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April 24, 2010



For the record, I have never touched marijuana, whether to inhale or not. I've also never tried a securities case, read the law or the complaint in the GS case. That said...

OK, Barry Ritholtz offers: 10 Things You Don’t Know (or were misinformed) About the GS Case:

1. This is a Weak Case: Actually, no — its a very strong case. Based upon what is in the SEC complaint, parts of the case are a slam dunk. The claim Paulson & Co. were long $200 million dollars when they were actually short is a material misrepresentation — that’s Rule 10b-5, and its a no brainer. The rest is gravy.

2. Robert Khuzami is a bad ass, no-nonsense, thorough, award winning Prosecutor: This guy is the real deal — he busted terrorist rings, broke up the mob, took down security frauds. He is now the director of SEC enforcement. He is fearless, and was awarded the Attorney General’s Exceptional Service Award (1996), for “extraordinary courage and voluntary risk of life in performing an act resulting in direct benefits to the Department of Justice or the nation.”


3. Goldman lost $90 million dollars, hence, they are innocent: This is a civil, not a criminal case. Hence, any mens rea — guilty mind — does not matter. Did they or did they not violate the letter of the law? That is all that matters, regardless of what they were thinking — or their P&L.

4. ACA is a victim in this case: Not exactly, they were an active participant in ratings gaming. Look at the back and forth between Paulson’s selection and ACAs management. 55 items in the synthetic CDO were added and removed. Why?

What ACA was doing was gaming the ratings agencies for their investment grade, Triple AAA ratings approval. Their expertise (if you can call it that) was knowing exactly how much junk they could include in the CDO to raise yield, yet still get investment grade from Moody’s or S&P. They are hardly an innocent party in this.

5. This was only one incident: The Market sure as hell doesn’t think so — it whacked 15% off of Goldman’s Market cap. The aggressive SEC posture, the huge reaction from Goldie, and the short term market verdict all suggest there is more coming.

If it were only this one case, and there was nothing else worrisome behind it, GS would have written a check and quietly settled this. ... I suspect this is a tip of the iceberg, with lots more problematic synthetics behind it.

And not just at GS. ...

6. The Timing of this case is suspect. More coincidental, really. The Wells notice (notification from the SEC they intend to recommend enforcement) was over 8 months ago. ...

7. This is a Complex Case: Again, no. Parts of it are a little more sophisticated than others, but this is a simple case of fraud/misrepresentation. The most difficult part of this case is likely to turn on what is a “material omission.” Paulson’s role in selecting mortgages may or may not be material — that is an issue of fact for a jury to determine. But complex? Not even close.

8. The case looks thin: What we see in the complaint is the bare minimum the prosecutor has to reveal to make their case. What you don’t see are all the emails, depositions, interrogations, phone taps, etc. that the prosecutors know about and GS does not. ...

Going back to who the prosecutor in this case is: His legal reputation is he is very thorough, very precise, meticulous litigator. If he decided to recommend bringing a case against the biggest baddest investment house on Wall Street bank, I assure you he has a major arsenal of additional evidence you don’t know about. Yet.


9. This case is Political: I keep hearing that phrase, due to the SEC party vote. It is incorrect. What that means is the case is not political, it means it has been politicized as a defense tactic. ...

10. I’m not a lawyer, but . . . Then you should not be ignorantly commenting on securities litigation. Why don’t you pour yourself a tall glass of STF up and go sit quietly in the corner.

Me again, anduril. That's right, I'm gonna ignore Ritholtz's advice. :-)


Looking to restore your faith in the financial system? Don't look here: In Senate testimony, ratings agency heads won't take the blame. It's long and disgusting, but a blog simplifies it somewhat under this heading: Rating Agency Testimony: "Must say yes" to Wall Street:

Testifying under oath before the Senate Permanent Subcommittee on Investigations, officials who were closely involved in giving investment-grade ratings to complex financial instruments backed by shaky U.S. mortgages described how they were pressured to give Wall Street what it wanted. ... Called to appear before the panel, Richard Michalek, a former Moody's vice president and senior credit officer, described the ratings process for deals that could bring more than $1 million in fees as a "must say yes" atmosphere.

Must say yes! Presumably as a public service, right? It couldn't have been for the fees, and a little moral courage--the courage to just say no--could never be expected, much less demanded.


Getting back to the pot story, marijuana seems considerably easier to home brew than either cigarettes or booze so I'm rather doubtful its legalization is going to reap anywhere near the tax dollars they're assuming, even on the low end.

CAnd considering the apparently now well established link between pot use and psychosis for those susceptible, and as the father of a schizo affective son, I'm not too sanguine about the societal consequences either.

Melinda Romanoff


I'd take Ritholtz with Lots of salt. He's a prolific economist with a brand new plow blade for his idea of an agenda. You need to go back years to appreciate is "spin" on things.

Not going to touch the ratings thing, might get infected with an STD, or something, from them.


We've gone from Medical Marijuana to Good Citizen Marijuana.

I don't know the answer. I no more want a bunch of stoned people driving than I want drunk people driving. They are going to have to develop some sort of legal limit/test.

Here in CA, medical marijuana is relatively easy to come by, and it's legal for 18+. As I understand it, plain old legal marijuana would be legal for 21+, so there is going to be that gap to fill (or that missing revenue).


