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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, April 28, 2010

Goldman Sachs Links and News - April 28, 2010 - Featuring Larry's Corner

      Senate Hearings...have you heard?

The media and blogs were up late last night and it seems everybody is talking about the Senate hearings and Goldman Sachs.  Wow, news alerts were coming in steadily from the conclusion of the hearings straught through the night.  Again, the number of alerts I received doubled from their usual volume.  That's a lot of reading.  

What we are seeing is par for the course - a mixed bag of opinions and observations.  Some like it hot and some like it cold.  Almost no one sits in the middle and likes it warm.  So how does one analyze what some portray is a "circus"?  Simply, you don't.  Giving an analysis is largley based on one's personal feelings about Goldman Sachs.  To be somewhat accurate one would have to watch the ten plus hours of he hearing several more times and to be even more accurate in giving an evaluation one would have to actually read the trasnscript.  Whew, that would probably take as long to read as it does a Congressional Bill - and we all know most don't read those.

Those who support Goldman Sachs - like former President Bill Clinton - have said GS has done no wrong.
Former President Bill Clinton said he’s skeptical that Goldman Sachs Group Inc. broke the law...(click here to read Ex-President Clinton Says He's Skeptical That Gold,am Violated Any Law in Bloomberg BusinessWeek)
Some are saying that GS won a victory at the hearings.  I am not sure how one can be victorious at a Congressional hearing where you are sworn to tell the truth, the whole truth and nothing but the truth, so help you God.  But of course, when you have a direct relationship with God and a mandate to do his work, what ever you say must be Gospel.  The truth according to the Lord (Blankfein).rules victorious above all.

Then there are those who do not like GS ( like us ) and would love to see their demise who even go as far as saying that their testimony at the hearings was their death bell.  (I personally don't think these hearings will lead to the end of GS...sadly). 
I saw something die today. It didn't die accidentally either. It was killed.
This was a very painful event to watch, not just because death is tragic and not because this death was intentional rather than accidental.   (see complete story in HuffPost by Steve G. Brant, The Death of Goldman Sachs)
 So what can we take away from spending over 10 hours of precious time watching this Washington drama, our eyes and ears glued to our TV screens or computer monitors, Ipods or other 3G devices?  Just some observations with no judgement of right or wrong.

The first panel of witnesses were all very guarded, some nervous and uncomfortable (understandable) and very evasive.  Very few questions were answered directly or even answered at all.  Of all the gentlemen on the first panel, I would have to say Fabrice Tourre was the most confident and eloquent, which for someone who is at the core of the SEC law suit, speaks highly of his strength of character.  (I am making no judgment as to his guilt or innocense nor his ethics.  I was just very impressed withthe way he spoke and handled himself.

Then came the second part of the hearing with GS CFO David A. Viniar.  If one were to form a first impression of the company from his presentation and demeanor, that impression would be very positive.  He handled himself with a lot of confidence, self esteem and knowledge. What was most impressive about him, as a colleague watching with me said, was that he spoke with respect even when disrespected.  He talked directly to the questioner, not above him/her as previous panelists did.  He did not represent himself as that typical arrogant - better then you - Goldmanite.  He was, I must say very eloquent.

Finally came panel 3 whose sole member was none other then GS CEO Lloyd (Lord of the Rings) Blankfein.  Wow, I found him to be embarrassing to say the least, evasive due to insecurity as well as lack of knowledge.  More over, if his constant lack of knowledge was due to plausible reliability, he should have been a little more convincing.  It was not very plausible..

He rarely finished a thought often changing direction in mid sentence.  He hemmed and hawed quite a bit obviously looking for ways not to step on his tongue and mis speak the truth.  I personally found him to not to be the buck stops here, I'm in control and have done nothing wrong top executive of the company.  I personally feel he will be a casualty if being thrown out with billions of dollars can be considered a casualty.

All in all, some valid and damaging information did come out mainly in the reading of the documents contained in that very thick loose leaf binder everyone had in front of them.  An interesting fact that was brought out is that the only emails released by Goldman Sachs were those of Fabrice Tourre.  When questioned why - there was - no answer.  It is obvious to all - at least to me - that they - GS - were throwing him to the wolves as a sacrificial lamb.

