Volatility

April 17, 2010

The SEC Sues Goldman

Filed under: Law, Reformism Can't Work — Tags: , , — Russ @ 2:05 am

 

Yesterday the SEC sued Goldman Sachs for civil fraud. The case centers on Goldman’s 2007 ABACUS CDO, which it manufactured at the behest of hedge fund predator John Paulson. The scam was for Paulson to cobble together a toxic mess of MBS he expected would blow up, find suckers to buy this CDO, and then short it. Goldman’s role was to launder the CDO as having been conscientiously constructed. They used the good name of a vetting firm, ACA. Goldman supposedly told ACA that Paulson was consulting on the MBS selection and would be taking the same side of the bet as the buyers would be.
 
Goldman then cited ACA’s imprimatur in touting this CDO to the suckers – pension funds, other institutional investors, dumber banks, the usual suspects. Meanwhile it helped Paulson really bet against what was really garbage. It collected fat fees every step of the way, including from the investors it defrauded.
 
(Barry Ritholz compares it to The Producers, who try to defraud their investors by putting on a crappy play they expect to quickly close while embezzling much of the loot.)
 
Typical of this feckless government, it’s only a civil and not a criminal indictment. Even if the SEC is serious this time (which I won’t assume until I see it), Goldman would still get off easy for capital fraud.
 
Of course the terrorist stock market struck fast, with the Dow plunging 125.91 points, the most in tow months and ending a week-long surge, to punish this nuisance to the banksters. The MSM rushed to defend the market. The NYT showed great compassion for the victims and fear for the future. “A relatively calm day turned turbulent” as those regulatory barbarians struck out of a beautiful spring sunrise.
 

Expectations are unusually high this quarter: investors are looking for an average of 38 percent growth in profit. Banks have driven much of the strength in the market over the last year, helped by a period of historically low interest rates that have made borrowing cheap.

But analysts worry the golden days for the financial sector may be limited if government investigators intensify their examination of risky trading practices. That may raise new questions about whether the broader momentum in the market can endure.

“What you’re going to go into now is a market that is very skeptical about the outlook,” Mr. Battipaglia said. “Whether this recovery continues or flattens out will be made clear in the weeks ahead.”

 
Even in the first moments of the indictment the first speculation was on how GS probably had a heads up and took positions to capitalize. Zero Hedge was asking how, not if, they must have shorted themselves. Sure enough, a few hours later there were more specific rumors. It’s likely that Goldman has committed every financial crime it was able to conceive every time it could, so it would be extremely out of character for them not to have engaged against insider trading against their own market image. After all, it would only be shareholders who took any hit.
 
If the SEC is serious about this, that’s fine as far as it goes, though we have to assume the least. When everyone parses the technicalities of this or the similar Magnetar trade, or any of an endless list of crimes, we get bogged down in counting how many angels were dancing on the head of a pin. What was technically a violation? What was a “crime” in the legalistic sense.
 
This misses the big picture that the rule of law has already long since been subverted. The law was hijacked to legalize many of the worst crimes. A corrupt Congress led the way, with such abrogations of the rule of law as the CFMA, which unleashed CDS into a lawless free-fire zone. Where it’s technically impossible for “crimes” to be committed, crime can run wild. That’s just one example of how the rule of law has been completely liquidated. Few financial crimes are clearly identifiable as crimes anymore, since the system is set up to allow them to use the very complexity which enables their cons to also legally whitewash them. Meanwhile “regulators” are generally compliant and often accessories.
 
That’s the whole point of rule by administrative decree. You first liquidate the law and replace it by the rule of unaccountable bureaucrats. Then you select the bureaucrats themselves according to their conformity with whatever gangsterism is the regime you really want to impose. Any rogues who actually want to work in the public interest are bullied, marginalized, or purged.
 
So in any particular case like this struggling to figure out the technical extent of the “crimes” is likely to be a fruitless effort. Even if the process goes through the motions of establishing a technical violation, there won’t be any real punishment. It’s political theater. Meanwhile the overall criminal regime continues unabated. It’s misdirection.
 