This is really a sign of just how broke we are.

nathan hale

So, let me get this straight,they want to ban transfats, dairy, burgers, caffeine et al, but they went some soma gelt, with this and
the reconsideration of LSD, from last week.


No kidding, Nathan - and don't forget salt!


Exactly, Nathan.

nathan hale

On the other point, I'm trying to figure who isn't the guilty party here, Goldman, ACA,
the SEC and the rating agencies were all trying to 'game the system'


Instapundit has a link to VDH at pajamasmedia about what is wrong with California. I especially liked his postscript:

PS. I don’t vote Democratic any more much, if at all, but haven’t gotten around to changing my registration to Independent. But this June I will at least once more vote in the Democratic primary, largely for Mickey Kaus, whose online campaign seems to be reminding us just how absurd Barbara Boxer has become. He has good sense about unions and amnesty and state spending (my late mother, an appellate judge, used to speak highly of state Supreme Court Justice Kaus, a Democratic moderate, who, I think, was his father). In general, I have listened to all three senatorial Republican candidates and they are all good. Note — Barbara Boxer is a particularly unfortunate sort of politician, combining arrogance (remember her much publicized slapdown of a general and African-American businessman) with a loud sort of ignorance. (A diversity note: Three of the most powerful women in the world that have a lot to do with running the U.S. are multimillionaire, doctrinaire liberals, who at one time lived within about 50 miles of each other in San Francisco — Nancy Pelosi, Dianne Feinstein, and Barbara Boxer.)

Victor says: ...that have a lot to do with running the U.S. Somehow, I think that is a typo and he surely meant ruining.

Thomas Collins

It is difficult for me to get high on the pot debate or the strength of the SEC's case against Goldman when Congress is on the verge (perhaps with the active help of the GOP) of substantially federalizing corporate governance rules. This will not prevent any future financial market meltdown but will deprive the states of their longstanding role as laboratories of corporate governance experiments. See LUN (via Instapundit) for a more detailed look at this.

This supposed financial reform bill could in the medium and long term turn out worse than the ObamaCare legislation. Most folks are attentive to the problems with ObamaCare, while I fear the federalization of corporate governance will slip under the radar screen. I think it is more likely that ObamaCare can be fixed in a future Congress than the upcoming corporate governance federalization.


Running could mean trod upon, and in that case VDH and CC are saying exactly the same thing! Great minds think alike!


I'm with TC--Everything seems frivolous compared to the big stuff on the front burner.

I'm drowning my anxieties in cooking--braised short ribs, saffron risotto, mesclun salad with mustard vinaigrette and wild blueberry souffle.

The hell with it all.


It is difficult for me to get high on the pot debate or the strength of the SEC's case against Goldman when Congress is on the verge ... of substantially federalizing corporate governance rules.

Me too, TC. I've been disappointed that fearless leader has not posted much on this topic, so that we can discuss it.


Heh, Dr J No man is a hero to his personal horde of marauders.

Captain Hate

I don't understand why VDH is considering registering as an independent since doing that means he can't vote in a primary (at least ones where they check on such things, which I realize isn't all states; and thanks again Michael Steele for having done nothing to address this while you're busy torpedoing the GOP). Or am I missing something?

Patrick R. Sullivan
For the record, I have never touched marijuana, whether to inhale or not.

Then what is your excuse.


Clarice - many years ago as a young mom, with limited time and cooking skills, I stumbled upon a braised short rib recipe in a woman's magazine that was just wonderful. Somehow, I lost it immediately afterward to my utter dismay. Care to share you recipe? (you always seem to have really, really good ones!)

nathan hale

I know it's considered adhominem, but any bill with Chris Dodd's finger prints on it,
but every single vote he has done really has
set back transparency in financial transactions. "Friend of Angelo, very special beneficiary of aIG's Cassani.If he doesn't deserve a 'tar and feathering' then no one does


I'd take Ritholtz with Lots of salt. ...

Not going to touch the ratings thing, might get infected with an STD, or something, from them.

The name was familiar to me, but I knew no specifics. I tried a few rudimentary searches but nothing specific popped up immediately. My wife and I had to get out on our Saturday morning walk, so I went with what I considered a provocative post--that is, with regard to thought. OTOH, you would have to agree with Ritholtz's take re the ratings agencies--it was unquestionably a big part of the mix, an essential ingredient, and a rotten one.

On the other point, I'm trying to figure who isn't the guilty party here, Goldman, ACA, the SEC and the rating agencies ...

What's wrong with "all of the above?"


cc--I love this one from Williams Sonoma. I'm using the slow cooker recipe, but if you go to their site they have the same thing made the regular way--They also have several other versions, including an Asian version.
4 lb. bone-in beef short ribs
Salt and freshly ground pepper, to taste
2 cups all-purpose flour
3 Tbs. olive oil, plus more as needed
2 large yellow onions, chopped
3 large carrots, peeled and cut into 1-inch chunks
4 garlic cloves, chopped
1 bottle (750ml) full-bodied red wine
1 can (6 oz.) tomato paste
3 fresh thyme sprigs
2 fresh rosemary sprigs
1 bay leaf
1 to 2 cups beef stock
Season the short ribs with salt and pepper. Spread the flour out on a rimmed baking sheet. Dredge the ribs in the flour, shaking off the excess.

