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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

Monday, September 6, 2010

Goldman Sachs on this Labor Day

Here's a video to reprise the actions of Goldman Sachs before and during the present recession.


Anonymous said...

I wonder how deep Goldman's involvement in HFT really is and if they contributed to the state of the current market...interesting interview.

Jim Rickards Tells His Clients To Get Out Of Stocks

If you no longer invest in stocks, you are not alone: "I don't even take the stock market seriously" says Rickards, "and I mean that in all seriousness. Who's in the stock market right? You have indexers and robots. Is anybody else trading the stock market?" Obviously, that is a rhetorical question.

Rickards continues by blasting the now prevalent, and well documented HFT feedback loops, that endow the market with a certain broken fractal quality: "the market has become self-referential, an algo playing itself out, almost the way you would run a self-recursive equation on a computer and you get very unpredictable results from very simple equations. It has degenerated into a joke. Everyone is looking around for the cause of the Flash Crash: what you find in complex systems is that the cause is almost irrelevant. What matters is that the autonomous agent, the participant, the elements of the system are prone to catastrophic collapse, so once you are in that mode, once you have that scale and that degree of complexity so that you are prone to collapse, the catalyst doesn't matter. If you have an avalanche who cares what snow flake started it, what you care about is the instability of the mountainside. The Flash Crash was the warning, I don't think the warning has not been taking very seriously. The markets are not reflecting fundamentals, because there are no more fundamental traders. It is an accident waiting to happen. I recommend to clients that they not be in stocks anymore. I don't take the market very seriously up or down because it has no informational content."

Anonymous said...

Goldman Sachs

Burry said Wall Street investment banks such as Goldman Sachs Group Inc. shouldn’t trade on their own account and don’t always act in the best interests of clients. The firm is disbanding its principal-strategies business, one of the groups that make bets with the company’s own money, two people with knowledge of the decision said last week.

“I don’t believe that any Wall Street bank always acts in the best interests of its clients,” said Burry, adding that he often fought with firms while betting against housing. “It’s an incredibly vicious, incredibly competitive world when you’re going to go take a position opposite one of those banks.”

He asked seven Wall Street banks to help him bet against the housing market, and only Deutsche Bank AG and Goldman Sachs expressed any interest, Lewis wrote in his book. At the end of June 2008, original investors in Burry’s hedge fund received a return on their money, after fees and expenses, of 489.34 percent, according to the book.

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