TRASHFUTURE - UNLOCKED: Frankenstein's Balance Sheet

Episode Date: June 19, 2020

In light of new information coming to light about the company that forms the subject of this episode - both allegations about potential wrongdoing with regard to circular financing, and the fact that they've just been approved as one of the accredited lenders for the Government's Coronavirus Business Interruption Scheme - we decided to unlock it for you. The original blurb: There's a ticking time bomb in the economy. No, a DIFFERENT ticking time bomb. This week, Riley, Milo, Hussein, and Alice discuss the balance-sheet chicanery of a mysterious Australian plane enthusiast that is slowly but surely imploding every SoftBank investment vehicle. We would normally say it's a laugh riot, but this one... maybe not so much.

3, 2, 1, Mark. Nice. Alice, now you say. That's the closest it's ever been. That's right. I had to get the clap nice and close. That's how I would bi-weekly clap for the NHS. Yeah, we do one single clap.

Yeah. That's all they get from us. Well, because that clap is on audio and it is on Patreon or Apple podcast, which means that it will exist forever. In many ways, it is just doing like 10,000 claps plus. I would say the opposite. We are clapping for one specific doctor at St. Tommy's hospital. Who?

He's doing the work of whispering while wearing a mask. Yeah. That's why we should make masks for him. Hello, and welcome to this premium episode of Trash Future, that podcast you're listening to right now. Milo, your sexy voice sounds a lot like Statham. Premium. If I don't listen to a Patreon episode of my favorite leftist podcast in the next 15 minutes,

I was going to literally explode. True and non. And we, I am here. It's me, Riley. I'm joined by Milo as Jason Statham. Hello. Hello, you slag. Who's saying as Guy Euston Statham?

I'm not going to try to, I'm not going to try to voice, but what I am going to say is that yesterday I watched the most amazing Jason Statham-esque movie, which is called The Gentleman. It's so, it's so bad, but it's incredibly good. It's like what would happen if you like crossed the worst types of American movie gangsters with the worst type of British movie gangsters. And somewhere along the line, you had Hugh Grant, who just did like Joker smiles, like randomly.

What do they call that? It's a freaking Russia report. That's right. That's right. And also, Jasona Stathamina. I'm not doing the Jason Statham voice. I didn't make the NHS spend all of its coronavirus money on transgender voice therapy to sound more like Jason Statham rather than less.

Wait, no. Female Jason Statham is just like any woman from fake taxi. Oh, I don't get a cock in the next 15 minutes. We would have to angry on Twitter because what they think is that like, there are people who are forcing the NHS to give them great Jason Statham accents without working hard for it. That's right. So it is us.

It's Riley Milo, Allison, who's saying, no guest this premium episode. Instead, we are going to... We're going to do one of our... We're focusing on just one topic for this episode. We're not going to do, oh, here's a startup. Here's a reading. Here's a little interview. No, we're focusing entirely.

We're going to go through the looking glass on some carcosa shits on this one. Because this one, this episode is the episode that ties together a lot of like plot threads that have been left from season one and two of Crash Future. Yeah. Like whatever happened to weird uncle Lenny. Align your chakras and let the energy flow because you're about to be learning things at a greater speed than you ever thought possible. Some of which may not even be true.

All of which are completely bizarre. And it's all centered on an Australian esoteric financial technology company called Greensill. Yeah. This doesn't sound like much and it won't until you get into this and you find yourself levitating a foot above your chair. This is the episode that's going to get us all killed. We should all say to start with that none of us feel at all suicidal. We don't go near any windows.

We all check under our cars with mirrors on sticks. I don't even drive. If I'm if I'm found in a car shot twice in the back of the head, I don't drive. Maybe it'd be found. I'm like having followed off my bike. I don't drive myself in the back of the head. It's my least favorite thing. All of us have had our hyoid bones thoroughly inspected by medical doctors.

I had my hyoid bone inspected by a medical doctor who kept on saying something but I couldn't hear him behind the mask. I would like to say that straight off the bat, especially for an Australian company, Greensill really does sound like a kind of old timey slur. I can't move around this town these days for all the fucking Greensills we've moved in. It's like an incel but like an environmentalist one. Basically, like Alice was saying, this episode ties a lot of things together. It's about this tech company that isn't a tech company that's been valued at over

$6 billion by who else but SoftBank and which is creating all of these little financial bombs all over the world in every market. It's the league of shadows. And it is creating these ticking time bombs, big and small in all kinds of different companies. And it's through this strange and exotic financing practice called reverse factoring. It's not obvious what it is. It's very confusing and it's very, very boring.

And that's the key. The key is it's complicated and it's boring and it's esoteric and they're depending on you not to understand it. But coronavirus has already caused three of these ticking time bombs to go off already in companies that have had exposure to reverse factoring. With the collapse of two you've probably never heard of, aggregated NMC healthcare and one you definitely have heard of called Brighthouse and good riddance to that. But these bombs have been going off slowly for years.

For example, the failure of Carillion, the UK outsourcing giant that we discussed with Alan White, that was in many ways precipitated and disguised by a very complicated reverse factored supply chain. This is like an obscure financial thing, but it crops up in so many companies and so many startups that we've talked about on the show before. And when we started doing the notes for this, I just found myself getting more and more conspiratorial. Like my third eye opened and then my fourth, fifth and sixth eye.

I'm mostly comprised of eyes now. Yeah, Alice has constiped the conceptual teleporter from the fly. Literally, all I'm doing right now is just converting every surface in my apartment into a corkboard so that I can like pin more things to other things because it's all connected around this and it's insane. So, okay, we're going to start. We're going to start first with an explanation of what this is. And this is from Credit Suisse Marketing Materials.

So this is in a report they released some time ago. And this is an interview with the man behind Greensill, whose name appropriately enough is Lex Greensill. Mr. Greensill. Lex is famously not evil first name. Yeah, exactly. Mr. Greensill, how would you describe the business model of Greensill Capital in a few words?

Oh, well, certainly not fraudulent. I'd like to lead with that. Greensill's model has grown from the fundamental belief that access to working capital should be better priced and more easily available to those who need it. In a word, democratize. That's not a few words. Also, what the fuck do you mean democratize?

So keep that in mind. Keep in mind that he says that this is all about democratizing access to capital as we go through the explanation of what this company does, how it works, and what its effects have been. So he goes on. To achieve this, we have partnered with a group of leading invoicing technology platforms to provide early payments to entire supply chains from large multinational suppliers down to the smallest SMEs in over 40 countries.

And though, through our unique funding model, we are able to tap into large and diverse pools of capital alongside our own balance sheet to deliver the scalability and flexibility that our programs require. Anyone that should set off alarm bells? Anyone who says a series of words like that? Yeah, well, that certainly was a series of words. They said a few words and then he's like,

yeah, we like to investigate the synergy of certain small supply chains in relation to the fuck. We're just finding blue sky synergies in the middle of efficiencies. And don't ask about it. It's not evil. Absolutely so horrific, which is weird considering the whole spooky fucking castle thunder aspect to everything else that we find out about this. Not to like preview, but like,

Can we get some castle thunder on that? Yes. So I'm going to actually like number one. So keep that in mind, right? Number one, he says he's trying to democratize access to capital. Number two, he says he's doing it by being a technology company. So I'm going to explain what this is and it's going to be confusing and weird and it's not going to make much sense.