In a Dutch oven over medium-high heat, warm the 3 Tbs. olive oil until nearly smoking. Working in batches, brown the ribs on all sides, about 10 minutes total. Transfer to a slow cooker.

Add more oil to the Dutch oven if needed. Reduce the heat to medium, add the onions, carrots and garlic and cook, stirring occasionally, until soft, about 10 minutes. Transfer to the slow cooker.

Add the wine to the Dutch oven and cook, stirring to scrape up the browned bits. Add the tomato paste, thyme, rosemary and bay leaf, mashing any large chunks of tomato paste with a spoon. Increase the heat to medium-high and cook until thickened and reduced by half, 8 to 10 minutes. Add the wine mixture to the slow cooker along with enough stock to come halfway up the sides of the ribs. Cover and cook on high for 6 hours according to the manufacturer?s instructions, stirring occasionally.

Skim the fat off the sauce. Discard the herb sprigs and bay leaf. Transfer the ribs, carrots and sauce to shallow bowls or plates and serve immediately. Serves 6.


For my money, VDH is a tiresome bore who should write in his academic field. He basically has one or two columns that he constantly recycles.

Here's another issue not to get excited about: Fast Approaching the Tax Tipping Point. While it's true that people who don't pay Federal Income Tax do pay lots of other taxes, the importance of the FIT far transcends even its sheer size.

Thomas Collins

My fear is that the GOP will get some of the financial instrument regulations watered down, leave in the federalization of corporate governance provisions and declare victory as Obama signs another monstrosity into law.

The focus is all wrong. The focus should not be on federal rules on compensation and other federal intrusions into private businesses. Congress holds hearings on every topic under the sun which hearings become pontification sessions. Instead of pontificating, Congress should bring in experts on the economics of securities regulation and quiz them on whether they think the benefits of amending the securities laws to require more disclosure regarding this or that financial instrument outweigh the increased costs to business of increased disclosure requirements. In other words, it may be legitimate to look closely at the disclosure framework in which companies operate. Public companies already are required to disclose a lot of information, and increased disclosure in certain areas may be appropriate. However, this is not the approach Congress is emphasizing. Rather, Congress seems hell bent on enacting more substantive rules governing how businesses operate. Heaven help us.

Of course, God forbid that Congress might reconsider some rules already on the books. If Congress were serious, it would revisit Sarbanes-Oxley.

Whatever one thinks of the SEC's action against Goldman Sachs, at least the SEC is bringing an action under a framework of rules that have worked fairly well (namely, the provisions with respect to disclosure of material information to investors). When financial legislation morphs from Congress setting the disclosure framework to Congress setting the substantive rules of business operations, the economy suffers.


Thanks, Clarice - cut, copied and printed out. I think that will be Sunday dinner (desperately need to go grocery/supply shopping since I spent last weekend in Monterey).

Thomas Collins

In addition to its jackassery regarding federalizing corporate governance, Congress exhibits a studied ignorance to the benefits of having troubled company situations resolved in bankruptcy courts, which have the most expertise to deal with these situations. See LUN for a short blog post on this aspect of Congressional incompetence and how the notion that the bankruptcy process takes too long is nonsense.


The world is full of issues not to get excited about. How about this: Wall Street shuffle: Their ‘huge playground’ is safe.

Those of you worrying on Wall Street, please do not be distracted by the president’s apparent assault. He’s still got your back. With the push beginning Monday to push through a “cap-and-trade” energy tax and rationing scheme—without committee hearings and possibly, according to Harry Reid, even using “reconciliation” again—your big “ask” appears to be in better shape than ever for being crammed down on the rest of us.


Cap and trade would create what Commodity Futures Trading commissioner Bart Chilton anticipates as a $2 trillion market, “the biggest of any [commodities] derivatives product in the next five years.” That derivatives market will be based on two main instruments. First, there are the carbon allowance permits that form the nuts and bolts of any cap-and-trade scheme.… In addition to trading the allowances and offsets themselves, participants in carbon markets can also deal in their derivatives—such as futures contracts to deliver a certain number of allowances at an agreed price and time.

By biggest, do we also mean this fictional “market” is thus “too big to fail”? For fail, it certainly will. Like the Fannie/Freddie mess, this too will have been created by the state, and therefore surely would be bailed out by the taxpayer.

So it fell to a nominee to the Federal Energy Regulatory Commission to tell a Senate committee that it might take 1,400 new bureaucrats to oversee the carbon-trading market that the House’s climate change bill seeks to establish.

With banks like J.P. Morgan and Goldman Sachs running with this scheme cooked up in great part by Enron (with the able counsel of Goldman) in the 1990s, the Financial Times commented, “It is perhaps not surprising, therefore, that so many carbon traders used to work at Enron. Louis Redshaw, who is now the head of environmental markets at Barclays Capital, spent four years working for Enron in London and set up its renewable energies desk. Enron alumni have also ended up on trading desks at other investment banks.”

