Today, Tyler R. Tichelaar of Reader Views is pleased to interview again Theodore J. Cohen, who is here to talk about his new book “House of Cards: Dead Men Tell No Tales.”

Ted Cohen has been interviewed by Reader Views in the past about several of his books, including his mystery novel “Death by Wall Street: Rampage of the Bulls” about corruption within the Food and Drug Administration (FDA) and the incompetence of the Securities and Exchange Commission (SEC), and his trilogy of novels based on his own experiences on the 16th Chilean Expedition to the Antarctic in 1961-1962, which resulted in the geographical feature, Cohen Islands, being named for him. The novels in that series are “Frozen in Time: Murder at the Bottom of the World (Book I),” “Unfinished Business: Pursuit of an Antarctic Killer (Book II),” and “End Game: Irrational Acts, Tragic Consequences (Book III).” You can find all of Ted Cohen’s past reviews under “Cohen” at http://www.readerviews.com/reviews_author_c.html

Theodore J. Cohen, PhD, holds three degrees in the physical sciences from the University of Wisconsin-Madison and has been an engineer and scientist for more than forty years. He has been an investor for more than fifty years, and most recently, has focused on investigating and reporting on corruption in U.S. financial institutions and agencies of the U.S. government. His first novel, “Full Circle: A Dream Denied, A Vision Fulfilled,” is based on his life as a violinist; he is a violinist in the Bryn Athyn (PA) Orchestra and particularly enjoys the music of Gustav Mahler. Dr. Cohen has also published more than 350 papers, articles, columns, essays, and interviews, and is a co-author of “The NEW Shortwave Propagation Handbook” (from CQ Communications).

Tyler: Welcome back, Ted.

Ted: Hi, Tyler. It’s nice to be talking with you again. Thanks for inviting me back.

Tyler: Ted, it wasn’t that long ago that we talked about your book “Death by Wall Street.” I understand your new book is also a mystery centered on Wall Street. What made you decide to write another book on the subject?

Ted: “House of Cards” is about Wall Street, and more. And frankly, I had not intended to write another book so soon after the release of “Death by Wall Street” in late 2010. But while watching the aftermath of the financial meltdown of 2008, with our record high unemployment rate, high level of mortgage foreclosures, and high probability of a double-dip recession, and pondering the unbelievable fact that not one—NOT ONE—financial executive from Wall Street responsible for this economic apocalypse has been sent to jail, I got angrier by the day. To me, this was nothing more and nothing less than a colossal failure of our Federal government at all levels. Throw in the possibility of corruption on Wall Street—wow, that’s a surprise—and you have a volcanic eruption. So, it was time to take all of them to the woodshed. You know us old country boys! And the way I vilified Wall Street was by suggesting that some on the Street may have been purposely screwing their customers—selling them junk mortgage-based securities—at the same time they may have been positioning themselves for the collapse of the housing mortgage market. That is, some may have known their financial products—specifically, their collateralized debt obligations, or CDOs—were of such low quality that they would default. Throw in some verbal combat (nothing harmful) between NYPD Detective Louis Martelli and IT Specialist Missy Dugan, some Islamic terrorists, and . . . but I don’t want to spoil it for the readers.

Writing “House of Cards” was fun, so much so that the words fairly flew from my fingers to the keyboard. I had most of the first draft written in two weeks, and then, used the remaining time to add “color” . . . you might say, fidelity. I hope my readers enjoy it.

Tyler: What did you mean when you said that some on Wall Street were “positioning themselves for the collapse of the housing mortgage market”? How much liberty did you take in depicting the people in your novel and to what extent do you think your depiction of them is accurate?

