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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 20, 2012

Goldman Sachs is in the Home Stretch--Bringing Us the Rentier Economy

According to Michael Hudson, capitalism has gone through several iterations since the beginning of the 20th Century, from Industrial Capitalism to Finance Capitalism through Pension-Fund Capitalism and to US-centered Monetary Imperialism.  Then we saw the Bubble Economy with its Casino Capitalism.  The end product of Capitalism is a Neo-Rentier Economy.  This evolution can be traced through the example of Goldman Sachs:

Politically, the thrust of industrial capitalism was toward democratic parliamentary reform, so as to break the stranglehold of landlords on the national tax system and lawmaking. But today’s finance capital is inherently oligarchic, because it seeks to capture the government – and especially the Treasury, central bank and the courts – to enrich (indeed, to bail out) the banking and financial sector. This is why financial “technocrats” (proxies and factotums for high finance) were imposed in Greece and why Germany and opposed the idea of holding a public referendum to gain voter agreement in the European Central Bank’s austerity program. Central banks are to be made “independent” of oversight by elected political representatives.  (Hudson:  The Neo-Rentier Economy)

Goldman Sachs's revolving door captured the rating agencies, the regulators, the Treasury and the politicians.They bet on the mortgage market that they helped to destroy.  Their actions led directly to foreclosures of homeowners and the unemployment, the bailouts, the austerity and the poor economic growth, except in the financial system.  Goldman made billions and continues to do so even as the citizens they defrauded lose their homes, their pensions, their jobs and their savings.

Now we have a story about a former Goldman Sachs Group Inc. executive, Donald Mullen, one of the originators of sub-prime mortgage trade at Goldman, who is trying to raise funds to buy foreclosed homes to rent out and provide himself a steady stream of income.

Goldman Sachs is a predator of the first water.
Donald Mullen, Ex-Goldman Sachs Mortgage Chief, Starts Fund For Buying Foreclosed Homes
By Matthew Goldstein and Jennifer Ablan and Lauren Tara LaCapra - Reuters

NEW YORK, July 19 (Reuters) - Former Goldman Sachs Group Inc. executive Donald Mullen, one of the architects of the subprime mortgage trade, is trying to raise at least $500 million for a fund that will buy foreclosed homes with an eye toward renting them out.

Mullen, who until January was head of the credit and mortgage business inside Goldman's securities division, began marketing his Fundamental REO Access fund in earnest about a month ago, said seven people familiar with the matter, but who did not want to be identified because they do not work for the upstart fund.

Several sources said Goldman Sachs is serving as the placement agent for the fund and will market it to wealthy investors, including some of its own clients.
Read the whole article here


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