One other major point was made and that was ethics or lack thereof.  There did seem to be a great deal of conflict of interest and ethical violations in many GS transactions and business dealings.  I suppose the two combined can equal fraud but that is for a judge and jury to decide- not you, me or the Senate.  Those allegations should be brought by those directly or even indirectly impacted.  Apparently this is happening.  Other lawsuits are forthcoming and one - specifically  - coming from GS stockholders. 

Ladies and Gentlemen, Boys and Girls, Children of All Ages, Welcome to the Capitol Hill/Wall Street Circus.

Yes, this is a three ring circus..  In ring number 1, the Senators.  In ring number 2, the Goldmanites.  (Upcoming shows will feature other Wall Streeters in ring number 2).  In ring number 3 the SEC charge of fraud against one very small element of Goldman Sachs.  Send in the clowns.

As with those in the hot seat some of our Senators did not exhibit control or even what I would call professionalism.  Their function, if this were a true hearing, was to ask questions and get answers.  Too often they made comments and passed judgment. They brow beat the witnesses and sometimes told them what they wanted to hear from them.  Some Senators showed their anger - which as our representatives mirrors the anger of many of us.  But I personally don't believe that this was the forum to do so.  I think it simply added to the drama and entertainment value of what can be considered a reality TV program.

The committees job, I believe,  was to ask questions, get answers of those called to testify under oath.  If no answer was given or a diversion taken by a witness it should have been so noted and questioning continued..  Personal opinions and comments made to witnesses were also inappropriate even though I enjoyed some of them.  the comments and opinions should have been made after all the testimony was heard, analyzed and a report given by the Committee Chairperson.

Whose opinion is correct?
Browse the links below.  Listen to all the different opinions and observations, listen to the testimony again and decide for yourself.  Your opinion is as good as anyone's.  Any and all of our opinions are just that - opinions  The opinion that will matter will be the opinion that is rendered by a judge, jury or court, a regulatory agency with teeth and punishment or by the U.S. Government if vioations and actions against the country or its people are found to have occurred.  The real justice will be in the punishment - if any.  . The guilt or innocence of the specific SEC fraud charge is not the real issue.  Again, it must be brought out that this is a civil suit that could very well never see the inside of a court room and guilt or innocence never determined.

This hearing and the SEC civil law suit are part of this three ring circus.  The real issues and the real questions have yet to be brought out and asked although if you listen very carefully there does seem to be a foundation being laid for the real issues and questions to be raised.

My next post will be on the real issues and questions  Goldman Sachs should be asked.  What was their  real role in the economic crisis.  Who is responsible and Why?  Who should be accountable to the millions and millions devastated?

Senate hearings made politicians look worse than Goldman Sachs
Baltimore Sun
All-Star Panel on 'All-Star' panel on Goldman Sachs, Democratic Push for ...
Goldman Trader 'Hedging' Means 'Conflict' to Senator
Organized Labor Puts a Bull's-eye on Wall Street
Goldman Sachs Crossed Ethical Lines in Selling CDOs, Levin Says
Goldman Sachs deal in fraud case involved unsophisticated investors
Los Angeles Times
Goldman Sachs Hearing: Senators Wield Oversimplified Metaphors, Execs Fight ...
Huffington Post (blog)
Self-Evaluations Pose New Concern After Goldman Sachs Hearing
Political Wisdom: Arizona, Goldman Sachs Stir the Pot
Wall Street Journal (blog)
Goldman Sachs Says SEC Case Hinges on Actions of One Employee ... 
Goldman Sachs Emerges From Senate Showdown Ahead $549 Million ...
Comparing Goldman Sachs to a Casino is an Insult to Casinos
Huffington Post (blog)
Goldman Sachs: Playing Devil's Advocate
Forbes (blog)
Bill Clinton Says He Isn't Sure Goldman Broke Law
Political Grandstanding: Wall Street Slams Goldman Sachs Hearings
ABC News
Lincoln gives Goldman Sachs donations to charity
Washington Post
RBS Chairman Says Too Soon To Act On Goldman Sachs Transaction
Wall Street Journal
RBS Chairman Says Too Soon To Act On Goldman Sachs Transaction
Wall Street JournalJon Slattery: Thomson Reuters chief defends Goldman Sachs
By Jon Slattery
 Goldman Case Is Just 'the Beginning' for Banks, Malmgren Says
 Goldman's Viniar, Sen. Levin Agree: Don't Say Securities 'Crap'
'Fabulous Fab' Goldman Sachs exec Fabrice Tourre, Wall Street sext king, is a ...
New York Daily News
For Some on Wall St., the Spectacle on TV Was Background Noise
New York Times
Goldman Sachs Gets Potty Mouth Grilling
Congress berates Goldman Sachs
Chicago Sun-Times
Accused Goldman Sachs Exec Crowed Of Pending 'Collapse' -SEC -
NEW YORK (Dow Jones)--
Viniar Says Firm Didn't Negotiate With Treasury on AIG Payments
Goldman Sachs Grilled: Join the Live Chat
CNN (blog)
Goldman Sachs Knows How to Get 'Er Done!
Vanity Fair
Goldman Sachs' Long Day In Washington «'s StreetTalk
By Nathan Vardi
Goldman Sachs's Tourre to 'Categorically' Deny SEC's Claims ...
Goldman Armed Salespeople to Dump Bonds, E-mails Show
 Fabulous Fab Shows Managers Oblivious to E-Mail Peril
Goldman Sachs executives face senators investigating role in financial crisis
Washington Post
Goldman Sachs, Goldfish Eat Their Young
Huffington Post (blog)
Goldman Sachs Gains as Senate Hearing Questions Executives
Wall Street Comparison Offends Las Vegas, Ensign Says
Goldman Sachs bankers disagree on duty to clients
Enron law firm sues Goldman Sachs
 Probe: Goldman Eyed Profits from Housing Bust
CBS News
Goldman Sachs Suffers The Perils Of PR Spin
Goldman Sachs fraud is criminal
Chicago Tribune
Will their bite match their bark? Obama advisor rails against Goldman Sachs ...
New York Daily News


