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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, September 7, 2010

Michael Lewis On Goldman Sachs

Mr. Lewis (author of The Big Short: Inside the Doomsday Machine) has quite definite opinions about the need for banks like Goldman Sachs. In an interview with Jaime Lalinde in Vanity Fair, Michael Lewis answers the following two questions about GS:

Q&A: Michael Lewis Talks About the Banks That Brought Down Greece
by Jaime Lalinde (VF Daily)

Would the world be better off without Goldman Sachs? It seems that everywhere we turn that they are involved in some kind of sketchy, not really illegal, but gray-area-type behavior.

Yes, the answer is yes. The world would be better off without Goldman Sachs, and I don’t think it is just Goldman Sachs the world would better off without. If you waved a wand and wiped out Goldman Sachs, someone would step in and occupy that place. I think the world would be better off without the idea that Goldman Sachs embodies, which is that financial manipulation is a legitimate way to get really rich. If you look at the story of Goldman Sachs in the last six or seven years, you’ll see that they made an awful lot of money getting people to do stuff that never should have been done.

Since the departure of [former C.E.O.] Henry Paulson?

I would say the beginning of the end of the Goldman Sachs I admired was when it ceased to be a partnership. The minute it becomes a public corporation there is this moral justification for bad behavior. By saying, “We are doing it for our shareholders,” you have an excuse to do shitty things to people and do things that are bad for the world. Your job then requires you to generate profits by doing anything short of breaking the law so that you can maximize returns to your shareholders. This is a very dangerous financial attitude. It’s a shame that Goldman drifted into this because it didn’t used to be this way. It used to be “long-term greedy” and now it’s “short-term greedy.” It isn’t just Goldman Sachs we need to get rid of; it’s the concept of the public investment bank that is given a license to pursue short-term profits at any cost.

Read the full interview here


Anonymous said...

Alan Greenspan Admits America Is A Crony Capitalist System

In the following exchange from a DemocracyNow interview, Greenspan is
forced to respond to his quote from Age Of Turbulence on the
definition of crony capitalism: "When a government's leaders or
businesses routinely seek out private sector individuals or business,
and in exchange for political support bestow favors on them, the
society is said to be in the grip of crony capitalism. The favors
generally take the form of monopoly access to certain markets,
preferred access to sales of government assets, and special access to
those in power." Greenspan's pathetic excuse is that while crony
capitalism is a "dominant force" in some other regimes, it is "not the
dominant force in this country." Perhaps all those who are fighting
with the virtual monopoly granted to certain players, such as Goldman
in fixed income trading, and Pimco in government bonds, would beg to
differ. So yes, according to the Greenspan definition America is now
nothing more than a crony capitalist society, which will only get
worse as more and more power it granted to those who are believed to
be able to ramp various asset classes, and thus the market in general,
higher, because as Greenspan himself pointed out recently, nothing is
as important a "driver" to the economy as the stock market: "if the
stock market continues higher it will do more to stimulate the economy
than any other measure we have discussed here".

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