If you're bored listening to it, remember that's the point. So it's called reverse factoring. It's called reverse factoring. Your child may be doing it. Hi, I'm Troy McClelley. You may remember me from such previous scams as all the other stuff we talk about on this show. Yeah. So this guy, Lex Greensill, more or less invented it as a kind of financial transaction,

or at least he took it and put it created into the form it is today. And it is going to, if it's not going to collapse the economy, it is a, let's just say it's a market that has all the characteristics of the mortgage-backed security market in 2008, except the entire world is exposed to it because it's rife in the entire private sector. I love how we've identified as part of season three that we have stepped off of the ledge of capital. And then we've identified that, oh, and on the way down, someone has filled our pockets full of bombs.

I think that's the best way to understand it. So I'm about to explain this and it's going to be strange, but try and follow me. Conventional factoring is when a company sells its accounts receivable to a third party, like a bank, which then collects money from the buyer. So your accounts receivable, it's the money that people owe you for providing the services. You get a debt collector, you get dog the bounty hunter to chase down your accounts for you. Or even accounts receivable is just, I have a pencil company, I ship you a bunch of pencils. You've got your only fans, you're not getting the money for the feet picks till the first of the month.

You need that money now to buy the containers for the bottle. Stop, accounts receivable is a perfectly normal thing for businesses to have. It's just the money that you're expecting to come in from the people that you're selling your stuff to. Yeah, in the Sims, right? So conventional factoring happens when basically I say I have $100 due from you next week. I need it this week. So a bank pays me $98 and then now and then goes and collects the $100 from the buyer. That's common supply chain practice.

Reverse factoring is when a company handles its accounts payable via a third party, such as Greensill, rather than paying suppliers directly. So suppliers accept a slight cut, but get paid today rather than in the future. So it is essentially that suppliers accept a slight cut to their invoice, right? So you owe me $100. I accept $98, but I get paid today rather than getting paid when the invoices actually do. Why do I feel as if I've just seen the ping pong ball disappear under one of the cups and then get them shuffled around really fast?

Yeah, Hussain, you haven't said much. What do you think of this so far? One of the things that I was going to say was when I was researching this yesterday, me also being a dumb guy was like, well, maybe if I look at a picture, it'll make more sense. The pictures that you can see are basically... I mean, just to put it simply, they're pyramids. They're all fucking pyramids. Not the most efficient shape.

Lots of them have eyes on them. I'm not really sure why that is. It kind of also reminded me of something that teen girls do sometimes, which is I can't remember what it is. I keep thinking dropshipping, but there's another word for it. So if any listener realizes, just message me. What about many teen girl listeners? What about many teen girl listeners?

When they kind of can't afford heightbeats close, and then they end up going through a third-party service... Oh, like Lana. Sorry, say that again? Lana or Karma. Yeah. They pay in installments. Yeah, they get all this stuff and they pay it in.

So that might actually make more sense than this fucking system. So I've just been listening intently and being like, well, maybe I'm stupid for not understanding this. I'm really happy that actually I'm not, and even the person who has been most fixated on this all week still doesn't get it. I've had a very long day. Riley, you've been walking around yelling about this

for a week and a half by this point. That's true. I've had a very long day today. One last thing, and I don't know whether this is going to come up later on the episode. This also seems to be a very Australian thing. Every website that I've read about reverse financing has some sort of root in Australia. Australian politicians have been arguing in defence of it in the parliament. It's just Lex Greensill.

This is the guy who, if not invented, then perfected this. This one weird trick. There's nothing more Australian than reverse financing. The whole country is upside goddamn down. I'm going to finish describing what this is. To remind you, reverse factoring is when a company handles its accounts payable by a third party. Suppliers accept a cut, but get paid today rather than in the future. I outsource my debts.

I'm owed $100. I accept $98 so I get paid today instead of in the future. What makes this so incredibly pernicious is that this basically means that companies are able to turn their entire supply chain into a personal bank that they can then invent new credit out of thin air. It's turning companies into governments, which is really funny to me. You're essentially issuing bonds on your debt like you have a national bank, but instead it's just like one Australian man.

Companies have effectively been able to more or less print money in some cases, but without it showing up as debt. A lot of what happens is a large company will extend their payment schedule to some ludicrous amount of time, say 120, 160 days. Then say if you want to be paid in 30 days, which is a normal amount of time to have an invoice to be processed, you must use our reverse factoring partner and therefore accept a reduced amount of the invoice. The crazy thing is that effectively turns the company's accounts payable,

so the things I have to pay you as a supplier of items to my company. That turns that from just normal operating expenses into debt, which is then owed to a financial institution, can be renegotiated, most importantly, securitized in salt. Oh, good. So we're back from mortgage-backed securities to an even more tenuous debt-backed security. I love it when the economy gets collapsed by a bunch of people who've invested trillions of dollars in futures on bunning snags that never existed.

It feels like what we saw in 2008, but just more corrupted and injected with some bizarre serums to turn it into... It's gone from backing assets, which at least have some sort of physical... You can fixate on it as a physical moniker of some sort. Now, if I have this right, so basically just turning unpaid wages or unpaid... Unpaid debts, yeah. Unpaid debts usually for OPEX, which is for suppliers of things. That could be suppliers of power, suppliers of raw materials, suppliers even of properties, so rent.

Okay, so it's like basically monetizing and turning the supply, the actual motions of the supply chain into debt that you can then refinance. Not monetizing. Financializing. Financializing. Because they become a tradable. Your supply chain basically turns from something where I pay you to send me a thing, and it turns into something that can be bought and sold by a major financial institution.

I mean, let's be clear, there's two parts of this, right? The reverse factoring part in and of itself is literally just this Australian monorail guy comes to your company and offers to give you the money printer that governments have. And then for as long as that works, you can just be like brrr, and print out all of the stuff that you would normally be paying for, like the fuel to run your machines or the electricity to keep your lights on, just off of the back of this like black box Australian corporation. The other half of that is that what that Australian corporation is doing with that debt

is sort of turning it into a financial instrument that it can gamble with. That's correct. That's exactly right. That's already a machine, which feels the bond machine. It feels normal, innovative, something that we've never seen before, and something that I feel will just be fine. Yeah, absolutely. Well, because the thing is right, like these, and I'm not even going to say it's a scam,

because it's perfectly legal, but these kinds of financial practices, the ones that were happening in 2008, what we're talking about now. I mean, it always works until it doesn't. Yeah, they put a din in North Havabrook on the map. Because the thing is, like this, you, if you, let's say you have a heavily financialized supply chain, you can keep just churn, no matter what, you can just keep churning that through. So long as your company continues to be a going concern. Yeah.

Money machine go brrrrr. And the thing is, you can effectively print money to keep yourself in operation as long as Greensill agrees to let you keep doing it. And they could have a number of reasons to do that, but we'll get to that later. And so let's say they let you keep doing it until your company implodes, because either you just do Enron shit, which happened at Abangoa, Carillion, NMC Healthcare, Brighthouse, and Agra Trade. There's a wake of bodies behind them for one thing.

