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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, October 11, 2010

Another Goldman Sachs Guy Ensconced in Obama's Administration

Here we go again! As has been reported many times on this blog, Goldman Sachs rules the roost when it comes to positions of financial importance in the government. Gary Gensler was made chairman of the US Commodity Futures Trading Commission (CFTC) in 2009, a position that Brooksley Born held from 1994 until 1999. Born sought to have derivatives regulated and made transparent as she feared a global financial crisis would otherwise occur which, indeed, happened in 2008. Resistance to regulation of derivatives came from Robert Rubin (a GS man), from Alan Greenspan, from Larry Summers and from Arthur Levitt (SEC chairman at the time and now policy advisor to Goldman Sachs).

Of course, Gensler spent 18 years at Goldman Sachs in preparation for his work at CFTC. Gensler worked to deregulate credit default swaps and other derivatives prior to attaining his present position. It seems passing strange that he will now chair the Commision staff of the CFTC who "will write rules to regulate the swaps marketplace." Isn't that action a standard conflict of interest? The man who believes in deregulation will now help to put in place regulations that he does not believe in!

Hey Gary, why don't you resign and let someone who believes in the regulation of derivatives do the work at CFTC?

You can see how convoluted the relationship is and how intertwined the government is with the alumni of Goldman Sachs. Need we even ask why financial actions and (lack of) regulations favor the likes of Goldman Sachs?

So blogger Tom Masters asks the question

Why are so many Goldman/Sachs guys working for Obama?

Goldman Sachs partner Gary Gensler is Obama’s Commodity Futures Trading Commission head. He was confirmed despite heated congressional grilling over his role, as Reuters described it, “as a high-level Treasury official in a 2000 law that exempted the $58 trillion credit default swap market from oversight. The financial instruments have been blamed for amplifying global financial turmoil.” Gensler said he was sorry — hey, it worked for tax cheat Treasury Secretary Tim Geithner — and was quickly installed to guard the henhouse.

– Goldman Sachs kept White House Chief of Staff Rahm Emanuel on a $3,000 monthly retainer while he worked as Clinton’s chief fundraiser, as first reported by Washington Examiner columnist Tim Carney. The financial titans threw in another $50,000 to become the Clinton primary campaign’s top funder. Emanuel received nearly $80,000 in cash from Goldman Sachs during his four terms in Congress — investments that have reaped untold rewards, as Emanuel assumed a leading role championing the trillion-dollar TARP banking bailout law.

– Former Goldman Sachs lobbyist Mark Patterson serves under Geithner as his top deputy and overseer of TARP bailout — $10 billion of which went to Goldman Sachs. Left-leaning government watchdog Melanie Sloan of the Citizens for Responsibility and Ethics in Washington responded: “It makes it appear that they are saying one thing and doing another.” Paul Blumenthal of the Sunlight Foundation noted that, while at Goldman Sachs, Patterson lobbied against executive pay limits that Obama had crusaded for as senator (before, that is, his administration carved out exemptions for AIG). While Patterson agreed to recuse himself on any Goldman Sachs-related issues or related policy concerns, Blumenthal wrote, it “still creates a serious conflict for Geithner, as Treasury is being partly managed by a former Goldman lobbyist. Geithner is also placed in a tough position considering that his chief of staff is limited in the areas in which he can work (supposedly).”

– Obama’s close hometown crony, campaign finance chief and senior adviser Penny Pritzker was head of Superior Bank of Chicago, a subprime specialist that went bust in 2001, leaving more than 1,400 people stripped of their savings after bank officials falsified profit reports. Pritzker’s lawyer at O’Melveny and Myers, Tom Donilon, is now Obama’s deputy national security adviser. He earned just shy of $4 million representing her and other high-profile meltdown clients including Goldman Sachs.

– White House National Economic Council head Larry Summers reaped nearly $2.8 million in speaking fees from many of the major financial institutions and government bailout recipients he now polices, including JP Morgan Chase, Citigroup, Lehman Brothers and Goldman Sachs. A single speech to Goldman Sachs in April 2008 brought in $135,000. Summers has prior experience negotiating government-sponsored bailouts that benefit private concerns. In 1995, he spearheaded a $40 billion Mexican peso bailout that bypassed Congress. Summers personally leaned on the International Monetary Fund to provide nearly $18 billion for the package. Summers’ boss, then Secretary of the Treasury Robert Rubin, was former co-chairman of Wall Street giant Goldman Sachs — the Mexican government’s investment banking firm of choice.

Rubin continues to mentor another former employee of his with regular visits and chats — Treasury Secretary Geithner, who as head of the New York Federal Reserve pushed bailed-out insurance conglomerate AIG to cover up sweetheart deals for investment banks that benefited, you guessed it, Goldman Sachs.

As Obama harangues Wall Street to clean up its house, all the president’s Goldman Sachs men have their feet on the coffee table at his.

Read the article and find a link here


Anonymous said...

Not the first time this happened...history lesson:

The Athenian Real Estate Panic and Banking Crisis

Anonymous said...

"At the Root of the Crisis We Find the Largest Financial Swindle in World History", Where "Counterfeit" Mortgages Were "Laundered" by the Banks

Indeed, Galbraith just gave a must-watch half hour speech where he points out:

* "At the root of the crisis we find the largest financial swindle in world history."
* The fraud originated in the mortgage market of the United States.
* The houses were over-appraised, and the banks only hired appraisers who were willing to do that. Galbraith rhetorically asks: "For what conceivable reason would a lender accept an inflated appraisal for a house against which it was going to make a loan?"
* The language used in the mortgage industry is very telling: "liar's loans", "ninja loans" (where the borrowers had no assets and no income), "neutron loans" (where it would destroy the people but leave the buildings), and "toxic waste"
* The mortgages in the millions were counterfeits, not mortgages. They were "laundered" ... the dirty paper was converted into clean paper. Securitization was used to convert the worthless paper from triple D minus junk to triple A. The commercial banks were the "fences", they took the laundered paper and sold it on to the legitimate market. The "marks" were the pension funds, or any investing entity which trusted triple A rating or investment banks.
* The police left the beat.
* If the counterfeit is big enough, the whole system collapses, because you can't tell what's real from what's counterfeit and so confidence collapses.
* The failure to face the problem of fraud constitutes a huge barrier in the path of economic recovery. The banking system can't be restored until it is taken apart, cleaned up and rebuilt in a transparent and honest manner.
* We should make the Department of Justice uncomfortable to ignore these frauds. Because if we don't have fair and honest and functioning financial system, we won't get out of this crisis.

Anonymous said...

FEDman Sachs is the worst, the most lousy, dirty financial terrorist mafia EVER. this is a pathological vortex of future mass destruction.

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