The reality is always that the finance sector is organized crime, across the board. The government and the MSM want us to think that Goldman may have committed an isolated de jure violation here, an aberration from its general pattern of legality, with technical legality being synonymous with moral legality and with what any human community would treat as legal.
 
But the truth is the opposite. Goldman Sachs and all of Wall Street is a criminal enterprise. All of its major actions are crimes according to any common sense measure of morality and rationality. These crimes have simply been illegitimately legalized by a hijacked system of law. Goldman’s crimes are not the aberrations, but rather the criminal trend itself, while its truly legal actions are there only for money laundering and political cover, just like with similar criminal syndicates like the Mafia.
 
Since we live in a kleptocracy, this government will never actually restore the rule of law and bring justice to these rackets. Even what shreds of legality still remain will only be rarely, meagerly enforced. That this anodyne indictment (not even criminal) has been greeted with such a bustle is a testament to what a vacuum justice has become. We shouldn’t lose sight of the big picture – the entire finance sector is criminal, and this legal system has been hijacked and will never be sufficient to solve the problem. If we sit around and wait for the likes of the SEC to set things right, let them set the pace and dictate the scope of what can be done, we’ll definitely remain serfs and eventually become slaves.
 
In the meantime, what’s the real purpose of this lawsuit? The immediate consensus is probably correct. It’s meant to put on a big political show, to make the Obama administration look good as part of the rollout for his finance “reform” bill. In the end Goldman will at worst get a slap on the wrist. (But maybe not even that -there’s always Obama’s cowardice, his propensity to cave in under the slightest pressure even the rare times he ever tries to do something supposedly in the public interest. It wouldn’t surprise me if he fails to follow through on even this paltry little traffic ticket. Look at what happened to his bogus “Volcker rule”.) Meanwhile they seem to be setting up the standard “bad apple”, in this case one Fabrice Tourre, the Goldman cadre who ran the ABACUS operation. Presumably Blankfein and the rest of the brass have plausible deniability. Ah, there’s that “rule of law” again….
So the administration is inviting Goldman to make the bad apple defense. They can get together to make a deal. They can scapegoat this bad apple, implicitly exonerating the Goldman brass. Goldman gets a slap on the wrist, Obama claims a big phony victory. That looks like the plan. (But like I said, watch for Obama to instead cave in.)  
 
(Meanwhile we can see another example of the government’s bad faith in that phony finance bill. They’re sure in need of propaganda help for it. Its centerpiece is looking to be the “resolution authority” scam. We can see the scam when we look at how this vaunted, robust “authority” would actually require court approval to be exercised. The Federal Bankruptcy Court would have to sign off on any resolution. That’s absurd on its face.
 
Even assuming the government ever actually wanted to “resolve” a collapsing big bank instead of bailing it out, which we should never assume, how are you supposed to do this when you’re melting down so fast that “by Monday we won’t have an economy”? All a bankrupt bank has to do is stall, fight the action in court, and the government will feel it has no choice but to cave in and bail them out.
 
That’s the intended outcome of the “resolution authority” scam. It’s designed to fail even in the unlikely contingency that the government really tried to use it.)
 
These are history’s worst robbers. We need to stop obsessing on the scam “legalities” and develop a fully political consciousness and attack. Sure, when there’s a particular example like this, we can have fun with parsing it – but only and always within the broader context that this is part of a political war. Don’t let the government, the banksters, or myopic commentators frame it as: “Let’s see if they got caught in a technical violation. That’s the extent of culpability here. The burden of proof is on the accuser to prove his case according to the technicalities. If this fails, that signifies innocence.”
 
That would be the equivalent of a Russian in WWII having to prove in any particular case that German invaders were committing a technical crime.
 
The right way to look at this case, or any case like it, is “So for once you’re claiming you’re going to apply your law to one of these crimes? Refreshing. But we’re not going to let you fool us. We’ll believe you’re serious about justice when you restore real laws which criminalize all finance crimes. Until then this is all a scam. We’re not going to wait for a day that will never come. We’ll seek to redeem the law on our own.”

