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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

8 Responses to “Enforcing Rule of Law Is NOT a Waste of Time”

  1. cynical says:

    It is a waste of time b/c it is not (and should not) be material. Even if Fab said even more fantastic lies about other investors such as warren buffet was buying the equity at $110, it is not material. No one buys/wraps a CDO because someone else is buying. And no one should. If they do they are a fraud.

    In an ad-hoc world it is easy to say subprime would implode and go to zero etc. But in early/mid 2007 notable hedge funds Farallon, Fortress were buying up subprime (link below). Again, even if Fab lied about Paulson, he could have easily accomplished the same saying…hey Fortress just put down $1.7bn, Bernanke said “contained”…buy now before it snaps higher (this is an example not an exact timeline – I am not sure when abacus happened). Should the buyer rely on Fortress buying subprime risk as part of their diligence? Fab is a salesman and the buyers knew that. He is inherently conflicted and not to be relied on.

    Is lying scummy, sleazy, wrong – yes yes and yes. Should it be wrong – yes – and does it violate some other rule – probably. Is a banker really higher/mighter than any other salesperson – nope. But this lie is not material under 10b-5. And a jury may disagree with me and that is fine. And the SEC has the right to bring it. So not a waste of time that way but I think it is a pretty weak case overall.


    http://www.marketwatch.com/story/farallon-fortress-ease-subprime-credit-crunch-a-little

    ~~~

    BR: Move to Somalia . . .

  2. Frilton Miedman says:

    More importantly – Who’s writing the rule of law?

    GS makes monumental “contributions” to both parties in D.C. – therefore they are the rule of law.

    “Material misrepresentation”…What about “triple A” rated liar loans, garbage mortgages sold en masse to anyone with a pulse and repackaged to the public with the same credit rating as the U.S. government?

    “Fab” deserves his fate, yes, but he’s a token offering to appease the masses, he’s a scab resulting from a larger disease that’s going untreated, he did what GS regularly does and got caught for his boastfulness in Emails, as with the traders Barclays energy manipulation scandal.

    Yet again, Bribery is NOT free speech.

  3. PeterR says:

    Right on!

    Love Barry’s outrage and terminology — weasels, grift, etc. — and tone of voice.

    Well done.

  4. [...] Enforcing Rule of Law Is NOT a Waste of Time | The Big Picture. [...]

  5. rd says:

    One of the key hallmarks of advanced successful societies is an even-handed application of the rule of law. Unfortunately, the US has been heading towards the tinpot dictator approach to justice dispensation over the past couple of decades. I think it is one of the reasons of the current economic and societal malaise and dysfunction.

    You have to prosecute the little guys to make it clear to the little guys that they will go down for their bosses whims. Prosecuting the little guys also opens up the opportunities to flip the little guys. Some percentage of them will actually have some real evidence that can be used to leverage up the food chain.

    I am hopeful that two of the things that Mary Jo White will be doing is actually investigating potential crimes and making recommendations to Congress on how to write laws to make them actually prosecutable. It was a travesty over the past fivbe years that Eric Holder has refused to have the Justice Department even ask questions about whether or not crimes have occurred. The jails should be filled with guys in suits at this time, not petty nickel bag drug users.

  6. rd says:

    An interesting article in WSJ today about the explosive growth of police SWAT teams in the US:

    http://online.wsj.com/article/SB10001424127887323848804578608040780519904.html?mod=ITP_review_0

    If you “accidentally” misplace a few hundred million dollars of other people’s money, you get to attend galas at the Met. If you grow a dozen pot plants in your basement for your own use, you get a visit from a SWAT team. Somehow our societal priorities have gotten a wee bit skewed.

  7. BusSchDean says:

    To even ask the question: a) show complete ignorance of Adam Smith and true capitalist theory, b) shows how far we have come down the wrong road, c) makes any educators job either difficult or superfluous, d) is absurd.

  8. Blissex says:

    «Enforcing Rule of Law Is NOT a Waste of Time»

    «One of the key hallmarks of advanced successful societies is an even-handed application of the rule of law. Unfortunately, the US has been heading towards the tinpot dictator approach to justice dispensation over the past couple of decades.»

    Bill Black very strongly and more diplomatically Barry Ritholtz have shown very well that massively financial fraud has happened and nobody has gone after the fraudsters.

    They haven’t yet argued convincingly why ever the majority of voters should care, when the majority of voters are property and stock owners and think that they are in on the scam, or that the fraudsters are scamming someone else, or that if they had the opportunity they would do the same as Ken Lay, Angelo Mozilo, and all the other heroes of wealth creation.

    Also, the USA has not suffered the rule of law for most of its existence, and the dispensation of law has always depended on popularity. In the USA your rights and your chances to get away with crime have always depended largely on how popular your ethnic group was and even your personal popularity.

    I have lots of quotes from de Tocqueville, Galbraith, Norquist, Gingrich on this, and I have posted them in comments to “The Big Picture” before.

    The only cases where there has been enforcement of laws against fraud have been when the fraudsters made themselves unpopular, which is not yet the case.

    Voters have been writing to their congresspeople and writing them campaign donation checks for many causes, from taxpayer-paid contraception to teaching creationism, but not about massive fraud, of which they are indeed aware.

    If you want most voters (which are the wealthier 50% of those with the right to vote) to care about “the even-handed application of the rule of law” please explain to them how it is going to boost the prices of their houses and their stocks, because that’s what they really care about so far.