So don’t cry for Wall Street. The Obama administration and Democratic Party are about to give them what the carbon fat cats have long pined for. What could possibly go wrong?

nathan hale

This is all they do but pontificate, they rarely contribute anything of substance to
the matter at hand, proof of which is their
logorheic exemplars now in the Oval Office
and the Naval Observatory respectfully. It
seems every law has a cosnequence opposite it's stated purpose, the CRA made more people
homeless, in the long run, Sarbanes Oxley permitted more fraud, but hampering issuance
of legitimate financial instruments, etc, etc

Thomas Collins

I may follow your advice, Clarice, and focus on dish preparation. My dishes are far less tempting than yours, but I must say that my simple green salad with freshly squeezed lemon and lime juice drenching each stage of the salad making process is always a hit. Simply sprinkling some dressing on top of a dry salad is a no-no.


TC, I think they do know the law of bankruptcy. But it would have given the secured creditors more and the unsecured creditors (aka the unions) less than the robbery scheme they enacted.


Over at Aces I see this dismal news:

The campaign to topple Boxer and take the governor's mansion has a rough road ahead. The Democratic advantage in party registration—14 percent—is the largest it's been in at least twenty years.

Damn - I hope the increase is because some on our side are wanting to vote for Mickey Kaus!

Thomas Collins

Clarice, I suppose they view bankruptcy judges as too independent from Congressional control. The bankruptcy system in the US actually works pretty well. I suppose for Congress that is as good a reason as any to preempt it.

nathan hale

That kind of proves my point, wth, is a carbon credit, it's another synthetic instrument, that has little to do with what
we really need is more power production.

Btw, in the nearly 9 1/2 years since I first
heard and read of Professor Hanson, I have found him, almost invariably on point. Who would have thought a classicist would have
so much to say on the vagaries of 21st Century polis way fo warfighting, economy, culture et al

Steve C.

Never forget Brooks' First Law of Politics
"We have to do something to save our phoney baloney jobs."

There is a bill titled "Financial and Regulatory Reform". What's in the bill? Who knows? It's over a thousand pages. Just like health care I'm sure it contains a welter of provisions working at cross purposes and promises us unintended consequences galore.

Yesterday, the Senate had a hearing on the failure of the ratings companies, Moodys, Fitch et al. What was learned and was that knowledge incorporated into the bill? Who knows? And let's not forget the House of Representatives has already passed a reform bill. Interesting that. They passed a bill without even the benefit of investigating what actually happened.

The adverse results of this administration will dwarf the consequences of 12 years of FDR.


VDH's old homestead is just down the road a piece from me. Whenever he is around, he is usually a guest on the local talk radio station - he is always interesting to listen to. However, I was dismayed when I last heard him (about 1-2 weeks ago) being very negative about the possibility of repealing any of Obamacare. I am not ready to give up on that idea just yet.


TC, I expect any day they'll ask Sally Fields to be their chief witness on the financial reform bill--after ll she once played a mill worker so surely she's worth listening to.

Or Pam Anderson on the tribulations of life guards in today's market environment.


Dare we hope? Will Wall Street Be Saved by Porn?

You can’t make this stuff up. When Goldman C.E.O. Lloyd Blankfein and the firm’s wonderfully named C.D.O.-hawker Fabrice Tourre sit before Congress next week, how is Senator Carl Levin, chairman of the investigations subcommittee, going to put them in their place knowing that his A-number-one enforcement team was surfing for smut while they were busy leveraging our entire society?

Oh and there's LOTS more good, ripe commentary, including this bit that I can't resist quoting (I'm a sucker for assonance:

Carol Platt Liebau at Town Hall piles on with rhetoric about our onanistic “overlords”...
Thomas Collins

LOL, Clarice. How about Bernie Madoff to testify on legislation regarding the Federal Reserve. Bernie showed himself an expert in Ponzi scheme money supply management, which seems to be an important Fed function.


Perfecto--TC. You could qualify as a first rate Committee Chief Counsel.

nathan hale

You know a sign we've drifted from merely 'bearded spock' to full fledged Bizarro universe is this, in the LUN


You don't have to be a fan of Steve Pearlstein nor unconcerned with the role of government to nevertheless enjoy this article: Wall Street's know-it-alls can't tell right from wrong.

Bonus link: Is Goldman Sachs Dragging Down Warren Buffett? Call me vindictive, but I'd personally enjoy seeing this life long Dem get his come-uppance at the hands of Goldman.

nathan hale

Pearlstein, wasn't he one of the first to introduce the "tea party goer as terrorist"
meme, the previous spring. Wall Street does
seem to ignore the maxim by Jurassic Park's
Ian Malcolm, 'just because something can be done, doesn't mean it should' then again the same should be said for all recent government
initiatives, many with much less justification

Captain Hate

The campaign to topple Boxer and take the governor's mansion has a rough road ahead. The Democratic advantage in party registration—14 percent—is the largest it's been in at least twenty years.

They can have all the advantage in registration they want (btw I'm a registered donk even though I haven't voted for one of the jizzmops in a general election in decades; in this Soviet it just makes sense to vote in their primaries) but if the jobless situation persists it won't be pleasant for them unless Californicate is too far gone anyway...


