CountVanBadger
Inventor of the you-know-what
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The Last to Comment Wins
- Thread starter mrsimple
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Tempokai
The Overworked One
- Joined
- Nov 16, 2021
- Messages
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- 153
I'm winning currently by forcing The Butler to do this:
Ah yes, the Internal Revenue Service, that cathedral of fluorescent suffering where hope goes to be stapled, audited, and filed in triplicate by men whose souls have been tenderized into ledger paper. In one of its less glamorous organs, several floors beneath the republic’s self-esteem and one floor above the pipes that coughed like lifelong smokers, there worked an accountant named Leonard Voss, a man so aggressively beige that even his reflection looked like it had forgotten why it showed up.
Leonard was not the sort of man who dreamed. He reconciled. He tied out. He adjusted. His heartbeat had the rhythm of a twelve-key adding machine, and his marriage, after ten years of staring at opposite walls in polite tax-deductible silence, had dissolved into separate bank accounts and one very civil argument about a salad spinner. In the office, he was known for three things: his immaculate ties, his hatred of imprecision, and his supernatural ability to smell an unreported liability the way wolves smell blood, only with less romance and more coffee breath.
By day, Leonard worked for the IRS, pinning wealthy liars to the board with the delicate efficiency of an entomologist cataloging expensive insects. By night, because mere employment had apparently failed to satisfy his appetite for punishment, he took on discreet research gigs for private attorneys and forensic consultants who needed someone patient enough to follow money through ten countries, twelve shell companies, and one charitable foundation devoted, as near as anyone could tell, to laundering conscience.
That was how the Halcyon matter landed on his desk.
Basil Halcyon was one of those men the business pages referred to as a visionary, which in practice meant he had inherited a logistics empire, said the word “disruption” until journalists got dizzy, and bought enough senators’ smiles to wallpaper a mausoleum. His tax position, at first glance, was grotesque but conventional, like a gilded gargoyle. Offshore vehicles, family trusts, debt-financed acquisitions, charitable losses that seemed to have been composed by a team of drunk illusionists. But buried in the stack, almost shyly, sat a debt entry so oddly placed it twitched.
It was enormous. Not obscene by billionaire standards, where numbers ceased to mean anything and became weather systems, but odd in shape. It appeared on three entities’ books, in slightly different amounts, with slightly different dates, as though reality itself had gotten tired and begun freehanding. One ledger showed Halcyon Capital owing a note to Margrave Holdings. Margrave’s books showed the same note as collateral for a credit line with Eider Bank. Eider Bank’s risk disclosures treated it as exposure transferred to a securitization vehicle called Lantern Reef Funding. Lantern Reef, in turn, showed an asset linked to a debt instrument originated by Ashgrove Recovery Partners, which, like a rat wearing a top hat, turned out to be wholly owned by a trust whose beneficiaries were confidential and whose mailing address was a law office in Delaware that appeared to have been built from filing cabinets and plausible deniability.
Most people would have written “complex financing structure” and gone home to microwave fish in a studio apartment. Leonard, whose hobbies included reading footnotes the way medieval monks read visions, felt a stir of professional nausea. He took the side gig. He told himself it was for the fee. This was a lie. He took it because the debt was ugly in a way that suggested it had a secret.
The first week was ordinary misery. He traced the note through trusts, subsidiaries, bridge loans, intercompany receivables, and acquisition vehicles named after birds no one had ever actually seen. He learned that Margrave Holdings had borrowed to buy a receivable from a distressed-debt fund that had borrowed against a revolving facility to purchase defaulted paper from a bank syndicate that had offloaded exposure from a leveraged recapitalization whose proceeds had funded, among other things, a dividend to Halcyon himself. This was not yet alarming. This was finance, the modern art of making ownership too embarrassed to introduce itself.
The second week grew mold in the walls.
Lantern Reef Funding had pledged the note into a structured product that was sold to a pension-adjacent insurance wrapper in Luxembourg, funded by repo borrowing from an investment bank whose own balance sheet showed the repo hedged by credit protection from a reinsurer in Bermuda, whose reserves were invested in private credit funds, one of which held a sliver of Margrave’s mezzanine tranche. Leonard sat at his kitchen table at two in the morning, tie loose, eyes red, staring at the arrow he had just drawn from Fund A to Vehicle B to Bank C and back into Fund A by way of a derivative so spitefully written it seemed to have been drafted by a divorce attorney during an eclipse.
He redrew it. He checked the ISIN numbers. He called a contact in structured finance who laughed for a full twelve seconds, then said, “Oh, Jesus Christ, one of those.”
