about 'betting on securities.' Here's one particularly lucid and brief
response. I hope this clarifies the issue for many. Many thanks
to John Imani, by trade a playwrite, by nature a human activist.
That explains the clarity but poses the question of why he sticks
with the arts. (I know the answer..., just can't resist the irony.)
Ed
----- Original Message -----
From: "johnaimani" <johnaimani@earthlink.net>
To: "Ed Pearl" <epearlag@earthlink.net>
Sent: Tuesday, April 20, 2010 3:50 PM
Subject: Re: [LAAMN] Dayen: The Fall Of Goldman Sachs?, Whiff of Rebellion
Spreads in Thailand
Short sale. Whereby one 'borrows' shares and sells them anticipating that
their price will trend lower and thus when the borrower repurchases these
shares to play back he purchases them at the now-reduced price and pockets
the difference.
Also one can buy 'insurance' (this esp in the case of the issuer, AIG) on
debt instruments without owning them (essentially your 'casino') and thus if
the securities fail you are paid at the insured amount. This is especially
how Goldman wagered and the payment of which bankrupted AIG (til the Fed
Reserve created out of nothing but air the $700 billion that was given to
the bankers (appx $185 billion to AIG alone.)) It has been revealed that
Blankfein was present when the administration (and Paulson from Treasury and
Bernanke from the Fed) was debating whether to pay AIG's debts at par.
----- Original Message -----
From: "Ed Pearl" <EPearlag@earthlink.net>
Sent: Tuesday, April 20, 2010 6:53 AM
Subject: [LAAMN] Dayen: The Fall Of Goldman Sachs?, Whiff of Rebellion
Spreads in Thailand
Hi. Can anyone send me an explanation of "they sought to make
profits by betting that securities would plunge in value"? Specifically.
Is there a Las Vegas type betting system, beyond bundling bad loans
and selling them to greedy suckers. Bill Maher joins me in being
puzzled, not to mention his entire audience and panel. I'd bet
many who get this would also appreciate clarification. -Ed
PS. Tthe quote is from Krugman's recent op-ed 'Looters in Loafers'
This Will be Obama's Legacy
By ALEXANDER COCKBURN
and JEFFREY ST. CLAIR
Counterpunch Weekend Edition
April 16-18, 2010
With the impending departure from the U.S. Supreme Court of Justice John
Paul Stevens at the age of 89, we lose one of the nation's last substantive
ties to Great Depression and to the effect of that disaster on the political
outlook of a couple of generations.
Stevens' father, Ernest, owned a famous hotel in Chicago - the Stevens, with
3,000 rooms, now the Hilton. It was built in 1927, and there young John Paul
met Amelia Earhart, Charles Linbergh and Babe Ruth.
But by 1934 hard times took their toll. The hotel went bankrupt. John Paul's
father, grandfather and uncle were all indicted on charges that they'd
diverted money from the Illinois Life Insurance Co. (founded by the
grandfather) to try and bail out the hotel. The uncle committed suicide, and
Stevens' father was convicted. The Illinois Supreme Court exonerated him two
years later, stating, "there's not a scintilla of evidence of any
concealment or fraud."
Thus did John Paul, still in his teens, acquire his life-long skepticism of
police and prosecutors. Between the year he went on the Court (put up by
Gerald Ford in 1974 on the recommendation of Ford's attorney general,
Chicagoan Edward Levi), and 2010, John Paul Stevens voted against the
government in criminal justice and death penalty cases 70 per cent of the
time. Only one justice - William O. Douglas, whose seat Stevens took over -
served longer on the Court. When Justice Harry Blackmun retired in 1994,
Stevens became the senior associate justice and, thus, able to assign
opinions to the justice of his choice. Stevens played his field expertly,
time and again maneuvering the swing vote - Anthony Kennedy - onto his side
by assigning him the task of writing the opinion.
The most famous case of this sort was the 2003 decision Lawrence v. Texas,
which became the equivalent for gay rights as Brown v. Board of Education
for racial discrimination. Among other Stevens-written or Stevens-influenced
landmark opinions: Atkins v. Virginia, where Stevens successfully won the
necessary majority for the view that executing the mentally retarded
constituted cruel and unusual punishment.
Stevens was also the Court's most powerful opponent of the so-called
doctrine of unitary executive power, which takes the view that the U.S.
president and his executive wield constitutionally unchallengeable power.
Stevens - again, a true conservative - opposed all such assertions and
extensions of dominance by the executive. The relevant case was Hamdan v.
Rumsfeld. Stevens wrote the majority opinion that Bush Jr. could not
unilaterally set up military commissions to try detainees in Guantanamo.
