Hiding Mountains of Debt in Wall Street?

Here's what I want to know more about. What about this "hiding mountains of debt in complex instruments?"

It brought down Enron and others. Is that what the "mortgage backed securities" were all about? This is Fareed, in Newsweek:

If there is a lesson to be taken from this crisis, it's a simple and old rule of economics: there is no free lunch. If you want something, you have to pay for it. Debt is not a bad thing. Used responsibly, it is at the heart of modern capitalism. But hiding mountains of debt in complex instruments is a way to disguise costs, an invitation to irresponsible behavior.

And, excuse me, but could someone please explain to me how a "derivative" in the sense used here and on Wall Street, differs from a worthless piece of paper sold to an unwitting investor with knowledge it had no intrinsic value or economic basis in equity, meaning something of tangible value such as an asset. Is a derivative something derived from a mortgage, but not a piece of the pie?

Am I right on this, or what? These were never worth more than precisely zero? How could they have been purchased? Zachary Karabell in Newsweek:

... Absurd though these all were, they paled in comparison to the financial innovations that grew out of the mortgages—derivatives built on other derivatives, packaged and repackaged until no one could identify what they contained and how much they were, in fact, worth.

Ready to Rumble?

Here, is the headline of the day (Discourse dot net on tip from Progressive Law Blog aka Prolawblogs). A Demonstration, Miami for Peace is sponsoring this action with Global Exchange, CODEPINK Women for Peace, United for Peace and Justice, the Bill of Rights Defense Committee, Veterans for Peace South Florida, Miami Chapter of Amnesty International and many others.

This is a close second, S. 223. A bill to require Senate candidates to file designations, statements, and reports in electronic form; to the Committee on Rules and Administration (from Votelaw, which I will be adding to the "roll" here or on the Poliblog).

Additional Curiosities Related to "Criminal Politics":

"Sexual politics" means a lot of things in Washington, even how men and women relate to each other, defining notions about femininity and masculinity. For better or for worse, as in the marriage vows. In Washington "sexual politics" is usually more about power than sex. The Republicans are the Daddy Party, the Democrats the Mommy Party. But the stereotypes are changing right before our eyes, and smart pols will take due notice now because public expectations and psychological perceptions will shape their future. Suzanne Fields/
WashingtonTimes

Not Ship-Shape at State, Sherlock (WPost)

Lefty v Righty Churches: Do Donors Affect or Reflect the Flock's Thinking? (WPost)

UPDATE: I have been struggling for a label for these trendy, newsy, dailies that I post, having previously tried "currents" "trends" and variations thereof. NOW I HAVE IT. Henceforth, these will be THE CROW'S NEST. Apologies but I could not resist a reference here to "running point" which is something I've been asked to do and Army (and football) guys should appreciate. Contrast this with "on point" which the big legal guns know all about.

End of the Year Currents and bubbles

I am breaking my general rule that I do not blog on Sundays, only because it is the last day of the year (one out of 365 is not bad). Bring on 2007. Just before this stuff goes stale (mostly from Washington Post):

Politics of (and) "Free" Speech (George Will)

A three-judge federal court recently tugged a thread that may begin the unraveling of the fabric of murky laws and regulations that traduce the First Amendment by suppressing political speech. Divided 2 to 1, the court held -- unremarkably, you might think -- that issue advocacy ads can run during an election campaign, when they matter most. This decision will strike zealous (there is no other kind) advocates of ever-tighter regulation of political speech (campaign finance "reformers") as ominous. Why? Because it partially emancipates millions of Americans who incorporate thousands of groups to advocate their causes, groups such as the American Civil Liberties Union and the National Rifle Association.

Classically Innocuous WP: "O'Malley's Gift" (very political and correct--maybe the perfect Christmas gift)

on Nifong (the Duke rape case prosecutor is in trouble now)

more resolutions (Deborah Howell/ombudsman)

Broder on years end

Teggies (Rob Pegoraro/WP)

2006 and the Constitution

2006 was not a good year for the Constitution. It was not remotely a good year for the concept of separation of powers in government or for the idea that our system works best when there are sufficient checks on the excesses of one branch over another. It was not a good year for opponents of an imperial presidency or for supporters of a concerned and compassionate Congress. It was not a year that offers a lot of hope that things will get any better, or even stabilize, in 2007.

So we got out of the law this year what we deserved from it. And hopefully we will come to realize in 2007 and beyond that if we continue to ignore and neglect the most important and weighty issues that confront the Constitution, its power and authority will erode, slowly but surely, until one of the best ideas ever conceived by man is relegated to being just another dusty, historical document.

Andrew Cohen writes Bench Conference and this regular law column for washingtonpost.com. He is also CBS News Chief Legal Analyst. His columns for CBS can be found online here.

Gitmo stuff (get rid of the kangas--better late than never! Staunch the stench!?)

“We have tried again and again to have a say in the process,” said Barbara Olshansky, a lawyer who has coordinated much of the work of the detainees’ lawyers for the Center for Constitutional Rights. “But we learned pretty early on that these were kangaroo courts.”

(from the New York Times)