“One of what,” Leonard asked.
“One of those self-referential debt towers,” the contact said, with the casual cheer of a man explaining mildew. “They crop up when everyone borrows against everyone else’s promise to pay everyone else. Usually they collapse before anyone notices. Sometimes they don’t, because accounting is a religion and disclosure is interpretive dance.”
Leonard did not laugh. Men like Leonard did not laugh at interpretive dance metaphors. They stored them in bitterness for future use.
He kept digging.
He found a note issued by a Halcyon affiliate to retire an older obligation owed to a family office, only the family office had financed the original advance through a securities-backed line collateralized by units in a fund that owned the affiliate’s preferred shares. He found a debt swap in which a creditor accepted paper in a new entity that had borrowed to purchase bad paper in the old entity, both guaranteed by a holding company whose cash flows came from management fees charged to operating companies funded by debt service reserves replenished by—this was where Leonard first removed his glasses and pressed his thumb and forefinger into the corners of his eyes hard enough to see fireworks—proceeds from an issuance backed by projected collections on the very obligations under review.
He began to sleep in fragments, like a bombed city.
His apartment filled with legal pads. Arrows multiplied over his walls in looping black constellations. He ate crackers over spreadsheets. He stopped returning calls. He forgot, for three consecutive days, that there existed such things as trees. At the IRS office, he still performed his official duties with grim precision, because habit is the final narcotic, but now he flinched whenever someone said “carry the balance.” Every balance carried something. Every something sat on top of another something. Civilization, he concluded at three-thirty in the morning while comparing intercompany eliminations, was just stacked obligations in a trench coat trying to pass as solidity.
Then he discovered the servicer memos.
Someone, years earlier, perhaps sober, perhaps not, had prepared internal memoranda explaining the lifecycle of the note. Leonard read them in the private reading room of a firm that smelled of leather, old money, and the legal immunity of predators. The memos traced the debt’s genealogy through restructurings, asset transfers, novations, defeasances, and synthetic re-riskings so baroque they ought to have required wigs.
The original obligation, it turned out, was born when Basil Halcyon borrowed against future distributions from a holding company to fund a share buyback in another entity. That entity financed the buyback with debt underwritten by banks who packaged portions of the exposure into a vehicle financed by notes purchased by funds that borrowed against capital commitments from investors, among them Halcyon-related trusts that had themselves pledged anticipated proceeds from the buyback. The money moved in circles so perfect that one could have set a compass to them and drawn hell.
Leonard leaned closer.
One memorandum contained a schedule of ultimate beneficial interests. It took him four hours to untangle the percentages, because no one in finance ever says “this man owns this thing” when they can instead produce a diagram resembling a nervous breakdown in Helvetica. But when the figures finally aligned, when the ownership chains were flattened, obligations netted, guarantees cross-referenced, and collateral pools decomposed, the thing shuddered into view.
Basil Halcyon, through a cathedral of entities built to evade sunlight, was effectively a creditor to the fund that had purchased the debt issued by the vehicle that had refinanced the affiliate that had acquired the note arising from the loan Basil Halcyon had taken out.
He owed money to the machine that owned the promise that he would repay the money he owed to the machine.
Leonard stared at the page.
Then, because the universe had not yet exhausted its sense of humor, he found the tax angle.
The interest deductions claimed by one entity were income to another entity whose losses were sheltered by depreciation from assets acquired with borrowed funds sourced from distributions enabled by those same deductions. Deferred liabilities rolled into carryforwards that supported valuations used to justify additional lending against future tax efficiencies created by prior leverage. The debt was not merely financing itself. It was breeding in captivity.
He went further, because men destroyed by obsession always call it completeness.
He traced the debt into a distressed tranche sold off after a covenant issue, then into a recovery fund, then into a litigation trust, then into a rescue financing structured to stabilize the trust’s assets, which included a claim on the old Halcyon note. That rescue financing was subscribed, in part, by a special opportunities vehicle managed by an advisory firm whose lead investor was, through a private foundation and a family partnership and some breathtakingly cynical estate planning, Basil Halcyon.
Leonard took out a fresh legal pad and wrote, in block capitals, HE BORROWED FROM HIS OWN SHADOW.
Then he crossed it out because it was imprecise.
By the fourth week, he had developed the look of a saint in a painting about tuberculosis. The dark circles under his eyes were no longer circles so much as geological events. His cheeks had hollowed. His pupils carried the bright, startled vacancy of a man who had peered directly into the bookkeeping engine of empire and found that it ran on paper promises devouring each other in a ritual of elegant cannibalism.
