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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

Friday, February 26, 2010

Goldman Sachs Links and News - February 25, 2010 with Editorial Comment

Goldman Sachs Group, Inc.Fed Looking into Goldman Sachs' Role
in Greek Debt Crisis - Truthdig
Feds Probe Goldman Sachs Over Greece | Sweetness & Light
By Steve 
Goldman Sachs Is 'Morally Culpable' for Greek Debt (Video) - Home ...
By DailyBail 
All About Work & Financial: Bernanke Says Fed Reviewing Goldman ...
By Yeoh Guan Teik
Greece crashes, Goldman Sachs and Chase profit (Jack Bog's Blog)
US Fed reviews Goldman Sachs on Greece finance - XDN ASIAN ... 
Bernanke Says Fed Reviewing Goldman Sachs Relations With Greece
BloombergBernanke: looking at Goldman Sachs role in Greece
Fed chief: We're looking into firms betting on Greek default
USA Today
Billionaire Singh Eschews Goldman Model for His India Brokerage
Jon Corzine: People Hate Goldman Sachs Because They "Envy" Success (VIDEO)
Huffington Post (blog)
Goldman Sachs, the WSJ, and Consumer Protection
In Taibbi's Latest, More Shots at Goldman
New York Times (blog)
All About Work & Financial: Goldman Sachs Asked By Senator About ...
By Yeoh Guan Teik
....GS666  GS666  GS666....
Editor's Comment:  The Grease is Heating Up Or is It?
It seems like every couple of weeks another major story develops concerning Goldman Sachs.  Currently the hot topic is Greece.  It seems that the grease in Greece is heating up and maybe ready to start splattering or is it. 
Several major news outlets have reported on The Fed looking into Goldman Sachs and others role in the Greece affair.  A quote from the piece in says,
Federal Reserve officials are using new supervisory powers over firms such as Goldman Sachs and Morgan Stanley to gather information on financial system risks. Bernanke was responding to a question from Senator Christopher Dodd, a Connecticut Democrat, who asked if there should be limits on the use of credit default swaps to prevent “runs against governments.”
“Obviously, using these instruments in a way that intentionally destabilizes a company or a country is -- is counterproductive, and I’m sure the SEC will be looking into that,” Bernanke said. “We’ll certainly be evaluating what we can learn from the activities of the holding companies.” 
"Destabilizing a company or a country is counterproductive" says Chairman Bernanke. Counterproductive?  I believe if someone came into the United States with an attempt to destabilize this country or its economy it would be considered an act of terrorism and even treason if it were done by a citizen - corporate or individual.  The word - counterproductive - seems like a way to sanitize this type of action.  After all, there are no laws against counter-productivity in this country or any other, I don't think.  If it were, then many in our government would be doing time.  After all, much of our government is counterproductive.

But let's talk more about destabilization.  Our country has at the door steps of another Great Depression after our entire financial system was destabalized by Goldman Sachs, JPMorgan, AIG, Bear Stearns, Lehman Bros., Merrill Lynch, Countrywide, WAMU and a host of other banks, foreign and domestic.  Yet there is no outrage, no investigations or even SEC inquiries into these banks for "Acts of Counter-productivity" which led to a massive destabilization.

Bernanke's "counterproductive" comment was  - stupid - this next comment from Minneapolis Fed President is even more confounding.
“There are lots of enforcement actions that the Fed can take all the way up to something like cease and desist, but I think it is way, way premature to conclude anything like that would be even worth considering,” said former Minneapolis Fed president Gary Stern in an interview
"There are lots of enforcement actions the Fed can take" -  and this is where it gets out there - "all the way up to something like cease and desist".  All the way up to a cease and decist,  WOW, the CEO's at GS and the other banks and their other high paid exiecutives must be readying their Cayman get away homes for permanent residency.  They must be shivering in their Gucci boots.  

First of all, what enforcement powers does The Federal Reserve actually have?  They are a private company not a U.S.Government agency.  Have they been given "police" powers somewhere that I and we as a nation are not aware of?  And if they do have enforcement action then why have they not used it against these same companies for their use of derivatives, off balance sheet deals andcredit default swap activity that destabilized this country?

If one of their strongest weapons of enforcement is a cease and desist order why did they not use it long ago when they knew what these banks were doing and knew what the devastating affects would be down the road?  Even former Fed Chairman Greenspan said in front of Congress that he knew that some of the actions he took - which opened the door to creative investment products - would be bad albeit he didn't think it would be as bad as it was.  Had they issued cease and desist against these banks to stop the creation and sale of these exotic products we would not be in the condition we are in now.  Makes me wonder all the more about who is working with who and for whose benefit.  Certainly not the people of this country or othiers it seems.
Outsourcing may be the answer.

As we have outsourced so much of our economy, outsourcing investigations and enforcement may just be the solution to the justice we all seek.  