When we say Enron shit, are we talking like embezzling from the company or? Well, we're talking about, we're talking about specifically keeping your company, keeping your company afloat by, by, by sort of disguising a lot of bad debts in your supply chain. So we don't know, I don't know if they were specifically stealing from the company, but that kind of thing, that kind of financial misconduct, let's say. Yeah. Using company money to buy company stock, that kind of thing. Yeah. And well, because the thing is, because, because reverse factor debt is recorded in your books as operating cost,

that makes your company look like it's in better financial health than it is, allowing you to borrow at better rates, sell off the stock that you have now before everyone realizes how shit your company is, or disguising general failure and bad behavior for a whole hell of a lot fucking longer. Yeah, because it's all in this black Australian box. Well, it's not even just that. It's once the money elite goes from the factor to your books as the company, it's not booked as debt. And that's crucial because the most important ratios for determining the financial health of a company

are basically their, the debt to their equity or their debt to their income. How much are they borrowing versus how much are they earning? But when you use reverse factoring, you just churn a bunch of finance through it and it looks like a healthy company until you realize that something like Brighthouse had leverage ratios of like 90 to one or some shit by the time it actually collapsed. What you're telling me is that we work ahead of their time with the community-adjusted EBITDA and that this is entirely now a vibes-based economy because the line is getting really perverse in its death rows.

You don't even need to have vibes for this. You have really bad vibes and it still works. And here's the crazy thing. You're saying, well, surely this kind of behavior is illegal. But remember, Greensill's not a bank. It's a tech company. Amazing. So it's not regulated like a bank. Not even at all. Reverse factoring. I looked this up.

You know what the regulation is at the European level for reverse factoring? Companies are encouraged to not report reverse factoring debt as operating expenses. Yeah. I love a non-binding encouragement. So wait. That is some Liz Warren shit if I ever heard it. It takes deposits and it pays out and it financializes it on the basis that that is debt. But it's not debt legally because even though it does all of the things that a bank does,

it's not a bank because it's a tech company. So my question is, what's the tech? I'll give you two answers. First, it actually doesn't take deposits, so it's not a bank. So there's an entire sector called the shadow banking sector. That sounds good. And shadow banking is basically any financial firm, usually they deal in debt and credit, brokers of debt and credit that do not take deposits and so are not regulated like banks.

Greensill is the largest non-bank bond issuer in Europe. And so this should be an example of why there's a bit Riley explains here. I'm nesting a Riley explains and Riley explains, but why the concept of prudential regulation, which is the war and approach always fails, because prudential regulation tries to ameliorate future risks by looking at by be acting prudently and by, say, trying to prevent bad behavior where you know it will be. But our rules-based form of prudential regulation says, for example, well, in 2008 the problem was banks and the problem was banks taking certain kinds of risks

that reduced their overall, that reduced their liquidity to unsustainably low levels. We're going to solve that by saying, okay, you banks, you banks identified by being these characteristics. You must sign bank regulation. You must keep a certain amount of capital in reserve versus your debts. And that's the main approach of how they stop this, because yeah, it's like outlawing. It's basically like implementing the TSA after 9-11 already happened. Thank God we didn't do that.

This isn't going to stop anything. The thing that you're preventing has already happened. You're basically padlocking a door from which the horse is thoroughly bolted. And the horse is now in your house kicking shit over. But what's the tech? Oh, I said that earlier. Yeah, borderless Milo, that's basically it. They have a website and an email address.

In order to do reverse factoring, you do need to have some voicing technology. One Bloomberg terminal and like a Microsoft Office subscription. Yeah, you need a clippy. Now, what you need is you need some invoicing technology because it requires you to process invoices really, really, really fast. And you're basically charging a premium for doing that to the people who the invoices are owed to. And so that's what makes it a tech company. But it's a real value.

Isn't that it processes invoices fast? It's that it created an entirely new asset class out of fucking nothing. Yeah, it sort of financializes the sale of money printers. Yeah. And so the idea that this is a tech company on the barest whisper of a definition. But like that's the other thing, right? What have we learned about tech companies from having done this show for so long that they're really cool and good? There's no such thing.

Is that the real innovation is always circumventing regulation. I'd go a step further. It's not the real innovation. It's the only innovation, the only innovation left in capital that's profitable is like coming up with new ways of financialization. I kind of feel like the more that we look at this, the more it was just like, you know, like the money printer meme, like the money printer meme. It was just like, yeah, why don't we just make that into a company?

That's kind of what this is, right? It's jamming two memes together. It's the money printer meme. What if we did that in order to do the stonks meme? Yeah. What's really funny to me about it, though, is like just some European bureaucrat being like, who's called like, you know, Lisbeth Van, Schwarzspiet Dünkel, who's like, I completely trust these corporate executives not to be corrupt and to honestly declare this stuff, even though I myself have so far been fired

from eight European Union jobs for stealing like over a hundred billion euros worth of pens. Well, here's the thing, Alice, right? Uber is a tech company. It's an employment. It's an employment rights circumvention platform. Airbnb is not a tech company. It's a property and like red tenants rights circumvention platform.

And just like this, Greensill is not a tech company. It's a financial regulation circumvention platform. None of these companies are actually tech companies. Like there is such a thing as a tech company. It's just most of them you probably haven't heard of because they do some quiet, competent B2B service. And then get immediately bought out by Google. Yeah. You've probably never heard of most of the actual tech companies.

But anyway, so all that doing like weird border racism using facial recognition. So human rights regulation, human rights circumvention. So where we are, let's use this as a worked example. You're Vodafone. You agree to pay a supplier a hundred pounds in 90 days. Greensill pays your supplier 98 pounds today. How does Greensill pay your supplier? They have to, and this is where we talked about that financialization,

issue a financial instrument themselves in order to pay that supplier today. So remember, they're not a bank, but they can sign a contract with, say, a credit Suisse fund. So all the big banks now have supply chain finance funds because guess what? This has become massively popular in the last couple of years. They can sign a contract. A contractor is a promise to pay that fund. So essentially what they do is they set themselves up as the middleman.

So Greensill doesn't necessarily have an incentive to choose good investments. They just have an incentive to choose more investments. Anyway, so now Greensill issues that financial instrument themselves in order to pay the supplier today against the expectation that Vodafone is a blue chip company who will come up with that hundred pounds within 90 days to pay back you, to pay back credit Suisse. Credit Suisse is a big one here. But Vodafone is able to invest in that financial instrument.

This is not an example. This is real. Okay, so hang on. I mean, that's obviously funny, but this is a bit that I genuinely don't understand. Why would Vodafone buy their own debt? Because isn't that just the same as just paying off the debt? You've turned debt into a capital asset. You shift the thing one column over.

Yeah, but they've had to buy it. So they've had to spend money to buy it. But their money was an asset before. Yeah, I think they have probably borrowed money to buy. I imagine they might have borrowed money to buy that. I know that they've done it to flatter their balance sheet. And again, perfectly legal. It's a financial instrument.

You can just invest in your own supply chain. Damn. In the future, every transaction is just Vodafone paying Vodafone via credit Suisse. Well, kind of, yeah. The human centipede was like a much more like poignant film than we all like to. Anyway, this is just government bond shit, which has been applied to fucking like your phone company, which is insane. Because so long as Greensill agrees to keep facilitating your supply chain finance,

your supply, all of your, everything you need to get paid will be paid. So long as they choose to keep doing it. So Brighthouse was effectively able to not necessarily print money because new money didn't come into circulation. It was just able to churn a bunch of like, if not credit Suisse, then maybe one of the other big banks, money through its balance sheet to more or less stay alive for longer. And so Lex Greensill himself devised this system specifically for Vodafone.

