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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

Thursday, December 8, 2011

Here's The World That Goldman Sachs Has Created for Itself!

Recently, two articles have been written about the role of the banks (and Goldman Sachs in particular) that outline the path that the banks are on in their control of finances around the world. Conspiracy theories are difficult to prove, but these two articles show the possible place that the world will be in the future. The themes are chilling in their simplicity and implications.

The first article is written by Mike Carey of and is beautifully entitled "The Goldman Saching of Europe." The second piece by Michael Hudson of New Economic Perspectives is called "Europe's Transition From Social Democracy to Oligarchy." These articles are long but they are well worth the read if you want to know what is happening to economies now and what might happen to them in the future.

The Goldman Saching of Europe
By Mike Carey -

I don't want to sound alarmist but it looks like Goldman Sachs has taken over Europe. The continent has succumbed to the dictates of global finance, there was no choice. The bankers are holding us all to ransom and have done since the beginning of the GFC in 2008.

The German government's reaction to its disastrous bond auction a week or so ago, gives a big clue to the real multibillion dollar game being played out in boardrooms from New York to Frankfurt. The most powerful and resilient economy in Europe couldn't get a bid for 35% of its 10 year bonds on offer. Observers say it was a warning from bankers, on both sides of the Atlantic, do as we say or else!

Germany, through its Finance Minister Wolfgang Schaeuble, had been at the forefront demanding that banks share any sovereign bailout losses that eventuate from the European Stability Mechanism, to be up and running next year. The failed German bond auction was the bank's curt reply and Schaeuble backed down.

Right from the start of the European crisis, the banks have been pulling the strings. Remember when the former Greek Prime Minister, George Papandreou announced a plebiscite, to get popular buy-in for his austerity plan and the markets went bananas and he was excoriated. The markets and the banks, not the Greek people, passed judgement and he had to go.

Across the Ionian Sea, former Prime Minister, Silvio Berlusconi hadn't done enough to satisfy the self-serving screen jockeys and they turned their weapons, their bond traders, lap dog ratings agencies and share market speculators on Italy. Berlusconi was rumoured to be resigning and the bourse rallied. No, he wasn't going and it fell away again with a promise that it would rocket when he finally and inevitably bowed to massive financial pressure to resign. As night follows day, he was replaced by a euphemism, a technocrat. Nowhere was there much talk about voter's wishes or rights.

All this might have been ameliorated if not avoided had the Obama Administration brought the bankers to heel three years ago by jailing a dozen or so, now it's too late! But of course that was never going to happen when the President's own economic team was drawn from or had strong links with Goldman Sachs. With Summers, Rubin, Geithner and Emanuel it was Wall St. on the Potomac.

That's probably why, in 2008, Goldman Sachs was too big to prosecute. It received more subsidies and bailout funds than any other investment bank. How did Goldman Sachs thank the American people for their largesse? By using billions in taxpayer money to enrich itself and reward its top executives who received, it's reported, mind boggling wage increases and bonuses of $18 billion in 2009, $16 billion in 2010 and $10 billion in 2011.

At the same time, Goldman Sachs offloaded billions in worthless securities helping destroy the global economy. The firm misled investors about the true nature of this worthless junk and hid the fact that it was betting against these same securities. In just one such deal Goldman Sachs is reported to have raked in $2 billion.

Scroll back to 2002. Goldman Sachs covertly bought 2.3 billion Euros in Greek debt, converted it into yen and dollars, and then immediately sold it back to Greece at a supposed loss. Goldman Sachs had struck a secret deal with the then, free-market government to conceal its massive budget deficit. Goldman's confected loss was Greece's imaginary gain just to meet Europe's requirement that its deficit never surpass 3 % of GDP. Now, it's reported that Goldman made a $250 million fee on the deal and a motza on credit default swap insurance sold to Greek bond holders against the country going bust.

Apparently this only became known to Prime Minister, George Papandreou and his Socialist government when they came into office and investors demanded monster interest rates to lend more money to roll over this debt.

So who is going to save Europe, and by extension us?

Read the rest of the article here

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Europe's Transition From Social Democracy to Oligarchy

By Michael Hudson - New Economic Perspectives

This article was first published by Frankfurter Allgemeine Zeitung, Dec. 3, 2011, as “Der Krieg der Banken gegen das Volk.

The easiest way to understand Europe’s financial crisis is to look at the solutions being proposed to resolve it. They are a banker’s dream, a grab bag of giveaways that few voters would be likely to approve in a democratic referendum. Bank strategists learned not to risk submitting their plans to democratic vote after Icelanders twice refused in 2010-11 to approve their government’s capitulation to pay Britain and the Netherlands for losses run up by badly regulated Icelandic banks operating abroad. Lacking such a referendum, mass demonstrations were the only way for Greek voters to register their opposition to the €50 billion in privatization sell-offs demanded by the European Central Bank (ECB) in autumn 2011.