31 Comments

  1. I will believe they are serious when an important investment bank is indicted under RICO as a criminal enterprise. Look for a quick settlement and a pompous SEC press release. This is election year kabuki.

    This Administration would have arrested Al Capone for overtime parking and trumpeted the arrest as an assault on organized crime.

    Comment by jake chase — April 17, 2010 @ 7:43 am

    • Naw, they’re only creative in extending RICO downward to street criminals.

      I read somewhere that technically two guys standing next to one another on the street wearing the same “colors” can be busted for a federal RICO conspiracy.

      So they’re all over that. Wall Street? Never heard of it.

      Comment by Russ — April 17, 2010 @ 10:11 am

      • When chasing down Michael Milken on some civil charge, it seemed like a matter of hours, maybe days, before Rudy Juliani, then U.S. Attorney, opened his own separate criminal invesigation. All Juliani had to do was threaten Drexel with the RICO statute and they folded and pulled a Spiro Agnew. THere was some discussion of master-slave relationsip and corporate/employer responsibility for the crimes of employees.

        The current U.S. Attorney for the Southern District of New York is the renowned Preet Bharara. Wiki reports he graduated from Columbia’s law school in 1993. Oy vey. His CV is heavy on the political and light on the criminal. And this is the guy who would be prosecuting Khalid Sheikh Mohammed, an easy mark compared to Goldman—terrorists of another stripe.

        Comment by Jessica — April 17, 2010 @ 6:33 pm

      • It’s sometimes amazing to remember how, as bad as things already were in the 80s, it was still vastly better than today.

        I’m sure if Giuliani did that it was only to score political points since he was just gearing up to start his political career. But it still shows how aspiring pols still felt the way to political success was to go after criminals, not coddle them like today.

        To give the most obvious example, Obama and Rahm think the best path to electoral success in 2010 and 2012 is not to make war on Wall Street (helping and pleasing the people) but to carry its water (assaulting and offending the people).

        Comment by Russ — April 18, 2010 @ 5:01 am

  2. The government’s attack on Goldman marks the beginning of an all out war between the US financial oligarchs and the globalists represented by the IMF/BIS/FSB cabal working under the auspices of the G20.

    The globalists have given the money center banks sufficient rope to hang themselves financially and politically. The globalists, by demonstrating the corrupt and greedy nature of national ruling elites, will have sufficient cover to take out what remains of national sovereignty in favor of a new global government with the IMF/BIS/FSB administering a single global currency and international monetary regime.

    Simon Johnson is the globalists’ designated point man to take out the US financial oligarchy based on the lessons he learned during his stint at chief economist at the IMF.

    Comment by Jefferson — April 17, 2010 @ 8:26 am

    • I’d say they’re all part of the same oligarchy.

      Though your theory would explain Simon’s frequently effervescent optimism, like today. 🙂

      Comment by Russ — April 17, 2010 @ 10:13 am

      • I should have been more specific.

        The management of the money center banks are well-paid, disposable pawns that are playing the role of the villain in torpedoing the global financial system.

        The heroes led by Volcker, Soros, Krugman, and Simon (Is he really an American?) Johnson are all members of the G30/CFR/Peterson Institute globalist hit squad that just happen to have the perfect global regulatory solution to address those pesky asymmetrical free market” risks.

        Comment by Jefferson — April 17, 2010 @ 10:31 am

      • The next phase of the global financial takedown will consist of the Bad Boy globalists using the unregulated CDS market to undertake hit and run missions on sovereign debt issuers made vulnerable by the bailouts of their respective financial institutions during the GFC. In other words, they will get the Lehman treatment.

        Of course, the now kinder, gentler IMF, with its newly funded $550 Billion SDR denominated bailout fund, will be ready to save the developed world from financial oligarchs just like it did for third world countries like Argentina and Indonesia.

        Comment by Jefferson — April 17, 2010 @ 11:00 am

      • You think the IMF is higher up in the heirarchy than the Wall Street TBTFs, or that Goldman is the equivalent of a Suharto crony-owned Indonesian outfit?

