Coming to the Defense

The Oracle of Omaha, Mr. Warren Buffett, doesn’t believe that Goldman Sachs did anything wrong. In a perplexing statement today at a press conference, Mr. Buffett said, “It’s very strange to say, at the end of the transaction, that if the other guy is smarter than you, that you have been defrauded.”

Fraud has nothing to do with outsmarting another person or company. When it comes to fraud, one party creates trust in a transaction with another party, then breaks that trust, which is the practice of deception. Essentially, Goldman Sachs deceived its clients when it knowingly sold risky securities to them and at the same time bet those securities would fail, while withholding that information. The lack of transparency made it easier for Goldman to sell those securities to risk averse clients, in addition to making a profit from this deception.

I’m sure there are five billion reasons why Mr. Buffett is defending Goldman and its messiah, Lloyd Blankfein.

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