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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, August 24, 2010

Inside Job: The Story About the "Crash" That Could Have Been Avoided

We here at GS666 typically do not promote for profit products - especially films - but this one came to me and I thought it was interesting enough to publish. The film is set for release in October..."coming soon to a theater near you".  Below is the official movie trailer along with excerpts from the official "Inside Job" press kit.

The Press Kit contains some very good information including a pretty complete list of the cast of characters (all real people not actors). to view the Press here.
From Academy Award® nominated filmmaker, Charles Ferguson (“No End In Sight”), comes INSIDE JOB, the first film to expose the shocking truth behind the economic crisis of 2008. The global financial meltdown, at a cost of over $20 trillion, resulted in millions of people losing their homes and jobs. Through extensive research and interviews with major financial insiders, politicians and journalists, INSIDE JOB traces the rise of a rogue industry and unveils the corrosive relationships which have corrupted politics, regulation and academia. Narrated by Academy Award® winner Matt Damon, INSIDE JOB was made on location in the United States, Iceland, England, France, Singapore, and China.

This film attempts to provide a comprehensive portrayal of an extremely important and timely subject: the worst financial crisis since the Depression, which continues to haunt us via Europe’s debt problems and global financial instability. It was a completely avoidable crisis; indeed for 40 years after the reforms following the Great Depression, the United States did not have a single financial crisis. However, the progressive deregulation of the financial sector since the 1980s gave rise to an increasingly criminal industry, whose “innovations” have produced a succession of financial crises. Each crisis has been worse than the last; and yet, due to the industry’s increasing wealth and power, each crisis has seen few people go to prison. In the case of this crisis, nobody has gone to prison, despite fraud that caused trillions of dollars in losses. I hope that the film, in less than two hours, will enable everyone to understand the fundamental nature and causes of this problem. It is also my hope that, whatever political opinions individual viewers may have, that after seeing this film we can all agree on the importance of restoring honesty and stability to our financial system, and of holding accountable those to destroyed it.

Charles Ferguson, the founder of Representational Pictures and the director of Inside Job, is a filmmaker, writer, and political scientist. A native of San Francisco, California, Ferguson obtained a B.A. in mathematics from the University of California, Berkeley in 1978 and a Ph.D. in political science from M.I.T. in 1989. Following his Ph.D., Ferguson was a postdoctoral researcher at M.I.T. for three years, focusing on interactions between high technology, globalization, and government policy, and frequently consulting to U.S. government agencies including the White House staff, the Defense Department, and the U.S. Trade Representative. Then from 1992 to 1994 Ferguson was an independent consultant to high technology companies including Apple, Xerox, Motorola, Intel, and Texas Instruments. In 1994 Ferguson founded Vermeer Technologies, a software company which developed FrontPage, the first end-user Web site development tool, which he sold to Microsoft in 1996. Subsequently he spent several years as a Senior Fellow at the Brookings Institution and a visiting scholar at M.I.T. and U.C., Berkeley.

In mid-2005, Ferguson formed Representational Pictures and began production of his first film, No End In Sight: The American Occupation of Iraq, which premiered at the Sundance Festival in 2007. No End In Sight won the Special Jury Prize at Sundance, the Best Documentary prizes of the New York and Los Angeles Film Critics circles, and was nominated for an Academy Award for Best Documentary. Ferguson has authored several books including High Stakes, No Prisoners: A Winner’s Tale of Greed and Glory in the Internet Wars, and Computer Wars: The Post-IBM World (co-authored with Charles Morris).

How Deregulation and the Evolution of Wall Street Culture Led to the Financial Crisis
A chronological re-ordering of the events and arguments of INSIDE JOB here then scroll down to page 16.
Editor's Note:  This is a very well done and interesting timeline study of the breakdown of our financial system due to deregulation.  Take the time to look at it.
If the movie expands on the above, it will be the first public attempt at exposing the crimes and criminality of what has brought many of us to the brink of disaster and millions more sent over the brink.  Hopefully, a public showing of a documentary from a very credentialed individual may wake us up and force us to force our elected officials to begin doing the right thing, uphold our laws and bring us justice.  The crimes of Wall Street must come to an end.

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JR said...