Well, he worked for Citibank in the late 2000s in London. And after that, decided to take it global. And nowadays, you'll be hard pressed to find a firm that doesn't make liberal use of SCF. And it may not be as strange and incestuous at the Vodafone example, but it is weird. And by the way, Neil Gerrard, Vodafone's Treasury Director, joined Greensill as CFO in 2019 after basically handing Lex Greensill his first gigantic client about a decade ago. So that's fine.

Cool. Yeah. Also, like the amount of control, like factoring we've talked about, but reverse factoring, you handing over your entire accounts payable to gamble on as a financialized instrument is such a like a deep level of control of your operations that you're just giving to fucking upside down Lyle Lanley. I don't know, man.

It scares the hell out of me. Well, I actually approached Lex Greensill for comment about this, and he said, get your hand off my penis. This is democracy manifests. So this is the marketing text from a website of a subsidiary company of Greensill specializing in receivable securitization. So this is the other end. So they're not just doing this as payable securitization,

which goes to the financial institutions. They're also offering to securitize your receivables. So they want to burn the candle at both ends. So they say in the first 30 years, since the first trades were placed with the investors in the U.S., the total outstanding amount of receivable securitized worldwide has grown to about $50 billion today and has thought that the total world market could grow as large as $5 trillion. The reason that they say it's thought to be $60 billion is because nobody knows.

Literally, nobody knows how much of the economy is just this. So I was able to say this is a parasite. It comes in and it seizes control of your company, and it gets into the ant's brainstem, and it marches it to the top of the blade of grass. And it's totally opaque. It's totally far-reaching. And it's created this whole kind of shadow economy

dealing to itself, from itself. And yeah, my hyoid bone is tingling. It feels real bad. So we talk about why an earth equity market seems so deeply disconnected from the underlying economy. It's because there exists not just a supply chain financing. This is a big one, but it's not the only one, because these kinds of financial products basically exist

to sustain these values independently of any underlying economic activity. And by the way, if you think this isn't widespread systemic or pervasive in the economy, here's just an example I found while doing some random looking. Australian telco giant Telstra increased its reversed-factor financing from $42 million to $600 million in one year, representing nearly 20% of its 2019 cash flow, and yet still got an A credit rating,

because none of this shows up as debt. It all shows up as operating expenses. And it can invest in the financialized instrument, which is going to be backed by Telstra's credit rating, which remains as an A. The thing keeps... It's like having a fucking game shark for the economy. All the stock markets just been having a rumble pack.

The entire stock market's just... You hit the turbo button. The entire stock market's just sitting on a washing machine at this point. They're all aim-balting. I think we did a pretty good job of explaining why this is so fucked, right? Do we feel like we understand this before we move on to the personal, as opposed to the economic? I'll do a quick review.

Reverse factoring is what happens when you basically get your debts to a supplier sold on to an investor. You are effectively able to just magic money into existence as long as the factor allows you to keep doing it. None of their activities are regulated because even though Greensill owns a bank in Breben, it's not itself a bank, and none of the actual debt that's happening shows up on any balance sheet as debt.

So it doesn't appear in any overall measure of indebtedness of a country or an industry or a company, and you can basically just churn cash through your balance sheet in order to stay looking like you're in financial health. The other thing I want to say, right? Much like a mortgage bond, in as much as putting aside just the evil of debt as a method of social control and in the firm as a method of same, et cetera, et cetera,

there's a perfectly fine reason to have a mortgage bond. There's nothing inherently bad about the mortgage bond. It's that it was very open to misuse by people who realized they could. It's the same thing about supply chain financing. There's nothing inherently evil about needing to smooth out cash flow in order to like to keep your operations going. There are elements of it that make it extremely exploitable, and people like Lex Greensill have made it their business to,

let's just say, with quite a few brushes with the morality, transparency, and the law, basically brutally impose it on the economy and therefore the rest of us, you better believe that the risks from this activity are going to be socialized. So with that review, let's talk about the personal. Let's talk about Lex Greensill. This is from a Greensill press release from June 2017. I think it tells a good story.

Greensill Capital is delighted to announce that its chief executive, Lex Greensill, has been made a CBE, a commander of the British Empire for his services to the economy. Services to the economy is so vague. Everyone conducts services to the economy. What the fuck kind of thing is that? Lex Greensill firsthand saw the impact of late payments on small businesses when his father's sugar came farm in Bundaberg, Australia,

experienced the pressure. I hate this fucking shit of being like, oh, I'm just a small country lawyer who's made good fuck off. No, you worked at Citibank and then you invented a thing at Citibank that you used to like do further, like to just do Illuminati shit. Shut the fuck up. Wow, my family were just simple farmers.

We just owned a small plantation. I don't really see why. All this city financing. Yeah, they're like fanning themselves. I'm just a simple country money printer. Yeah, he grew up in the money fields of Western Australia. So he invented the steam powered money printer in 1874. He said he experienced the pressure of being a small company

supplying large multinationals. Never mind the fact that again, even like putting aside the fact that all business is evil no matter what size, putting aside the fact all this is all this is that does is enables Vodafone to tell its suppliers. Sorry, I only owe you 98% of what we agreed. If you don't agree, I'll pay you next year. So fuck off.

Anyway, the following years saw Lex successfully lead supply chain finance businesses from Oregon, Stanley and City before he and a team of seasoned specialists founded Greensill in 2011. What he doesn't tell you is that he founded Greensill in 2011 with and I quote, wealth derived from the agri-business that he created from his family and several wealthy friends. Oh, you were close with the plantation thing.

It was nothing but a simple country inheritance of several million dollars and I must say where these seasoned executives with whom I have said we are talking 11 hubs and spices my friend. Can you set like one of your brain subroutines to come up with a Brendan O'Neill take about this guy? You can take a minute. He was appointed a senior advisor to Prime Minister David Cameron in Barack Obama advising both Downing Street and the White

House on the successful launch of their supply chain finance initiatives and remains the senior advisor to Her Majesty's government on supply chain finance. So he invented an esoteric kind of sort of transaction that allow again like invented perfected whatever, but he basically created this business as a modern category of finance. He invented an asset class and is now traveling the world telling the most like gormless liberal leaders how they can also have

like scam money printing factories of their own. And like these, the fact that there is like a British government SCF task force, it's not a task force to regulate the idea. It's a task force to encourage this is like one opaque sort of Australian conspiracy. If we regulated it like Carillion wouldn't like Carillion basically was able to continue as a business and stiff all of it saw suppliers and many of its employees by disguising its

enormous amounts of debt using this exact thing. All we wanted to do is propagate it because we assumed that well that's fine. It's a new asset class that means more GDP because again all GDP is a measure of transactions that take place. If you invent a new asset class, that's good for everyone except those who have to pay for it when lockups crashing down. I'm so glad we're not entering an enormous recession at the same

time that there's a bunch of like prestige national firms that the government would be keen not to go under. So the Brendan O'Neill take about this. I've worked out what it is is that, you know, the chattering classes. They hate this company because actually they just don't want small businesses to be paid in a timely fashion. And then that this and what they would actually do is they just wouldn't give any business to the large companies that do it

even though there's no public record which large companies do it. That's right. I just had a horrible realization too. You know the thing is right is that this is such one of the like worst contortions of capital and like capitalist ideology that you have governments trying to encourage these like say you are a government and you have an industry that like the British steel industry right that you want for that.

