Truth be told, a little poking around leads me to suspect that KCBC is actually owned by the People's Liberation Army (PLA), which owns and operates a huge slew of legitimate firms in China--firms which are expanding globally despite their ownership by a Communist Army.

Lest this sound unsavory, let me reassure you that the Western partner in the firm is a reputable corporation with roots tracing back to the 1700s--The Royal Dutch Comestibles Trading Company. Like all the other secretive multinational Dutch corporations, RDCTC gained its first profitable footing in the exploiting-your-colonies trade of the 1700s, exporting bat guano and the once-plentiful and now rare Sumatran Boatplug hardwood. Having lost control of the seas to the British Fleet, the Dutch contented themselves with growing exceedingly rich via immensely wealthy and under-the-radar trading companies like DRCTC.

You may wonder why I am so free with criticism of my new sponsors. Actually, they want me to continue my skeptic's ways, as this will only build the credibility of their sponsorship. Devilishly clever, isn't it? Which explains why they picked my miserable little outpost on the Web as their foothold in America, rather than buying adspace on Chuckles' page, with its adorable banter about bratty kids, or "I hate (insert political figure or cause)" websites filled with mindless preaching to the choir.

I fulfilled my duties as sponsor by designing some adverts for Kroika Cookie Corporate (Xiangxi). You can view the adverts (and I know you'll want to!) here: Welcome to the Kroika Cookie and Biscuit Company (KCBC). A sample is presented for your viewing pleasure. (Reload the page to view it again.)

What makes Kroika Cookie and Biscuit Company truly remarkable is their entry always marks the very top of a trend. Thus when Wal-Mart hit its PR nadir a few years ago, Kroika copied their marketing: Wal-Mart and Kroika (December 31, 2005).

Then Kroika joined the pirating-famous-brands trend in China just as it peaked: Kroika and Starsbuck Take a Hit (January 10, 2006).

Shortly afterward, amidst the turmoil of a Chinese firm attempting to buy a U.S. oil company, Kroika made an unsolicited bid for Oreo cookies: Kroika Makes Bid for Oreo--Nation in Uproar (April 1, 2006).

Kroika's construction of a landmark corporate tower marked the precise top in the global real estate bubble: Kroika! Tower: World's Tallest Bamboo Structure (March 12, 2007).

Admittedly Kroika was a bit early in its entry into investment fund speculation, but they only missed the top by a few months: Shanghai Stock Market: the Top Is Near (May 7, 2007).

But Kroika is stretching the envelope in launching an investment fund open to the public. There is even talk in Xiangxi HQ about pitching the fund on every package of cookies, along with a slogan such as "Let your fortunes rise like warm cookie dough!" (My suggestion.)

Kroika's lead manager is a 19-year old economics student with a hot hand trading the Shanghai Composite; he apparently traded next semester's tuition of $430 U.S. into $100,000 in the past few months, using out-of-the-money calls and maximizing margin debt. His compatriots are a 22-year old female banker who quit a safe but low-paying government gig to parlay her mother's hocked gold jewelry into $200,000 last year, and a junior analyst who has not yet graduated from high school. The math whiz turned his wages from a weekend job at Kentucky Fried Chicken into $300,000 over the past two years. After a few missteps with the Scholes calcs back when he started at 16, he's generated huge profits by leveraging leverage. (Don't ask.)

Alas, after that brief run of glory, Kroika's investment fund crashed along with the Shanghai index and the company nearly folded, being saved only by the sale of the Kroika Bamboo Tower to an American firm which planned to use the tower for extreme bungee jumping.

Imagine my reaction to the news that Kroika is opening a U.S. commercial and investment bank, with the express intent of becoming a major player in toxic derivatives. It seems that the Kroika execs have been studying Goldman Sachs, Bank of America, Citicorp and other major banking players, and they realized it was impossible to lose:

Either you make billions selling toxic complex derivatives and swaps, or you lose huge sums and are immediately bailed out by the U.S. government. You win no matter what.

Long wise to the ways of guanxi--it is after all the essential skill one needs in China if you wish to prosper--Kroika has purchased a slew of senators via staggeringly generous campaign contributions (funneled through obscure political action committees like the "Joint U.S and China Cookie Cooperation Forum" and the like) and greasing the sweaty palms of various K Street lobbying bigshots. (Don't call them lobbyists--that sounds tacky. Call them "consultants.")

When Kroika execs encountered a bit of resistance, they simply called in their pals at China's central bank who then read the riot act to the U.S. Treasury: either allow Chinese firms to set up banks in the U.S. or we'll bleed $2 trillion dollars into the market and start selling $1 trillion in Treasuries. That smoothed over any questions in the name of China-U.S. "cooperation," heh.

Kroika is also deeply interested in front-running, black-box trading and setting up a quant shop staffed with newly minted math wizards from China's top universities. I have a familiar funny feeling that Kroika's entry into front-running black-box millisecond trading marks the top of this bogus global stock market "rally."

Volume has been declining since the "rally" began, and around 70% of that dwindling volume is being generated by trading bots. The propaganda machine a.k.a. the Mainstream Media and SIFP (standard issue financial pundits) has been madly pumping "the recession is over" and a host of other blatant lies, but their frenzied drive to convince everyone is close to backfiring as glimmers of inconveniently sordid reality filter through the onslaught of spin, manipulation and ginned-up statistics.

I tried to tell Kroika execs what the U.S. politicos and MSM refuse to hear: exactly how much can people without jobs, income and assets buy and consume? How much can people with no collateral borrow?

The Kroika execs just brushed off my warnings; they're currently salivating at the prospects of jumping into the "recovering U.S. housing market."

They liked only one of my ideas: issuing a derivative contract with every package of Kroika cookies sold in the U.S. It would be the equivalent of a jackpot contest: most of the derivatives and swaps would be worthless, but a few might reward the lucky cookie buyer with stupendous returns.

So look for your free derivative in your next package of Kroika Cookies. That single derivative might contain a yen/euro/krone swap mixed in with a mortgage-backed security tranch and a credit-default swap on commercial property in Budapest.

In other words, you may have a tough time figuring out if you have a winner or not.

If the Kroika Curse is still active, the global stock market is due for huge decline.

If you want more troubling/revolutionary/annoying analysis, please read Free eBook now available: HTML version: Survival+: Structuring Prosperity for Yourself and the Nation     (PDF version (111 pages): Survival+)

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