The problem is that Greece lacks the ready money to redeem its debts and pay the interest charges. The ECB is demanding that it sell off public assets – land, water and sewer systems, ports and other assets in the public domain, and also cut back pensions and other payments to its population. The “bottom 99%” understandably are angry to be informed that the wealthiest layer of the population is largely responsible for the budget shortfall by stashing away a reported €45 billion of funds stashed away in Swiss banks alone. The idea of normal wage-earners being obliged to forfeit their pensions to pay for tax evaders – and for the general un-taxing of wealth since the regime of the colonels – makes most people understandably angry. For the ECB, EU and IMF “troika” to say that whatever the wealthy take, steal or evade paying must be made up by the population at large is not a politically neutral position. It comes down hard on the side of wealth that has been unfairly taken.

A democratic tax policy would reinstate progressive taxation on income and property, and would enforce its collection – with penalties for evasion. Ever since the 19th century, democratic reformers have sought to free economies from waste, corruption and “unearned income.” But the ECB “troika” is imposing a regressive tax – one that can be imposed only by turning government policy-making over to a set of unelected “technocrats.”

To call the administrators of so anti-democratic a policy “technocrats” seems to be a cynical scientific-sounding euphemism for financial lobbyists or bureaucrats deemed suitably tunnel-visioned to act as useful idiots on behalf of their sponsors. Their ideology is the same austerity philosophy that the IMF imposed on Third World debtors from the 1960s through the 1980s. Claiming to stabilize the balance of payments while introducing free markets, these officials sold off export sectors and basic infrastructure to creditor-nation buyers. The effect was to drive austerity-ridden economies even deeper into debt – to foreign bankers and their own domestic oligarchies.
This is the treadmill on which Eurozone social democracies are now being placed. Under the political umbrella of financial emergency, wages and living standards are to be scaled back and political power shifted from elected government to technocrats governing on behalf of large banks and financial institutions. Public-sector labor is to be privatized – and de-unionized, while Social Security, pension plans and health insurance are scaled back.
This is the basic playbook that corporate raiders follow when they empty out corporate pension plans to pay their financial backers in leveraged buyouts. It also is how the former Soviet Union’s economy was privatized after 1991, transferring public assets into the hands of kleptocrats, who worked with Western investment bankers to make the Russian and other stock exchanges the darlings of the global financial markets. Property taxes were scaled back while flat taxes were imposed on wages (a cumulative 59 percent in Latvia). Industry was dismantled as land and mineral rights were transferred to foreigners, economies driven into debt and skilled and unskilled labor alike was obliged to emigrate to find work.
Pretending to be committed to price stability and free markets, bankers inflated a real estate bubble on credit. Rental income was capitalized into bank loans and paid out as interest. This was enormously profitable for bankers, but it left the Baltics and much of Central Europe debt strapped and in negative equity by 2008. Neoliberals applaud their plunging wage levels and shrinking GDP as a success story, because these countries shifted the tax burden onto employment rather than property or finance. Governments bailed out banks at taxpayer expense.
Read the rest of the article here


No recourse said...

John Crudele: Bloomberg News confirms that stock market was rigged

So now do you believe me? The stock market was rigged.

It has been a little lonely telling this story over the past few years.

But now that another news organization has finally gotten off its lazy butt, I'll tell it again: Under former Treasury Secretary Hank Paulson, confidential government information was regularly leaked to select people on Wall Street.

As I've explained many times before, the Post got hold of Paulson's telephone records back in 2009. And the phone logs show that Paulson, the former head of Goldman Sachs, regularly spoke with influential people on Wall Street with whom he shouldn't have been communicating. These phone calls could have been -- let's use the word "enriching" -- for the recipients.

Were screwed said...

Analysis of Jon Corzine Statement MF Global - Open Letter 2 to CME

Keep believing in justice said...

Jon Corzine has released the written testimony that he will make before Congress today.  It has been highly polished up by his legal advisers and contains so many "I can't recall's" that even Bill Clinton would blush. While the entire testimony has very little credibility with regard to substantive issues,   I just want to address one specific quote from the testimony because I know - for a fact - that Corzine is lying. From page 17 of the prepared testimony:

    I did not, however, generally involve myself in the mechanics of the clearing and settlement of trades, or in the movement of cash and collateral. Nor was I an expert on the complicated rules and regulations governing the various different operating businesses that comprised MF Global. I had little expertise or experience in those operational aspects of the business.