Ted: A few, and I mean a few, very prescient investors intuited that the subprime mortgage party could not go one forever. So they convinced AIG Financial Products to sell them what are called “credit default swaps.” It’s all very complex, but think of these swaps as insurance against the mortgage market imploding. Those who held these swaps when the housing market collapsed made a fortune. The depiction of what happened, as told in my new novel, is as accurate as anything you will find in the literature today. Read, for example, Michael Lewis’ “The Big Short.” The problem was, and Senator Levin’s Permanent Subcommittee on Investigations is still looking into this, some Wall Street firms may have been selling their clients junk mortgage-based securities at the same time they may have been purchasing swaps from AIG-FB. That’s like taking out insurance on someone, knowing he has cancer and soon will die. Clearly, whether you’re talking the mortgage-backed securities or someone’s life, either is a no-no! The more ethical firms stopped selling the junk CDOs, sold what their customers had, and then, went “short” in the mortgage market by purchasing swaps from AIG-FP.

Tyler: Tell us about the murder victim in “House of Cards.” I understand he’s a Wall Street big shot?

“As the president, chief executive officer, and chairman of the board of Richardson Stanfield & Cooper, one of the largest investment banking and securities firm in the United States, he had a car and driver available to him 24-hours a day, anywhere in the world.”

Richardson’s a pretty good guy who lost his first wife to cancer and now is picking up the pieces of his life with his second wife, a lovely French woman by the name of Collette. He’d rather spend a night at home working on his watches and clocks than go to parties.

Tyler: If Richardson is, as you say, “a pretty good guy,” why would anyone want to murder him?

Ted: Ah! That’s a very good question, and one I can’t answer without inserting a “spoiler” into this interview. So let me just say this. You know from reading my earlier novels and from our previous interviews that one recurrent theme in my books is bad things happen to good people. Of course, bad things also happen to bad people. But it would be nice to think that being a good person “buys” a person some modicum of protection from the worst that life has to offer. Not so. And while we perceive Richardson to be a good person, and, generally, he does appear to be such a person, we don’t know if he is. Remember what Captain Roberto Muñoz said in my novel “End Game”?“I don’t know, Catalena. I think most people, especially men, are half good and half bad.” Good or bad, Matthew B. Richardson III, unfortunately, is a man caught in a very bad situation, and he pays for it with his life.

Tyler: What are some other recurring themes for which readers should keep an eye peeled?

Ted: Well, you already know that I pay homage to the military in all my books. Lou Martelli is a wounded Iraqi War Veteran. I lost a very good friend during the 2003 invasion of Baghdad, CPT James F. (Jimmy) Adamouski [http://www.arlingtoncemetery.net/jfadamouski.htm Tyler], and the creation of Martelli is meant to honor Jimmy. I also honor police officers who have died in the line of duty by mentioning the Police Unity Tour. Martelli’s father is such an officer, though he is a fictional character, to be sure. Another recurring theme, and there are many, is that the people closest to you can do the most harm. Not a comforting thought, is it?

Tyler: Not at all, Ted. Now, to continue, Richardson’s murder happens during New York’s Festival of the Dead. Will you tell us about the significance of that festival for those of us not familiar with it?

Ted: There is, of course, significant material available on the celebration of Halloween through time related to the practices of different religions. Here’s what I found, for example, when I looked at what Wikipedia had to say on the topic. “Some Christians feel concerned about Halloween, and reject the holiday because they feel it trivializes—or celebrates—paganism, the occult, or other practices and cultural phenomena deemed incompatible with their beliefs.” Wikipedia also informs us that “[I]n many cultures a single event, Festival of the Dead, lasting up to 3 days, was held at the end of October and beginning of November.” I won’t begin to list the many different interpretations of the celebration, past or present. But suffice it to say that the use of Halloween in “House of Cards,” with all its connotations, appealed to me because of its alternate name, the Festival of the Dead, and the fact that the first murder takes place that night. As well, the timing of the holiday was exactly what I needed for the novel’s timeline in terms of what was happening in the mortgage markets and Congress in the aftermath of the 2008 financial meltdown.

Tyler: Detective Louis Martelli returns in this novel. Does that make this book a sequel to “Death by Wall Street” or simply another in a series of novels with the same detective? How is Detective Martelli different from in “Death by Wall Street” or has he changed any in this book, and do you plan to feature Detective Martelli in future books?

Ted: Good questions. This is not a sequel. It’s an entirely new book. I guess having a second book makes them a series. <laughter> I don’t think that Martelli has changed much. We do learn more about him in the new novel, as a young man as well as now. Readers also learn more about his father, who was killed in the line of duty. I think they will be surprised.