        I’d put them higher than that on the crime chart.

        Over at Zero Hedge they call the notion of an IMF bailout for Greece an American taxpayer bailout, since America is the largest funder of the IMF.

        That would be the IMF cleaning up after another of Goldman’s hit jobs. (Or at any rate, Goldman’s actions contributed to the Greek situation.)

        Comment by Russ — April 17, 2010 @ 3:16 pm

      • It’s not only the IMF but the entire globalist apparatus we are talking about including the central bankers. The executive management at money center banks are simply errand boys and make convenient scape goats. Their fraud and deceit are being used to justify the final globalist putsch.

        There will be plenty of globalists falling on their swords and torpedoing the particular institution or organization they are in charge of in order to make way for the new global regime. Just think about what Rubin did to Citi.

        What we experienced after 911 was the consolidation of the globalists’ control over the world’s military intelligence apparatus. Now they have moved on to shock and awe in the international monetary system.

        Comment by Jefferson — April 17, 2010 @ 8:21 pm

      • We certainly agree that it’s a globalist putsch.

        The only question is how long they can prop up this global debt-and-casino zombie before it all comes crashing down.

        For humanity’s sake I hope it’s not long.

        Comment by Russ — April 18, 2010 @ 5:07 am

    • Sounds like it would be a step up, from Phil Gramm to Simon Johnson, from Obama and Bush to what’s her name, Merkel?

      The new global currency will be the Phart. There will be an exchange of 460 to one. A new series of television commericals will be deployed on the theme, now that (or that or that or that) is really worth a Phart!

      Comment by jake chase — April 18, 2010 @ 11:20 am

  3. Russ wrote:

    “Where it’s technically impossible for “crimes” to be committed, crime can run wild. That’s just one example of how the rule of law has been completely liquidated. ”

    There it is. Create an environment where everything that occurs is colored in shades of grey, as opposed to black and white, and it becomes impossible for the rule of law to rule since it scarcely exists.

    Comment by Edwardo — April 17, 2010 @ 9:04 am

    • Yup. Where everything’s gray, nothing’s black. Or, you can pick and choose whatever you want to be black.

      Either way, you don’t have law.

      Comment by Russ — April 17, 2010 @ 10:15 am

  4. I think that Russ’s final paragraph – ‘The right way to look at this case, or any case like it, is “So for once you’re claiming you’re going to apply your law to one of these crimes? Refreshing. But we’re not going to let you fool us. We’ll believe you’re serious about justice when you restore real laws which criminalize all finance crimes. Until then this is all a scam. We’re not going to wait for a day that will never come. We’ll seek to redeem the law on our own.”’ – sums up a rational person’s attitude.

    While Jake’s comment re kabuki-type political strategy may be correct, the idea that Jefferson offers would appear to be conditional on the obvious problem that the ‘national ruling class’ (which I see as difficult to distinguish from the Mafia) does not plan to relent in its lobbying/infiltration efforts. That ‘national ruling class’ seems to own the govt.

    At some point in the future, this country needs to update/amend the Constitution/Bill of Rights if it is to ever escape control by the
    ‘national ruling class’. This country needs to focus on development of a democratic republic to preserve whatever might be worth the effort. The MSM needs to be de-corporatized (my term to denote the negative behavior of the corporate-controlled information/news media). However, at this point, it is necessary to focus on rules of the game of government; were that possible, it will be necessary to develop new rules to facilitate fair and open elections/
    representation so that the rules of the game may be updated.

    Comment by William Wilson — April 17, 2010 @ 9:20 am

    • Yes, one way or another we need to do all of those.

      Right now it’s hard to see how, but at least more people are starting to recognize the problem.

      (But not enough, yet.)

