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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

Tuesday, January 26, 2010

Goldman Sachs Is The System - The System Is Goldman Sachs

There is no power in this country more powerful the the dollar and he who controls the most dollars becomes all powerful.  We know the Federal Reserve has the most dollars and can create as many as they want therefore they have "the power".  It is often stated that "the most powerful person in our countrey is the Chairman of The Federal Reserve, more powerful even then the President of the United States.

Next in line would be, of course, Goldman Sachs.  The most profitable firm on Wall Street.  They to have a lot of money and can create and borrow dollars when needed.  How do they create money, you ask.  simple.  by being a Federally Chartered Bank - same as JP Morgan, Bank of America or that local commercial bank down the street, they are allowed to create (loan) up to ten times the amount they must keep in reserves.  In other words, if they have one dollar in reserves they can loan you ten dollars.  They just created ten dollars out of thin air.  As a Federally Chartered Bank, they can go to the Fed window and borrow money at or near zero percent interest, invest it or loan it or better yet, gamble with it and earn high rates of return.

But what has all this to do with them being or running the "system"?  A great deal.  First, with the amount of money they have at their disposal, they can influence or actually determine the outcome of various elections.  With this influence, they then control these candidates.  Case in point;  GS was one of Obama's largest campaign contributors.  Did anyone notice a change in Obama the candidate to Obama the President?  I did.

Now take into consideration the many GS folks that walk through that revolving door in the government and those in government walking through that same door into Goldman Sachs.  there is even very unofficial talk - so unofficial that it can be considered heresay at this point - that if Geithner is removed from his current position as Treasury Secretary, there is a job wailing for him at GS.  Perhaps even replacing Lloyd Blankfein (my thought, not even heresay).

A first summation.  Goldman Sachs makes a lot of money, can create money and can borrow money at will and they have friends in high places - very high places - like the White House, Congress and The Federal Reserve.

With all of this money power they also have the ability to make or break markets.  They have taken over the spot once held by Merrill Lynch in their ad campaigns, "when ____ talks, everyone listens.  To be sure, when GS talks everyone does listen.  Another case in point.  They are predicting an oil shortage in 2011.  What do they know that we don't.  Possibly they know how they are manipulating the oil markets and the price of oil.  Just a guess and a question.

Now comes the Supreme Court's recent ruling on campaign advertising.  A ruling that certainly will benefit the "money machine" Goldman Sachs.  Are Supreme Court Justices somehow influenced by them or their big brother the Fed?  I wonder about this as the Court's ruling just doesn't make sense to me.  A corporation is not a person, it is an entity.  Persons eat, breath and sleep, are made of flesh and have emotions and feelings.  None of these exist for a corporation - least of all the emotions and feelings part.  So how does the First Amendment - meant for people - fit in here.  What a stretch!  I want to believe that justice still exists in this country but I see too much evidence that it does not and where it does it is not dispensed equitably.

Men, by nature are conspirators and those with power are more likely to do so while somehow believing it is for the good of all.

So the question really remains, how much power and authority does Goldman Sachs really have?  It appears to me they have a great deal as everything our government did in the name of saving our economy worked best for GS - even better for them then their smaller brothers on Wall Street.  Bail out money, free money loans, gambling losses covered (AIG) - all looks like they are our economic system and our economic system is them.

The issue with Goldman Sachs is not their highly overpaid executives as much of the media is obsessd with, the real issue is how powerful and influential they are.  Are they the dictatorial leaders of our Plutocracy?  Do they influence or even dictate foreign as well as domestic policy?  they certainly have a big presence and economic commitment around the globe.  Such a large influence that they are too big to fail internationally.  If AIG's failure would have brought down the world's economy, what would a Goldman Sachs failure do?  Basically I don't believe either failure would have "destroyed" the world's economy but we were certainly led to believe so.  Again, for whose benefit were we told this?

Now Goldman Sachs is talking about giving up their Federal Bank Charter as well as becoming a private company, giving up their public status.  Is this an effort to wield their power without any public scrutiny at all?  Just think about it.  When Halliburton was taking a lot of hits from the media and the public, they simply gave up their American corporate citizenship and became a Dubai corporation - no longer open to domestic scrutiny or regulatory oversight.  Is GS planning a similar move  to shield their operations with much more limited regulatory oversight and no public scrutiny without having to give up their American citizenship?  Only time will tell but during that time, we, the people can take back control and our system from all those who threaten our Democracy.

Of course, this is just my opinion, I could be wrong. 

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Anonymous said...

The whole system is.....