Here's the full testimony:  LINK  If you take the time to read the full testimony, please try not to puke like I nearly did over the obvious lies and legally refined statements which are designed to obfuscate and cover-up the truth.

No regulation said...

Capital Account: William K. Black on MF Global and Jon Corzine Culpability (12/08/11)

From Goldman Sachs to governor to grilling, Jon Corzine former CEO of
the now bankrupt MF Global testifies on Capitol Hill. He claims he is
clueless about how and where the possible $1.2 billion dollars of his
client's money is that is missing. How has all of this happened three
years after the financial crisis when Wall Street was supposed to be
reined in? And the golden boys of Wall Street have their Goldman
tentacles spread over the MF Global case. The head of the CFTC - MF
Global's regulator - has recused himself from the MF Global probe
because he worked with Jon Corzine at Goldman Sachs. We speak to William
K. Black, a former regulator who during the Savings and Loan crisis
oversaw more than 10,000 criminal referrals, 1,000 felony convictions,
and where hundreds of bankers went to prison.

Go to jail said...

It's as if Jon Corzine's PR machine is in top spin mode. You'll
recall Jon Corzine is the former head of Goldman Sachs and former CEO of
MF Global that appeared in front of Congress yesterday to answer
questions about an estimated $600 million to $1.2 billion in missing
money from the segregated accounts of customers of MF Global.

Yesterday and today, I heard confusion about whether or not MF
Global's diverting customer funds was allowable and the possibility that
customers will eventually get the money back.

Let me be clear. The diverting of customer funds from segregated
accounts is not legal or allowable, and even if the money is later
"found" it is fraud.

Jon Corzine was a bond trader in his past life and he says he doesn't
know where the money is and that he didn't understand the details of
the operations of MF Global, which appear to be a mess due to negligence
or intent.

Instead of unwinding the trades, it appears that MF Global illegally
wired money from customer accounts to satisfy margin calls on MF
Global's trades. If that illegal activity happened, Corzine as a bond
trader aware of risk and as the head of MF Global, knew it or should
have known it. This should be the focus of Congress' investigation.
Wire fraud is a federal crime.

Nothings sacred said...

Taking Profit from the Mouths of Babes
How the combination of tax policy and Wall Street greed results in the systematic bilking of Medicaid and a generation of traumatized children.
By Jim Moriarty and Kevin Tumlinson

There's an old party game where someone asks, "What would you do for a million dollars?"

Answering this question can reveal a lot about you as a person. Would you steal for the money? Would you hurt someone? Would you hurt a child?

As empathetic, moral, and ethical human beings we hope there is a line we would refuse to cross. It's wrong to steal, we say. It's horrible to hurt someone for money. And it is absolutely unthinkable to hurt a child under any circumstances.

Humans, we reason, will largely refuse to do evil things out of a sense of common decency, if not a fear of social or legal reprisal.

The problem is corporations1 aren't human.

The simple fact is that inhumane acts occur every day, and the payoff is a lot more than a million dollars. In fact, thousands of children are being systematically abused and Americans are paying the bill for it, all as part of an elaborate and reprehensible disregard for state and federal laws.

But don't worry," an advocate for the company said. "Your insurance won't be charged for the root canal."

The problem is pretty simple. Wall Street hedge funds and private equity groups have discovered a veritable gold mine. They mine for gold by purchasing dental clinics, paying one of their employee dentists to pretend that he/she actually owns and controls the clinics, and then treating incoming patients with a laser-like focus on increased profits. The corporate control business model puts financial goals over legitimate dental needs, and the primary target is in Medicaid-paid dental services to children. However, the model is increasingly pervading all dentistry for children, spreading across the country like a cancer. The thought comes to mind, "There ought to be a law against this." Interestingly, there are such laws, but because of a lack of awareness on the part of the authorities, nothing is being done. A single Assistant U.S. Attorney or Assistant District Attorney could put these companies out of business over his lunch hour.

At the core of this scam is the intersection of two different policies: tax policy and independent medical/professional judgment policy. Hedge funds and private equity funds circumvent the medical/professional judgment laws, and at the same time convert ordinary dental income into capital gains so as to maximize revenue and at the same time, pay much lower taxes. The economic result of this is the cheating of the American taxpayer and systematic and widespread child abuse.

Converting these small dental practices into large corporate-run practices has opened a way for dentists to make tens or even hundreds of millions, but it has also opened the door to systematic corruption and abuse. To increase the number of procedures performed, dentists are performing procedures that are unnecessary and perhaps even unwise. Their victims are often lower-income families, who neither realize anything is wrong nor that they can fight back. This happens every day, to thousands of children, across America.

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