Heh. You don't have to believe or agree with everything you read at Minyanville--I just like some of the writing: Five Reasons the Financial Reform Bill Is Bogus. For example:

Reason #1: Literally No On Earth Knows What It Means

Reason #2: It Won’t Ever Work

Let’s just say the bill is one-thousand four-hundred and eight pages long, because I saw the number on the Internet. You know what the lawyer/wonks who actually read this thing are going to do with their unparalleled comprehension? They’re going to explain to their employers (the evil banks sucking the life blood of Main Street) how to go about making absurd amounts of money by trading and selling financial devices that pass through loopholes in the bill. The lawyers aren’t necessarily “bad people” for conducting themselves in this manner. The banks are paying the lawyers absurd amounts of money solely to find the bill’s loopholes. Bankers and lawyers are uneasy allies. This isn’t a moral issue; it’s a business deal.

The lawyers write a brief. Many of the practices suggested in this brief, and what the traders do with it, will someday be page 1,409 of a future reform bill. But, at least for the next few years, the brief is a license to print money doing stuff that won’t be illegal for ages. The banks will deal with repercussions then. For now, “Surfs back up, boys... and, uh, you, Betty!”

Reason #3: None of the Accused Parties Are Going to Jail

Reason #4: The SEC Went After Goldman for Political Reasons and the Press Knows It

I read the New York Times because the current administration leaks news to it. The Wall Street Journal is a better paper, but I generally know what they’re going to say. The Times is more apt to flabbergast me. I enjoy a good flabbergasting.


When I didn’t bother to call but rather pretended to have a conversation with SEC Chairwoman, Nancy Shapiro, she commented:

Finally, Reason #5: The Bill Was Passing Anyway; Holding a Pep Rally Was Just Running Up the Score

Lots more.


Alan Grayson proposing something that would be good for America, that is really, really weird?


How much marijuana should be added to brownies and at what point?

nathan hale

I know Pagar, in his moments of lucidity, Grayson, can occasionally hit the target, most times he's like a parody of a character from Python.


Actually, I read somewhere that you can have the brownies later.


I can check it out in the Alice B Toklas cookbook if you really need to know.

Charlie (Colorado)

Based upon what is in the SEC complaint, parts of the case are a slam dunk.

Anduril, if you base your conclusion only on what's in the complaint, any complaint, the case will always look like a slam-dunk.


Questions left to answer:

Would drug testing as a condition for employment be deemed the next great "privacy invasion?"

Would the feds then have to dictate that companies must not drug test as a condition for employment?

#3 Ignatz: "...marijuana seems considerably easier to home brew..."

A brilliant deduction, indeed.

Charlie (Colorado)

How much marijuana should be added to brownies and at what point?

1/2 to 1 cup, fold into the batter before baking.

Warning: the marijuana won't come on for at least a half hour after eating. Do not, do not wait 15 minutes and say "damn, it's not working, I should have another one."

Actually, I read somewhere that you can have the brownies later.

It is imperative to have chocolate and salty snacks, and the number of a late-night pizza delivery place. (See above.)

(C'mon, I was an undergrad in Boulder. In the 70s.)

Charlie (Colorado)

Would the feds then have to dictate that companies must not drug test as a condition for employment?

If marijuana were legal, would it be necessary to test for it? Or even desirable?

Charlie (Colorado)

Or am I missing something?

He says he won't do it until he's at least had a chance to vote for Mickey.

Frau Faulpelz

ccal - This was one of the winning (family-rated)comments at Aces:
"Of course the repub #'s are falling....they are all leaving. Pretty soon the whole state will be Dems."

My small newspaper reported that San Bernardino County now has more registered Dems. It was always a reliable Rep. county. Thank you ACORN, COI or whatever you call yourselves, neocommies.

nathan, I'm with you on VDH. He can be a broken record as far as I'm concerned. Someone will listen who hasn't before and be enlightened.


Another piece of good news:
WASHINGTON (AP) - The Supreme Court has turned down ACORN's request for help in its lawsuit claiming Congress was wrong to shut off the activist group's federal funding. The high court on Friday refused to throw out a decision by the federal appellate court in New York City. That court had decided to freeze a judge's determination that Congress acted unconstitutionally in yanking the group's funding. ACORN, which bills itself as an advocate for low-income and minority home buyers and residents, has drastically cut its operations since losing its funding.


Anduril, if you base your conclusion only on what's in the complaint, any complaint, the case will always look like a slam-dunk.

Which, I suppose, is why Ritholtz introduced his statement with the qualifying phrase: "Based upon what is in the SEC complaint..." Duh! Moreover, Ritholtz offers 10 points, several of which offer additional reasons for thinking that the SEC case--or, as Ritholtz further qualifies his statement, "parts of the case"--may have merit. So why didn't Ritholtz offer a comprehensive critique of both sides? Maybe because he's an author who wants to generate debate, not put people to sleep, and because his overall point is that much of the commentary on the conservative side has been, precisely, one sided.

Anyway, if you follow the link you'll see that, in the true spirit of the case, he's putting his money where his mouth is. Rather than wasting valuable time posting silly comments here, why not follow the link and arrange to make a little easy money at Ritholtz's expense? Or at least address the substance of his argument.


--#3 Ignatz: "...marijuana seems considerably easier to home brew..."--

--A brilliant deduction, indeed.--

Well it seems a deduction too brilliant to make for all those clowns rubbing their hands together about the copious pot taxes they're going to be collecting, which was the full context of my comment, asshole.

JM Hanes

Thomas Collins:

"I fear the federalization of corporate governance will slip under the radar screen."

