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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

Saturday, January 15, 2011

Goldman Sachs, You Are Too Big to Succeed!

When banks like Goldman Sachs reveal another $5 billion in losses a long time after the fact, and when the Fed finally acknowledges buying $590 billion of GS toxic assets, then we know that it is time to break up GS into its constituent parts so that huge losses and huge bailouts can be mitgated in the future. That should even make sense to Goldman Sachs.

The article below came from a comment and a link to ZeroHedge and is worth a post. Thank you for the link to:

Reggie Middleton from who says,

The Financial Times Vindicates BoomBustBlog's Stance on Goldman Sachs--Once Again!
I read this headline from the Financial Times and said to myself, “Okay Reg, Don’t say ‘I told you so’”. Thus, you won’t hear it from me, at least not this time. As reported today in the Financial Times: Goldman reveals fresh crisis losses and Goldman’s republished results present a new picture

Goldman Sachs has revealed details of about $5bn in investment losses suffered during the crisis for the first time this week, in a move that will deepen the debate over companies’ financial disclosures. The figures, issued as part of internal reforms aimed at silencing Goldman’s critics, show that the bank suffered $13.5bn in losses from “investing and lending” with its own funds in 2008. But Goldman’s regulatory filings and its executives’ comments to investors at the time pointed to about $8.5bn of losses arising from its investments in debt and equity, as markets were rocked by the turmoil.

Hmmmm! I walked through this in explicit detail in “When the Patina Fades… The Rise and Fall of Goldman Sachs??? and I did it without being privvy to Goldman’s financial innards. It was more or less common damn sense. Goldman and its employees do not walk on water, they do not shit gold, and they cannot perform miracles. If one takes an objective approach to their equity analysis, and simple plug the numbers into a spreadsheet (objectively) you would have come up with the exact same conclusions that I gave my subscribers all of these years. Let’s reminisce, shall we?

So, what is GS if you strip it of its government protected, name branded hedge fund status. Well, my subscribers already know. Let’ take a peak into one of their subscription documents ( 131 pages). I believe many with short term memory actually forgot what got this bank into trouble in the first place, and exactly how it created the perception that it got out of trouble. The (Off) Balance Sheet!!!


. . . .

As a matter of fact, it looks just as scary today as it does at the height of the bubble, but since very few people read balance sheets, no one really notices.


You know what most people don’t realize is that it looks quite scary now as well.


I said it before, and I’ll say it again, I think this is a prime example of the “Devils Chickens Coming Back Home To Roost“. You see, my dear readers and fellow tapayers…
You’ve been had!
You’ve been took!
You’ve been hoodwinked!
Led astray!
Run amok!

Read the full article here


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