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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 19, 2010

Goldman Sachs Links and News - February 18, 2010

By Kevin Connor 
Greece and Goldman Sachs - Atlantic Review - Analysis of ...
By (Andrew Zvirzdin)
skippy the bush kangaroo: goldman sachs and the banksters hate america
By Cookie Jill 
About This Whole Goldman Sachs–Greece Thing
New York Magazine
Greece facing Goldman Sachs debt deal scrutiny | The Daily Caller ...
By admin 
Could Goldman Sachs be the Next "Major Threat to Homeland Security ...
By Sam Rosenfeld 
Greece facing Goldman Sachs debt deal scrutiny
The Associated Press
Goldman Sachs, Greece didn't disclose swap, investors 'fooled'
Greek Bondholders "Fooled" or Goldman Sachs Committing Fraud?
By Rocky Vega

Editors Comment::  The link highlighted in red above is a recommended read by this editor.  The Atlantic Review is an interesting journal and describes itself as:
... ATLANTIC REVIEW -- a Press Digest on Transatlantic Relations combined with commentary and analysis by three young professionals from Germany, the Netherlands and the United States. More about us
This particular post contains a link to a New York Times article as well as one from Der Speigel discussing the Greece/Goldman Sachs Affair.  I would like to just highlight a few excerpts from them.

From the New York Times article:
As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.

In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books.(emphasis added) Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come. 
Two things strike me here.  The first is that Goldman Sachs is NOT the only bank involved yet there is little discussion or news emerging on this.  As you can see from the statement above, JPMorgan is also very involved in this particular activity and probably many others as well.  Unfortunately, we do not have enough volunteers to follow up on stories for our JPMorgan666 site.  Do not forget that JPMorgan has a seat at the table as a Board Member of the New York Federal Reserve Bank whose past President is now our Treasury Secretary.  Also be reminded that JPMorgan got a Sunday late night deal of $55 billion to purchase bankgrupt Bear Stearns.
The second item that struck me and hits me real hard is the accepted concept of keeping liabilities - as in this case - and assets, off the books.  This has become a common and accepted practice in this country called - Off Balance Sheet Items.  Our banking and financial institutions use and abuse this generally accepted accounting principal everyday.  Now here is where I have always had a problem with this condoned practice.

Basic Accounting 101 teaches you (at least it did when I took it) that a Balance Sheet contains all the assets and liabilities a company has.  It is basically a picture in time of the financial condition of a company.  In my previous life as a District Credit Manager for a large international company, my job was to analyze those statements to determine credit worthiness in order to establish a credit line.  But 40 years ago (I guess I just gave a clue to my age) Generally Accepted Accouonting Principals did not include "off balance sheet items".  Either you have the asset or the liability or you don't.  

By virtue of the ability to hide assets and liabilities, all companies doing so - specifically Wall Street and Main Steet Banks - along with any other publicly traded corporation is duping- defrauding - their shareholders, investors and clients.  Off Balance Sheet Accounting is simply fraud.  How can anyone evaluate a potential investment not knowing what the "real" liabilties may be.  While a company can appear solvent - like our banks say they are today - these off balance sheet items could in fact make them insolvent.  I believe the AIG issues had a great deal to do with this as well.

There can not be - nor should there be - Off Balance Sheet items, not here in the U.S.A, not in Greece or anywhere in teh world for that matter.  It appears that this type of accounting is just another fraudulent tactic we export.  

Having said all of lthe above, the next logical question is, "how much Off Balance Sheet Liabilites does Goldman Sachs have"?  Are they truly as solvent as they lead us all to believe while showering themselves with lavish salaries and bonuses using our tax dollars?  

Liabilities after all - disclosed or undisclosed - have their day of reckoning.  They must get settled and paid.  When the call comes are we going to bail out the TBTF guys again?  

But wait, we already know our country is broke otherwise we wouldn't have a deficit.  this is Accounting 101 again.  If your true Assets are greater then your true Liabilities then your are solvent.  If your true Liabilities are greater then your true Assets then you are broke.  So how can we bail them out again and actuallly, how did we bail them out before?  I guess that is called "Long Term Liabilities" which is a true accounting item.  But do my grand children and my great grandchildren really need to pay these ill gotten liabilities?  We punish them becuase we deal in instant gratification with no thought to the future.  That is this mess got started to begin with.

We need to know the truth.
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