Long or Short Capital

The next sentence will discuss what the memo will discuss. This memo discusses the risk of criminal liability for those who work at Long or Short Capital. Nothing gives me any reason to suspect that our staff are involved in criminal activity, but the Government’s recent waiver of certain optional social conventions and niceties (i.e. “the law”) means those who work at this firm may be subject to just about any treatment, except for waterboarding in Gitmo (waterboarding via rendition to Saudi Arabia remains above board).

The Government has discarded our traditional notions of due process and fair play and replaced them with a shower of golden benefits from a much older, yet somehow much more progressive rule, Force Majeure.

Force Majeure, from the french La Force Majeure is a legal term of art meaning “because we say so.” In the past, it described the principle that some forces of nature (such as wars, hurricanes, and leaders of unparalleled charisma and photogenic qualities) cannot be resisted, and all normal legal obligations and rights are therefore waived in its face. The doctrine was used as a defense against some poor sucker trying to enforce a contract. The new meaning, however, encompasses the power to re-write contracts. As the eminent commentators on Force Majeure Thomas Jefferson and Mao Tse Tung observed, “power comes from the barrel of a gun.”

Although some may disagree with Force Majeure as a guiding principle for the regulation of life and business generally, surely it is cause for celebration that the tiresome old Hegelian dialectic (Editor’s note: don’t worry if you don’t know what this means, not even lawyers do) has matured and reached its terminus. There’s no more back and forth and no more evolution of belief systems. Instead, the dialectic is looking down the barrel of an AK-47, trying not to crap its Frankfurt School underpants in its Nietzschean Lederhosen, and is being told to “shut the [bleep] up and eat your [bleep]ing vegetables, if you know what’s good for you.”

Recent examples of the exercise of Force Majeure abound. Just the other morning, a law was passed (aka “a press conference talking point”) outlawing the Federal bankruptcy code. Hedge fund managers dissented, noting that when seniority of debt was outlawed, only outlaws would hold senior debt, to which the White House Press Secretary replied, “that’s *so* true.” In another instance, somebody slipped a handful of Roofies into Chrysler’s drink at the Detroit Auto Show, after which it was forced to have sex in a very uncomfortable place (the back of a Pontiac) by some guys from the local Consolidated Union and their swarthy Italian buddy, Fiat, who settled for Daimler’s sloppy seconds.

You’ll do fine once you get used to the new rules. Things aren’t as bad as you think, we should revel in the fact that we have such an effective government under such a charismatic leader, President Ben Bernanke and his amiable bearded smugness. The idea of the Government rewriting your contracts in an ex parte and ex post facto manner seems unprecedented, but I’m sure you’ll adapt to that once you’re used to dealing with a Government that, as Judge Dredd would put it, is Judge Jury and Executor.

Now will you send up somebody to get the severed horse’s head out of my office? The process server brought this thing in attached to an summons cordially inviting you to testify before Senate Banking, and it is beginning to stink. He mentioned something about excessive management compensation and embezzlement, also creative accounting, but I’m not an lawyer accountant. It was difficult to hear him over the whir of my money counting machine.

As retained illegal counsel for LoSC, I sometimes perform consulting work for other clients. The terms of our engagement require me to disclose the nature of such work to you where it could create a conflict of interest within the firm. Naturally, I really only perceive such conflicts where the nature of the conflict is such that, it would not endanger our attorney-client relationship, or more importantly my ability to pay for my sweet M5 Beemer or to keep my equally sweet mistress in blow and cheap expensive champagne, the only two things she apparently requires for sustenance.

I was recently retained to perform some consulting work by a shadowy figure who identified himself as Dim Teithner. I do not perceive a conflict of interest here but am disclosing it to just in case, if by some remote and far-fetched chance, Mr. Teithner is in some type of adversarial relationship to you.

Mr. Teithner asked for assistance in crafting a marketing campaign to sell a new regulatory initiative. The thrust of the initiative was that Mr. Teithner’s crew would force a business to take a loan, then
refuse to allow payback, instead taking a novel no-stock-controlling-interest in the business that, to my knowledge, has only been tried in Italy-related businesses.

He needed legal review of the following marketing catchphrases designed by his brightest young staffers, aimed at selling the initiative to a marketplace he indicated was unduly (and shockingly) skeptical of his products. The phrases included:

This is the bottom line, because Stone Cold Larry Summers said so.

Show me the puppies!

Timothy 3:16

Can you smell what Barack is cookin’? and,

Suck it!

When I pointed out first that those lines were clearly based on classic professional wrestling catchphrases, Mr. Teithner threatened to “bend [me] over and stress test your o-ring, mother-[expletive]!” Still, I persisted, and reminded him that in light of the contemplated commercial use, the user would be subject to treble damages under federal law for intentional copyright infringement.

Despite Mr. Teithner’s protests that “I AM the law, bitch,” I persisted and suggested other catchphrases that might be more suitable and legally-compliant themes for Mr. Teithner’s campaign, or at any rate belonging to entities less likely to file lawsuit than Vince McMahon, including:

Resistance is futile!