He submitted a report to the attorneys, forty-seven pages of diagrams, citations, schedules, and conclusions, all drafted in the cool neutral tone required when describing madness in professional settings. He wrote that the debt chain exhibited recursive dependency. He wrote that beneficial ownership and creditor exposure substantially overlapped. He wrote that multiple tiers of leverage appeared to recycle the same economic obligation through affiliated structures in a manner obscuring true counterparty risk. He wrote, because he had to write something, that further regulatory inquiry was warranted.
What he wanted to write was that the rich had built a money mill fueled by signatures, vanity, and the stubborn refusal of institutions to admit that nothing under the hood was connected to anything resembling reality. What he wanted to write was that capitalism, in its mature form, was a house of mirrors financed by promissory notes, with a concierge desk and a wine list. What he wanted to write was that the debt was a serpent swallowing its tail and charging advisory fees to spectators.
Instead he invoiced, because everyone worships something.
A few days later, after another shift under the fluorescent tribunal of federal employment, Leonard stood in the smoking area behind the building, though he himself did not smoke. No one knew why he went there. Perhaps because it was the only place in the complex where people were honest about self-destruction. Rain had soaked the asphalt into a glossy black slab. The cigarette crowd stood in little knots, exhaling like condemned philosophers.
A rookie agent named Mallory came out, fresh-faced in the obscene way youth always is, carrying a pack she seemed ashamed to own and a curiosity she had not yet learned to taxidermy. She looked at Leonard, at the trench beneath his eyes, at the expression of a man who had spent a month wrestling a spreadsheet demon and lost on points.
“Jesus,” she said, lighting up. “Why do you have those giant dark circles under your eyes?”
Leonard watched smoke ribbon upward into the damp evening, as if even combustion were trying to leave the premises. He thought of Basil Halcyon, that lacquered duke of leverage. He thought of Lantern Reef Funding, Margrave Holdings, Ashgrove Recovery Partners, the trusts, the wrappers, the swaps, the guarantees, the glorious endless procession of liabilities breeding liabilities in a silk-lined abyss. He thought of the circle closing like a noose made of accounting standards.
Then he looked at the rookie with the haunted patience of a man who had followed one thread through the labyrinth and found the thread had been knitting the labyrinth the whole time.
“It’s debt all the way down...”
Leonard was not the sort of man who dreamed. He reconciled. He tied out. He adjusted. His heartbeat had the rhythm of a twelve-key adding machine, and his marriage, after ten years of staring at opposite walls in polite tax-deductible silence, had dissolved into separate bank accounts and one very civil argument about a salad spinner. In the office, he was known for three things: his immaculate ties, his hatred of imprecision, and his supernatural ability to smell an unreported liability the way wolves smell blood, only with less romance and more coffee breath.
By day, Leonard worked for the IRS, pinning wealthy liars to the board with the delicate efficiency of an entomologist cataloging expensive insects. By night, because mere employment had apparently failed to satisfy his appetite for punishment, he took on discreet research gigs for private attorneys and forensic consultants who needed someone patient enough to follow money through ten countries, twelve shell companies, and one charitable foundation devoted, as near as anyone could tell, to laundering conscience.
That was how the Halcyon matter landed on his desk.
Basil Halcyon was one of those men the business pages referred to as a visionary, which in practice meant he had inherited a logistics empire, said the word “disruption” until journalists got dizzy, and bought enough senators’ smiles to wallpaper a mausoleum. His tax position, at first glance, was grotesque but conventional, like a gilded gargoyle. Offshore vehicles, family trusts, debt-financed acquisitions, charitable losses that seemed to have been composed by a team of drunk illusionists. But buried in the stack, almost shyly, sat a debt entry so oddly placed it twitched.
It was enormous. Not obscene by billionaire standards, where numbers ceased to mean anything and became weather systems, but odd in shape. It appeared on three entities’ books, in slightly different amounts, with slightly different dates, as though reality itself had gotten tired and begun freehanding. One ledger showed Halcyon Capital owing a note to Margrave Holdings. Margrave’s books showed the same note as collateral for a credit line with Eider Bank. Eider Bank’s risk disclosures treated it as exposure transferred to a securitization vehicle called Lantern Reef Funding. Lantern Reef, in turn, showed an asset linked to a debt instrument originated by Ashgrove Recovery Partners, which, like a rat wearing a top hat, turned out to be wholly owned by a trust whose beneficiaries were confidential and whose mailing address was a law office in Delaware that appeared to have been built from filing cabinets and plausible deniability.