Let's say for political reasons you want to keep the British steel industry going. You want to keep it as a going concern. Steel requires a lot of suppliers. It requires a lot of raw materials requires a lot of energy. You have to get all of that stuff which means you have to pay suppliers. You can either do one step which is you bail out or nationalize

that industry or you can do the same thing with 19 extra steps and also just some weird car coaster and shit in the middle where you just get this guy to do it for you. Yeah. He's able to summon money into existence but he needs a pentagram. It's like you could just do that. You have the money printer. You don't need his money printer.

Why are you asking him to do the money printing? Pentagram made of five bunning snags. That's right. That's right. But he really leans into this simple country farmer who wants to make the world a better place narrative. It's not about money. He's sorry.

I'm going to use the vote. I mean, I can do the Australian voice. I'm going to do that. I'm a simple country money printer but it's not about the money. It's about it. It's actually a quest. It's a quest to actually make a difference. The financial outcome of that is just a byproduct.

It's a great privilege to have been able to get where we are today. But the thing that I love is the fact that every day I get to help small companies who have the same dream than I had. We're actually doing good. Small companies like Vodafone and some others that have the same dream as Vodafone and Vodafone and Vodafone and Vodafone and Vodafone and Vodafone and Vodafone. Small companies like Vodafone and some others that I will not identify.

Yeah. Also, like he's bought 50 planes for his 500 person company for some reason. Huh. Okay. That sounds good. We all seem to be circling around this very small uncharted island. Actually, Alice, I looked up the all the tail numbers the other day. I had opened all 16 of my third eyes and I looked up like flight

tracking for all of these. And it is weird. Firstly, nobody knows how many there are. Like he has a bunch of like Deso, Falkens and Gulf Streams and stuff, all in the same livery, very cool kind of blue and silver. And then they're just all over the place. Like they're in Europe, then there are some in Australia, and then they just, they go to Miami, they go to Amsterdam.

It's just totally, totally normal, normal stuff. Like scattered all around the UK too at dozens of different airports like that are 100 miles from one another. One of the most normal things about Lex Greensill is that he buys so many planes that in the like industry press a couple of years ago, there was a kind of like harmless piece about this that was like, huh, wonder if he's thinking about starting an airline. No, he wasn't.

He just, he just likes buying just jets. Crocodile Dundee 3. Collateralized debt per lava at Lewis and James. Is it one of those situations where like he's bought all these planes, doesn't know what to do with them, but in order to like keep your plane functioning, it has to fly. So he's just like making various like flights to nowhere just to keep these planes running. I mean, he has made money issuing a financial instrument against a process

that's not dissimilar to that, which we'll get to. So he says, when asked about how does he feel about being described as one of the country's newest and youngest billionaires? He says, it's like talking about someone in the third person, measuring the value of someone and their contribution to the world by the value of the shares they own seems like an asinine concept to me. No, you should value them by all the accounts payable. They haven't paid.

You should value them by, I don't know, maybe all of the government subsidies they are able to just eat. We clearly know that there is only one objective way to value a person and that's their seating arrangement in front of this enormous stone owl every year. Yeah, absolutely. It's how many layers into the party do you get taken? Yeah, yeah, yeah. The size of the like beak on your carnival mask.

Yeah. So here is from an article from this month, May. Oh, is that the month that it is? By the time of this article has been written, three companies have gone have exploded. Three large companies have gone belly up and in no small part, Greaseville was implicated in the in the process of them basically hiding being a catastrophe.

He brags about being the largest non-bank bond issuer in Europe as though that's something good. He says, life may have slowed down in rural Cheshire, but the opposite is true in supply chain finance. In our line of business, when supply chains come under stress, what does everybody want? Everybody just wants to get paid today, particularly smaller businesses.

Demand has been up 73% in the first quarter and more than 120% in April alone. And at no point does he interrogate why that is. No, it's fine. It's just simply beneficial to me to have like an enormous crisis and strain and supply lines. Yeah, it can't be that by providing this service, I create the conditions under which small businesses need the service.

Additional A, correct. That's absolutely correct, Milo. But B, imagine if you will, we're not facing a liquidity crisis, but a solvency crisis. Something like this could probably could distract from that fact and worsen it. Yeah, I love to be falling off the thing and just hear ticking from all of my pockets.

From all my pocket bombs? Why did I even bring these things? But I was going to jump off this cliff. Meanwhile, the credit markets at Greensill Taps on an almost daily basis have become more of a minefield. It's unquestionably the case that the fixed income markets are more disrupted than they were. It's going to work much harder to get our job done.

It's not going to get better. It's going to get worse. Poor baby. Did somebody build their entire shadow government on a weird financialized instrument on a stock market that is just now divorced from reality? Poor baby. We've had to work much harder to get our job done.

It also implies two things, which is A, what they were doing could really be considered work in the first place, and that there is a job that they are doing. All they're doing is just sitting on these companies' supply chains and then just issuing them a bunch of credit-sweice money. We're going to get... Oh, I keep talking about credit-sweice. We'll get to, but first I want to go a little bit back in time.

This is to 2016. No one can write the letters IOU like me, pal. No one can replace me. That's it. That's the innovation. That's the technology. We've taken one kind of IOU, the mortgage bond, mutated it to be something that the private sector gets,

so you don't even get a house for a little while, and then spread it all around the world. The only countries that aren't heavily exposed to SCF are Switzerland and Japan. And probably North Korea, to be fair. I mean, respect to those guys. Visionaries. This is a story of Sanjeev Gupta and his work with Lex Greensill

over Britain's ailing steel industry from Rio Tinto in 2016. So this was a 330 million pound deal, and a lot of this information comes from an investigation done by the Sunday Times. So basically, Gupta has this series of interlocking companies, the head of which is GFG Global. And what he wants to do is buy... He's this vision for making steel using renewable energy.

He calls it green steel. It's a bullshit idea. Anyway, one of my favorite Henry the Ace tracks that. Greensill and Gupta basically devised a plan together to persuade the Scottish government to guarantee a smelter's power purchases from a nearby hydro plant for the next 25 years. Oh, the S&P is so left-wing.

We need to guarantee the smelter's power purchases. Wait, why is he Dutch? I'm doing a gold member thing. The only way to not be racist against Sanjeev Gupta with an accent is just make him an entirely different ethnicity and just make him a Dutch guy. No, no, it's a gold member thing. Okay, so basically what happens here, right,

is we have this huge promise of, again, as Alice was saying, not a nationalization of an ailing industry, but rather a huge subsidy. What is this? It's worth so simple, right, that you could just buy the thing with your money and then be like, I own this now. Yeah, you can't do that. You have to do some fucking just fanning around

with like seven different guys in one. Just like, hey, can you buy this thing and instead you're just like, hold up, I have to like draw this like pentagram and the floor and like bone meal and summon up this fucking cork hat-wearing motherfucker to be like, yeah, I'll do you a money prince and I ain't no problem.

It's one of the things that annoys me the most when they're like, oh, the government can't just buy this business. That's communism. No, communism is when the government takes it. Buying it is called capitalism. So what Greensill did is he took this promise from the Scottish government and this is from the ST and he converted that into then 360 million pounds

worth of supply chain finance bonds. That's weird. It's almost like bond issuance, which would ordinarily be a government thing, especially bond issuance on a government bailout, has just been like parasitized by this fucking like mind control fungus. This basically reminds me of when Homer is buying the doll

from the creepy old guy and like, he doesn't really understand why it's bad, but he's being a nerve. Yeah. The Frogot contains potassium benzoate and I'm sort of thinking like, well, it sounds bad. I can't tell you exactly why it is bad, but it doesn't sound good.