I am the master of your domain.

I drink your milkshake! I drink it up!

Tell me how my ass tastes!

Arbeit macht frei, aber Wir befreien Ihr Geld! and,

All your basis points are belong to us!

It is not clear to me what course Mr. Teithner will choose to take, but I am sure it will be a wise one. As he explained, “alls he’s tryin’ to do, is run a business heah.”

Background: As retained counsel for Long or Short Capital, I am occasionally called upon to render illegal opinions regarding current developments. Yesterday my opinion was asked on the House bill which would tax at a 90% rate the bonuses received by those making over $250,000 at companies receiving over $5 billion in TARP funds, including those firms which did not opt to take TARP funds but which were forced to. Specifically, you asked whether this might retroactively abrogate your pathetic mini-baller bonus for FY’08, or at least that’s how I interpreted your questions about whether “Contracts are valid anymore, specifically contracts in situations which have involved gross negligience (e.g. we put all our money in Bear Stearns after listening to Jim Cramer or blew our investors moneys on a series of extravagant lemon parties)”. Specifically you asked (1) whether it was fair; and, (2) whether the law prohibited this.

Brief Answer: Ha ha ha ha ha. You *kill* me. I’m waiting for you to recommend the prime rib, Shecky. Ever since the New Deal-era Supreme Court translated the Commerce Clause into English as “we can do what we want and you can’t stop us,” Congress has been able to take as much of your money as they want, at any time and for any reason. It’s a testament to their monumental stupidity that it took them nearly 80 years to figure this out. Unfortunately for you, they did.

Analysis: First, the law doesn’t recognize the concept of “fairness.” It only recognizes people with highly paid attorneys, who went to the right law school and who are licensed members of an court-sanction conspiracy to restrain trade, aka a “state bar.” Even then it only recognizes us grudgingly, one at a time, and it helps if we frequently lose a lot of money to the law playing match golf. The law “recognizes” fairness in the same way you “recognize” that girl from Ops that you hooked up with in a utility room after the Christmas Party last year – if it sees fairness coming, it will duck into the men’s room until after fairness has gone back to whatever dingy little office (cage?) the managing partner normally keeps it in.

Second, although the Constitution nominally prohibits Congress from singling out a class of people and taking all their money and holding them up to ridicule, you are not classed as “people” under the constitution. Ironically enough, under both the Marxian Critical Legal Theory and the Chicago School Theory of Law and Economics, those who make money rather than just standing there waving around a tin cup are considered “economic production units.” So you don’t really count as people in the traditional sense, except when it is time to figure out how many place settings will be needed at political fundraising dinners. Unlike former slaves (freed by the 13th Amendment), women (enfranchised by the 19th Amendment), drunks (allowed to drink by the 21st Amendment), and the predominantly white male property owners who were formerly protected by the rest of the Constitution, you my dear friend have been liberated from the duties of citizenship, and it seemed only fair to liberate you from the privileges too. Thus, to the extent you “enjoy” Constitutional protection, it involves lying back and enjoying it while Congress has its way with you. Don’t sweat it; my friend Sabina tells me that this is how Rome was born, so whatever transitory pain you may bear is probably justified by the greater good.

The problem here is not the punitive tax policy that concerns you, but the fact that you do not appreciate the religious and miraculous tenor of our times. Just recently, a law that would have protected your bonus was birthed within the stimulus bill without anybody in Congress having written, read, or voted for it. It was signed by the President without his knowing about it, and enforced by Treasury without their awareness. Indeed, it was the Miraculous Conception. Then it disappeared Friday, we are told, ascended into Heaven there to sit at the right hand of Adam Smith, raised [Ed: sic. razed] by the hand of the mighty archangel, “Will of the People.” Not much is known about Archangel Will, except that he does not like you very much.

I warned you about all of this this in a memorandum prior to the last election. A crack legal team working at my firm determined that the current president is the direct descendent of Lion-O, Jesus, Karl Marx and a unicorn of some reknown. The Members of Congress, on the other hand, were found to have descended from the unholy mating of a Know-Nothing anti-Irish lynch mob, William Jennings Bryan and the ghoulies from the movie The Ghoulies. I recommended at the time that you “go long” shotguns and dehydrated food, and “go short” reservations for the Hamptons. I also advised that you should put a stop check on the payment for your listings in The Social Register and Who’s Who Among Financial Advisors. But did you listen? No. The way you ignore my advice makes me feel like your mother, except for the fact that I get nearly three times as much per hour as she does.

Regardless of your fiscal incontinence, a local teleprompter with whom I have good relations tells me that it is important for you to remit payment for my advice immediately. It would be a shame if anything were to happen to your bank account. Specifically, it would be a shame if the IRS were to find out you have one, and that there is money in it.

Your most humble servant,
Pleb, Esq.