With the collusion of Republicans, which makes it all the more disheartening. What's stunning to me, however, is how little of it is, in fact, sub rosa. Obama singlehandedly stood bankruptcy law on its head in plain view, with the connivance of both unions and "big business."

Over at the Corner they've been quoting WFB saying, "The problem with socialism is socialism. The problem with capitalism is capitalists." Capitalists give great lip service to free markets and competition, but what they dream about is monopoly. There's a reason that the Democrats are getting the lion's share of corporate donations; they've finally realized they've got something in common. Lobby Washington, corrupt Chairman Dodd, et voilá.

On the opposition side, to which Republicans seem only partially inclined, I'm worried that the original fiscal/states' rights mojo of the Tea Party movement has been largely subsumed into the Healthcare debate, instead of what should be the other way around. The personal impact of financial regulation and control is not as immediately obvious, and unfortuantely, Republicans jumping on the politically attractive "Repeal Healthcare" bandwagon don't seem to be working nearly hard enough to craft a compelling message about the dangers of federal control on every front.

Those dangers include centralizing "command and control" in the Tea Parties too. Republicans in DC would love to co-opt TP energy, and the press is desperately seeking some kind of national leadership handle/angle on the story, but IMO, the antidote to Washington will never be found in Washington. The antidote is beefing up the power and the conservative mandate for Governors to mount the resistance.

In terms of fiscal messaging, it's worth remembering that, much to Democratic consternation, blue collar Republicans have not, historically, voted their individual pocket books alone. So yes, it's the economy, stupid, but even folks who don't get the ins and outs of financial regulation -- among whom I number -- are fully capable of getting the ideological memo. It's the control, stupid.


a few points;

1 - the price of pot in California has fallen from $3,000/lb to $2,000/lb, making growing in more expensive, especially concerning lgal costs, than it returns on the investment. Heard this from a photographer friend who lives in the Green Triangle in NorCal. The primary cause is lack of law enforcement and the virtual legalization here. The street price is still $300/oz. Legalized and taxed, it will drop like a rock and we will have stoners everywhere. I have to believe this is true in this state anyway with the amount of production.

2 - pot is certainly antithetical to the Puritan ethic of hard work

Thus to me, legalization is really the last straw. We are in such a hole right now that it will take all hands to the pumps to keep the ship from sinking.

3 - Goldman and the big houses typical make their money on the spread, whether up or down. They're like the casinos and skim theirs. They may hold positions on both sides, but you can make enough from the spread to do just as well legally.

4 - Rule #1 in a buyers market, sell. In a sellers market buy. As I used to tell my friends, nobody has more supercomputers and rocket scientists than Goldman. They lie in wait for Joe Pension Fund or the hedgers like highwaymen.

Yes, they may have crossed lines, but overall, to them, with their access and market intelligence and the best tools in the business, plus owning the U.S. Government, it is like taking candy from babies.

Lastly, if their is money to be made in the pot business, ADM and Cargill will enter and Goldman will be their bankers.


In CA, it is up to the parties to decide whether or not they'll allow independents to vote in their primaries.
Now, I have a problem with this as long as taxpayers are paying for the primaries. However, in recent years only Democrats have allowed independents. In order to vote for Rudy I had to, for the first time in my adult life, register as a Republican.
Registering as an independent would only be self-satisfying for VDH, but nothing more. It wouldn't allow him to vote in whichever primary he chose.


I stayed registered a Dem for years because I wanted to vote in the primaries. Then Clinton came along and I thought it too embarrassing. So I registered Republican. In truth, the choice between various Dems for local office is rather ephemeral--they all stink.


2 - pot is certainly antithetical to the Puritan ethic of hard work

What, you don't America as a gigantic Yemen (qat) or Jamaica?


In truth, the choice between various Dems for local office is rather ephemeral--they all stink.

Truer words were never spoken!

Frau, I got my gardening chores done early, so went to the market, came home and put Clarice's yummy short rib recipe in the slow cooker (it was all I could think about after she posted her dinner menu). Anyway, earlier, on some blog (not here, I don't think) I read that quite a few donks had invaded Arizona from California, but otherwise I agree with you that sane conservatives are leaving the state in droves. I am sane, but I have a lot of kids, grandkids, etc. that I don't want to spend my senior years away from.

Melinda Romanoff



sane conservatives are leaving the state

I admit that I am starting to look for places where I can relocate my small company, I do hope that the state can recover, but I'm deeply skeptical.

Melinda Romanoff





I would look at Guam, assuming of course that it has not tipped over by then.

JM Hanes


"pot is certainly antithetical to the Puritan ethic of hard work. Thus to me, legalization is really the last straw."

I, personally, think the Puritans often get a bad rap, but you might want to delve a little deeper into Puritan ethics, before you're overcome by nostalgia for the good old days.


Reno does not have a good University, and yes, I know the president there. I worked for him at ASU.

Texas, North Carolina, Georgia and Tennessee lead the pack at the moment.

Jane says obamasucks

(C'mon, I was an undergrad in Boulder. In the 70s.

Hey that's my excuse too!

Pot is $2000 a lb? Really? Wow I really am getting old.


think ergot..when you think of Puritans..It helps you to see witches and warlocks more easily.

