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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, December 30, 2012

Goldman Sachs: The One PerCenters

You know, of course, that the executives of Goldman Sachs count themselves as part of the upper 1%.  The money that gives them that status was fraudulently obtained through the selling of toxic assets to pensions and savings groups and by other nefarious actions many of which have been recounted in this blog.  What does that mean to the rest of us?

By providing loans and creating increased indebtedness, Goldman has helped to successfully re-distribute wealth to their advantage and to everyone else's misery and penury. At the end of her article,  Pam Martens lists several ways to combat Goldman's bad practices:

Consumers Have Powerful Weapons Against Wall Street's Bad Practices
By Pam Martens - Wall Street On Parade
 . . . .
The richest 1 percent received over one-third of the total gain in marketable wealth over the period from 1983 to 2007. The next 4 percent also received about a third of the total gain and the next 15 percent about a fifth, so that the top quintile collectively accounted for 89 percent of the total growth in wealth, while the bottom 80 percent accounted for 11 percent.

Debt was the most evenly distributed component of household wealth, with the bottom 90 percent of households responsible for 73 percent of total indebtedness.
. . . .
In both eras, Wall Street ceased being an allocator of capital to worthy enterprises and became an institutionalized system of rigged wealth transfer. The primary artifices this time around included issuing knowingly false stock research; lining up large institutional clients to buy at predetermined prices (laddering) on the first day of a new issue of stock – this made the price appear to soar and thus sucked in the small investor; threatening to take the stock broker’s commission away (penalty bid) if the broker let the small investor take profits in the newly issued stock – the practice was known as flipping and was reserved for the big boys. When the tech mania went bust and the rigged game was revealed, the small investor left in droves. Wall Street, with the Fed’s able assistance, fueled the next bubble – housing – and crafted complex derivatives to turn this market into a cash cow for Wall Street and foreclosures for Main Street. And, we are just now learning some of the details about how even interest rates were rigged against the little guy – the Libor Scandal.

Read the article and see the suggestions for combating the rigged wealth transfer here


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