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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, August 16, 2013

What Are Goldman Sachs's Motives?

See for yourself the answer to that question from a Naked Capitalism post by Rajiv Sethi:

Rajiv Sethi:  The Spider and the Fly
By Rajiv Sethi - Naked Capitalism
. . . .
Aleynikov was hired by Goldman to help improve its relatively weak position in what is rather euphemistically called the market-making business. In principle, this is the business of offering quotes on both sides of an asset market in order that investors wishing to buy or sell will find willing counterparties. It was once a protected oligopoly in which specialists and dealers made money on substantial spreads between bid and ask prices, in return for which they provided some measure of price continuity.
. . . .
 Aleynikov relied routinely on open-source code, which he modified and improved to meet the needs of the company. It is customary, if not mandatory, for these improvements to be released back into the public domain for use by others. But his attempts to do so were blocked:
Serge quickly discovered, to his surprise, that Goldman had a one-way relationship with open source. They took huge amounts of free software off the Web, but they did not return it after he had modified it, even when his modifications were very slight and of general rather than financial use. “Once I took some open-source components, repackaged them to come up with a component that was not even used at Goldman Sachs,” he says. “It was basically a way to make two computers look like one, so if one went down the other could jump in and perform the task.” He described the pleasure of his innovation this way: “It created something out of chaos. When you create something out of chaos, essentially, you reduce the entropy in the world.” He went to his boss, a fellow named Adam Schlesinger, and asked if he could release it back into open source, as was his inclination. “He said it was now Goldman’s property,” recalls Serge. “He was quite tense. When I mentioned it, it was very close to bonus time. And he didn’t want any disturbances.”

Read the full article here 


JEHR said...

I won't be posting links to any articles from now on as I think it is too depressing to do so. I appreciate Larry's asking me to post daily and enjoyed doing so. May Truth triumph in the end.

Joyce, the poster

wheresthefreemarket said...

Moyers: America's Gilded Capital and Losing Democracy to the Predator Class

"The political class has reached some kind of critical mass
in the 21st century. There is something going on in Washington that
needed to be called out. I do not think it can be sustained, and I
think it is indecent. It is not how Americans want their government and
their capital city to be."

I strongly recommend that you watch this inside look at the
culture of unwarranted privilege, unprincipled greed, and
self-delusional narcissism amongst the ruling elite in Washington and
New York.

wheresthefreemarket said...

Bill Black: The New York Times is Wowed that Obama’s Six Rubinites Support Larry Summers

By Bill Black, the author of The Best Way to Rob a Bank
is to Own One and an associate professor of economics and law at the
University of Missouri-Kansas City. Cross posed from New Economic Perspectives

The Obama administration, for reasons that pass all understanding,
has been running a campaign of leaks disparaging one of Obama’s few
senior female appointees, Janet Yellen. Her high crimes include not
being a protégée Bob Rubin and doing exceptionally well in economic
forecasting. Rubin wants the job of Fed Chair to go to his top protégée,
Larry Summers. Yellen, as Vice Chair of the Fed stands in the way of
Rubin’s ambitions. (Rubin is too toxic to take the Chair directly.) The
administration has been leaking primarily to the New York Times’ Binyamin Applebaum. His latest article contains this remarkable statement, without analysis.

“[T]he president’s top economic advisers uniformly
support the selection of Mr. Summers. They regard him as a creative
thinker and an experienced crisis manager, qualities they value in
particular because they expect the Fed may confront difficult choices as
it begins to retreat from its six-year-old stimulus campaign.”

The obvious question, except to the NYT, is who the
“president’s top economic advisers” are who “uniformly support the
selection of Mr. Summers”? There are six such advisers:

1. Gene Sperling (Director, National Economic Counsel)

2. Jason Furman (Chairman, CEA)

3. James Stock (Member, CEA)

4. Jacob Lew (Treasury)

5. Penny Pritzker (Commerce)

6. Sylvia Mathews Burwell (OMB)

Each of Obama’s top economic advisers is a Rubinite. Sperling is one
of Rubin and Summers’ closest allies. Furman’s prior job was running the
Hamilton Project – created by Rubin to propagate his ideas. Stock is a
Rubinite, a colleague of Summers, and the co-author of the article that
infamously coined the term “The Great Moderation” (Ben Bernanke
popularized, but did not invent, their phrase.) Some “moderation” – to
state the case gently he missed the most important economic developments
in modern history. Jacob Lew and Furman share the characteristic of
being Rubinites and leading architects and proponents of the “Grand
Betrayal” (the effort to inflict austerity and cuts in the safety net).
Pritzker is a national disgrace. She connected then Senator Obama with Rubin. Her appointment prompted extremely pointed criticisms.

wheresthefreemarket said...

Wall Street’s Secret “Economic Endgame”: Making the World Safe for Banksters, Syria in the Cross-hairs

In an August 2013 article titled “Larry Summers and the Secret ‘End-game’ Memo,”
Greg Palast posted evidence of a secret late-1990s plan devised by Wall
Street and U.S. Treasury officials to open banking to the lucrative
derivatives business. To pull this off required the relaxation of
banking regulations not just in the US but globally. The vehicle to be
used was the Financial Services Agreement of the World Trade

The “end-game” would require not just coercing support among WTO
members but taking down those countries refusing to join. Some key
countries remained holdouts from the WTO, including Iraq, Libya, Iran
and Syria. In these Islamic countries, banks are largely state-owned;
and “usury” – charging rent for the “use” of money – is viewed as a sin,
if not a crime.That puts them at odds with the Western model of rent
extraction by private middlemen. Publicly-owned banks are also a threat
to the mushrooming derivatives business, since governments with their
own banks don’t need interest rate swaps, credit default swaps, or
investment-grade ratings by private rating agencies in order to finance
their operations.

Bank deregulation proceeded according to plan, and the
government-sanctioned and -nurtured derivatives business mushroomed into
a $700-plus trillion pyramid scheme. Highly leveraged, completely
unregulated, and dangerously unsustainable, it collapsed in 2008 when
investment bank Lehman Brothers went bankrupt, taking a large segment of
the global economy with it. The countries that managed to escape were
those sustained by public banking models outside the international
banking net.

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