skeletal industrial beasts - a muted testimony to a wild age of mutual assured destruction and self deceit. The future of Eastern and South Europe. The present of Russia, Albania and Yugoslavia.
About the Author
Sam Vaknin is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East. He is a columnist for Central Europe Review, United Press International (UPI) and eBookWeb and the editor of mental health and Central East Europe categories in The Open Directory and Suite101.
If it is Valentine’s Day, then many men resort to flowers
or candy to show the women in their lives just how much they really care.
For the bigger holidays such as birthdays or Christmas, men typically
reach a bit deeper into their pockets for the larger ticket items such as
jewelry or perfume. But the reason why so much perfume is sold in any
given year has far more to do with hormones and the feelings created by
certain scents than by the gift-giving rationale of men.
Perfumes, colognes, and scented oils have been part of
human civilization since the time of the ancient Egyptians and beyond.
Jars and vases filled with exotic fragrances have also been found in
ancient Chinese burial sites. In fact, the use of perfumes has no exact
starting date as its exact history is unknown. All that is truly known is
that women and men have been using cologne and perfume to enhance their
own scent for thousands of years will continue to do so for the
foreseeable future.
In any given year, 66% of men and 75% of women find
themselves buying cologne or perfume during the course of a year.
Researchers believe that part of the reason why women love receiving
perfume (and also when men love giving perfume as a gift) is due to
pheromones. Pheromones are hormones thought to stimulate sexual appetite
or interest and they are triggered by scent.
So do women love perfume because it makes them want to
have sex? No, actually the scent has a more dramatic effect upon men.
While the effect is less pronounced in women, certain colognes worn by men
have been known to produce a similar desire in women. Although a link
between the scent of perfume and increased sexual desire has been found,
researchers do not believe that it explains the desire to wear perfume on
a daily basis.
In fact, most scientists believe that human pheromones and
their impact upon our behavior has decreased over the years as we have
become more advanced and civilized. While most scientists conclude that
scent once played a rather large part in human mating habits, they believe
that it has relatively little to do with sexual attraction in this day and
age.
So then…why do women love perfume so much and why is it
such a popular gift during the holidays? It actually seems to be due to
the simple feeling created by wearing any fragrance that one finds
appealing. In fact, the feeling created by a woman wearing perfume is
similar to that made by a candle used for aromatherapy. It is soothing,
subtle, and slightly romantic but not really sexual in nature.
Of course, it does not really matter why precisely a woman
loves wearing perfume. All that is truly important is that she does love
to smell great and the attention she receives when wearing her favorite
perfume. In time, the perfume and the scent of her own body will combine
into a singular aroma that will literally become her own scent.
As the sense of smell can recall the most vivid of
memories, it is this unique scent of a woman combined with her perfume
that people tend to remember most when thinking of that person. Men will
often buy the same perfume for a woman even years after she has ceased
using it because it is the scent they have come to identify with that
woman.
And yet, women do move on to new perfumes and always seem
to be on the search for a new scent to adorn their bodies. Of course, it
is not surprising for some higher end perfumes to cost $100’s of dollars
per bottle which is why a large number of women and men find themselves
shopping for their favorite brands online. The Internet can also be a
great place to find deals on new perfumes and fragrances as most websites
generally offer a much greater selection than traditional stores.
The love of perfume by both men and women may be
completely instinctual and somehow related to sexuality. However, the fact
is that perfume just plain smells great and therefore puts us in a good
mood. Who doesn’t like something that smells good—be it a pot roast or a
garden lily? Of course, pot roast has a tendency to make us hungry…so what
does the smell of fine perfume make us? There has to be a really good
reason why perfume is so popular, now doesn’t there??
About The Author
Jim Jin
This article was produced by Ausna Onlinestore. Find more
information and tips about perfume by visiting our site
http://www.ausnaonlinestore.com where you will find a range of
perfumes on huge discount
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