Usain, before we go further, I want to sub in you back. Yo, I mean, I've kind of just, I'm waiting to hear like the rest of the story. I feel like we've just kind of went into some bizarre chaos where Sanjeev Goop said like was Dutch. Okay. So here's the thing. I'm sorry to have destroyed your brain with that one.

All right. So let's go back. So the Scottish government presumably would have to issue a bunch of bonds in order to borrow the money to guarantee the purchases from this hydro plant. And so what happens is they guarantee the purchase of, from the purchases from the hydro plant, green sale converts that guarantee back into bonds,

but this time that are privately held, sells them on the financial markets to finance Sanjeev Goop to purchase of that smelter. Just like just buy the thing. Don't bail out the thing and then use speculation on the bailout to let a guy borrow the money to buy the thing. It's a tech company. See, do you see all the technology there?

I am banging my head against the desk right now. Oh, don't poke your third eye. So basically here's the other crazy thing, which is that for this to work, it requires a gigantic pool of money, not necessarily act as a Patsy, but to maybe just take it on without asking any questions. So in this case, the debt was bought by his friend Tim Haywood,

who was a high-flying fund manager. Wait, wait, wait, hold up. Before you finish that sentence, who do we know that has just has a bunch of money and absolutely no interest in like seeing where it gets spent or diverted? Is it going to be soft bank? Not no.

In this case, no. Tim Haywood is at an asset manager called GAM in Zurich. They love an acronym. By the way, just so you know, in the 2017, Moody's gave these an A credit rating, these bonds, and then and they were just bought by his friend, more or less. Cool. Again, what they did was they,

the fund and Greensill created a Luxembourg domiciled company that existed solely to buy, hold, and trade bonds against Scottish government debt that were basically privatized by Alex Greensill. I'm so annoyed. I'm so annoyed that we're all going to get shot seven times in the back of the head for an episode that five people will understand. Yeah.

So I don't see the problem here because I mean, they sell the company in Luxembourg, which means it's good, because there are lots of companies in Luxembourg, so it must be a good place to set up a company. That's right. Business-friendly economy. So that's the first part of the plan, and that's not the part that led to a massive existential crisis at GAM.

In 2016, Gupta realized needed to fund more activities, and he saw that there was a big, a big government subsidy available for generating renewable power. So he basically said, okay, I'm going to use used cooking oil. What? Okay. Hey, fellas, I'm just going to buy used diesel generators

from whoever will sell them to me, put them in shipping containers, and then I'm going to just assume that these generators will be able to run 80% of the time until 2037 and generate more than a billion pounds with inflation factored in. I'm going to do some Lord of War shit, and I'm just going to fuck around and like just dump. Oh, no, fuck, your Simpsons thing is it's the grease

that the groundskeeper Willie has to siphon out of the fucking queue. I wrote a story a few weeks ago about like the value of used cooking oil, and it was kind of like, it was really weird because it was every kind of professional person, like biodiesel and renewable energy was basically kind of saying like there isn't really enough research or like data to kind of suggest that this is going to be like a good like long-term solution. And for the most part, the people who are making used cooking oil

are people who are basically like basically making their own fuel. So like libertarians who live in like Alabama, like Alabama and Sanjeev Goopters and even weird or something. It's just a simple country, all the trials invested. Also, the variants kind of like Facebook entrepreneurs who live in like Uganda and Kenya and Pakistan and stuff like that, who are like, so there's like this very There's a lot of emails.

That's all I'll say about them. There's a flourishing market for like used cooking oil on bizarre corners of Facebook, but it's nowhere near the amount that like he seems to like Sanjeev Goopters seems to have like valued it like, oh, that's so weird. That's crazy. Basically, what's happened is he's noticed that there is a certain kind of subsidy again from the UK government for generating renewable power. And the EU as well.

Like the EU like had quite a big subsidy for that. And so what you can do is again, you can say, I'm going to just basically throw together some shit, make a claim about how much I'll be able to generate, then I can just sell assets against those subsidies, assuming they'll come through. I love this that these people are just doing like wallet inspector shit on the government. And the way it works is just so bizarre.

It reminds me of those TikTok cooking videos where they're like the laddie ones where guys are like, OK, we're going to make chicken pie. All right, get that bug in there. And then like five seconds later, there's a chicken pie, but you have no idea how to make a chicken pie. OK, today we're going to be defrauding the government. So what you're going to need is five billion litres of used cooking oil, bug it in there, and now we've got $500 billion of mortgage securities.

We're going to sell to my mate, Tim, and now own a house on the Riviera. What? I don't forget. This is a tech company. Yeah. What happened was what actually happened was, right? They never got the fuel to power the generators profitably. They were not able to run the generators at all close to 80 percent because used cooking oil is an incredibly unpredictable and inefficient fuel.

That means you can... The fish suppers keep getting stuck in the generators. So basically, he just created this financial instrument against the promise of a government subsidy, but the government never paid the subsidies because the thing never worked. So it's not even Wallace inspecting the government. It's an attempted Wallace inspection that you then use to be like,

hey, I inspected that guy's wallet. Check it out. He successfully sold the securities against that back to that Swiss asset manager. And so in this case, it's just an asset manager. So who gives a shit? But if these kinds of bad debts are then sold to a bank, that risk is now socialized. So even when you don't draw down on the subsidies, the fact that you are...

Whether you draw down on the subsidies, then you're taking from the public purse by privatizing the subsidies, essentially. If you never draw down on the subsidies and you sell to a bank, then you draw on the public purse by creating more risk for that bank that has to be socially backstopped. Yeah. I love how dumb bankers are because they only ever think in terms of numbers, but they never actually think in terms of how anything practically works.

So a guy comes up to them and he's like, oh, I have this machine and what the machine does is it makes money. Now, the expected value of that money is quite a lot, but I'll sell it to you for 80% of that. But then the only thing is that the machine runs on this fuel called Chernobyl Explodium. Anyway, we're pretty sure it's fine. So basically, that shut down GAM as a purchase for Greensill bonds and was a huge scandal in the financial world.

Yeah, I'm sure there were so many consequences. Yeah, but that didn't stop Greensill for a number of reasons. For example, remember how they had cozy relationships with David Cameron? He's also a board member of Greensill. That's weird. Of course he is. Yes. Well, you know, I was thinking about this the other day, right?

Because I was reading a story in the mail. Wait, no, not the mail. I wouldn't have been reading it. I can't remember. One of the newspapers. And it was about this British Indian trader guy, who's just one of those autistic trading savants who basically made a load of money five years ago

by sending like rumour emails out and doing like kind of like short-term high-frequency arbitrages and stuff. And the US government is trying to like extradite him to the US to like put him in jail till like the sun explodes. And I was like, but no one who caused the global financial crisis went to jail. Wait, until the sun explodes, it's constantly explode. Yeah, my world. Okay, that's the thing.

Nobody is going to implode. Yeah, no one who caused the financial crisis went to jail. But don't forget, this is one of these things where it's like countries are begging Lex Greensill to come in and set vehicles up for them so they can do supply chain finance. Yeah, trading utes. He's never, if anything, as the crisis deepens, he's going to be asked to do more things.

Okay, so skip ahead to the red string on corkboard thing. What are some of the things that we have like that? What are some of the things that he has funded that like is okay? All right. Give us the list. So all of my chakras are aligned in like every teen different dimensions at once. Everybody take a deep breath. So Greensill has four major supply chain funds that back its activity.

