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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

Sunday, July 24, 2011

Goldman Sachs Borrowings from the Fed

Senator Bernie Sanders amended a reform law to include a provision for the Government Accountability Office (GAO) to study the $16 trillion of Federal Reserve funds that bailed out both U.S. and foreign banks from December 2007 to July 2010.

The Federal Reserve Board directed the FRBNY (Federal Reserve Bank of New York) to implement most of the emergency actions that authorized loans to banks in order to stabilize financial markets in 2008.

One of the recommendations of the GAO, amongst others, was that the Federal Reserve needs to strengthen conflict of interest policies. Other recommendations include strengthening risk management and strengthening procedures to manage program access for higher-risk borrowers. Also the GAO said that more transparency and accountability was needed.

Part of the Federal Reserve mandate includes protecting the credit rights of consumers and managing the nation's money supply to achieve maximum employment, stable prices and moderate long-term interest rates. These goals were sadly lacking in the actions performed by the Federal Reserve emergency loan system.

From the alphabet soup of loan programs created by the Federal Reserve, Goldman Sachs's total transactions across emergency programs (aggregate borrowings) from December 2007 to July 2010, amounted to a total of $814 billion ($589 billion from the Primary Dealer Credit Facility, PDCF and $225 billion from the Term Securities Lending Facility, TSLF). Goldman Sachs was paid a total of $11,157,426 in fees from 2008 to 2010.

Dudley, who joined the Federal Reserve in 2007 at Geithner's request, was a Goldman Sachs partner for 10 years before that. In 2009, he became the President of the Federal Reserve Bank of NY. If there were another financial crisis, would you think Dudley is free from conflicts of interest?

Senator Bernie Sanders on his website tells us more:

The Fed Audit
By Bernie Sanders - Website

July 21, 2011

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.

The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.

In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.

To Sanders, the conclusion is simple. "No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed's board of directors or be employed by the Fed," he said.

The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.

Read more here


Anonymous said...

Ron Paul to Congress: Stop Stealing from the American People
Central Bankers, Stop Stealing Our Money! Secret debts incurred by central bankers without the consent of the people should be declared...
Ron Paul: The U.S. Government Is Defaulting on the American People by Ron Paul The debt ceiling debate is providing plenty of opportunity for political theater...
Ron Paul: The Fed Is Stealing the People’s Money by Ron Paul Last week I was both surprised and pleased when the Supreme Court...

Anonymous said...

The business channels this morning say bankers are the whipping boys...they are misunderstood--ON THE CONTRARY--while you may not agree with all of this's worth a look.

25 Reasons To Absolutely Despise Bankers And Their Minions

11) Asia Times told us that the big international banks launder 500 billion dollars a year in bribes for politicians. This does not include campaign contributions and cash payments. Remember the congressman in 2008 who said he had two types of calls from his constituents about the proposed Banker Bailout. He said some said No and the rest said Hell No. Yet the Bailout was passed by both Houses and approved by both Presidential candidates. Now you know why the Congress, the news media and the President do not listen to you and do not care what happens to you and your friends and your family.

Anonymous said...

Puff piece ...

“It’s Too Bad. And I Don’t Mean It’s Too Bad Like ‘Screw ’Em.’”
Embattled Goldman Sachs CEO Lloyd Blankfein just can’t understand how he got cast as the Dr. Evil of Wall Street.

Should his era be coming to a close, Blankfein will be remembered first for having seen the 142-year-old-firm through some of the most perilous months in its history. But he will also have the distinction of having allowed Goldman Sachs to become a symbol of everything wrong with banks, corporations, even capitalism itself. Over the past three years, Goldman Sachs has been accused of having its hand in innumerable sinister activities, including but not limited to being the driving force behind the collapse of AIG and the Greek economy, spurring a global food crisis, colluding with Qaddafi, hoarding the swine-flu vaccine, hogging the fryers at Shake Shack, and bamboozling its clients in order to pay out monster bonuses. Even the firm’s name has become cultural shorthand for banker greed. “If you’re going to try to convince people you care about things other than money,” Amy Poehler quipped on Saturday Night Live, “may I suggest you remove the words gold and sack from your name?”

He may be right, but even in his Brooklyn twang, this argument is not particularly endearing—or satisfying to anyone who suspects the game to be rigged. Blankfein claims to have been humbled by the financial crisis. He points out that the firm recently completed a rigorous review of its business practices. “We’re going to come out of this productively,” he says. But the years of opprobrium have offended his sense of justice, and seem to have pushed him and his cohorts further into an intractable position: Goldman Sachs versus the world. “Look, I worry about these things, and I wonder how we slipped up and how are we behaving,” he says. “But I have a sense of who we are that’s inconsistent with what I perceive theirs to be. I’m not saying the world is crazy and we’re right, but I hope that’s the case.”

Humans rarely become CEOs of large financial companies, and Blankfein was not the obvious choice to run the firm when Henry Paulson left to become ­Treasury secretary in 2006. Among the alpha males jockeying for the position were John Thain, whose affectless demeanor earned him the nickname “I, Robot,” and John Thornton, who was rumored to have once said that if a deal didn’t go through, “I will personally slit the throats of all my team and drink their blood.”

Humans rarely become CEOs of large financial companies, and Blankfein was not the obvious choice to run the firm when Henry Paulson left to become ­Treasury secretary in 2006. Among the alpha males jockeying for the position were John Thain, whose affectless demeanor earned him the nickname “I, Robot,” and John Thornton, who was rumored to have once said that if a deal didn’t go through, “I will personally slit the throats of all my team and drink their blood.”

Anonymous said...

Embattled Goldman Sachs CEO Lloyd Blankfein just can’t understand how he got cast as the Dr. Evil of Wall Street

Anonymous said...

be first, be smart, or cheat

Margin Call Movie Trailer: New Film About the Financial Crisis

Read more:

Anonymous said...

Abusing money for power

For me, the most remarkable part of writing The Great Crash of 2008 with Ross Garnaut was diving into the murky depths of Wall St’s extraordinary manipulation of money. In the book, we called this “Clever Money”. It was the story of how, over many years, Wall St took the plain vanilla process of securitisation, twisted and stretched it, to produce a batch of ruinous financial instruments: securitisations of securitisations, which bore no resemblance to the goals and form of their constituent parts.

There were other dimensions to the GFC – greed, housing bubbles and global imbalances. But it was the sophistication and scale of clever money embedded in shadow banking that marked the GFC boom and bust cycle out as a unique episode in financial history.

But beneath the technical elements of labyrinthine instruments such as CDOs, hybrids and synthetics, there was another battle going on. It was a struggle for the power to control money.

Anonymous said...

What If Lobbyists Didn’t Exist?

Now the majority is not always right, and that is why we have a representative form of government, so our elected officials can also vote their conscience. But, corporate and special interest lobbying in Washington has become so pervasive that the country is begging for an alternative, and we hope to give it to them.

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