But then her bank turned her down for a home equity loan. 

Now Barb knows that Shylock is alive and well and going by the name of Fat Funzi   of Sackett Street and she couldn’t be happier.

“Call him a loanshark if you like, but Fat Funzi saved my life,” she says.

Barb and her husband Pabu, a Tibetan weaver, have been running Yayla Rugs out of their brownstone on Fifth Avenue in the Red Hook section of Brooklyn since they left their ashram in Ashland, Oregon six years ago. 

“We were dewy-eyed hippies ripe for the plucking,” she says, “but Brooklyn took us to its bosom and gave us life.”

They prospered in this newly trendy area, selling the colorful 150 knot rugs that Pabu’s family have been weaving for centuries.  “We dealt with the newly childed wealthy,” Barb says. “They were young, accomplished and expanding their lives to include new souls.”

But then tragedy struck. Working late into the night to fill their orders Pabu fell asleep at his loom of rods. A spark from his prayer lamp, which burns clarified yak butter, dropped onto the tangle of pure mountain sheep wool at his feet. Within seconds his work room was aflame. 

Pabu was lucky to get out with minor burns, but the work room was destroyed. With their customers clamoring something had to be done. Barb went to the bank to extend her home equity loan. To her astonishment they turned her down.

“The loan officer was very sweet,” she says. “He explained that the bank was carrying so many bad loans that it couldn’t lend any more money. He also said that he had to close our credit line because the value of our home had dropped below the amount we owed, between mortgage and home equity…”

Barb did some research. She found that Americans owed $1.1 trillion in home equity loans.  As of 2007 more than 5 per cent of those loans were delinquent or in default. That number had shot up to 11 per cent in the first few months of 2008. Banks were taking billions of dollars in bad debt write offs. More than 60% of banks had tightened their loan criteria. It was estimated that $50 billion had been taken out of the credit market in the last few months.

It looked like Barb and Pabu were going to become casualties of the sub prime crisis. But then their guru Soygal Rinpoche told them about a mysterious benefactor. He guided them down Sackett Street, past Googie’s Adorables and Riskay Rita’s Unmentionables. In between Fern’s Tchotchkies and Tots’n'Tubers, which specializes in teaching toddlers creative projects with root veggies, was a storefront its windows painted black.

“I had walked this street ten thousand times and never seen it,” Barb says. “I realized I was entering another dimension.”

Inside the dark room she found a huge fat man sitting like an inscrutable Buddha on a bridge chair. 

“He said his name was Fat Funzi,” Barb says, “but I knew he was an avatar of Tsho-Gyalma, the God of Happiness.”

Fat Funzi was a man of few words. 

“How much you want?” he asked Barb.

She told him and he nodded.

“Six for five,” he said. And the deal was done.

The mob reigned supreme in Brooklyn for many years, but fell on hard times in the ’90′s.

“Giuliani put us in jail,” Fat Funzi said in an exclusive interview with the Daily Event, “but Alan Greenspan put us out of business.” 

Greenspan, head of the Federal Reserve Bank, presided over the largest  expansion of credit in  history.

“Under Greenspan any deadbeat could get a loan,” Funzi said. “You didn’t need no collateral, no references. You didn’t need to come to me no more…”

Funzi gloats over what happened next. “But deadbeats don’t pay back. And if you can’t collect  with a two-by-four you’re outta luck.”

As of March 2008, ten percent of the mortgages were delinquent or in default. Banks were foreclosing on property that was worth less than their loans. Billions of dollars of mortgage derivatives were transformed into junk. Investment banks went under.  Retail banks facing huge losses, had no money to lend. 

“We were back in business again,” said Funzi.

After years of indigence the Mob was cash poor as well. But it had ways of raising capital.

Barb’s first loan  was in sacks of quarters that Funzi’s boys got from plundering parking meters. Then there was an envelope of two-dollar bills burglarized from a collection upstate. Hundreds came rolled up with traces of cocaine. 

“Funzi said they were donated by ex drug dealers who wanted to give back to the community,” Barb says.

Funzi even arranged for contractors to come and rebuild Pabu’s work room. They didn’t need an approval from the city.

“Funzi said the building inspectors were with him,” Barb says. “He took my hand in the nicest way and said: You’re with me, too. Nobody will ever bother you again.”

Barb felt she was going back in time to the old Brooklyn that existed before the settlers came from Manhattan and the Continent.

“It was like finding middens, remnants of an old civilization,” she says. “There had been a rich native culture here once.”  “With its own traditions, its own rituals.”

She says she learned some of the native language. 

“Vig was the interest on the loan. It was very zen. You paid and paid, but it never got any smaller.”

Only Funzi had power over the “vig.”