Anonymous said...

Goldman=hammer; client=nail...thank you may I have another!

The Client Always Comes First At Goldman...

Except When He Doesn't, Which Is Also Always
It is hilarious that Goldman would "spend countless hours" with clients to convince them of the Goldman trade only after the stops had been hit and Goldman was actively trying to cover shorts, i.e., when the stress in the mortgage market was plainly visible for all to see. Maybe Goldman should have spent just one hour with its clients when it itself decided to go short in the first place, instead of using its clients as spitoons for its toxic, HR Giger based saliva.

What is far more deplorable, is that Swenson admits that not only did the firm deny its client requests, but that these decisions lost the firm client credibility (although they saved Goldman "hundreds of millions").

And now you know why Lloyd Blankfein's statement that "the client always comes first" for Goldman is also merely anopther lie.

But we all knew that.

Anonymous said...

Fool's Gold(man)

The firm’s nonstop nope-a-dope strategy--evading questions, repeating gobbledygook answers and ceding no ground of accountability--may have been an effective legal defense against the SEC's specific charges in the Paulson case. But the Goldman team failed to realize that on this day they were being tried in the court of public opinion on much bigger and more serious charges and in front of jury that has been fed 18 months of incredibly damning evidence about junk mortgages, rigged ratings, sweetheart bailouts and obscene bonuses.

The result? Goldman arguably won the narrow battle inside the room on the SEC charges (as the Wall Street Journal suggested). But after hoisting itself on its own petulance, the firm lost the larger war--and any last shred of credibility with the frustrated middle. Indeed, with its condescending, responsibility-ducking performance Goldman showed why it deserved its status as the most hated company in America--and why the anger at Wall Street won't really dissipate with the expected passage of the financial reform bill now in the Senate. The white shoe of white shoes just doesn't get that the jig is up and that the sham brand of capitalism it has been profiting from at our expense has been exposed in all its repellent glory.

Anonymous said...

This story is just beginning. The real story is about the manipulation of oil prices with our taxpayer money along with the Fraud called Warren Buffet who knowingly participated with inside information when he "invested" in Goldman Sachs. Did you know that when Warren Buffett bought Shaw Industries he issued a decree to buy Chinese becuase it was cheaper and he broke all the contracts with American suppliers? Don't let Buffett's awe schucks cherry coke routine deceive you. CNBC is his propaganda puppet.

Anonymous said...

In the qotation below you seem to have conflated the father and son. The key verb is "issue," by the son. Also, the father uses the stronger verb "give," rather than the weaker "permit," or the even weaker "let."

Mayer Amschel Bauer, who founded the Rothschild family had said, "Give me control of a nation's money and I care not who makes the laws."

His son, Amschel Mayer Rothschild said, "Permit me to issue and control the money of a nation, and I care not who makes its laws."

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