Stevens, the last protestant on the high court, described himself as a
conservative, and in one sense he was, because he tried to preserve the
spirit of the progressive Warren court through the decades-long swing of the
court toward the right, both among the Republican nominees and the ones put
up by Clinton (Breyer and Ginsburg) and by Obama (Sotomayor). As Stevens
himself has said to law professor Jeffrey Rosen, "Including myself, every
judge who has been appointed to the Court since Lewis Powell [1971] has been
more conservative than his or her predecessor."
As Obama and his counselors ponder potential nominees, the air is filled
with counsel that Obama should avoid a protracted fight and should pick "a
moderate" - i.e., pro-business, pro-government - nominee, like Elena Kagan,
49, now solicitor general and in earlier years head of the Harvard Law
School, where she hired Jack Goldsmith, head of the Office of Legal Counsel
in the Bush administration, where he was intimately tied to the torture and
detainee abuse scandals. He's Harvard's version of John Yoo. Before that,
Kagan served as Clinton's deputy domestic policy advisor, in which capacity
she oversaw, among other assignments, welfare "reform." One of her
colleagues at the White House at that time was Christopher Edley, now the
Dean at Boalt, the law school at UC Berkeley. Edley says of Kagan that her
politics were "center to center right."
In the Clinton administration, Kagan helped formulate the Democratic
equivalent of what became, in the subsequent W. Bush years, the assertion of
unitary executive power. There's zero evidence that Kagan would do anything
to redress the right-wing tilt of the Court and plenty that she might
exacerbate it, in the areas of executive power, civil liberties, and
assertion of presidential war powers. In her confirmation hearings as
solicitor general, she so entranced the right with her proclamations in
favor of the War on Terror, indefinite detention, and against any pursuit of
war crimes investigations, that Democratic Senator Amy Klobuchar (Minnesota)
said, "it sounded like she was getting a standing ovation from the
Federalist Society."
Kagan is the worst possibility thus far to surface, but the others potential
nominees are scarcely inspiring. There's the mainstream liberal Diane Wood,
who sits the Federal Appeals Court in Chicago, and Merrick Garland, a
neoliberal Clinton appointee in the mold of Justice Steven Breyer, corporate
America's judicial representative on the Court. (Stevens, by contrast, began
his legal career as an anti-trust lawyer.) Garland, another Chicagoan, is
now on the Court of Appeals in the District of Columbia.
These are the three frontrunners. The left has put up no preferred nominee,
expressing concerns that the Republicans might filibuster. So, why not
provoke just such a filibuster with a decent candidate? This appointment,
remember, is Obama's last chance to vindicate the hopes of the left that our
African-American president is, at least, as liberal as Gerald Ford and would
leave as enduring a legacy as Stevens. Come November, the Democrats will
lose control of the House and Obama's legislative powers will be
extinguished, unless he goes into full Clintonian triangulation. It is now,
and only now, that Obama can actually install a nominee with the ability to
defend and advance progressive interpretations of the Constitution over the
next 40 years.
Who could the left put up, as an assertion of what a truly progressive
justice might look like? How about Steven Bright, of the Southern Center for
Human Rights, the country's leading anti-Death Penalty litigator from
Kentucky? Or, David Cole, professor of law at Georgetown? Or, Pamela Carlan,
at Stanford, a former counsel for the NAACP and openly gay? Or, Jonathan
Turley, at George Washington, who is particularly strong on civil liberties
and the environment? Turley defended Sami al-Arian, the Rocky Flats workers,
attacked warrantless wiretapping. Or, within the administration, Harold Koh,
Korean American and one of the principle legal opponents of the torture
policies of the Bush years? Koh was originally a Reagan appointee to the
Office of Legal Counsel. Turley says Koh is the closest we have to Justice
Brandeis.
There's one more name that has been nervously circulated among progressive
circles, that of Elizabeth Warren, currently head of the Congressional
Oversight Panel on the banking bailout. Warren originally hails from
Oklahoma and a professor at Harvard Law School. Warren is as close as we can
now get to Stevens' economic populism and has been eloquent on the topic of
corporate skullduggery and on the pro-bank tilt of the bailout. She would,
actually, be a shrewd choice for Obama, because it would turn the Supreme
Court confirmation hearings into a debate on economic justice, consumer
protection and regulation of Wall Street where Warren's Republican
opponents be forced to take the side of the rich, at a moment when the rich
are not popular with a large number of Americans.
Don't hold your breath.
Alexander Cockburn can be reached at alexandercockburn@asis.com.
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