Tyler: Why does the FBI get involved and try to interfere and even stop Detective Martelli’s investigation?

Ted: Sorry, Tyler, if I told you that, it would spoil the fun. Let’s just say that in addition to everything else Martelli has to cope with, he has to contend with his counterpart in the FBI who is unwilling to give him the information needed to solve Richardson’s murder. But I’ll tell you this. Martelli is not one to take this lying down, and so, he finds a way to “punish” the agent. Missy Dugan accuses Martelli of being “vengeful.” She even quotes the Bible to him: “‘Vengeance is mine; I will repay, saith the Lord.’” (Romans 12:19). To which Martelli replies: “Oh, yeah? Well, what you and most people obviously don’t know is that sometimes, He subcontracts the work!” As I said, my readers are going to see a side of Martelli they’ve not seen before. And I think they’re going to have a grand time making their way through this story.

Tyler: I understand the murder is connected to some U.S. financial institutions that are funding Islamic terrorist activities? Will you tell us a little more about that link to the murder?

Ted: Again, I don’t want to spoil the story. But as was the case with “Death by Wall Street”, “House of Cards” is based on a real event. Mark Mitchell, a former “Wall Street Journal”editorial page writer, wrote a story that was published on the DeepCapture blog (www.deepcapture.com) called “The Miscreants’ Global Bust-Out.” It addresses the link between our financial meltdown and terrorism. This story, if you will, is the real story behind “House of Cards” just as Mitchell’s “Michael Milken and Dendreon” was the real story behind “Death by Wall Street.” I invite your readers to read both of Mark’s stories for more background.

Tyler: Ted, I remember hearing after the Cold War ended that it created a problem for mystery writers because they didn’t have as much espionage and established bad guys to write about. Do you think Islamic Terrorists have replaced that need; do you have any qualms about including them in your book, or do you feel you’re reflecting the realistic world of the early twenty-first century?

Ted: There’s no end of bad guys out there for us to write about. We don’t even have to leave our shores. In fact, you don’t even have to leave New York City. I find the worst people in the world, right now, are on Wall Street. And, oh yes, let’s not forget those who ostensibly labor on our behalf in Washington. As I say in the book, we have the best government money can buy. And it has: Of Wall Street, By Wall Street, For Wall Street. Not to put too fine a point on it, I think both “Death by Wall Street” and “House of Cards” reflect the real world. And I can’t say how sad that makes me.

Tyler: How likely do you think it is that U.S. Financial Institutions would be involved with Islamic terrorists—is it completely fictional, or is there a dose of reality in the story somewhere that you found through your research?

Ted: More than a dose of reality. It’s happened. It IS happening. Read Mark Mitchell’s article, “The Miscreants’ Global Bust-Out.” Unfortunately, I’m not sure the Department of Justice really has a handle on what’s going on. The games that are being played are very complex, and many of the crooks are offshore. Further, the Securities and Exchange Commission doesn’t have a clue as to how to cope with the various ways in which our markets are being manipulated. They can’t even detect it, in most cases. Look at how they completely missed Madoff. My God, Harry Markopolos came to them repeatedly over a period of ten years with data showing that Madoff must be running a Ponzi scheme, and still, the SEC did not pick up the scent. And they still have not explained, for example, what happened to Dendreon Corporation’s common stock on April 28, 2009, when it dropped from $24.50 to $7.50 in 75 seconds. Nor has the Commission provided a credible explanation for the 1,000 point drop in the Dow Jones Industrial index on May 6, 2010. The SEC, for all intents and purposes, is totally “captured” by Wall Street and is incapable of executing its mission as a regulator of the U.S. markets. It should have been disbanded by Congress years ago.

Tyler: You wrote your previous novel “Death by Wall Street” following the economic meltdown of 2008. Has the economy improved since then in your opinion, as an investor, or do you foresee plenty of more fuel for the fire coming from Wall Street for your novels?