Here's a video from in which Matt Taibbi is interviewed about his article on the recently passed Financial Reform Bill.

Matt Taibbi, Rolling Stone, Correspondent

As part of the Financial series, Matt Taibbi goes over his August 19 Rolling Stone article, "Wall Street Wins Big." The article examines how the provisions in the financial regulations law can prevent a future financial crisis, and how the bill falls short of this goal.
Washington, DC

Video here:

JR said...

I'm looking forward to seeing Ferguson's film, if and when it comes North.

After having read the suggested articles and interviews about Ferguson's film, I am reminded that others have been saying the same thing, and more, for quite some time (William K. Black, Ellen Brown ( , Janet Tavakoli, Max Keiser, etc.).

And this blog is important as a record of what one banking institution was up to before, during and after the financial crisis. I hope that justice will reign in the end.

Anonymous said...

Where the hell did you think this years bonus pool was coming from?....

AIG Wannabe's Go-For-Broke Strategy Fails As Pension Fund Begins Liquidations

The problem there is that due to its derivative exposure, liquidations now become self-reinforcing, as more cash needs to be pledged as collateral in a declining market, and the AIG death spiral we all know and love, follows. The only thing missing is for Goldman to raise its overnight variation margin requirements and it's game over, as we get a brand new AIG on our hands.

And since Goldman is among the 60 or so asset managers that actually decide how the fund invests its meager assets, it is fully aware of its precarious position, and it is a sure bet that Goldman is currently deciding when to pull the plug on the TRS life support.

Anonymous said...

"The world is a dangerous place to live not because of the people who are evil, but because of the people who don't do anything about it."
-Albert Einstein

JR said...

After having read about the Illinois Teachers Retirement System liquidation above by Anon, I was curious if there were other pension funds in trouble. The Ontario Teachers Pension Plan is Canada's largest and has been credited with good investment strategy. In 2010, it had a shortfall of 17.1B on 96.4B invested mainly due to low interest rates ( ).

It makes one wonder how many more pension funds are going to suffer as we go through this "double dip." The double dip is not official but I think it's here anyway.

Anonymous said...

Isolated incident?

By Jonathan Spicer
Wednesday, August 25, 2010

NEW YORK -- A big high-frequency trading firm faces possible civil charges by regulators after its computer ran amok and sparked a frenzied $1 surge in oil prices in February, according to documents obtained by Reuters and sources familiar with the continuing investigation.

Infinium Capital Management confirmed only that it is the company at the center of a six-month probe by CME Group Inc. into why its brand new trading program malfunctioned and racked up a million-dollar loss in about a second, just before markets closed on February 3.

JR said...

I've just come across an article on Spencer Ganntt's book, "Vote the Bastards Out! Democrats, Republicans, Incumbents" below:

The book can be obtained online at google books.

There is also a video on the same subject here:

The premise seems to be that in order to correct a political system that is broken it is necessary to vote out all the incumbents (except for the ones truly interested in doing the will of the people). I would suggest that anyone associated with Goldman Sachs should not be elected.

If you think about it, in the next election Obama would not come back, neither would McCain or anyone else in the present government, except perhaps people like Levin, Merkley and anyone else that has been supportive of laws that make people's lives better. That means that someone not in the political arena now would become the next President. He/She would have less baggage (one would hope)than anyone in the present government. There are so many possibilities:

reform of lobbyists;
reform of campaign contributions;
legislation that is based on one idea at a time rather than 2000 pages long; etc.

This is an interesting idea that could work in any democratic country.

Anonymous said...

Good interview with Laurence J. Kotlikoff at end....

Pension Ponzi Scheme $16 Trillion Short?

Wall Street plays no role and makes no money? Who are we kidding here? Wall Street wolves are hungry and they want a piece of the Social Security (SS) pie. In fact, conspiracy theorists will tell you that this whole financial crisis was manufactured with the ultimate goal of privatizing SS to allow the fat cats on Wall Street to make even more money as they find new sources of revenues to fund prop desks, hedge funds, private equity funds and real estate funds.

Anonymous said...

Kotlikoff: U.S. Financial System Fundamentally Corrupt

JR said...

