Discourse.net

I agree wholeheartedly! What follows is my action plan for restoring justice to America.

First, let's send all the investors who lost money in the mortgage crunch to Milberg Weiss, a well-known security plaintiff's firm whose next address will be the federal prison system because they've run a racketeering operation extorting over USD 45 billion from US corporations since 1965, skimming 30% of that sum off the top for themselves. That will certainly set matters aright, won't it?

Then, let's get back to work with "our" legislation pen and ban sellers from buying shares, buyers from selling shares, and advisers from doing both. This way, no one will be buying or selling shares without proper advice or taking advantage of any two-sided transaction. Of course, this will kill the capital markets, but those are nothing but cesspools of greed serving no useful economic or social purpose or goal.

Finally, let's appoint a committe of lawyers to decide for everyone who gets what capital and how it shall all be used, the prevailing standard for which decisions shall of course be "the common good". This way, no unjust ecomomic disparities will arise from the application and ownership of capital because it will be applied to "the common good", and social justice will finally prevail in our great nation.

Let's get started immediately!

Well, I think there's an important difference between people who lost money aping the bad bets of their advisers (who also lost their own money, and thus presumably didn't know any better) vs. people who lost money while their advisers used smarter strategies for themselves. And even in the latter category, those who really should have known better (e.g. institutional investors), or ignored good advice, have no one else to blame unless they were actively misled. There is an issue in the first category as to whether the advisers should have known better, but as it is clear that so much of the industry did not know better, it will be hard, I think, to argue as a legal matter that an ordinary adviser applying the routine standards of the trade objectively should have done better. (Even if that's what I sort of believe.)

It's also hard to fight back when the radio active sludge burnt out your wallet.

Carly,

Hedges don't indicate that Goldman saw something in particular coming, only that it wanted to avoid risk in this market. This is typical of a broker. It is also typical of a broker to sell its own inventory to its customers. Goldman's customers include Merrill Lynch, Deutschebank, and Citigroup's SmithBarney group, which have lost billions, but still have their own yachts and don't lack in sophistication.

Wait.. you're a law professor, right? Correct me if I'm wrong (IANAL etc etc), but as far as I can tell, unless GS absolutely screwed you, bled you dry, fed your corpse to hyenas and sold the hyena pelts for a profit -- a big profit -- you have precisely no case.

I am quite serious. How can you sue? Because if you can sue Goldman, you can sue the entire financial sector, which last I checked was 20% of US equity capitalization.

And if you can sue a sector worth $3 trillion (with a 'T'), I want in.

C'mon, tell us. Them's some deep pockets.

If you can sue Goldman, you can sue the whole sector.

That's $3 trillion (with a 'T') in capitalization waiting for pillage.

Are you a lawyer, or are you a mouse?

[Note: snark entirely intentional]