Nothing has changed...just the agents..the laws do not apply to these knows no borders because as both of you(Larry and Pollock) say... its the money...your life, my life, means nothing to them ...yet every 4 years we gather support for one or the other (candidates) and for what? We're delusional..they win, we's a historical fact!

Anonymous said...

Watched the hearings...they were a joke. Some representatives tried to drive home some points but the allocated time is a hindrance...almost by design.

The truth remains:

"The biggest single gift was the AIG rescue. No one has ever provided a good argument for why we did it other than we were bailing out Goldman Sachs."
-Joseph E. Stiglitz Nobel Economics Prize Winner

Anonymous said...

AIG’s mysterious Schedule A finally revealed

It’s been known for months that Goldman Sachs and Societe Generale were the two banks who recieved the most money in the dea because they had insured the most CDOs with AIG. But the new information enables traders, investors and the general public to see just which deals the banks had purchased insurance on.

The new information also reveals that of the 178 tranches of CDOs that AIG insured, some 14% were on deals issued after 2005. That’s critical because in December 2007, former AIG Financial Products head Joseph Cassano had said AIG largely got out of the CDS business by the end of 2005.

The newly disclosed information also reveals that Goldman not only bought a lot of CDS from AIG to protect itself; the Wall Street firm also originated a good number of the CDOs that were in SocGen’s portfolio. Some of the Goldman deals in SocGen’s portfolio that AIG had insured includes CDOs with names like Adirondack 2005, Putnam Structured Product CDO 2002 and Davis Square Funding IV.

Anonymous said...

Revealed: See Who Was Paid Off In The AIG Bailout

An unredacted document obtained by the Huffington Post list the damage in detail. Goldman Sachs alone, for instance, got $14 billion in government money for assets worth $6 billion at the time -- a de facto $8 billion subsidy, courtesy of taxpayers.

Anonymous said...

Servicing Mortgages (Part 1): Underwater Homeowners, Banks and Social Trust

Because of all these problems, the Obama administration decided to start a program called the federal Home Affordable Modification Program (HAMP) last year. Long story short, we subsidize banks who make adjustments to the amount people pay per month. Obama is doing this do this because of the externality of waves of foreclosures, the threat of abandoned neighborhoods and to “nudge” the servicer of the loan, who have a twisted incentive to get paid through fees as things get worse for investors, to do the right thing.

So what has happened? From Analysis of Mortgage Servicing Performance, more than 70% of the modifications resulted in an increase in the loan balance. Not staying the same, and certainly not decreasing, but piling on more principal for the loan (click to enlarge):

I’ve seen a lot of bad things during this financial crisis, but this is the most disgusting thing I’ve seen so far. At a time when one out of four homeowners are underwater, banks are using a mortgage modification program to pile on more debt on these loans. They do this even though it’s well known there's a correlation between the level of being underwater and default.

Anonymous said...

I wonder why their favored...maybe they plant so many seeds to always come up roses?

Goldman Viewed as Favored by Regulators, Fed Says

Jan. 28 (Bloomberg) -- Goldman Sachs Group Inc., one of the biggest recipients of funds from the U.S. bailout of American International Group Inc., was seen by the public as favored by regulators, according to an internal Federal Reserve Bank of New York e-mail.


Also yesterday, Goldman Sachs board member Stephen Friedman was asked about his tenure as New York Fed chairman and his purchase of Goldman Sachs shares while in that role. Friedman, who spent a career at Goldman Sachs, said the bank didn’t gain any unfair advantage because of his involvement. Friedman, 72, was asked whether Goldman Sachs encourages employees to work for government agencies.

“What there has been over the years is a certain tradition that you work here, you try to do well for yourself and your family and then you give back and you do public service,” Friedman said. “For many years this was regarded as a very constructive and positive thing. Recently it’s gone the other way and people are thinking, ‘Is there some ulterior motive?’”

Anonymous said...

Wednesday, January 27, 2010

Anonymous said...

These guys should choke on their own lies!

Geithner’s faulty apologia

But AIG had already been downgraded, that’s why the government stepped in with a bailout. At that point the firm’s liabilities were taxpayer backed, so it strains credulity to say that extinguishing certain CDS it had written would cause systemic fallout in and of itself. Essentially what was happening here was unused insurance contracts were being extinguished. (Imagine a pro-rata refund from your insurer for a homeowner’s policy it wants to cancel…)

And there was precedent for this kind of negotiation. Eric Dinallo, former Commissioner of the NYS Dept. of Insurance and current candidate for Eliot Spitzer’s old job, had previously negotiated haircuts on CDS written by the monoline bond insurers. They were never forced into a taxpayer bailout. Did anyone at the Fed pick up the phone to consult Dinallo? Why not?