      Comment by Russ — April 17, 2010 @ 10:17 am

      • Although you and most commenters on this blog site are aware of what is happening and who has control, I haven’t read much here about attempting to deal with the current situation. Frankly, I am not aware of ‘the secret’, however, as long as the internet is not completely censored it is possible to discuss the matter. As I mentioned in an earlier comment, since the game is rigged in the favor of the criminals, it is reasonable to assume that one of the strategies to try to deal with this situation is to attempt to change the game (or rules of the game). It may be possible to try to spread the enlightenment should one become aware of an alternative strategy.

        In this regard, I would again call attention to Ellen Brown’s strategy to try to promote ‘public banks’. In that regard, most people do not have familiarity with banking and economic theory. In my searches, I have come across writings by a few economists who have thought out the situation involved in dealing with fiat currency; among those from whom I have learned quite a bit are LR Wray and Bill Mitchell.

        In reading Bill Mitchell’s recent blog article concerning Japan’s economy(http://bilbo.economicoutlook.net/blog/?p=9183), Dr Mitchell mentioned an effort being proposed by Joe Firestone. I advise any who may wish to read how several rational people are proposing to deal with the current debacles of social security/retirement money management, take a look:

        Bill Mitchell’s billy blog entry of April 13, 2010 contains the following notice:

        Japan … just wait … your days are numbered
        http://bilbo.economicoutlook.net/blog/?p=9183
        ……………………..
        ‘Coming up

        A Fiscal Sustainability “Teach-in” Counter-Conference looks like happening in Washington DC on Wednesday, April 28, 2010. Why there and then?

        Well the Peter G. Peterson Foundation is one of the places deficit terrorists hang out and it is sponsoring a “Fiscal Summit” in Washington, DC on that day to discuss fiscal responsibility and fiscal sustainability. The cast of speakers is a disgrace. All of them mainstream naysayers. Very little meaningful dialogue will come out of this meeting but because of their influence the outcomes that do emerge may impact badly on policy.

        To counter this bias in the public debate a MMT alternative was initially proposed by Joe Firestone. It is a great initiative. He is now being supported by a bevy of helpers who are working to make it a reality.

        I am very privileged to have been invited as one of the key speakers and if things turn out I will report from there the week after next. If you can come down to the US Capital for the day it would also be an excellent way of showing support for an alternative view of the policy and the opportunities the fiat monetary system offers governments desiring to advance public purpose.

        The way forward is for people-based movements to counter the biases that are imposed on policy by the bankers and their cronies. Events like the “Teach-in” are essential parts of that mobilisation. The Teach-in movement goes back to the Vietnam War days and were effective vehicles for ultimately ending US involvement in that hideous invasion.

        I will post more updates as the event format and location etc become clearer.’

        and, at Joe Firestone’s site (All life is problem solving):

        http://kmci.org/alllifeisproblemsolving/archives/progress-on-the-fiscal-sustainability-teach-in-and-counter-conference/

        A Fiscal Sustainability “Teach-in” Counter-Conference?

        I know that time is short between now and April 28th. But nevertheless, I propose that we organize a counter Fiscal Summit “Teach-in” Conference in Washington DC, on that day. Such a “teach-in,” depending on how many people we could get to attend, could steal media attention from the Peterson-sponsored event, and introduce an opposing narrative to the ones coming out of the deficit hawk events on the 27th and 28th. To have such a Conference would take money. Speaker expenses would have to paid, as would hotel expenses if it were possible to get a hotel site at this late date. On the other hand, it would not be hard to think of high-level speakers for such a Summit. Here’s my list of speakers who could do a really good job delivering a Modern Monetary Theory counter to the neo-liberal paradigm: L. Randall Wray, William K. Black, James K. Galbraith, Warren Mosler, Marshall Auerback, Bill Mitchell, Rob Parenteau, Yeva Nersisyan, Scott Fullwiler, and some other very good top-level participants who would question the neo-liberal paradigm to at least some degree are: Yves Smith, Simon Johnson, Joseph Stiglitz, Robert Johnson, Robert Reich, Robert Kuttner, and Dean Baker. Finally, someone who ought to be invited, since he’s expressed frequent and very explicit criticism of the neo-liberal paradigm is George Soros. It would be valuable to get him into direct discussions with others on the relationships between hedge fund traders and nations with unencumbered fiat monetary systems.