The European Union will not sit still for this nor will countries like Germany and France specifically.  I believe they will do the investigations properly and take appropriate actions.  I do believe that they will discover and publish the truth and the house of cards in the Derivatives Cartel will begin to fall.  Outsourced justice.

They will turn up th eheat and the grease will begin to splatter.

Read the full Bloomberg here

More on this story from around the country and around the globe below.
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Anonymous said...

Friedmanism at the Fed

That distinction belongs to Stephen Friedman, the former chairman of the board of the New York Federal Reserve Bank and a member of the board of directors of Goldman Sachs. Through those two posts, Friedman may have had access to privileged information about the extent of Goldman's exposure to AIG and the opportunity to profit from the Fed's bailout of the beleaguered insurance giant. While he was serving on both boards, Friedman purchased 52,600 shares of Goldman stock, more than doubling the number of shares he owned. These purchases have since risen millions of dollars in value--and raised allegations of insider trading.

And now, at least one member of the committee, Massachusetts Representative Stephen Lynch, is calling not just for continued Congressional investigation but for other enforcement agencies to look into possible insider trading and other matters surrounding the AIG bailout. In an interview with The Nation, Lynch said that he intends to meet with the SEC to see "whether or not they might be helpful with this." Lynch also suggested that the Justice Department's Financial Fraud Enforcement Task Force should be investigating Friedman's Goldman purchases as well.

That Friedman was simultaneously chair of the New York Fed and a board member of Goldman Sachs was itself a violation of Fed policy. As a "Class C" director who is on the New York Fed board to represent the public, Friedman was barred from being on the board of a bank holding company or even owning stock in a bank holding company. This policy came into play in September 2008, when Goldman converted from an investment bank to a bank holding company (the policy did not apply to investment banks). Friedman was not only on the board of Goldman but also held 46,000 shares in the company. So he had to make a choice: resign from the Fed or resign from Goldman Sachs and sell the shares he owned.

The fact that Friedman's actions augmented rather than diminished the conflict of interest was not lost on members of the House Oversight Committee. "At a time when Mr. Friedman was prohibited from owning Goldman Sachs stock, he proceeded to buy 37,000 more shares of it anyway," says committee chair Edolphus Towns. "That strikes many Americans as unjust, unwise and unfair."

"Goldman might have been fully hedged, but how good is that hedge if the counterparty in those hedges was not solvent or fully hedged and so on?" asks James Cox, a securities law expert and professor at Duke Law School. One of the parties must have been exposed, he says. "So would not knowledge that the first domino would not fall be inside information?"

Anonymous said...

Porter Stansberry: This is one of the biggest Wall Street frauds ever...

Thursday, February 25, 2010

But I completely missed one big part of the story... And once this fact becomes common knowledge, it will probably mean jail time for several leading Goldman executives and the end of the firm. What did I miss? The entire Goldman-AIG relationship was a complete sham. Let me explain...

Goldman eventually admitted it had insured roughly $20 billion worth of subprime CDOs with AIG and had major exposure to the firm. But the New York Federal Reserve and Goldman Sachs never revealed this critical fact: Goldman didn't merely buy insurance on a bunch of random subprime CDOs. It actually bought insurance on special CDOs it had put together and sold to its own clients. In other words, Goldman knew more about these CDOs than anyone else. Goldman bought insurance on these CDOs because it knew they'd collapse.

This is tantamount to building a house, planting a bomb in it, selling it to an unsuspecting buyer, and buying $20 billion worth of life insurance on the homeowner – who you know is going to die!

Anonymous said...

Street crime behavior just relocated to the penthouse?...that's all it is...but what happens when they go back to the street?

Is Goldman Finally About to be Leashed and Collared?

Goldman may have made a fatal mistake. Fatal not to the existence of the firm, but to its standing, reputation, legitimacy, and ultimately, to the thing it covets most, its profits.

The problem is that the behaviors that contributed to Goldman’s commercial success have over time become unbalanced, and are putting it at odds with governments. It is one thing to abuse the likes of a Jefferson County, as JP Morgan has. As deplorable as that behavior is, they cannot retaliate. It is quite another to mess with bodies that really are, ultimately, bigger than you are.

Similarly, on another deal, I walked into the Syndicate department when one of the most powerful partners at Sullivan & Cromwell was on a conference call, instructing the younger members of the department what the right answers to questions would be when the SEC came in asking questions on what they were about to do on this particular transaction, an underwritten call (note: what made Goldman savvier than most firm was that everyone got the official rationale for technically legal but questionable behavior BEFORE they did it, which made it much easier to maintain party line, rather than after the fact, when some conversations and communiques might contain remarks that were decidedly unhelpful. Note that this practice was well established over two decades before e-mails became pervasive).
But the Goldman of the new millennium has kept the same relentless focus on the firm’s financial interest, and has become utterly, hopelessly sociopathic, incapable of understanding right versus wrong. The firm’s defense strategies vary among priggish and legalists reports (a Lucas van Pragg speciality), insincere, non-specific apologies (Blankfein), or stony silence.

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