Tuesday, May 17, 2011

Judicial Variations on Rape

rape (v.)
    late 14c., "seize prey, take by force," from Anglo-Fr. raper "to seize, abduct," a legal term, probably from L. rapere "seize, carry off by force, abduct" (see rapid). Latin rapere was used for "sexual violation," but only very rarely; the usual Latin word being stuprum, lit. "disgrace." Sense of "sexual violation or ravishing of a woman" first recorded in English as a noun, late 15c. (the noun sense of "taking anything -- including a woman -- away by force" is from c.1400). The verb in this sense is from 1570s. Related: Raped; raping. Uncertain connection to Low Ger. and Du. rapen in the same sense. Rapist is from 1883.
According to Bloomberg, the agent's first question to the suspected criminal was, "We’re here to find out if there’s an innocent explanation.”  The suspected criminal in the case was not Dominique Strauss-Kahn, but Bernard Madoff.  Both men have been accused of rape, if you'll permit its broader meaning.  An examination of the differences and similarities between their cases and treatment by the Justice system exposes curious divergences in current Judicial sensibilities on crime.

Before going further, in anticipation of a justified critique, let's pause and consider the broad use of "rape".  I assume many (perhaps most) female, and quite a few male readers will take offense at the use of the same term in both cases.  I don't intend to downplay the alleged thuggish actions of Mr. Strauss-Kahn towards a hotel maid.  If the allegations against him are true, he, in my view, is a criminal.  His victim (or victims as seems to be the case) has suffered and may bear the scars, both visible and invisible for life.  Yet, so too will the many more numerous victims of Mr. Madoff (who interestingly also had something of a reputation as a "seducer" to use a term applied to Mr. Strauss-Kahn). 

In blunt terms I'm all for jail terms for convicted rapists in its broadest sense.  My question is this. Why do financial rapists, who admittedly inflict, in many cases, less acute trauma but to many more victims deserve the benefit of the doubt and more gentle handling than physical rapists by our Justice system?

Mr. Madoff confessed the crime to his sons, who then alerted the FBI.  Despite the confession, and years of SEC investigations, as detailed in Harry Markopolos' book No One Would Listen, the first question asked of Mr. Madoff, as noted above, was, "We’re here to find out if there’s an innocent explanation.”  

I doubt that was the first question asked of Mr. Straus-Kahn, who was arrested within 6 hours of the alleged crime (in my next post I'll examine more thoroughly the incredible speed with which the NYPD managed to nab an official who had cleared immigration and might be expected to have diplomatic immunity- talk about cutting through red tape). 

At his arraignment, Mr. Madoff was released to house arrest despite failing to provide the Judge's recommended 4 signatures (only his wife and son signed) on a $10M bail bond. 

Mr. Strauss-Kahn is in Rikers after the Judge refused a $1M cash bond and similar offer of house arrest at his daughter's residence in NY.

The moral of the story is apparently this.  It's better, in the sense of preferred US Judicial treatment, to rape many financially than to rape a few physically.  Those raped physically can not only hope to see their rapist in jail, they can sue for damages in civil court.  Those raped financially are quite lucky to see their rapists in jail.  More often they not only lose their investment, they have to bail out (financially) their rapists!

Tuesday, May 03, 2011

The Market Whisperer

Admittedly, it took more than a Cesar Millan "tsst" to stop Silver (and Gold and Oil) in its tracks.  Raising the margin requirements (details of which are most ably covered by Jesse at his Café Américain), killing Osam bin Laden, and continuing to promise an end to debt monetization helped, especially given the context- a highly leveraged market apparently overloaded with new longs.

Of course, as The Dog Whisperer himself will warn, he is a trained professional.  Don't try these techniques at home.

Whether this proves a permanent rehabilitation or simply a pause that refreshes remains to be seen.

It is, as I plan to discuss in my next post, most difficult for the ship of state to change direction.

Monday, May 02, 2011

An Interesting Read on US Involvement in Libya

The Libyan War, American Power and the Decline of the Petrodollar System

Being a lazy man, I'm always pleased to discover someone else has done the heavy lifting of ideas I should have fleshed out in my own arguments.  The article linked above provides context- and as Peter Dale Scott is both a better scholar and writer than I, in much better form- to the views in my post on Osama bin Laden

Panetta, Petraeus, Osama?

Timing, they say, is everything.

Less than a week ago, Leon Panetta was replaced as CIA Director by Gen. Petraeus, and nominated as Secretary of Defense.

Today, the world learns of Osama bin Laden's death.

What other changes are in the offing?

Sunday, May 01, 2011

After Osama

Osama bin Laden, according to CNN, has been killed in a firefight with US forces in Pakistan and his body has been recovered.

Almost a decade ago, bin Laden, in hopes of, according to some reports, inspiring a jihad and bleeding US financial strength, inter alia, directed the attacks on the Twin Towers and Washington D.C.

Now, only his ghost remains.  The jihad he hoped to inspire has thus far been thankfully quashed, but the US has been bleeding financially for that decade.

What next?

Aside from a substantial increase in Prez. Obama's political capital, which might deflect the right wing's attempts to dismantle the welfare state, inter alia, (and thus indirectly shift market sentiment, to wit, increase negative sentiment on US bonds) direct effects on market psychology and prices (and eventually the underlying fundamentals), at first blush, include:

1) A temporary (duration dependent on, inter alia, announced US policy changes in the next few days) resurgence in $ assets, and consequent decline in Gold and Silver. A rise in US debt market prices. A decline in oil prices.

2) Increased speculation on oversea troop levels in Afghanistan- will they be brought home, will they be redeployed, will they remain the same?

3) Will the Islamic world, in the event troops remain in Afghanistan or are redeployed either in Iraq or Libya, come to the view that US peacemaking after Osama is colonialism in disguise?

4) Medium term, a status quo military presence in the Islamic world, with a significant cause célèbre removed, will not only continue to negatively impact the US budget, it may also increase Islamic resistance (thus further increasing the price of military action), and reduce foreign willingness to finance what may seem more like colonialism than peacekeeping.

The ball is in the Obama administration's court.  Like 9/11, this is a key pivot point.

Much has changed in the US over the past 10 years.  Will this opportunity to change course be grasped, as a similar opportunity was grasped in the aftermath of 9/11?  Will the story simply fade from media consciousness in a few days- signaling an opportunity squandered (or deftly avoided depending on perspective)? What, if any, will the new course be?

From a financial perspective, this seems to me a wonderful opportunity to begin to significantly reduce military expenditure without losing face at home.   US military adventures abroad since 9/11 brought forward the US budget's "day of reckoning" by many years.  Either the US buys some time by reducing such expenditure or the financial day of reckoning will continue to creep forward. 

Without the goal of bin Laden's capture as cloak of respectability, assuming military deployments continue unchanged, the financial day of reckoning might leap instead of creep forward as foreign demand for US debt and willingness to sell oil "cheaply" dries up further.

Ten years ago the world went to war.

What next?

Full Disclosure: Long Gold