He taught me another word,” says Barb. “Gummare…It was like the Chinese custom of the second wife. Funzi said if I became his gummare he would make the vig go away.”

But Pabu said polyandry was forbidden in the Tibetan culture and Barb gratefully refused Funzi’s offer.

Then, after a few missed payments, Barb learned a new meaning for the word “kneecap.”

In the hospital, Pabu did some research. When he  came off the crutches he told Barb he had discovered a branch of Buddhism, the Vagrayana, that allowed a married woman to become the “spiritual consort” of another man.

Now balance has been restored. The debt is repaid. Pabu’s loom is clicking. Barb has  a huge diamond ring and a diamond choker so heavy she can hardly hold her head up.

“Everywhere we go Funzi introduces me as his Spiritual Consort,” Barb says. “His friends laugh and clap and everybody’s just in the best mood.”

“Find a hacker and go to Harvard.”

That’s what Efraim Durg, CEO of Durgometrics, a hedge fund that specializes in high risk investments, is advising his clients these days.

Durg has just returned from the Federal Reserve Bank’s annual retreat in Jackson Hole, Wyoming, where the mood was dismal. Central bankers from all over the world were puzzled and distressed by the slow but steady erosion in the global economy.

“We are in the midst of the greatest financial crisis since World War 2,” said Stanley Fischer, governor of the Bank of Israel. Yutaka Yamaguchi, former Deputy Governor of the Bank of Japan warned that the world was in a period of “exceptional uncertainty.”

But Durg is optimistic. “The economy is like a seesaw,” he says. “if somebody is down that means somebody else is up.”

Durg says he has found two classes of investors that are doing exceptionally well–US Senators and university endowment funds.

“Our research shows that the net worth of all US Senators has risen almost 20% since 2004,” he says. “And this same period recorded substantial gains for endowment funds.”

Durg quoted a report in the Washington Spectator, which said that Senators who played the market earned an “abnormal rate of return” According to the report: “Senators consistently anticipated movements in stock prices; they often purchased stocks before prices took off like a rocket and revealed an uncanny ability to sell just when a stock was about to flatten out.”

Senators and their spouses outperformed the market by by around ten per cent annually, the report said.

“Nobody gets results like this in the financial world,” said Professor Tom Ferguson of UMass-Boston, “Any manager of a mutual fund who beats the market by two per cent is considered a genius.”

“Just shows you how clever these politicians are,” says Durg with a knowing wink.

University endowments have done almost as well in this down market. The top fifty funds have risen over a 100% in value. The managers of these funds may have done well in former jobs, but they became financial wizards when they went to work in the Academe.

“Must be the food in the campus cafeteria,” says Durg with an ironic tap of his nose.

But Durg says the “numbers really explode” when you pair a Senator with his/her alma mater.

“Take Senator Kennedy (Edward Kennedy, D. Mass.) for example,” he says. “During the periods 2004 to the end of fiscal year 2006 his maximum net worth rose 300% from $51 million to $162 million. As Kennedy contributed less than 1% of his income to charity he was able to spend most of it on his lifestyle, his homes and especially his beloved yacht where he recuperated after cancer surgery.”

At the same time Kennedy (Harvard ’56) was getting rich his alma mater’s Endowment Fund was getting richer, growing at a rate of 23% per annum to $35 billion at the end of fiscal 2007. And this year with the finest minds in finance going bankrupt or to jail the Harvard Fund is up 9%.

This means that it has $1,456, 940 to spend on every student, not counting tuition and grants. But the fund plows most of its profits back into investments.

“University Endowments are run by managers, not educators,” says Durg. “They just want to use their money to make more money.”

What’s behind this incredible success? Do lobbyists and anxious constituents feed inside information to Senators? Do wealthy alumni tip off their endowment fund managers?

Durg refuses to speculate. “If you catch a guy playing with loaded dice, you don’t turn him in, you get a piece of his action.”

Unlike Warren Buffet, Senators and endowment funds don’t share their wisdom.

“You’ll have to get shady to get rich,” Durg says.

He suggests trying to corrupt an employee of the endowment or the senator’s staff–”maybe drugs or sexual blackmail, incriminating e mails or photos–” and getting information on the daily trades.”

Or planting a mole inside the endowment–”an MBA with a streak of larceny–” and have him spy from the inside.

You can always find a cleaning lady or maintenance person to bring you the all the trash from the trading floor.

But the best way is to find a hacker–”some nosepicker in Slovenia or Mindanao–”to plant a keystroke in their computers that sends all their transactions right back to Mama.”

Just be careful not to get caught.

“Insider trading is nothing,” Durg says. “Senators can get away with murder, too.”