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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, August 1, 2011

As Our Economy Tumbles So Might Goldman Sachs

This is big.

Business Insider just reported that Landsdowne Partners, one of Goldman's top 20 investors has dumped its entire $850 million stake.  Wow, talk about lack of confidence. Of course, as you will see, they are taking some losses also and their investment in GS is not helping them at all. 

BI goes on to explain,
The Telegraph cites four reasons why the $10 billion long/short equity hedge fund run by Stuart Roden and Peter Davies sold the huge stake:
  • Dodd Frank legislation that caused Goldman to get rid of its proprietary trading business
  • Capital requirements 
  • "The bank saw its shares hit a two-year low of $125.50, having fallen 19.2% this year"
  • "Profits in the second quarter of the year fell to $1.09 billion, from $2.7 billion in the first three months of the year, as its behemoth Fixed Income, Currency and Commodity division saw revenues tumble by 64pc from the first quarter"
Read here

Also in Business Insider Clusterstock:

THE REVOLVING DOOR: 29 People Who Went From Wall Street To Washington To Wall Street

Interesting to see all the Goldman crowd in there as well as some other very interesting characters who have influenced our government and our economy.

Read here

Even More from Business Insider Clusterstock.

Goldman Sachs Traders Quitting The Bank In Droves
"More than a dozen traders have quit Goldman Sachs... North American government bonds and derivatives trading desk in New York in recent months as the bank takes fewer risks and big bonuses for ambitious traders dry up," Lauren Tara LaCapra reports at Reuters.

Finally have a few laughs compliments guessed it - Business Insider Clusterstock

15 Reasons You Don't Want To Work At Goldman Sachs

Read here
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Anonymous said...

A Senator Acknowledges Total Leadership Failure

Anonymous said...

Whether or not you like the debt deal...this seems very screwed up!

Why is the debt deal so bad?

As I've previously noted, the deal would create a "super congress" which is an end-run around accountability to the voters and the constitution.

As Chris Floyd writes today:

[The] extraordinary "special committee" or "Super Congress" ... is an unaccountable politburo which will be able to circumvent all normal democratic (and republican) principles and issue budget-slashing, tax-cutting legislation that cannot be debated or amended, but simply approved or rejected by the rest of the now-powerless representatives and senators.

That's not all. If the politburo -- handpicked members split evenly between the two gangs of thieves and poltroons that now hold sway on Capitol Hill -- can't agree on just how much they want to gut the budget and cut taxes for the rich, why then, this will trip a series of "triggers" which will automatically start gutting, slashing and cutting, without any vote by the democratically elected representatives whatsoever. And surely it would be superfluous in me to point out that these unaccountable "superpowers" will soon stretch to cover other areas of legislation beyond budgeting and taxes.

Anonymous said...

guess who's going to be paying for all the fun tbtf had....good night irene!

Robert Samuelson Redefines "Wealthy"
In a piece titled "Why Are We In This Debt Fix? It's the elderly stupid," Samuelson tells readers:

"some elderly live hand-to-mouth; many more are comfortable, and some are wealthy. The Kaiser Family Foundation reports the following for Medicare beneficiaries in 2010: 25 percent had savings and retirement accounts averaging $207,000 or more."

Anonymous said...

Good read....

Who are this ‘we’ of which you speak, Tyler Cowen?

Why were banks so easily persuaded that, via the magicks of tranching and diversification, lending into obviously questionable real projects was so safe that any downside risk could safely be socialized? The banking sector’s job is to convert a portfolio of real investment into money that is ultimately backed by the state, and its responsibility is to do so in a manner such that the likelihood realized values will in aggregate undershoot funds advanced is negligible, without recourse, directly or indirectly, to any heroic government stabilization. “Mistake” is not a remotely sufficient characterization of what occurred. There were discernible incentives behind the banking sector’s misbehavior. Throughout the securitization chain, conservative valuation practices were entirely inconsistent with maximizing employee and shareholder wealth. And why did institutional money trust bank and rating agency valuations when money managers were not too stupid to understand that high yield and low risk make for a fishy combination? Again, the answer is not some kind of sunspot. Agents were well paid not to question “money center banks”, for whose misjudgments and misrepresentations they could never reasonably be blamed.

{But, in fact, it is not “institutions” that buy this paper, but managers who are paid for performance. And from a manager’s perspective, all these securities do trade, about once a year, when bonuses and performance fees are taken. During bonus season, hypothetical valuations of illiquid securities become converted into liquid nonrefundable cash, just like during an ordinary sale. Institutions effectively purchase securities from themselves, at arbitrarily high prices, and pay their managers a commission for the privilege. Financial innovation truly has been a wonder these last years. Institutions have cut out the middlemen and become their own greater fools, to the benefit of managers and the detriment of other stakeholders.}

Larry Rubinoff said...

Anonymous said...

"Whether or not you like the debt deal...this seems very screwed up!"

Yes Anonymous, it is. More power in the hands of a few, less liberty for the population. As I have been calling our system of government for quite some time now - a Democratic Dictatorship!

Anonymous said...

Revolving Door at S.E.C. Is Hurdle to Crisis Cleanup

Perhaps more important, his role once again raises questions about the revolving door between Washington and Wall Street at a time when public distrust about the agency and its lack of enforcement action against the culprits of the crisis is running high.

It is a common question as the government increasingly looks to fill its ranks with regulatory officials proficient in the language of Wall Street. Robert S. Khuzami, the S.E.C.’s director of enforcement, was previously the general counsel of Deutsche Bank. The agency tapped Eileen Rominger, the former global chief investment officer at Goldman Sachs Asset Management, as its director of investment management.

“The revolving door is such a dominant fact about the S.E.C.’s culture,” said John C. Coffee Jr., a Columbia Law School professor. “You get people who go to Washington for one to three years and then go back to Wall Street.”

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