Ted: The economy has not improved. It’s getting worse. It won’t improve until people go back to work. Jobs drive the economy. Remember that catch-phrase the Democrats used in 1992: “It’s the economy, stupid.” Well, things haven’t changed since then, though this time around, I suspect the Republicans will be the ones shouting it. If people aren’t working, they don’t have money to spend. I don’t understand what’s so difficult about that for Washington to understand. Yet this administration has done virtually nothing to foster job growth. It’s wasted two years playing at government.

Tyler: So the fact that the stock market, for example, the Dow Jones Industrial (DJI) average, has gone up since the crash of 2009 is not a sign of an improved economy in your opinion? What is it a sign of?

Ted: Oh, the economy improved, temporarily, but the DJI average did not return to the 14,000 level it reached before the crash. Basically, you had a lot of money in the hands of professionals on Wall Street chasing stocks following the bear market that began in 2007. For the most part, however, the public did not participate in the rally unless it was through the money they had tied up in their 401(k) and other retirement accounts. And many people gutted those accounts to get the funds they needed to live on when they lost their homes and jobs.

Look at the second chart on this Web site:

http://www.brandes.com/Documents/Handouts/Handout-Importance%20of%20a%20Long-Term%20Perspective.pdf

Again, a lot of people on Main Street, Mom and Pop, did not participate in the recovery of the market. They pulled their money out of the market after the meltdown and either would not or could not return.

There’s an old saying, “The public is always wrong at the major turning points.” And it’s true. On the upside, they’ll wait until 30% or more of a new bull market is underway before committing money. And on the downside, 30% of the bear market will have unfolded before they begin to sell. It seems like the public is always the “last to know.” The fact is, you can’t time the market. People think they can, and maybe in the short term, some occasionally will get lucky. But in the long run, their profits will get eaten up by commissions . . . assuming they even have profits. The only way to make money in the stock market is to stay fully invested at all times. And while that may sound crazy, over time, and here, I’m talking over any ten-year period, people who invested in the stock market will came out way ahead of those who invested in money market funds or bonds. Fortunately or unfortunately, depending on whether or not you have a cast iron stomach and a good supply of antacids, investing in the stock market is the only way to stay ahead of inflation.

I hope I haven’t bored you and your readers. I guess it’s not often that you get responses like this. <laughter>

Tyler: What about the Troubled Asset Relief Program, or TARP. Do you feel that helped the economy?

Ted: TARP started under President Bush and continued into the Obama administration. But the emergency funds provided to the banks by the U.S. government were given with almost no pre-conditions. Do you know what Wall Street did with that money? It didn’t loan it to Main Street, as Washington intended. Wall Street used a significant portion of the TARP funds to speculate on commodities. That’s one of the major reasons we paid almost $5 for a gallon of gas earlier this year. This is what passes for “strategic thinking” and “economic stimulation” in Washington. The money was used to stimulate Wall Street, not Main Street. And I really come down hard on the Federal government and the Federal Reserve, which readers should know is not a Federal agency, for this debacle in my novel. Here’s an excerpt:

And yet, here were the oligarchs of Wall Street, the very perpetrators of this heinous crime, not only surviving, but thriving. Having accepted money from the Federal Reserve under TARP—which in some cases was forced upon them by Treasury Secretary Hank Paulsen and Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System—the ‘fat cats’ so despised by the American Public were better off than they had been before the crisis. True, some banks had vanished while others had merged, but still, the survivors were bigger and stronger than before, giving new meaning to the phrase ‘too big to fail’.
Martelli shook his head. He thought about President Abraham Lincoln’s Gettysburg Address. ‘. . . [t]his nation, under God, shall have a new birth of freedom — and that government of the people, by the people, for the people, shall not perish from the earth.’
More like government of Wall Street, by Wall Street, for Wall Street, he thought as he pushed the button for the 75th floor of the building housing the offices of Shahrestani & Associates, operator of one of the largest hedge funds on Wall Street. Stepping off the elevator and pushing through the large glass doors, he was greeted by a beautiful Iranian woman in her mid-20s, who already was expecting him.
® “House of Cards”, Theodore Jerome Cohen, 2011

Tyler: So, in your opinion, what’s the answer?

