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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

Friday, July 1, 2011

Premonitions About Goldman Sachs's Financial Prowess

It is too bad that Goldman Sachs bankers can ever afford to go into public service either early in their careers or later. It would be better for government financial policies if Goldman Sachs had to stick to just making money for itself rather than trying to control the finances and politics of its own country and other countries. Lurking in the background is Goldman Sachs's greed, its constant push against rules, its untiring search for deregulation of the financial system and its constant meddling in politics.

The following article can be read in two ways: as a warning for the future of the world's financial system or as a way to do business Goldman Sachs-style. Maybe they are both the same thing.

Goldman's Central Bank Connections Deepen
By Simon Kennedy - Bloomberg

The revolving door between Goldman Sachs Group Inc. (GS) and central banks is spinning again.

The fifth-biggest U.S. bank by assets said yesterday it hired Bank of England economist Andrew Benito after recruiting Huw Pill from the European Central Bank in May and Naohiko Baba from the Bank of Japan in January. Moving in the other direction, Ben Broadbent, Goldman Sachs’s ex-chief U.K. economist, started at the Bank of England last month. Former vice chairman Mario Draghi will take up the presidency of the ECB in November.

The targeting of central banks reflects the value banks such as New York-based Goldman Sachs place on the skills economists gather working in policy-making at a time when growth in advanced economies is struggling to gain momentum. Meantime, governments seeking top officials are again turning to Goldman Sachs for top decision-makers 12 months after it settled U.S. fraud claims and almost four years since the start of the worst financial crisis since the Great Depression.

“The people they’re hiring from central banks tend to have valuable understandings of monetary policies, currencies, what’s going on with regulation and have access to all sorts of important people,” said Roy Smith, a finance professor at New York University and former Goldman Sachs partner. “Goldman Sachs has taken a bashing in the crisis. It’s bound to be near the bottom or recovering now, as there’s nothing of substance to follow the charges. Governments recognize that to be the case.”

‘Talented People’

Benito, who most recently served as a senior economist at the Bank of England’s structural economic analysis division, arrived at Goldman Sachs this week as senior European economist based in London, according to an internal memo obtained by Bloomberg News. Fiona Laffan, a Goldman Sachs spokeswoman, confirmed the memo’s contents. She declined to comment further.

Pill, the ECB’s deputy director general of research, will start at the firm as chief European economist in August, succeeding Erik Nielsen, who will become global chief economist at UniCredit SpA (UCG), Italy’s biggest bank. Baba joined in January as chief economist for Japan after leading financial systems analysis at the country’s central bank.

“Investment banks seek out talented people and those who have skills, insight and access to how policy decisions are made are very attractive,” said Peter Hahn, a former Citigroup Inc. banker who lectures on finance at London’s Cass Business School.

Mario Draghi

The Securities and Exchange Commission sued Goldman Sachs last year for misleading investors in a mortgage-linked investment that was sold in 2007. Then British Prime Minister Gordon Brown said the firm’s employees showed “moral bankruptcy” amid calls to ban the company from government work. Goldman Sachs paid $550 million in July to settle the SEC’s civil claims.

Bank of Italy Governor Draghi’s three years as a vice chairman of Goldman Sachs’s international division from 2002 to 2005 became an obstacle to his candidacy to run the ECB before his German rival Axel Weber dropped out. Goldman Sachs arranged currency swaps that helped Greece hide the extent of its budget deficit. Draghi said on June 14 he “had nothing to do with this deal whatsoever” and that it had started before his arrival.

Goldman Sachs isn’t alone in recruiting central bankers. UBS AG, Switzerland’s biggest bank, said today it plans to appoint former Bundesbank President Weber to its board and then make him chairman in 2013. Barclays Plc said in May it hired Brian Madigan, the Federal Reserve’s former top staff adviser on interest-rate policy, to provide counsel on economic research and regulation.

Read the full article here


Anonymous said...

Munger Says Bankers’ ‘Megalomania, Insanity’ Fueled Bubble

"“The bubble in America was caused by some combination of megalomania, insanity and evil in, I would say, investment banking, mortgage banking,” Munger, 87, said today at a conference in Pasadena, California."

...I guess the prospect of getting closer to meeting your maker causes a change of heart?

Anonymous said...

All one big corrupt family...

“Accordingly, it sure is a good thing that the world’s biggest derivatives player – J.P. Morgan – has “seemingly” NEVER, EVER made a bet even “1 % wrong” with their 80 Trillion derivatives book. JPM has a Market Cap of roughly $180 billion. A wrong bet of a mere 1% on their ‘book’ would translate to a loss of $800 billion dollars eviscerating their entire capital base more than four times over.”

dditionally, what can be said for J.P. Morgan can also be said for the likes of B of A, Citibank, Goldman Sachs – all with derivatives books [currently] ranging from 44+ to 79+ Trillion in size. Take note of the TOTAL derivatives for Commercial Banks at 243 Trillion:

Derivatives: A Capital Markets Gong Show For Whom The Bell Tolls

The fix is in???????????????

Fink, Dimon among leading candidates for Treasury secretary job

Read more:

Anonymous said...

Clinton Pimps Some More for His Bank and Corporate Benefactors

Delaying the implementation of Dodd Frank. From The Hill:

Former President Clinton suggested Thursday that the implementation of the Dodd-Frank financial reform be slowed.

As the one-year anniversary of the financial overhaul draws near, Clinton was generally positive on the law as a whole, but suggested regulators should parcel out the new rules bit by bit for the benefit of businesses.

“One way to clear that up may be to stagger [the regulations] in over a more pronounced time table,” he said on CNBC. “I think there’s only so much change that institutions can handle at one time.”

If you haven’t been following what happened during the fights over financial reform, one of the ways Dodd Frank was already hampered is a great number of its supposed changes were not hammered out, but instead were delayed by requiring studies or being fobbed off on more detailed rulemaking (beyond the degree that is typical). That gave the industry the opportunity to water it down further. And at this juncture, delay could be a monstrous boon for the banks, since if Obama loses in 2012, even more bank friendly regulators will be put in place.

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