The simplest financial engineering there is

Posted on: 9 July 2026

There is a particular kind of figure the internet has trained everyone to recognise. He sells success. He films himself beside a car worth more than a house, the line under his name carries a number with a generous count of zeros, and he would like you to become the next version of him. The easy conclusion is that he is lying, and now and then he is, but the ones who last do not lie at all. Lying is crude and, worse, it can be checked. What the good ones do is quieter. They say numbers that cannot be checked, which is a different thing entirely from saying numbers that are false.

The distinction looks small and turns out to be the whole game. Take a real business, with customers who actually pay, and instead of keeping it in one company you scatter it across many small ones, a company for the site, a company for the product, a company for the courses. Each files its own modest accounts, tidy and in order. Then in public you never mention a single company, you talk only about the group, you add it up out loud and arrive at a figure that sounds like a proper enterprise while every piece, taken alone, stays a small provincial thing. In this country a small group is not obliged to file consolidated accounts, so the total sits nowhere on paper, because the document that would carry it is one you are not required to produce and therefore do not.

At this point the reader smiles and files it under market-stall cunning, something transparent. And it is. The trouble is that the transparency is the trap, not its opposite. When a thing looks simple the suspicion switches off, because you are not being sold a derivative you cannot follow, you are being sold an idea you caught at a glance, and a thing caught at a glance gets signed at a glance.

The people who sign are the young ones, recruited online with footage of a life lit like an advert, the supercar that may well have been hired for the afternoon. They come in on the promise of becoming partners, we are building something together, the American way, whoever starts at the bottom takes a slice, and they put in years, energy, often their own savings, into the operating companies, the ones that sign the leases and take on the bank debt. That is where the risk lives, at the bottom, on their shoulders, while the man at the top makes the opposite move, keeping his capital away from the exposed point, collecting shares in things built largely with other people's money, and pricing those shares on the value of the group, which is to say on the number nobody can check, all of it narrated from the driver's seat.

This is where the big phrase, financial engineering, shows what it was for. Not to manage a complexity that is not there, but to dress up the oldest asymmetry of all, the one between the person who knows and the person who does not. The seller of the share knows two things the buyer does not. He knows the group total is not a figure but a sum spoken aloud, and he knows exactly which way the floor tilts, because he arranged the tilt himself, downhill, into the operating companies where the young recruit is placing his savings. The recruit sees the gym full on a Saturday morning, sees the film-set life, sees the large numbers and concludes that he has understood, when what he has understood is the surface. The slope beneath the surface was never shown to him, and not because it was buried in some clause, but because nobody told him and he had no way of knowing it for himself.

Calling it a scam would be wrong and unfair, and whoever does loses the argument at once, since all it takes is someone pointing at the busy gym. The thing is real, people train, it is not an empty box, and it is harder to explain for precisely that reason. It is risk shifted with some precision onto whoever has the fewest instruments to weigh it, wrapped in a vocabulary whose only function is to make something ancient sound technical. The group, the valuation, the equity for those who earn it. Strip out the large words and what remains is an informed party selling to an uninformed one at the price that suits the first. Economists call it information asymmetry. It works just as well under a plainer name.

It holds up beautifully while the money keeps coming in, the memberships paid up front, the courses bought in advance, and in that phase it can even look generous, a man handing out free months because he can afford to. Then one day the inflow slows, and the total that never existed goes back to being what it was. What remains is the young man with his percentage in his pocket, sure he owns a piece of something large. He is not short of intelligence. He was only ever short of what the other man knew.