
How Two Guys Lost God and Found $40M - finid
http://www.bloomberg.com/news/features/2015-10-06/how-two-guys-lost-god-and-found-40-million
======
ChuckMcM
I found three things very sad about that article; these guys were raised to a
strict religious code but had no idea about right and wrong, they had no
problem rationalizing their behavior to themselves and others, and they ended
up with a fat exit because the guardians of sleeze on Wall Street bought them
out.

Really? Sort of encapsulated the attitudes of some of the worst sorts of
people who exploit "perfectly legal" loopholes to prey on people.

~~~
api
If the only reason something is bad is because a big guy will send you to
hades, then once you stop believing in that then nothing is evil and
everything is permitted. It's not really a moral code at all, since there is
no _understanding_ of morality. It's just "don't do X or God will whack you."

Two of the least moral people I've ever meet were raised fundamentalist. A
part of their atheist conversion was to realize there is no morality and that
humans are "just animals" (in the words of one). It's a perfectly rational
conclusion if force wielded by God is the only basis for moral action.

~~~
xacaxulu
One could argue that some the worst things happen precisely when you think you
have god on your side. In the paraphrased words of Christopher Hitchens, "The
suicide bombing communities and the child genital mutilation communities are
almost entirely faith-based."

~~~
cpr
Yes, but it's taboo (this will get downvoted hard) to point out that neither
the Christian nor Jewish communities are involved in such activities.

(Not that Christians and Jews as a group are sinless, of course.)

~~~
homonculus1
Christians and Jews are pretty heavily involved in child genital mutilation.

~~~
cpr
Yes, but circumcision doesn't seem to have any long-term effects on genital
function. Yes, there are arguments back and forth in the medical community,
but it's not an obvious mutilation.

~~~
retbull
You are wrong sorry. Plenty of Christian mutilation of female genitalia is
permanently disfiguring and removes their ability to have pleasure during sex.
Any mutilation is horrible just because it isn't so bad does not excuse it at
all.

~~~
cpr
I'm sorry, but I've never heard in all my decades of life about female
mutilation among Christians. Can you point to some credible evidence?

~~~
retbull
[http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3507121/](http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3507121/)
By all means

>Practice of FGM has no relationship with religion. Muslims and Christians
practice it, but it is more widely spread in Christian predominated parts of
Nigeria.[2]

------
RodericDay
This wasn't too bad, actually. Starting off with them looking fairly "boss-
like", ending up with them looking mediocre with lame post-party fare, and
ending with both familial and distant anecdotes of the people they made suffer
with shark loans, for plastic pearls. I would hope the average reader sees it
as a cautionary tale about how not to become pathetic like this.

Then again, my time browsing WallStreetOasis.com showed me that people
unironically admired Gordon Gekko, so I'm sure some money hungry dweeb out
there just wishes he was in their shoes right now.

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Jedd
The God reference is perhaps a canard here. (If you think ${religion} provides
a useful moral framework, you haven't read enough about ${religion}.)

IIRC each of the three major monotheistic religions is fairly clear about the
wrongs of lending money and charging interest -- _except_ Judaism, which says
it's okay so long as the borrower is not Jewish.

Perversely, from a regulatory perspective they'd have been in trouble if
they'd vetted their customers based on their faith.

~~~
jtome
I don't think this is entirely correct, I think there might be some
disagreement in Islam as to whether interest is actually forbidden

~~~
mjbraun
Having worked on getting a Sharia-compliant investment fund set up a few years
back, what I recall is that interest ("riba") is specifically forbidden.
However, there are structures that can provide the same cash flows as interest
but aren't technically interest: example, instead of paying interest on a
30-year mortgage, you just buy the property from the lender in installments
over 30 years, etc.

~~~
azth
Unfortunately, some of these so called Shariah-compliant transactions are not
really. There is heavy debate around them, and as they say, the devil is in
the detail.

For instance, my biggest issue with the scheme you mentioned is that, why
would a third party come and buy the property and resell it back to you if
they did not have an incentive (i.e. they have a buyer already lined up)? And
can the contract be conditional that you have to agree that they sell it to
you after they buy it? How is the profit rate set? Etc.

There are other schemes which seem permissible (e.g. a group of people agree
to buy a house, then they find a renter and split up the rent between them.
This way, the risk is spread across everyone, not just the one who owes the
loan. The renter can then decide to buy shares of the house along the way). Of
course, there need to be scholars who review this since there are small things
that can render the agreement non-Shariah compliant.

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yownie
What a ridiculous story and moral. Grew up poor but religious threw it all out
to become rich and predatory. Great job guys.

~~~
thehoff
All empathy right out the door. No second thought for the lives they were
ruining for their own self.

~~~
theworstshill
People need to understand basic math, and around 30% of the population
doesn't, at all. I went to public school and I know what kind of people
neglected real education, and chose to fuck around instead. Its not the fault
of these two guys, banks, or anybody else.

~~~
TheBranca18
I think you need to understand what empathy is. Nothing in your post actually
addresses the post you replied to. Seems like what you're implying, is that
it's okay to take advantage of people. And you're basing this implication on
some anecdotal experience you had growing up. I just fail to see what that has
to do with anything. Do you feel like taking advantage of desperate people is
okay? Because that's what I'm getting out of your post.

~~~
theworstshill
Well hold on a second. How did the two playboys take advantage of the small
businesses? The businesses needed money, he lent it to them. Did he physically
force them to sign on the dotted line? Did they even bother reading the terms
and understanding what it meant? If the business is croaking, taking a high
interest loan isn't gonna help. Liquidate now, so at least you got some cash
to pull through while you look for a normal job.

I mean, what do you have to say? Surely you're more empathetic than I am, so
I'm very interested in how people like you think.

