Homeland

Chapter 10

This chapter is dedicated to Anderson's Bookshops, Chicago's legendary kids' bookstore. Anderson's is an old, old family-run business, which started out as an old-timey drug-store selling some books on the side. Today, it's a booming, multi-location kids' book empire, with some incredibly innovative bookselling practices that get books and kids together in really exciting ways. The best of these is the store's mobile book-fairs, in which they ship huge, rolling bookcases, already stocked with excellent kids' books, direct to schools on trucks -- voila, instant book-fair!

Anderson's Bookshops: 123 West Jefferson, Naperville, IL 60540 USA +1 630 355 2665    

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Zyz wasn't always called Zyz. It was once called Fireguard Security, and it was founded by an exec at Halliburton, a giant military contractor that sucked a bazillion dollars out of America's bank accounts selling pricey, underperforming military services to our troops all over the world, then followed up by helping to build a couple of semi-defective, way-over-budget oil wells, including one that may yet be responsible for the sterilization of the Gulf of Mexico.

Halliburton had a "dynamic, thrusting young VP" (seriously, that's what Fortune magazine called him) named Chambers Martin who quit the company in 2008 to found Fireguard, which immediately began to make major bank by taking U.S. Army contracts to guard Halliburton supply convoys in Iraq and Afghanistan.

So far, so normal. There are plenty of companies who bled out the taxpayer by providing bloodthirsty mercs. They guarded truckloads of Twinkies around Kandahar Province and Fallujah to restock the Forward Operating Bases that were a cross between an armed fortress and a mini-mall. The Army paid them enormous fees to have soldiers' clothes laundered and to supply Internet access and Pizza Hut.

But Fireguard had bigger plans. Rather than simply sucking up tax dollars for substandard services, they decided to become...a bank. Specifically, they began to issue bonds based on their anticipated future U.S. government contracts. The simplest bonds are basically loans: I sell you a bond for $100 with a five percent return and then I pay you $5 a year over the term of the bond (say, five years), and when the bond runs out its term, say, five years, we're done. Of course, if I go broke before the bond runs out, I go bankrupt and you're screwed.

Fireguard was selling its debt left, right, and center, paying top interest rates, telling everyone that the gravy train could never end, because every year they were taking in bigger military contracts, which meant that every year, they'd have more money on hand to make their bonds' payouts. It worked great, until the military drawdowns started to reduce their annual revenues, and they needed to branch out.

So they started trading bonds, instead of just issuing them, beginning with bonds issued on student loan debt. It turned out that every dollar I borrowed to go to Berkeley got turned into a bond -- someone with money bought the right to get paid every time I made a payment on my debt. This made big bucks for Berkeley and for other universities and companies that "gave" students the loans they needed to get their magic diploma paper. Student debt bonds are even better than skeezy military contractor debt bonds because a skeezy military contractor can go bankrupt, but students can't.

Bet you didn't know that, huh? If you borrowed money to go to college and you someday find yourself so flat broke that you have to go bankrupt, all your debts will be wiped off the books -- credit cards, car notes -- but your student debts are immortal. And whenever you miss a payment, the scuzzy finance companies that buy the debts from universities are allowed to jack your debt up with monster fees and penalties, so if you owe $30,000 for college and $50,000 in credit card debt and you go bankrupt, you'll find the credit card debt reduced or eliminated, but your student debt might grow to $150,000 after all the missed-payment fees are tacked on. The way student debt bankruptcy laws are set up, they can take money out of your Social Security check to pay the student loans you took out as a teenager, even if you've already paid millions in fees and penalties.