Most people would have written “complex financing structure” and gone home to microwave fish in a studio apartment. Leonard, whose hobbies included reading footnotes the way medieval monks read visions, felt a stir of professional nausea. He took the side gig. He told himself it was for the fee. This was a lie. He took it because the debt was ugly in a way that suggested it had a secret.
The first week was ordinary misery. He traced the note through trusts, subsidiaries, bridge loans, intercompany receivables, and acquisition vehicles named after birds no one had ever actually seen. He learned that Margrave Holdings had borrowed to buy a receivable from a distressed-debt fund that had borrowed against a revolving facility to purchase defaulted paper from a bank syndicate that had offloaded exposure from a leveraged recapitalization whose proceeds had funded, among other things, a dividend to Halcyon himself. This was not yet alarming. This was finance, the modern art of making ownership too embarrassed to introduce itself.
The second week grew mold in the walls.
Lantern Reef Funding had pledged the note into a structured product that was sold to a pension-adjacent insurance wrapper in Luxembourg, funded by repo borrowing from an investment bank whose own balance sheet showed the repo hedged by credit protection from a reinsurer in Bermuda, whose reserves were invested in private credit funds, one of which held a sliver of Margrave’s mezzanine tranche. Leonard sat at his kitchen table at two in the morning, tie loose, eyes red, staring at the arrow he had just drawn from Fund A to Vehicle B to Bank C and back into Fund A by way of a derivative so spitefully written it seemed to have been drafted by a divorce attorney during an eclipse.
He redrew it. He checked the ISIN numbers. He called a contact in structured finance who laughed for a full twelve seconds, then said, “Oh, Jesus Christ, one of those.”
“One of what,” Leonard asked.
“One of those self-referential debt towers,” the contact said, with the casual cheer of a man explaining mildew. “They crop up when everyone borrows against everyone else’s promise to pay everyone else. Usually they collapse before anyone notices. Sometimes they don’t, because accounting is a religion and disclosure is interpretive dance.”
Leonard did not laugh. Men like Leonard did not laugh at interpretive dance metaphors. They stored them in bitterness for future use.
He kept digging.
He found a note issued by a Halcyon affiliate to retire an older obligation owed to a family office, only the family office had financed the original advance through a securities-backed line collateralized by units in a fund that owned the affiliate’s preferred shares. He found a debt swap in which a creditor accepted paper in a new entity that had borrowed to purchase bad paper in the old entity, both guaranteed by a holding company whose cash flows came from management fees charged to operating companies funded by debt service reserves replenished by—this was where Leonard first removed his glasses and pressed his thumb and forefinger into the corners of his eyes hard enough to see fireworks—proceeds from an issuance backed by projected collections on the very obligations under review.
He began to sleep in fragments, like a bombed city.
His apartment filled with legal pads. Arrows multiplied over his walls in looping black constellations. He ate crackers over spreadsheets. He stopped returning calls. He forgot, for three consecutive days, that there existed such things as trees. At the IRS office, he still performed his official duties with grim precision, because habit is the final narcotic, but now he flinched whenever someone said “carry the balance.” Every balance carried something. Every something sat on top of another something. Civilization, he concluded at three-thirty in the morning while comparing intercompany eliminations, was just stacked obligations in a trench coat trying to pass as solidity.
Then he discovered the servicer memos.
Someone, years earlier, perhaps sober, perhaps not, had prepared internal memoranda explaining the lifecycle of the note. Leonard read them in the private reading room of a firm that smelled of leather, old money, and the legal immunity of predators. The memos traced the debt’s genealogy through restructurings, asset transfers, novations, defeasances, and synthetic re-riskings so baroque they ought to have required wigs.
The original obligation, it turned out, was born when Basil Halcyon borrowed against future distributions from a holding company to fund a share buyback in another entity. That entity financed the buyback with debt underwritten by banks who packaged portions of the exposure into a vehicle financed by notes purchased by funds that borrowed against capital commitments from investors, among them Halcyon-related trusts that had themselves pledged anticipated proceeds from the buyback. The money moved in circles so perfect that one could have set a compass to them and drawn hell.
Leonard leaned closer.
One memorandum contained a schedule of ultimate beneficial interests. It took him four hours to untangle the percentages, because no one in finance ever says “this man owns this thing” when they can instead produce a diagram resembling a nervous breakdown in Helvetica. But when the figures finally aligned, when the ownership chains were flattened, obligations netted, guarantees cross-referenced, and collateral pools decomposed, the thing shuddered into view.
Basil Halcyon, through a cathedral of entities built to evade sunlight, was effectively a creditor to the fund that had purchased the debt issued by the vehicle that had refinanced the affiliate that had acquired the note arising from the loan Basil Halcyon had taken out.