Ted: America needs to reinvent itself. Our leaders need completely to rethink taxes, education, and jobs, with a focus on restoring America’s leadership in the production of innovative products. I don’t know how you can add wealth to a society unless you produce tangible products . . . things that people can hold in their hands, or drive, or fly. Providing services and moving money around does not add wealth to a society. Face it. We’re never going to be able to compete with shirt factories in South Viet Nam or chip factories in China. Nor can people in the U.S. answer phones for less money than their counterparts in India or the Philippines. Those jobs are gone forever. And the managers of U.S. companies are no different than their counterparts around the globe. Their job, wherever they are, is to enhance shareholder value, not put people to work. So Americans must, as I say, reinvent what they do and the way they do it to ensure this country retains its leadership position in the world.

Tyler: So, do you foresee plenty more fuel for the fire coming from Wall Street for your novels?

Ted: Most assuredly. Given what I know about Wall Street and how corrupt it is, there’s more than enough “fuel” to write a thousand novels.

Tyler: As a highly educated man, what is it about writing mystery novels that appeals to you when some might dismiss them as a less serious form of literature?

Ted: <Ted laughs> I don’t know about the “highly educated man” part. But I take writing mystery/thrillers very seriously. All of my novels, as you may have noticed, weave a complex fabric of fact and fiction. Even my own family could not sort the two out in “Full Circle.” For weeks at a time I was getting phone calls from my sister in Chicago, asking “Did Dad do this?” or “Did Dad say that?” The Antarctic Murders Trilogy is loaded with biographical material and real events interwoven with pure fiction. “Death by Wall Street” is based on what happened when Dendreon Corporation first attempted to bring its new treatment Provenge to market for end stage prostate cancer. [Full disclosure: Ted owns stock in Dendreon Corporation. Tyler] So to me, writing mystery novels is very serious business. In “House of Cards,” I raise the possibility that terrorists could be funded through companies on Wall Street. Frankly, I think they have been, and now are. And by the way, do you know where the money you pay for gasoline ultimately ends up? Just asking?

One more thing, Tyler. Just to show you how serious I take my work, if any of your readers are interested, they should check the weather and tides on the days and locations cited in “House of Cards.” They may be surprised to see how true to life the novel really is. A little realism goes a long way.

Tyler: That’s an interesting detail, Ted, especially to me since I try to find out the weather and such details for the times my novels take place. Where you do get access to that kind of information and why is it important to you to be so detailed and accurate?

Ted: The information is available on the Internet, if you know where to look. It’s a matter of putting key words into a search engine—words for locations, dates, and times, and the like—and then, sifting through the various “hits” until you find a comprehensive source for whatever your need. I don’t know that this is something a writer must do in all cases, but as a research scientist, I like to be precise. And frankly, I enjoy the “chase” . . . that is, I enjoy doing the research necessary to acquire precisely what is needed. Some people would call it being “anal”! <laughter>

Tyler: Thank you, Ted, for the interview today. It’s been a pleasure as always. Before we go, will you tell us about your website and what additional information we can find there about “House of Cards: Dead Men Tell No Tales”?

Ted: Always a pleasure, Tyler. You can learn more about me and my novels at my Web site www.theodore-cohen-novels.com. I have a page devoted to “House of Cards” that includes an excerpt from the novel as well as some quotes from various reviewers, including one from Marty Shaw of Reader Views. I think your readers would enjoy seeing it here: “If you enjoy the ‘ripped-from-the-headline’ stories of shows like Law & Order, then you should definitely take a ride with [Cohen’s] Lou Martelli and Missy Dugan.” I think that really says it all. This novel is as current as tomorrow’s newspaper, though truth be told, I don’t want to wake up to learn that the Dow dropped 2000 points because terrorists hit the New York Stock Exchange.

Tyler: Thanks again, Ted. I’m not sure if I should wish you much luck in writing future novels; I’d rather what is wrong with Wall Street was fixed, but it’s good to know that as long as Wall Street keeps causing problems, someone is there to call them on it. So keep writing.