        Who should hold this counter-conference? I propose that Firedog Lake, The Huffington Post, New Deal 2.0, and The American Prospect jointly sponsor and provide financial backing for this Conference. If the Conference could be planned and implemented over the next three weeks, it could go a long way toward beginning to blunt the impact of the Peterson Foundation Event and the first meeting of the President’s Commission. We need to blunt that impact if we expect to have any material success in getting progressive legislation on a host of issues in the coming decade. “We must make this commission politically radioactive.”

        other relevant links:
        http://seminal.firedoglake.com/diary/39485
        http://www.correntewire.com/fiscal_sustainability_teach_in_counter_conference
        http://bilbo.economicoutlook.net/blog/?p=9183

        Whether such a conference could/will be organized on short notice is doubtful, however, at least some are starting to consider doing something other than sitting around taking notes on how the Mafia-inspired banksters are taking over the USA.

        Comment by William Wilson — April 17, 2010 @ 2:14 pm

      • I saw some notices about this. It’s an interesting idea.

        Although I’m inclined to think that the voters aren’t as worried about the deficit as the deficit terrorists want them to be, or as much as MMT types are worried they are. My point being, this is well-meant but maybe extraneous to the core of real American politics.

        People who are unemployed or fear unemployment, who are scared and angry, will be the drivers of the coming transformations, for better or worse. I doubt the deficit is high on their list of fears and hatreds.

        If I were organizing a teach-in I’d make it about criminality and how only these criminals stand in the way of taking back our country.

        As for fighting back against Obama’s plan to unite with the deficit terrorists to assault Social Security, there too I think a more direct political approach would be best.

        I do wish them luck with this. I can imagine what the media coverage ratio will be.

        Comment by Russ — April 17, 2010 @ 3:54 pm

  5. William, with respect to “the rules of the game of government” the rule is that money rules. And as you know corporations have vastly more wherewithal than the citizenry. There is a very good way to end this horrible state of affairs and that is to shorten federal elections by two thirds. We certainly don’t need two years of pablum packed campaigns. Three or four months from start to finish will do.

    Changing campaign finance laws, which has not worked in any case, is unnecessary. Shorten the election season and cap spending, and you will drastically alter the political system immediately.
    Thrown into the bargain you will get legislators who can govern instead of run for office. Because that’s all we have, for the most part now.

    Comment by Edwardo — April 17, 2010 @ 11:58 am

  6. I hasten to add that until we have candidates putting such an agenda forward we have next to no chance of making progress. It doesn’t matter whether it’s Scott Brown, or someone who has held office for decades, it will be the same game until they change the game in the manner I described.

    The whole issue of free speech vis a vis campaigns (which of late has been grotesquely distorted by the SCOTUS) is vastly reduced as an issue when the entire show is cut from an hour long affair to one that lasts no more than fifteen minutes since what corporations have to offer, namely pots of money, in exchange for the privilege of talking over everyone else, will no longer be essential to running a campaign.

    I forgot to add the stupefyingly derided solution of term limits to the equation. That would go a long way to changing the game as well since the obvious benefits of voting so as to stay in office would be foreclosed on. You will get a very different (and better) calibre of person working in D.C. if these various nostrums were to be implemented.

    You’d also put the word “service” back in the term public service.

    We shouldn’t hold our breath.

    Comment by Edwardo — April 17, 2010 @ 12:16 pm

    • Since none of what you suggest is possible with Congress passing laws limiting themselves, we might seek environmentalists aid in “restoring the wetlands”: returning Washington, DC, to its original state—a malarial tidal swamp. No use of DDT, as proscribed by law, of course.

      No Representative wanted to be near the place circa 1800: Jefferson, Adams, et al. came to “serve,” as you say, and fled poste haste.

      Comment by Jessica — April 17, 2010 @ 9:10 pm

      • LOL, “wetlands mitigation”.

        D.C. sure was a more healthful place as a malarial swamp.

