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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

Saturday, January 14, 2012

What Does Goldman Sachs Do For You?

You may have noticed that the rehabilitation of Goldman Sachs is in full throttle. Its brand is coming back according to YouGov's BrandIndex's Buzz score. Goldman's share price has been falling recently but Goldman never seems to go without clients. Goldman is being sued by a number of individuals and firms but that is just the cost of doing business and they have set aside billions of dollars to deal with that contingency.

Adam Davidson of The New York Times is offering his bit to rehabilitate Wall Street and that includes Goldman Sachs. His take on Wall Street is that without Wall Street "The poor would stay poor;" "There would be no Middle Class;" and "Lots of awesome things would never happen."

He asks two questions: "How does Wall Street do this?" and "Is it still O.K. to hate Wall Street?"

Here are some answers:

Without Goldman Sachs, there would have been fewer poor people and fewer foreclosures; the middle class would be far more robust with better pensions and more savings; lots of terrible things could have been avoided, such as robo-signing, illegal foreclosures, indebted municipalities (Jefferson county) and massive losses in savings (401Ks) and siphoned off pension money.

How did Goldman Sachs do these things? Answer: by using accounting control fraud, by going in and out the government's revolving door, by paying excessive salaries and bonuses, by committing fraud with CDOs made up of sub-prime mortgages that should have been rated as junk, by contributing to the failure of the mortgage market and then by making billions from that same market by betting against it.

It is still okay to hate Goldman Sachs and to hope it will be regulated within an inch of its existence or broken up and parceled out in small pieces. One can hope.

You can read the Times article and comments here


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