Over a decade ago, when I first started covering the 2008 financial crash, a small sky-blue booklet in a library sale caught my attention. The Man Who Sold The Eiffel Tower turned out to be a biography of early twentieth-century swindler Victor Lustig, often considered the Michaelangelo of con artists (we’d say the Michael Jordan of cons today). Lustig was famous not only for twice pulling off the book’s eponymous scam, but also for an ingenious hustle called the “Rumanian box.”

When he sailed across the Atlantic, Lustig would bring a carved mahogany box on board. It had slots on either end, and a mechanical crank inside. Once a crowd gathered, he would feed blank sheets of paper in a slot on one side, and the machine would spit out a $1000 bill. Toward the end of a voyage, he would sell the machine for a fortune, then disappear on land after disembarking, never to be seen again.

The “Rumanian box” ended up being a perfect clarifying metaphor for the mortgage securities scam. Originators and banks were taking the mortgages of underemployed, under-credentialed homeowners, feeding them into the “machine” of the securitization process (which pooled the mortgages and used a “tranching” process to create different levels of investment products), then spitting them out the other end as securities. In this way, a junk-rated mortgage could be turned into AAA-rated debt.

The scam resembled the Rumanian box in more ways than one. Not only were you feeding worthless paper in one end and getting investment gold out the other, but the banks and originators that pooled the mortgages were typically selling off the product to third parties as soon as humanly possible, sometimes in under a week. Just like Lustig, they were jumping ship and disappearing into the crowd before investors could realize they’d been had.

A lot of ostensibly complicated Wall Street ripoffs were just jargonized versions of simple street cons, many of which were detailed in the Lustig book and others like it. The mortgage securities game had a lot in common with the “Big Store” scam popularized in The Sting, as well as the “Thai Gems” hustle. Both involved long lines of characters who were supposed to be strangers or arm’s-length actors, but in fact all knew each other and/or were pushing the customer toward a catastrophic investment.

The 2008 bailouts were a version of “The Reload,” a score in which the victim of a ripoff is visited by someone offering to help get his or her money back, for a fee. Some Americans were similarly beaten and re-beaten in the mortgage con, up to three times. Some were induced to buy exotic no-money-down or variable-rate mortgages, then their pension funds invested in mortgage securities, and then, when the markets all went belly up, their tax dollars went to “save the economy,” which in practice often meant buying up toxic mortgages at cost from guilty banks.

Moreover, the entire bubble economy in the years leading up to 2008 was a plain old Ponzi scheme, as the continually ascending prices of mortgage securities relied on an influx of new investors rather than the inherent value of the properties.

In 2007, before the crash, Goldman, Sachs CEO Lloyd Blankfein even inadvertently paid tribute to one of the most ancient scams — the pig in the poke — when he ordered subordinates to start selling off the mortgage-backed “cats and dogs” on his company’s books. This detail, which came out in a Senate investigation of Goldman’s “Big Short,” let the “cat out of the bag” about the real value of mortgage-backed securities.

In 2021, we’re seeing a surge in con-like corruption cases once again, many involving old-school ripoffs. An economy puffed up by the steroid enhancement of Fed support has led to a great flowering of such creative grifts. Some are not terribly accessible to non-financial audiences at first glance, so to make it a bit easier to keep track of new cases coming in, I’m creating a new feature, “Racket of the Week.”

We had a cartoonist draw up icons for a key system, which will help explain how and if the story covered contains elements of common street rackets. The top of the feature will look like this:

In the feature, you’ll get a headline, followed by icons that indicate which tradition each scandal covered borrows from. For instance, if we’d put the “Goldman Penis Envy” story from last week about Archegos in this column, you might have seen something like this at the top of the page:

Name: Archegos

Hustle(s): Cornering, Kansas City Shuffle

The tale of investor Bill Hwang had a cornering angle, as Hwang borrowed enough to essentially control the market in several securities. There was also a bit of Kansas City Shuffle, which often involves an element of convincing your mark to do something shady — that way, the mark believes himself/herself to be a conspirator, not a target. A lot of the banks in the Archegos tale thought they were doing the naughty thing, earning easy fees helping a runaway train of an investor bid up stocks. Still, the joke appeared to be on them, as companies like Credit Suisse ended up holding a $5.5 billion bag in the end.

The first full entry in the “Racket of the Week” series, coming in the morning, is an escalation of the madness already described in this space, in our “Financial Dictionary” series on the “SPAC.” Are you ready for the backstory to a $1.9 billion sandwich shop? Check in this space today for the first entry.

Other changes are coming to this site in upcoming weeks, including reporting from a few select outside contributors, some on-location reports as per the recommendations of subscribers, and a few user-friendly graphic tweaks. In the meantime, here’s a quick rundown of material that’s been in TK in recent weeks:

Be it Resolved: The Mainstream Media is Dying, and that's OK. Matt Taibbi Debates Ben Bradlee, Jr. Joining in the Munk Debates with Ben Bradlee, Jr., in a discussion about the state of the media

Will “Goldman Penis Envy” Crash the Economy, Again? A reported look at the Archegos scandal involving investor Bill Hwang, who may have punched a $100 billion hole in the economy by himself.

Interview: Glenn Greenwald, on "Securing Democracy," Twitter, and the Media Business. Interviewing Glenn Greenwald about his new book on the “Operation Car Wash” story in Brazil

Why “Securing Democracy” Will Be Taught In Schools. Review of the aforementioned Greenwald book, from the angle of its utility as a guide to bringing home a history-altering scoop

The Heroic Congressional Fight to Save the Rich. A bipartisan caucus of congresspeople launches an all-out campaign to save a tax break for the top 10% of the population, at a time when Democrats, in particular, are claiming to want the exact opposite

An Afghanistan Veteran Looks Back on the "First Postmodern War. Author and veteran of two combat tours, Captain Adrian Bonenberger, talks about war without reason, contracting fraud, and the at least ten-year overstay in Afghanistan

Rachel Maddow is Bill O’Reilly. In an encore of the WMD episode, the Afghan Bounty story blows up, and the MSNBC anchor who pushed it most aggressively shrugs.

Due Process Is Good, He Said Controversially. Whether it’s Matt Gaetz or Scott Stringer or Alex Morse, the press is now ahead of the facts in sex scandals to a degree we haven’t seen before, and they don’t seem to mind much.

Interview: Noam Chomsky. The world’s most famous “public intellectual” talks about Gaza, China, climate change, and the legacy of Manufacturing Consent.

The Two Faces of Joe Biden. Is the president really the second coming of FDR, or is he more of the same with better P.R.?

Is Traditional Liberalism Vanishing? Review of Mighty Ira, the film about former ACLU chief Ira Glasser. Would the ACLU defend Nazis in Skokie today, or have traditional liberals changed their views on speech and other core ideas?

Has American Liberalism Abandoned Free Speech? Interview With Thomas Frank. Ibid. The author of What’s the Matter With Kansas? talks about his influential and controversial Guardian article, cautioning against “shushing the world.”