And for at least one of whom it is the sole broker. That means Greensill is the only source of notes for that fund. So it's the only seller to that fund. So Greensill acts as the exclusive broker for the supply chain financing of Credit Suisse's $8 billion supply chain financing fund. 15% of which goes into the following companies. And remember earlier, I said that Greensill was a soft bank investment. It's valued by soft bank at $8 billion.

15% of Credit Suisse's supply chain financing fund goes into Ohio. Oh, we didn't episode on them. And then two more. We haven't done an episode on view and gauzy. One of which is a window manufacturer. The others a car sales platform. Okay. Sound like SoundCloud wrappers 15% of that fund goes into four companies

in which soft bank has advanced invested. All of which were added to that fund at that level. After soft bank made its investment in Greensill. The really the most fucked thing about this when we were doing these notes Riley and I was we went through and we looked at the companies that Greensill had been propping up and just quite independently. We were like, huh, didn't we do an episode on that one? And then like five minutes later, huh, didn't we do an episode on that one?

And it turned out that the like shadow antagonist of our podcast this whole time was this one fucking Australian because he has like he's the power behind the throne for every single dumb startup you have ever heard us made fun of. Every fucking fucking riff that we've ever done about like a Benny Hill like doorbells chasing you and like drones dropping pizzas on your face. That's all been this one guy. I love to live in the Hideo Kojima investment economy where like there was

there was originally there was there was a Dundee of whom several clones were made punished Dundee crocodile Dundee. This guy is absolutely like a solid a snake figure. He terrifies the fuck out of me. I want to talk about I want to talk about some some financial relationships and how they work in the Credit Suisse supply chain financing fund. What specifically these companies being reverse factored through Greensill does for them and does for SoftBank in theory because let's remember if it wanted to

and we have zero evidence that it did right there is no evidence that SoftBank did this but SoftBank could use Greensill to churn Credit Suisse's money through for example OYO's books and make it look like a normal operating cost without affecting OYO's ratios and therefore without affecting OYO's overall valuation and therefore while improving the performance of the SoftBank vision fund on paper only at the expense of every hotel owner in the world. Remember remember how at the time we did each one of these dumb startups were like why is it valued this much? Oh those wacky SoftBank shenanigans. How could it possibly make money?

Yeah. No. Allegedly theoretically hypothetically there could be possibly a very good reason why you would want to like value the machine that kills hotels at 18 trillion dollars. Because you can just take Credit Suisse money and make it look like money's going through that business. Yeah. Cool. And let's not forget right we have no evidence that SoftBank did that but we know that like five major Greensill clients two of four of which in the last year did do that. Yeah but that's just a coincidence.

You can't really undo that too. Yes, Carillion did that. Oh they say, fall me once, shame on you, fall me today or nine times. It's weird that this keeps happening. Just so I can get this clear again. I wonder if like the whole tech company thing is kind of almost like a way of whitewashing this. Like the one where it's like well the transaction seems a little bit less sus if it's going through or it's being administered by a technology company that doesn't have the same type of baggage as like

what is effective like an investment or a finance fund. Yeah well it's not just that it doesn't have the baggage, it's that the regulation doesn't apply to it. Right and I wonder if that also reflects into like the whole maybe like there's not like a kind of public attitude but like tech companies need to be, need to have that type of regulation and I definitely see like in other areas of discourse the idea of like well if we want to get the economy back up and running post-coronavirus then tech companies are really going to be the ones who like lead in terms of innovation so we should be putting less regulation on them and that kind of like fucks the whole premise of like

what we're talking about and even like the nature of this program is one which basically says that like tech companies do nothing except for like obscure capital and capital flows and capital movements. So really like what we're effectively doing is basically like we have this industry of people who are not only much stupider than banks in terms of trying to achieve the same objective but they also kind of on the virtue of their stupidity are kind of going to get like a much freer pass to like do all this shit. I think it's a mistake to call Lex Greensill stupid. No, no, no. He's a very smart man. It's not Lex Greensill that's stupid. It's Liz Warren who's stupid.

Yeah, exactly. Liz Warren or like other prudential regulators are stupid because they will like talk very, very loudly about how they're going to like leave blood and teeth on the carpet when dealing with banks and then be like you are a bank only if you have the word bank in big gold letters on the outside of your building. If you do not have that, I pretend I do not see it. It's like if your house is being robbed by someone who's not wearing like a striped shirt and carrying a big dollar sign. Exactly. You're like, I couldn't be being robbed. That's not dressed like a robber.

But here's I want to also do a little bit of Marx here right now, which is that when we talk about the tendency of the rate of profit to fall, we mean something very specific about the replacement of labor by capital. So the composition of capital is refers to a combination of invested capital like a machine and human and variable capital, which is your labor force over time to get more efficient and stay ahead of its let's say stay ahead of its competitors. Companies replace more and more of the human capital with machines, which means that they make less and less money because the money that you make, the profit that you make, is the excess value that you're able to extract from your labor force from human capital. So you make profit by exploiting labor.

But the amount of labor you're using is going less and less and less and less. You replace a laborer with a steam loom or you replace a laborer with the McDonald's ordering thing. So the rate of profit falls and the reason that these tech companies, the ones that get really successful, the multi-billion dollar unicorns, the reason that they are successful is that they are able to, not that they are able to create better physical capital, they are able to create better machines, it's that they are able to circumvent regulations allowing you to more intensively exploit frequently labor, or in this case, circumvent regulations that allow you to invent money from thin air. So the idea of seeing tech companies as primarily involved in the business of capital,

of physical fixed capital, is incorrect. They should be seen as facilitating the exploitation of variable capital, or in this case, facilitating the ability to just dream money out of thin air. Alternatively, if you don't like that idea, think of it as the monorail episode of The Simpsons. Also, you could do that. But here's the thing, right? If we go back all the way to the creation of Greedsill and more and more than that, to it's the manufacturing of consent for supply chain finance as a practice,

where they even bothered to manufacture it, they mostly just hit it. It was always talked like the supply chain finance initiative in the US and UK and stuff. It's always talked about as a solution to a liquidity problem. I, as a business, need money now so I can pay some employees or pay suppliers or whatever, when actually it's most frequently used, or it is increasingly frequently used, as the solution to a solvency problem, which is I am not a going concern. I'm not making profit. However, I am able to continue chasing a falling rate of profit,

either as capital in general, or as a defunct firm, or not defunct firm, a zombie firm, by just inventing the money. And it does zombify your company, right? It seizes control of it with a thing which is dead, is still shambling around. It's one of these things where it doesn't necessarily seize control of it, but in all cases, debt is a, it doesn't seize control of the individual decisions, but it seizes control of the decision framework. It seizes control of the, of what you do, what you're working to,

and you begin to be, it's almost like a payday lender. The payday lender doesn't seize control of your daily operations, but it controls your life. Yeah, cool. Yeah, that sounds good. I mean, as we know, people who borrow money from payday lenders always works out well in the end. Yeah. Why does Motherfucker own so many planes, though? Yeah, I read a really interesting article by this guy called James Ball.

I really recommend it. And apparently, a payday loan's really helped people pay their bills on time. So here's the thing. What do you think Greensill is doing now to respond to the coronavirus crisis? Learning to shaman, like doing some sort of skill share class. I don't know. Are they at a big meeting where a goat has just been sacrificed and they're chanting in tongues? Yeah, it's going to be some yellow king shit.