Thomas Collins

I think that anyone interested in the structure of government established by the US Constitution, and the various powers of the President, Congress, federal courts and the states, will be fascinated by the Reynolds/Althouse discussion on Arizona's recently enacted bill re illegal immigrants. See LUN (via Instapundit).


So, let me get this straight,they want to ban transfats, dairy, burgers, caffeine et al, but they went some soma gelt, with this and
the reconsideration of LSD, from last week.

...and like cc said, they want to ban salt.
So we are banning foods, but looking to legalize drugs? Just idiocy.
A more lethargic, addiction prone young adult population is just what the USA needs.

Do the groups or people that advocate for legalizing pot have any children? Do they care about the future of young people or what will happen to our nation?


Most of the daily pot users I knew were NOT big income earners. Most of the "rich enough to tax" users were either living off Mom and Pop, or dealers.

Jane says obamasucks

I know many people my age and older who smoke pot - doctors, lawyers, business people. They don't smoke it at work obviously, just like I don't drink at work. I think in the 50 + crowd it's a fairly normal thing. And I bet we have some pot smokers posting here.

I'm ambivalent on legalization, most likely because I don't smoke it, and I don't have kids.


LUN is an article at JWF about recycling gone mad in the UK. 9 different bins! I think Penn (of Penn and Teller) had a parody video about this. You can't parody the left anymore, because tomorrow it is reality!

The video at the end is sorta creepy. A young person that advocates against AGW. He was trained by Al Gore. He says we can all do little things - change light bulbs, or some big things - "go after large corporations". What exactly does "go after large corporations" mean? ...
We are raising a generation that hates "large corporations"...just because.


LUN is the Penn and Teller Recycling Test.


Yes, I saw, Janet how life imitates good satire/


Tornadoes and oil. The things might leave people alone now.

Rob Crawford

Getting back to the pot story, marijuana seems considerably easier to home brew than either cigarettes or booze...

I've helped raise tobacco and brewed my own beer and wine but have only what I've heard about marijuana to go on there. From what I understand, the land and labor required for marijuana is comparable to that for tobacco.

Beer and wine, though, just need water, a container, and something to ferment. Growing your own ingredients probably takes up as much land as growing your own tobacco, and comparable labor.

I can't see legalization doing much about the crime problem, particularly when coupled with taxation. You'll have people smuggling pot to avoid the taxes, just like you have people smuggling cigarettes to avoid the taxes now. Do some digging, and you'll see that cigarette smuggling INSIDE THE US is a money-raiser for some Islamist groups.


Of all places, Ace of Spades had an interesting post on legalizing pot awhile ago. He pointed out drug dealers would just move on to another drug if pot becomes legalized, regulated, and taxed. They are not loyal to the product...they are looking to make tons of money.
No "problem" has been solved, just a different "problem" created.
I'll look for the post...

Danube of Thought

For my money, VDH is a tiresome bore

And God knows we don't want any of those around here, right?


LUN in the Ace article from May 2009. It raises very good points.


One more off topic...Gateway Pundit has another post of the 95% group. This group came out to the April 15th Tea Party and in this video from Newsbusters you can hear the main guy say (at 9:50) that they are just some friends that got together and made the sign and came out on their lunch to let us know how much Obama is doing for us.

Bill in AZ

"you can hear the main guy say (at 9:50) that they are just some friends that got together and made the sign and came out on their lunch to let us know how much Obama is doing for us."

Without watching the video, was their sign a blank post-it note?


Hah!, no it is a huge banner sign on poles that needs to be carried by 2 (or maybe 3) guys. They had special harnesses too for the poles. What gets me is the lie. I don't care if they come, or if they are an organized group....but why lie? Leftists are always hiding who they are and what their true beliefs are.

nathan hale

This is what passes for civility, in Latte land, in the LUN


"..but why lie? "

That is just what leftists do. They Lie!

Ann says Obama Sucks!

I wouldn't worry about this group nathan.


Ludieroqs and i gnorant
Never president ever

(loverly) :)

nathan hale

You're right, Ann, how would Forrest Gump have put it 'stupid is, as stupid does' in regards to this group.also Dean Vernon's admonition is on point

Ann says Obama Sucks!


Show Your Support for Sarah Palin's Alaska Series!:here.

Just for you:


--I've helped raise tobacco and brewed my own beer and wine but have only what I've heard about marijuana to go on there.--

I can't win. One guy tells me I'm a dunce for stating the obvious that pot is easier to home grow and now Rob tells me it's not.
All I can say is I've found four different "farms" of it out in the woods and other than a little bit of drip line at a couple of sites they looked like pretty hands off operations to me (One in fact may have been a heads off operation since we found some poor sap's skull next to one of the plantations);
plant it out of the way, leave it, come back, whack it off.
Sounds a lot easier than growing a field of corn and gettin myself a copper still to brew up some white lightnin.
And the stuff seems to grow like a weed anywhere, unlike tobacco.


the stuff seems to grow like a weed anywhere

By definition.

Sara (Pal2Pal)

Marijuana is far less dangerous than alcohol both to the user and those around the user. You never hear of a pot user beating his wife and kids.

Marijuana is proven to have extremely beneficial uses especially for nausea, pain and stress relief. If anything, it would cut the use of dangerous and addictive prescription drugs, especially the pain killers.

