Six months ago Goldman Sachs splashed out $ 2600000000…a very big number…to acquire 5.7 percent of China’s largest bank: the Industrial and Commercial Bank of China (ICBC). Last week they made a nice little turn on the deal when ICBC floated on the Hong Kong and Shanghai stock exchanges and was priced by the new punters…whoever they were…at $139000000000…another very big number. Out with your abacus. These are just numbers.

Forget the noughts for the moment and multiply this second very big number by 57. Set it to the left three positions to take account of the fact that we really want to find out what 5.7% of the very big number is. The 26 in Goldman Sachs VBN#1 has now magically transmuted into 79 in GSVBN#2…an increase of 53. This is alchemy of the highest order.

Tack the eight zeros back on and divide by the 1.8975 Barclays Bank adopted when converting last week’s $400 cheque from Chattanooga into money my local butcher could do business with and you are just seven million shy of two thousand eight hundred million pounds. This would buy me a posh Pied-à-Terre or two in Kensington or Belgravia…with Russian oligarchs for neighbours. May I have this seven million please? I need to store my stuff.

As for the rest of the £2800 million let us hazard a guess where it has gone. Some went to a few hundred Goldman Sachs partners last week in six, seven and eight figure bonuses. Some was recycled back into the banking system where it destroyed large dollops of the money supply…as economists quaintly refer to it. Did you know banks create money every time they make a deposit to your account and destroy money every time your loan repayment comes in?

Some more of the loot went to assorted Money Power Fraternities around the world. None of this funny money ever sees the light of day. Instead it takes a strange turn or two around a gaggle of printed circuit boards clipped onto motherboards surrounded by steel cabinets in the basements of tall buildings in Kentucky or London’s Docklands…to name the particular locations of ixwebhosting.com and easily.co.uk whose Linux Servers and Apache Open Source Software look after my own imaginary numbers. This looting is wrong…but legal. We the People permit banks to reclaim the costs of their expensive lunches in elegant City Watering Holes. Then there is usury…major and minor.

So much for the visible tip of the iceberg. What lies below the water line? Let’s start chipping away. The ICBC float is a peculiar chapter in Free Market History. Not so long ago ICBC was one of the ugliest kids on the global banking block because it was overloaded with Bad Debts…rather like the holding companies for Nuclear Power Plants. Along with China’s other three giant state-owned banks, Industrial & Commercial was technically insolvent.

So in 1999 the Chinese Government started shifting non-performing loans…a euphemism for loans that will never be repaid…off the balance sheets of the Big Four into a state-controlled Asset Management Company. Over the next seven years ICBC’s books were scrubbed clean as one third of its Loan Portfolio…140 billion dollars-worth…was taken out of ICBC’s public purse and placed with AMC. By 2006 ICBC was ready for market…as the saying goes.

One question this raises is whether anything has changed at ICBC. Will local Communist Party Bureaucrats carry on issuing orders to ICBC Bank Managers…money for this; none for that; roll this loan over; swap that with this. Another question is the fate of the AMC. In this country it would be placed in liquidation. For years companies have been able to destroy their debts in this manner while partnerships and individuals have been forced to make good their indebtedness…even after all being robbed of their assets…though not their livelihood…at least in theory.

An interesting coda to this Tale of Everyday Capitalism brings us back to those doyens of the American Financial Establishment…Goldman Sachs. A few years ago the firm moved aggressively into the International Debt Swapping Business which works like this. Peter Late owes Paul Early £2000. Paul reckons there is not a chance in hell of getting his money back as Peter is being screwed by the VAT Gestapo for money he didn’t know he owed and doesn’t have. But Ronnie and his brother have ways of making offers that people find hard to refuse. So they do a deal with Paul…Peter was not asked his opinion…and give Paul £1000 for the £2000 Peter owes him. It is all nice and legal. Ronnie’s solicitor Johnnie Walker draws up the contract, Ronnie and Paul sign it and Paul buys Ronnie lunch.

Happy Paul goes off to Corfu with Tracy. Sadly for the Fray Brothers Paul and Tracy die of carbon monoxide poisoning…faulty boiler...before Peter is informed about the second part of his deal. Paul should have got in the habit of reading the small print. Strange the ways of fate. In the end Peter Late flew out to Istanbul and back to Amsterdam with Ronnie’s consignment of diamonds in Paul’s stead. Peter travels a lot for the Frays nowadays. Peter’s marriage was already crumbling because of his VAT problem but it might have survived. But no love was lost between Kimberley and Ronnie Fray. ‘Diamonds? You are so stupid! You’re a mule. Get out while you can.’ These were Kim’s last words to Peter as she left the flat with her suitcases. Peter would like to wipe the slate clean. But he can’t.

Buying and Selling Loan Portfolios has become a lucrative business for Goldman Sachs. Perhaps I underestimated them. They may turn out to have a use for Rob Muller’s goldmansex.com website. After all what is pornography?