It's going to be like... They're handling... No, I'll tell you this. They're handling NHS salary advance payment. Oh, good. Cool. Great. Because they bought a company called Earned, which we also talked about.

Oh, my God. Oh, my God. Awesome. Yes, I remember them. Oh, my God. It wasn't at the company where, like, someone would lend you money and then you were encouraged to tip them and you didn't have to tip them, but if you didn't tip them, like, bad things would happen to you. Yes.

This has been, like, this episode has been so long in the making because every time we got close to Greensill, we were brushed by the wings of something dark and then it just, like, kind of passed. And we were like, oh, this startup's quite silly, isn't it? Oh, also, the one about tipping was called something else. We talked about Earned on a different episode. Yeah, whatever. But still, yes, we talked about Earned.

I feel no obligation to be accurate towards these people. We have one million percent on some yellow king shit. We have talked about Earned in the past. And they're doing it, by the way, they're not charging anyone anything. They're doing it as a public service. But hey, Golly, don't you know it? They're going to become essential to the operation of the company as people begin to expect and then, like, to be paid on a daily basis.

And because, let's say, people who can impose costs of workers, like landlords and stuff, begin charging rent at, like, different rates. Hey, what do you know? The entire NHS has just been infected by the Cordyceps fungus. More or less. Yeah, we let it in for it to do a public service. Because Alex Greensall is always about doing a public service. He's about making the world a better place for soil business.

Meanwhile, he's just, like, taken over all of... He's just created a bunch of magical banks out of nothing. Yeah, I love to, like, privatize various bits of the state with my magic flute. And here's the thing, right? The Greensall model has exploded in popularity. He says it's a $5 trillion market. He says there's about 60 billion of receivables assets secured. No one knows how big it is, though, because it's completely unregulated.

All the people producing supply chain finance, unregulated. Or many of them are, because it's a very big non-bank area. There are banks that do it, too. And additionally, anyone taking out supply chain finance doesn't show up as debt. It just shows up as OPEX. So if you have no idea how big this market really is. But it's all based on this idea that everything is just going to keep moving forward. Because when the housing market stopped growing in the U.S.

when people realized there was a problem, the entire thing came crashing down. Because the entire thing was living on confidence from one month to the next month to the next month. And now it's the same thing in a very large amount of corporate supply chains. Because when the regulators weren't looking, the big just-in-time supply chains around the world all slowly became banks. Awesome. This guy is like corporate finance Willy Wonka. You get the tour of the chocolate factory and then you take the chocolate and he's like, oh, you don't have to pay for the chocolate now.

I'll pay for the chocolate to myself by selling a security to someone else, which I'll then invest in. Let's just say that you don't pay with money. Here's the thing. Sky News has learned that the Treasury and Bank of England are in discussions about an emergency program targeted at the users of supply chain finance. Actually, I can do that. I mean, I joke with the drop, but you probably should have chills by now. At some point, for different listeners, the penny will have dropped at different times.

But this is a genuinely horrifying new kind of extractive innovation. Rishi Sunak is understood to have been alerted to concerns about reduced liquidity in capital markets, which usually fund the receivables-backed instruments on which supply chain funders depend. All of that money. Unless it's by a shadowy Australian-shaped informant. So here's the thing. All that money that the bank has now worried that workers might get addicted to is about to be dumped. The Bank of England is about to be hooked up directly to a shadow pool of unregulated financialized supply chains.

Yeah. I mean, this is the thing where you can get as conspiratorial as you want about this because it doesn't actually matter. It would be the same whether this guy was taking orders from, I don't know, some moon base, or if he was just like one Australian shithead out for himself. The actions would be the same. The motivations would be the same either way. But on a personal level, I have to stress, I 1 million percent believe this is some moon-based shit. I think this guy, we should investigate the moon closely. Well, you have to blow it up. You have to believe that it's the moon-based shit. Yeah, I have to because it's so perverse that just one dude,

just inadvertently bumbling into this shit on his own, is too implausible for me. Now I'm imagining the supreme leader of this weird, secretive Australian moon colony, the Australia of the solar system. I'm totally into the Australian Illuminati between this guy and Murdoch. I'm having some dark thoughts, man. Who do you think pays the salaries of the Pennsylvania and Bridgend Secret Services? It's the Australian Illuminati. The Illuminatels.

Have you seen how high a fucking hop and dog can jump on the moon? It's crazy. Some of them don't come back. Oh, man. This episode has been just... My brain has been rattling back and forth in my skull for days. Well, good news. It will do that once you get shot several times. I still don't fully understand what the fuck's going on. I just keep thinking about the reverse fucking pyramid, which I guess is a very neat... We're talking now about the Australian Illuminati.

Upside down, I with a pyramid. Right. We have our conclusion. We've unlocked the secret of the Illuminati, which is that just a bunch of angry, dungry, wearing Australians. You know what else is an upside-down triangle besides the Australian Illuminati? The fucking trash future logo. That's right. That's us. The pyramid just says Bunnings on it. Okay. I'm vibrating it too high of a frequency. I have to...

Yeah. We all have to throw ourselves out of windows several times. Yeah. I'm going to be attacked by a random assailant that we'll be just never talked about again. I'm feeling very much like I want to disappear forever and just not be found. Yeah. If anyone needs a shirt, just put your name, address and postcode on a postcard and send it to the suitcase at the bottom of the Thames, which I'll be in. No. Just think that you want a shirt. You don't have to tell anyone. The Australian Illuminati will know and they will arrange the shirt getting to you. Also, this has been a Patreon episode, so thank you for subscribing.

We're going to do some weird shit to our Patreon income soon. We'll see if we can financialize it into a billion dollars somehow, just with some hot-headed tricks and a cork hat. Yeah. We're a bank now. Yeah. We're a bank. Trash Future Bank. We were an oil storage warehouse last week, so we should just be a bank this week. From phase bank to phasing to a bank. We live in a society. We're going to leverage the shirts we still have in stock to buy a Saudi oil company or something.

Right. Probably afford it. All right. I think that's about it for now. I have to go lie down. Yeah. Again, I'm good. I'm feeling good. I'm not upset if I disappear. All of us are fine mentally and physically. None of us are getting ill. None of us are having any thoughts of self-harm. I can't have a chill-acting podcast with my friends and I got exactly that. Yeah.

So, once again, thank you for listening. Thank you for listening to our Patreon. You know where to get a shirt. Should you want one, it's going to be details in the description. Remember, St. Brendan's Day Debate is happening on Thursday... 18th. Thursday the 8th. There is no Thursday the 18th. I invented that. Yeah. Well, the St. Brendan's Day Debate is going to be... That was a secret signal to your Australian handlers.

Yeah. The St. Brendan's Day Debate is going to be happening on Thursday the 21st. Oh. It is Thursday the 21st. The closest Thursday to St. Brendan's Day on the calendar that we could get. So, do check out twitch.tv slash Trash Future podcast for that. Otherwise, it's 9 to 11 on Wednesday, Thursday and Sunday. And do I miss anything other than the song? The theme song is Here We Go by Jin Sang. If you play it backwards, it contains a series of coded instructions that will lead you to a dead drop.

Yeah. That's right. The bit where he says, start taking notes, if you play that backwards, it says, crikey. Look at the size of that ripper. Yeah. This is why the Steve Owen had to be silenced to see Newsy March. All right. Maybe Luminati Stingray. I'll see you all later.

Bye. Bye. Bye. Bye.