It is amazing that Goldman Sachs can say with such confidence that the Fed is going to stimulate the economy even more, perhaps to the tune of $1 trillion. I can just imagine GS getting ready to hedge some more and to get even richer than King Midas. (Though the ending of that story could be prophetic too.)

If the government had originally wound down the TBTF banks that contributed mightily to the present recession whilst protecting the depositors, much like the FDIC does and is doing with smaller banks, the result would have been less risky and expensive than it turned out to be. The big banks' CEOs and CFOs should have taken the major risk rather than earning stupendous bonuses. When the FDIC manages a bankruptcy, it gets rid of the management and installs new and better managers.

Goldman Sachs (NYSE:GS) Says More Fed Stimulus Coming

According to Chief U.S. Economist at Goldman Sachs Jan Hatzius, the Federal Reserve will attempt to stimulate the economy as it continues to show it weakness.

More here:

JR said...

How Goldman Sachs will maintain proprietary trading:

Despite Reform, Banks Have Room for Risky Deals
The New York Times


Indeed, several trades that were made on behalf of clients went bad for the banks even as the new rules were being debated in Washington this year. JPMorgan Chase and Goldman Sachs, for example, each lost more than $100 million on transactions handled for customers in the period from April to July.


“You can use client activity as a cover for basically anything you are doing,” said Janet Tavakoli, who runs her own structured finance consulting firm. “It’s very problematic that losses like this are showing up. It’s a prime example of what the financial reform bill doesn’t address.”

Read article here:

Anonymous said...

Banks’ Self-Dealing Super-Charged Financial Crisis

Over the last two years of the housing bubble, Wall Street bankers perpetrated one of the greatest episodes of self-dealing in financial history.

Faced with increasing difficulty in selling the mortgage-backed securities that had been among their most lucrative products, the banks hit on a solution that preserved their quarterly earnings and huge bonuses:

Goldman, Merrill and Others Get Tough
A little-noticed document released this year during a congressional investigation into Goldman Sachs' CDO business reveals that bank's thinking. The firm wrote a November 2006 internal memorandum [10] about a CDO called Timberwolf, managed by Greywolf, a small manager headed by ex-Goldman bankers. In a section headed "Reasons To Pursue," the authors touted that "Goldman is approving every asset" that will end up in the CDO. What the bank intended to do with that approval power is clear from the memo: "We expect that a significant portion of the portfolio by closing will come from Goldman's offerings."

republicanmother said...

Looks like a great documentary - will have to find a way to see it sometime.

On the subject of these super banksters, I thought this excerpt from Quigley's Tragedy and Hope were revealing:

Pg. 324: "the powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basle, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank, in the hands of men like Montagu Norman of the Bank of England, Benjamin Strong of the New York Federal Reserve Bank, Charles Rist of the Bank of France, and Hjalmar Schacht of the Reichsbank, sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

Larry Rubinoff said...

A very interesting piece. I have long subscribed to the theory that Meyer Rothschild's plan of a "One World Order" by control of economies was a plan very much in effect. I believe that in this country, George W. Bush implemented the final stages of the Rothschild plan here.

From the article above, central banks - all privately owned - were the creation of Rothschild. Indeed, his family still controls the Bank of England and the central bank in France.

We can see here with our FED, that they are in control not only economically but politically as well.

Anonymous said...

Many of us that watch the economy were astonished when Obama appointed Gietner and Summers. They were at the helm when the economy started going down the tubes.
And what happened to the big banks' bonus pool? These people have no conscience.
The Republicans are worst and the Tea Party????
I think there might be something to this "one World Order. Certainly the world financial power is concentrated to a few.

Larry Rubinoff said...

Beware the "One World Order". It is happening as Meyer Rothschild said, "Let me control the money of a nation and I care not who makes its laws"

The bankers are taking control of all the wealth worldwide. All the major Central Banks work together along with the World Bank. It is one large but closed fraternity who are playing out the plan laid out many years ago. Rmember Bush 1 talked about the "New World Order" which is what it really is. Bush 2 allowed it to come to fruition and Obama is closing the book on it.

Bernanke's plan of lowering interest rates giving away more "free" money will only move more wealth to that 1% that owns most of it now.

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