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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, November 20, 2011

Risk Meisters: Goldman Sachs

The degree to which Goldman Sachs continues to pursue its risk-laden affairs is a fine way for it to thumb its nose at all those risk-averse pensions, savings and municipal bonds that have suffered in a big way during the present Great Recession.

The following paragraph, which apparently is a common thing to report on and not given any special significance, is from the Wall St. Cheat Sheet article "Weekley Financial Biz Recap: . . . It makes one's blood run cold with fear and trepidation--$5 Trillion!!:

Goldman Sachs (NYSE:GS) and JPMorgan (NYSE:JPM)have sold CDS protection on more than $5T of debt around the globe. However, don’t expect to get detail on which it was that sold. The banks have hedged themselves perfectly, and are not likely to divulge how they did so, unless they suffer a run similar to what has occurred to Jefferies (NYSE:JEF). (Wall St. Cheat Sheet)

You can find the paragraph here

As balois on Seeking Alph comments:
Why are Obama, Geithner et al desperately urging the Europeans 'to get their house in order'?

Because if one of the 'netted' CDS counterparties around the world seizes up and starts the infamous domino and, say, only a couple of percentages of those trillions of 'notional' suddenly become very real, the WS betting parlors are toast as toast can be.

And where are these trillions booked? Off balance sheet, of course. Only their +/- replacement values, deviously 'netted', are shown on the real thing. Derivative 'netting' is the mother of all deceptions to make these bucket shops look less ugly.
(Comment on Seeking Alpha)

You can find the comment here


Delusional said...

"We also want to see Corzine in court, under oath, and we want to hear his answer to where he thinks the money is and give him the option to be honorable and forthright, or to be a coward and take the Fifth.

I want to show the American people that no matter how connected you are, no matter if you were the Governor of New Jersey, no matter if you were a senator, if you break the law you should go to jail. And quite frankly, I think it's a disgrace that no one went to jail over the crisis in 2008.

All the people who gave triple-A credit ratings to essentially junk securities, none of them went to jail, none of the people who sold those went to jail, none of the people who committed mortgage fraud went to jail - I think it's ridiculous. If [Corzine] did commit a crime, I want to see him behind bars."

Art imitates life said...

His latest book is “The Detachment” in which the antagonists are a powerful cabal called the oligarchy. We discuss the real oligarchy, the one that represents the one percent, from the perspective of one who served the oligarchy, working inside the enforcement arm of the American Empire.

Stinks to high heaven said...

Local "Crime Boss" Secret Sewer Deal with Morgan Stanley and Secret Partnership

The local county executive politico (Mangano) "aka Crime Boss" cut a secret deal with Morgan Stanley in which the country pays $25-$175K dollars to study the idea of selling the sewage system to private hands for $700K to $1B dollars. The private parties are "Secret" entity called P3. We don't know who owns it or how the financing was arranged. The politico is willing to flush the future of the municipality down the sewer to reward friends and family in this crime heist to steal an asset already paid for by local residents. This deal was secret in that it was a line item hidden away as a line item in a double secret budget. How long can this wall-street criminality continue that infects local, state, federal, and other national governments such as Italy-Greece.

Newt should read said...

False Narratives

If you want to know what the protests are about, ask one of the protesters.  Jesse LaGreca, an unofficial spokesman for the movement, said last week, “What we are doing is engaging in civil disobedience in non-violent manner throughout the country.”  LaGreca says the bigger issues are things like “crimes that took place on Wall Street” and “corporations bribing our politicians with campaign funding.”  No big Wall Street bankers have been jailed for causing the biggest financial meltdown in history (in 2008), and I think everyone can agree both parties are bought and paid for.

Thieves said...

More MF Global: How Much Is Missing Again?

$3 billion? I thought there was a $600 million discrepancy?

What rules? said...

As we await the results of a probe into MF Global and its missing clients’ funds that will no doubt be conducted with the same tactical zeal with which authorities across the country arrested over 4000 Occupy Wall Street protestors it’s interesting to note another component of the MF Global - Goldman Relationship. Beyond the past-leadership of Goldman Sachs by former MF Global head, Jon Corzine, and fact he was brought to the helm by former Goldman buddy, Christopher Flowers, there was also a nice little execution business-sharing going on between the firms. An examination of those transactions, each less than $200,000 , could be illuminating.

Under Rule 606 (formerly SEC Rule 11Ac1-6), as part of its strategy to rely on the companies it is supposed to be regulating to reveal whatever part of their hand they want to, the SEC requires a quarterly report  from brokerage firms on  their order-routing services. Specifically, the report covers ‘non-directed’ orders, or ones that customers haven’t specifically requested go through a particular vendor for execution.  The report has four sections: one each for securities listed on the New York Stock Exchange, The Nasdaq Stock Market, the American Stock Exchange and 'Other' exchange-listed options, and indicates the venues most often selected.

So, according to MFG's third quarter non-directed routing report, guess what vendor showed up prominently? Yep - Goldman Sachs Execution and Clearing LP.

No rules and no police said...

MF Global trustee: $1.2 billion missing

the apparent shortfall in what MF Global management should have
segregated at US depositories may be as much as $1.2 billion or more,"
the trustee said in a statement

Joyce said...

Thank you to all the commenters for their valuable links to on-going stories of fraud, malfeasance and inequality that seem to go on forever.  We appreciate your participation on this site.

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