If you don’t read Karl Denninger, you are missing out. He writes in a no-nonsense way that everyone can understand. Yesterday he published a piece, the subject of which has been on my mind for awhile.
What do you do when the government is ‘the bad guys’?
Here it is, emphasis and links carried over from the original.
Last night apparently Oakland CA was the scene of an ugly mob that decided to try a little rioting.
For those who don’t read the news, the underlying reason for the crowd assembling in the first place is that a man was recently shot, apparently in the back, by a BART cop.
It doesn’t matter where you are – shooting a man in the back isn’t going to fly, especially when the victim is unarmed; you have to expect the reaction will be, well, negative. Especially when you’ve already got him on the ground, on his face, he’s outnumbered 4 or 5:1 by police officers. (Video is here: http://www.ktvu.com/video/18409133/index.html)
There is an investigation in process, of course, but the people have seen enough on the news and elsewhere and have come to the conclusion that this was murder, and they’re not getting what they believe would be satisfaction (that is, the cop involved being arrested for the alleged offense.)
Anyway, the point here is that when the people conclude that the government is the felon, not the enforcer of law and order, you are dangerously close to full-scale rioting.
Even the ancient Greeks understood this.
It appears we do not.
Why am I bring this up in the context of the markets? Because as I noted in the morning’s Ticker, we seem to have a lot of lawlessness going on in the financial markets and it is rather clear that the government has been and is at least willfully blind if not outright complicit in the scams.
Madoff, who it seems every brokerage on the street, including Goldman, which at the time was headed by our current Treasury Secretary, knew there was something hinky going on, but when Paulson went to Treasury he did NOTHING to figure out what was going on and stop it.
On top of blatant thievery we have banks that have tripled their “rake” off mortgages over the last three or four months, using the “financial crisis” as a means of screwing consumers who already got raped by these very same financial institutions with their crazy “Option ARMs”.
And now as Mr. Mortgage has documented, we are starting to see documentary evidence of even bigger abuses in the “refinance” space.
Our government needs to put a stop to this crap, and do it now, before a significant percentage of the population comes to the conclusion that The Government is the Felon and is actively conspiring with financial fraudsters to rob the citizens.
Mark my words – if they fail to do so immediately the violence in Oakland last night is almost certain to be just a sneak preview of what will be coming to a city near you.