At the hearing, Geithner said he took “great pride” in his judgment to pay out 100¢ on the dollar to AIG counterparties because, he claims, it saved us from economic catastrophe.

Anonymous said...

While Tim Geithner may hope the AIG situation is now dead and buried, it is likely anything but, with the recently launched investigation into disclosure fraud by the SIGTARP, and the relentless efforts by Darrell Issa to metaphorically crucify the tax-challenged treasury secretary currently ongoing.

As these noble pursuits continue, we ask two simple questions:

1) In Yesterday's hearings, it became clear that everyone essentially recused themselves of any oversight over the AIG disclosure issue, including Hank Paulson, with most, even Bernanke, claiming they had no control over the counterparty decision-making process. We ask - then who did? Surely someone at the FRBNY had to pull a trigger at some point. Who is that person? And if it is merely Sarah Dahlgren, is there a formal notification that she had obtained proxy power from Tim Geithner, who yesterday disclosed had recused himself only informally to a very select circle of TurboTax-challenged friends.

2) Why did the Fed not guarantee AIG's assets ahead of the firm's implosion. Surely, the realization, which as everyone trumpets these days, that AIG's failure would have destroyed the world should have been known to at least one person in authority? And as all know, the collateral call toxic spiral commenced only once AIG was formally downgraded by the rating agencies. Well, had the AIG had the formal guarantee of the Federal Reserve, which is implicitly a guarantee by the U.S., then AIG would not have been downgraded in the first place, and no collateral calls would be forthcoming. Of course, Goldman would end up owning CDOs that as Janet Tavakoli points out, and contrary to what the Fed claims, are now worth at best pennies on the dollar. Furthermore, Goldman's AIG CDS would immediately have become worthless, with Goldman unable to sell them in the open market for a profit of billions of dollars, yet the firm would continue extracting collateral as per its prior arrangement with AIG, in essence not impairing Goldman at all. And had AIG not started down the downgrade spiral, then numerous other adverse consequences of the nationalization of the insurance company would not have transpired. While it would not have saved America's financial system, it would have made the descent more manageable. Yet with Goldman having benefited massively from the elimination of a vast swath of competitors, one wonders if the guarantee track may have been considered and subsequently denied, under the wise tutelage of 85 Broad advisors. We suggest Senator Issa and Neil Barofsky focus very closely on any email released as part of the disclosure process that highlight the Fed's reasoning as to why AIG should not receive a guarantee, and what the nature of such reasoning may have been.

Larry Rubinoff said...

@ the last comment.
There are many questions that remain open on this issue - many. Hopefully the investigation will reveal "real" answers.

But one big question, I have and still do have.

If will over 100 of AIG's operating divisions were profitable and onlyl the holding company was in danger, then why were all the profits from the rest of the company not used BEFORE any bailout money was given?

I fail to understand how a company can have some profits in other "owned" divisions or subsidiaries does not use that money to save itself. Then, if there is still a shortfall and it is to the benefit of the American public, some public money is used.

The same holds true for the owner of Chrysler Corporation - Cerberus. Cerberus is flush with billions of dollars. Chrysler belongs to them so again, why did not they use their money first.

In my business over the years, when my company needed money and there was not enough, I had to put my own money back into the company and often times did not take my own pay so as provide additional operating funds. I, as owner was always the last to get paid and take profit if any.

Nobody would loan any small business money to cover losses or negative cash flow. It would not be a "credit" worthy decision on the part of any bank of investment firm.

So, where is all the money AIG was making in all of their operating divisions? That is the real question.

Anonymous said...

All dollars are green...? that's the kind of answer you'd expect from a master of the universe ceo/treasury secretary?.....

and you think you would be able to get away with a smart ass answer like that?...don't count on it....

This is Paulson stuttering and stammering his way through his Congressional testimony on AIG yesterday. He confirms that the FED printed the money to bailout AIG because given the choice in the question whether the funds came from bank fees to member banks or just printed, or some combination of the two, Paulson says it didn’t come from fees to member banks.

Anonymous said...

Hmmm...if the shoe fits....
Perhaps this is why many of the so-called elites are sociopaths. The definition of sociopath used on this site is:

"Intraspecies predators who use charm, manipulation, intimidation, and violence to control others and to satisfy their own selfish needs. Lacking in conscience and in feelings for others, they cold-bloodedly take what they want and do as they please, violating social norms and expectations without the slightest sense of guilt or regret."

I suspect that one of the reasons it is difficult for us to know if they're lying or not is that the so-called elites don't think they're lying. They seem to believe that they're doing "God's work," where they win and everyone else loses.

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