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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Wednesday, May 6, 2009

More Garbage from Goldman's December

Editor's Note: Wonder if Goldman's accountants are available for hire for personal finances?

The $850 million Dollar Question

by Tyler Durden from Zero Hedge

"(1) Includes one day on which the firm incurred negative trading net revenues of $859 million, principally reflecting a writedown of approximately $850 million related to the bridge and bank loan facilities held in LyondellBasell Finance Company."

Now, two questions emerge:i) the digital jump in value on this loan from something likely reflecting par to a value indicative of zero or just above, raising questions about just what the mark-to-market or otherwise methodology at Goldman is, especially since the underlying bonds in Lyondell did not demonstrate anywhere near to a comparable corresponding plunge.ii) why did Goldman take the charge in December, when LyondelBasell did not file for bankruptcy until January 6, 2009? Just how did Goldman know to remark their position a week in advance of one of the biggest bankruptcies for 2009? As has been speculated elsewhere, the orphan month of December was used by Goldman as a garbage bag in to mark down all its underpeforming positions (and in some cases undermark existing assets especially in the commodities book). As such, it seems Lyondell was merely yet another symptom of this rampant remarking malaise, although what is not clear is what prompted the bank to remark when it did. Obviously a near $1 billion writedown in Q1 (where it belongs), would not have been quite as palatable to shareholders who were thrilled to see the bank obliterate earnings expectations, just like all the other banks in the US.

Didn't Stephen Friedman, Goldman Director, and NY Fed Chairman buy quite a few shares of Goldman Sachs stock in December, like 37,000 shares? Guess the timing worked out pretty darn well for him.

Read the full article - click here


Jr Accountant said...

Goldman has the BEST accountants, you didn't know that? bwhahaha.

Sadly, most of the accountants are corrupt to begin with. So imagine what sort of accounting magic GS has to work with?


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