        Comment by Russ — April 18, 2010 @ 5:05 am

  7. Yeah, when I try to figure out how even in principle we could shorten campaigning periods to just a few weeks or months, I find it hard to imagine. And that’s not even counting the fact that this system would never undertake such a reform.

    We’d have a better chance of getting together a critical mass of people who agree to reject this government, have a new constitutional convention, and declare themselves a new, much more direct democracy, within some part of the US. And then just engage in mass resistance to federal attempts to rope them back in.

    I’ve long thought that would be the best way for the dispossessed to confront this insurance racket mandate if the psychos really do go forward with trying to impose it. We’d be much better off with organized refusal to comply than each being exposed to hanging alone.

    Comment by Russ — April 17, 2010 @ 3:28 pm

    • I have been getting wind of a populist movement to vote EVERY incumbent out of office…every election…without respect to party or past behavior.

      I know it may be oversimplistic, but it makes sense. By the time the miscreants find the restroom, they are turned out of office. It is one thing we voters can do without requiring Congressional action.

      Comment by Jessica — April 18, 2010 @ 9:36 am

      • Yes, I’ve seen lots of proposals like that.

        But it’s no good to just vote for the opposite Washington party.

        If people still want to vote in federal elections (I sure don’t), they should at least vow to vote for neither Washington party. Either a third party, or “none of the above”, or something like that.

        Comment by Russ — April 18, 2010 @ 4:31 pm

  8. Basically, if “real change” is to occur that is probably the only way it will occur. Of course, rejecting the government, opting out, in effect, will, of course, be treated as insurrection. I’m sorry to say that I have a difficult time seeing this sort of path unfolding without, gulp, bloodshed.

    And I wonder if that is part of what holds a lot of folks back from really taking bold action as opposed to these endlessly futile efforts to work within a system that is not amenable to anything but faux reform. Modern armaments, even for those who love their firearms, are a fearsome prospect in a way that weaponry may not have been at other times and other places in history. I really don’t know, it’s just a thought.

    Comment by Edwardo — April 17, 2010 @ 5:00 pm

    • Yeah. There’s definitely nothing anyone could do by force so long as the instruments of violence are intact and obey the government.

      But in theory broad passive resistance could work. Especially if lower level and local government could be held by the resisters and their spirit. If people were willing to organize to resist at all I suppose they’d also be willing to take back their own towns.

      But for any of that to work people would truly have to relocalize economically, and get off the juice of money from above, especially from the federal government (which I imagine will be cut more and more toward the bone anyway)…

      Oh well, just some vague musings. I don’t know how all that can be done. Whatever version of it is done will probably end up happening by default once the whole thing crashes.

      Comment by Russ — April 17, 2010 @ 6:14 pm

  9. Just heard that the SEC, after a nine month investigation, offered to settle, with Goldman paying fines and penalties. Goldman refused. I read Jake Chase’s comment somewhere that this case will never go to court and I know that the majority of civil suits end in settlement. I know, too, that refusing to settle at the outset does not prohibit agreement to settlement in the future. But, hell’s bells, how strong can the case be when the plaintiff rushes to settle early on?

    Lawyers spend a great deal of their time shoveling smoke.—
    Oliver Wendell Holmes, Jr.

    Comment by Jessica — April 19, 2010 @ 4:02 pm

    • The inherent strength of the case isn’t the same thing as the plaintiff’s will to vigorously press it, if my post and many others are correct that this is just meant to be political theater.

      But just because Obama wants a certain kind of theater doesn’t mean Goldman will play along, as we’re perhaps seeing. (And as I said, I predict if GS refuses to make a deal, Obama will cave in.)

      And just to reiterate, because we can never say it enough, this system of “law” has been hijacked and perverted, so that what any human society would consider criminal has often been legalized, as is the case with most of Wall Street’s practices. So if Goldman refuses to deal, who knows if the administration could even win, in the unlikely event that they did decide to go ahead with the prosecution.

      What a mess.

      Comment by Russ — April 19, 2010 @ 4:36 pm

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