Marijuana does not need to be smoked. Marijuana edibles come in everything from cheesecake and pudding to biscuits, cookies and even lollipops. The edibles do not make you high or stupid. For some reason, their benefits of pain relief, muscle relaxation, and stress relief remain without the head trips. They are described as body highs rather than head trips.

Marijuana is not addictive, which is one of the better reasons to switch to its use over alcohol and/or prescription controlled drugs, all of which are extremely addictive and dangerous. Unfortunately for all of us, I doubt that the legalization and taxation of pot would affect the sale of alcohol one iota. It is not an either or.

Marijuana is already the largest cash crop in California and probably some other states as well, but tax free.

I spent some time recently with two people who hold state distribution permits for medical marijuana. One is a co-owner of an onsite dispensary, the other is delivery only. I was unaware of the delivery only permits, but this man told me that he has over 600 patients, almost all of them are in their seventies or older and he delivers directly to them at their homes. These are not left over hippies sitting around listening to G'full Dead recordings, they are chemo patients or those suffering great pain from arthritis and other old age ailments.

My own doctor suggested that pot would be a far better choice for me, as a chronic pain sufferer, than getting hooked on legal pain meds.

I am a strong advocate for decriminalizing pot and I'll vote in November to legalize. And if it curtails the sale of even one fifth of liquor, I'll consider it worth it. Alcohol is a killer and a horrible drug.

If you search YouTube or Google marijuana recipes, you'll see that most require large quantities of pot to make them and for the edibles to have any effect at all. Far more than the average user buys for personal use on a day to day or week to week basis, so I expect that if the tax applies at the wholesale end, the revenues would be huge, even if it becomes legal to grow plants for personal use. Here in California, a Medical Marijuana card entitles you to grow up to six plants per year, as I understand it. What isn't needed for personal use can be turned over to the co-ops or home providers for sale. And for those who do not like the idea of smoking or who don't want the smell of pot around, and who are looking for the benefits of the "body high," the edibles are a best case solution.

You can buy tomatoes, squash, peppers, or almost any other veggies at the local grocery store and I don't see the home gardens putting much dent in that business. I doubt the legal marijuana business would be impacted too much by those who chose to have a few plants growing in their backyards. It is a pain to grow, and most people wouldn't even mess with it, if they could stop in at their legal dispensary or store. You could easily set it up similar to the State Stores for liquor sales like they have in Pennsylvania.

Rather than pontificate on something most of you claim to know nothing about, I'll suggest this link as a starting point, especially the history and policy links you'll find in the sidebars.

Sara (Pal2Pal)

And not really going off topic, but at 2 pm Sunday afternoon I'll be attending the "Celebration of Life" Memorial service for my very best friend, who died of a sudden heart attack as she walked back to her car after having dinner after work with her daughter. She was my closest friend for 40 years, like a sister, and I can't believe she's gone.

We are all still in shock at her loss.

She was a Medical Marijuana user this past year due to severe rheumatoid arthritis that had already cost her two of her toes, plus she had a hip replacement last year as well. Her doctor put her on the marijuana because he was concerned that her 15 years of having to take powerful drugs to combat the arthritis was destroying her heart and liver. I know that they had turned her skin into something that looked like tissue paper. A slight bump into a padded chair back split her arm from the wrist to the elbow one day. She said that cutting back on the powerful pain meds she had been taking and substituting pot was a Godsend to her. She continued to work as a manager at the newspaper and as a real estate broker. I would defy anyone who dealt with her to ever detect any signs of pot use. She was, if anything, more functional than she was on the high dosage pain killers.

My friend was a wonderful and extremely productive person. She raised four children without a dime of child support, sometimes held down 3 jobs at a time and in the last few years continued to run her profitable real estate business and manage the accounts of some of the largest advertisers in the San Diego area. She also managed her own 5 properties that included 11 rentals and she still found time to spend hours with her five grandchildren. Just days before she died, she learned that her granddaughter had been accepted at UCSanta Barbara and she was looking forward to going up to the area to try and find a condo to buy for her to live in while attending school. She was very proud of her granddaughter, since she never got the chance to go to college herself. Pot did not slow her down or make her dangerous, it gave her back some of her zest for life and the ability to go from sunup to midnight day after day. She was also an accomplished musician with a beautiful voice. She loved to sit down at the piano and encourage everyone to gather around and sing five part harmonies with her. She was active with her church and volunteered for a prison outreach that helped young women to find employment when they got out. She was always getting her friends to donate suitable business clothing for these women to wear on job interviews and she would work with them on what she called making a first impression.

We are expecting hundreds to show up for her Memorial. She was just that kind of wonderful person. The world has lost a very special gal the day my very special friend died.


I am sorry to learn of your loss, Sara.


You know, this is not an economic issue no matter what. This is a personal freedom and responsibility issue. Period.

I have inhaled about 12,000 times I suppose.


--the stuff seems to grow like a weed anywhere--

--By definition.--

I've felt it my duty, after accusing TM of lame-o puns, to show him just how lame a pun can really be.


What gets me is the lie. I don't care if they come, or if they are an organized group....but why lie?

Here is another video of leftists telling a lie at the April 15th Tea Party...via Taranto, from Americans for Prosperity

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