He owed money to the machine that owned the promise that he would repay the money he owed to the machine.
Leonard stared at the page.
Then, because the universe had not yet exhausted its sense of humor, he found the tax angle.
The interest deductions claimed by one entity were income to another entity whose losses were sheltered by depreciation from assets acquired with borrowed funds sourced from distributions enabled by those same deductions. Deferred liabilities rolled into carryforwards that supported valuations used to justify additional lending against future tax efficiencies created by prior leverage. The debt was not merely financing itself. It was breeding in captivity.
He went further, because men destroyed by obsession always call it completeness.
He traced the debt into a distressed tranche sold off after a covenant issue, then into a recovery fund, then into a litigation trust, then into a rescue financing structured to stabilize the trust’s assets, which included a claim on the old Halcyon note. That rescue financing was subscribed, in part, by a special opportunities vehicle managed by an advisory firm whose lead investor was, through a private foundation and a family partnership and some breathtakingly cynical estate planning, Basil Halcyon.
Leonard took out a fresh legal pad and wrote, in block capitals, HE BORROWED FROM HIS OWN SHADOW.
Then he crossed it out because it was imprecise.
By the fourth week, he had developed the look of a saint in a painting about tuberculosis. The dark circles under his eyes were no longer circles so much as geological events. His cheeks had hollowed. His pupils carried the bright, startled vacancy of a man who had peered directly into the bookkeeping engine of empire and found that it ran on paper promises devouring each other in a ritual of elegant cannibalism.
He submitted a report to the attorneys, forty-seven pages of diagrams, citations, schedules, and conclusions, all drafted in the cool neutral tone required when describing madness in professional settings. He wrote that the debt chain exhibited recursive dependency. He wrote that beneficial ownership and creditor exposure substantially overlapped. He wrote that multiple tiers of leverage appeared to recycle the same economic obligation through affiliated structures in a manner obscuring true counterparty risk. He wrote, because he had to write something, that further regulatory inquiry was warranted.
What he wanted to write was that the rich had built a money mill fueled by signatures, vanity, and the stubborn refusal of institutions to admit that nothing under the hood was connected to anything resembling reality. What he wanted to write was that capitalism, in its mature form, was a house of mirrors financed by promissory notes, with a concierge desk and a wine list. What he wanted to write was that the debt was a serpent swallowing its tail and charging advisory fees to spectators.
Instead he invoiced, because everyone worships something.
A few days later, after another shift under the fluorescent tribunal of federal employment, Leonard stood in the smoking area behind the building, though he himself did not smoke. No one knew why he went there. Perhaps because it was the only place in the complex where people were honest about self-destruction. Rain had soaked the asphalt into a glossy black slab. The cigarette crowd stood in little knots, exhaling like condemned philosophers.
A rookie agent named Mallory came out, fresh-faced in the obscene way youth always is, carrying a pack she seemed ashamed to own and a curiosity she had not yet learned to taxidermy. She looked at Leonard, at the trench beneath his eyes, at the expression of a man who had spent a month wrestling a spreadsheet demon and lost on points.
“Jesus,” she said, lighting up. “Why do you have those giant dark circles under your eyes?”
Leonard watched smoke ribbon upward into the damp evening, as if even combustion were trying to leave the premises. He thought of Basil Halcyon, that lacquered duke of leverage. He thought of Lantern Reef Funding, Margrave Holdings, Ashgrove Recovery Partners, the trusts, the wrappers, the swaps, the guarantees, the glorious endless procession of liabilities breeding liabilities in a silk-lined abyss. He thought of the circle closing like a noose made of accounting standards.
Then he looked at the rookie with the haunted patience of a man who had followed one thread through the labyrinth and found the thread had been knitting the labyrinth the whole time.
“It’s debt all the way down...”
CountVanBadger
Inventor of the you-know-what
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ElijahRyne
A Hermit that’s NOT that Lazy, currentlycomplainen
- Joined
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I am winning currently.
Tempokai
The Overworked One
- Joined
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Shiriru_B
Hi again.
- Joined
- Nov 1, 2020
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Tempokai
The Overworked One
- Joined
- Nov 16, 2021
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nope, it's from iken senki volundioThat's edited right?!? She can't be like me fr fr
also I'm winning currently by doing this muscle girl
ElijahRyne
A Hermit that’s NOT that Lazy, currentlycomplainen
- Joined
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I am currently winning.
Anonjohn20
Pen holding member
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She isn't a sheriff.That's edited right?!? She can't be like me fr fr
Anonjohn20
Pen holding member
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Nyah!