Winston wrote:
On 4/19/2010 10:08 AM, John R. Carroll wrote:
Ignoramus9593 wrote:
On 2010-04-19, wrote:
Let's say that I sell you a product that I know is worthless
and will almost certainly cause you to lose a large amount
of time and money. Let's say that I game the system
so that the product appears to be well regarded and a good
value; I use that to convince you to buy.

Exactly.

Let's say that I sold you a lathe that was made of parts handpicked
to fail, greased with abrasive added to grease, pee instead of oil,
etc.

Furthermore, assume that my client actually built this lathe so that
it will fail as early as possible, say to eliminate competition
(just to make this example more realistic).

I know that full well, sell you a lathe like that, and say "here's a
lathe, as far as I know it is great, it runs, but it is sold AS IS".

Then the lathe fails in 2 weeks.

Would I be a fraud? Yes. Would saying something like "but the buyer
considered hilself sophisticated", absolve me from responsibility?
No.

Nicely put, Ig.

They haven't been charged with, or done, anything criminal.

Bill Moyers Journal that aired last night:

http://video.pbs.org/video/1471123509/#

"SIMON JOHNSON: (...) the person who nailed this intellectually a
long time ago was from the University of Chicago. George Stigler.
Not a man of the left. He got a Nobel Prize for his observation.
All regulated industries end up with the industry capturing the
regulators."

It's a little disingenuous to claim that nothing criminal took place
only because the captured regulators were told to regard broad
categories of theft as 'technically legal'.


I follow Moyers to the extent possible and he's just excellent.

There isn't anything "disingenuous" about such a claim at all.
You and Ig are placing the failure of both the voters and regulatory
agencies on the backs of the regulated.
I'm not condoning GS's behavior in any way, I'm saying that putting people
in jail anytime someone gets mad is a bad idea.
Even promoting that possibility is counterproductive.

As close as there is to a silver bullet to our current dilemma would have
been to trade derivative products on regulated exchanges.
At that point, most of the behavior that proved so problematic wouldn't have
happened because all of the sleights of hand would have been obvious in real
time.

Another mistake was in letting money, real money as demand deposits, get
into the hands of businesses that are speculative by nature.
Goldman Sach's is a bank and they shouldn't be unless they want to divest
their investment banking and hedge fund divisions.

All of these companies were granted the power to print alternative
currencies that were backed by their actual currency based demand deposit
operations. Only an idiot would expect them not to have gone ahead and done
just that when it could be done in a completely opaque environment. They
would actually have been failing in their duty to shareholders had they not.

The final failure of our government was the lack of any resolution authority
whatsoever.
Having allowed the comingling of previously seperated types of financial
services operations, the resolution authority and mechanisms weren't updated
to reflect the new reality.

None of this couldn't have happened in the face of a well informed, active
and motivated electorate.
America did itself and what's "disingenuous" is claiming otherwise.

--
John R. Carroll