~~~
thehoff
From the article:

 _At Second Source, the best customers were the most desperate. Often they
were immigrants with poor English. Brokers bragged about their biggest rip-
offs. For motivation, Hurwitz would tape $100 bills to the wall. Salesmen who
weren’t cutting it would have their chairs taken away. “Why are you sitting on
my chair,” Hurwitz would yell, “if you’re not making me any money?”_

I'm sure those businesses were not physically forced to sign but I'd wager
those phone calls were not entirely forthcoming on details as well.

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zensavona
Good for them, I guess. I don't think there should be a legal limit on
interest rates, but I also don't think I'd like to be in their business. At
the end of the day, I'm of course envious of their money and lifestyle. I'd
just like to get there a different way.

~~~
a8da6b0c91d
The lenders of yore would drag you into a legal status of debt peonage, a form
of slavery, if you couldn't make payments. The old loan sharks would break
thumbs and legs.

As long as it's very easy to declare bankruptcy and walk away from debt I
don't get too worked up about it. Look at the irish pub owner discussed in the
story. The business was going to go bankrupt anyway, he took a gamble with a
loan that might have floated him through, but it turned out not to. The loan
wasn't really the problem.

The student loan originators are way more immoral than these guys, because
student loans can not be discharged in bankruptcy.

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mbarrett
there is some truth to this quote.

“But a business owner can buy this beer for a dollar, mark it up eight times,
and sell it to idiots like us, and no one cares.”

~~~
mschuster91
The mark-up in bars comes from the cost of rents, human resources, some
advertising and a mark-up for smashed/lost/stolen glassware.

Source: worked in a bar long enough

Edit: Also, licensing and inspection fees tend to be ridiculous. And as soon
as you serve food in your bar and not just alcohol, you're thrown into yet
another pool of regulations, more licenses and more inspections.

~~~
TeMPOraL
> _stolen glassware_

Oh yes. This happens far too often. It seems to be a common hobby among many
college students to snatch anything and everything they find interesting. That
very big beer mug? Gone. The decorations you hung for Valentine's day? If
they're made of anything stronger than paper, they'll disappear. Hell, I've
seen students stealing _metal infomation boards from trams_ as souvenirs.

~~~
mschuster91
And bartenders are a walking target for criminals. I got robbed three times, a
colleague got his cellphone stolen behind the bar while clearing a fight - and
next day, he was working again, cops arrested someone and another guy stole
his backup cellphone right under the cops' nose and vanished.

The amount of times people tried and sometimes succeeded paying me with fake
money or blowjobs (okay, I accepted the blowjobs though) cannot be counted
even if I had eight hands and twenty fingers.

And soccer club banners are a prime target for fans of rival clubs. Hell, I
could write a book about my endeavours.

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itbeho
There have always been loan sharks and a subset of the economy that they feed
off of.

What is troubling is that the business segment described in the article is so
profitable that it has attracted institutional investors at a much bigger
scale, which makes me think the number of small businesses in trouble these
days must also be higher.

~~~
MC7447a
If the loans are so profitable, why wouldn't more and more competition drive
the interest rates lower and lower to "normal" levels?

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smithkl42
I couldn't help but be reminded of a passage I was reading just this morning:
[https://www.biblegateway.com/passage/?search=Psalm%2010&vers...](https://www.biblegateway.com/passage/?search=Psalm%2010&version=NRSVCE)

In part:

In arrogance the wicked persecute the poor— let them be caught in the schemes
they have devised. 3 For the wicked boast of the desires of their heart, those
greedy for gain curse and renounce the Lord. 4 In the pride of their
countenance the wicked say, “God will not seek it out”; all their thoughts
are, “There is no God.” 5 Their ways prosper at all times; your judgments are
on high, out of their sight; as for their foes, they scoff at them. 6 They
think in their heart, “We shall not be moved; throughout all generations we
shall not meet adversity.”

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masterponomo
They should have held out for a Michael Lewis interview. They would have
sounded a lot more pithy and heroic.

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forgetsusername
You can see where the story is going from that ridiculous opening
photograph...

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GlitterBall77
What a scummy business. A reminder of the fact that it's not just that you
make bank, but how you earn your living. For the shame.

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cm2012
I am surprised they allowed those pictures to be taken.

~~~
thehoff
Judging them on how they are quoted and this article makes them appear doesn't
surprise me at all. I'm sure they want others to see how _they 've made it_.

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cjrp
So they created a less successful Wonga?

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6stringmerc
Following the description of the business model, I was mildly amused to see
the name of the buyer: Goldman Sachs.

"Doing God's work" indeed, Mr. Blankfein.

~~~
cm2012
Goldman Sachs declined to buy them, some other company did.

~~~
puranjay
As per the article, Goldman Sachs just looked at their books to understand the
business model, then started offering their own version of the service.

Doing what GS always does: take someone else's crap, wrap it in gold foil and
serve it on a silver platter in the guise of 'legitimacy'

