[Daniel_Plainview]

$this->bbcode_second_pass_quote('PenultimateManStanding', 'T')ake them out and shoot them. Hang them from a lamp post. Boil those in charge in oil. The President puts those same creeps in charge. It is an outrage. He claims he is the only thing between them and the pitchforks. What a sham. Geithner? Summers? Who does Obama think he's fooling?

[Novus]

"In Sachs We Trust"

Should be the new motto of our currency. Even though the company was handed billions in tax payer money the company even made a profit which they are keeping. Nothing like taxing the poor to fatten the rich. This is the new age of the Robber Barons.

[Micki]

$this->bbcode_second_pass_quote('DoomWarrior', '')$this->bbcode_second_pass_quote('PenultimateManStanding', 'T')ake them out and shoot them. Hang them from a lamp post. Boil those in charge in oil. The President puts those same creeps in charge. It is an outrage. He claims he is the only thing between them and the pitchforks. What a sham. Geithner? Summers? Who does Obama think he's fooling?

[jboogy]

More and more keeps coming out about how Goldman IS the 800 pound gorilla, no offense Aaron.
here's a good one

http://www.goldmansachs666.com/2009/05/ ... -fund.html

here's a good one by robert scheer that covers what some here have already written and expands on it a little.

http://www.pasadenastarnews.com/ci_12338340

here's the Dick Durbin D-Ill. quote
"And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place," he said on WJJG 1530 AM's "Mornings with Ray Hanania." Progress Illinois picked up the quote.

Durbins seat must be super safe for him to risk angering the corporate power structure by publicly revealing the extent of their reach.

[neocone]

Who are the only investors and hedge fund who made money during the downturn? Those that relied on computer-driven transaction models.

This is why this article and accusations seem puzzling:

http://www.dailyfinance.com/2009/07/06/ ... ing-codes/

Knowing how inefficient large banks and trading firms are, and how they rely on a endless hierarchy that would take 6 months to produce an empty box, to mimic the heavy handedness of IBM back in its heydays, it does surprise me they would have some "cutting edge" divisions like that.

This article smells BS to me... First if a day trader got ahold of such a software, he would be like a dog that caught a car, because 1/2 of it is probably managing and getting last minute data on countless stocks and titles.

Which needs accounts and ability to download a lot of stuff, with enormous fees.

Secondly, GS, which seems intent on manipulating the whole of Wall Street, has legal ammo to accuse successful and genuinely AI or computer driven funds that they "stole" its software, with subsequent legal harassment and ultimate takeover or running out of business.

Another day in the land of swindle and greed.

[AlexdeLarge]

**FLASH** Goldman Code Theft BOMBSHELL?
http://market-ticker.org/archives/1192-FLASH-Goldman-Code-Theft-BOMBSHELL.html

$this->bbcode_second_pass_quote('', 'S')omething really ugly popped up on Daily Kos yesterday late in the afternoon.....

...GS, through access to the system as a result of their special gov't perks, was/is able to read the data on trades before it's committed, and place their own buys or sells accordingly in that brief moment, thus allowing them to essentially steal buttloads of money every day from the rest of the punters world.

Two things come out of this:

1. If true, this should be highly illegal, and would, in any sane country result in something like what happened to Arthur Andersen...

(2. ... is way off point....)

God help Goldman if this is true and the government goes after them. This would constitute massive unlawful activity. Indeed, the allegation is that Goldman alone was given this access!

God help our capital markets if this is true and is ignored by our government and regulatory agencies, or generates nothing more than a "handslap." Nobody in their right mind would ever trade on our markets again if this occurred and does not result in severe criminal and civil penalties.

[Armageddon]

Nobody is going to go after Goldman. Goldman runs Washington.

[ian807]

Sounds like a good way to level the playing field. Let other countries "improve" their economies with this software just like we did. Lucky them! Soon, they'll also be in a hopeless mess and unable to compete.

[AlexdeLarge]

[Daphne64]

Sounds plausible, both in terms of technical possibility and Goldman's willingness to do it it.

Hell, what's a little espionage off the backbone of the internet after you've bribed the US government to let the US be run into the ground for your benefit?

Actually, put that way, it sounds like pretty small potatoes to me...

[Armageddon]

$this->bbcode_second_pass_quote('AlexdeLarge', '[')img]http://riverdaughter.files.wordpress.com/2009/02/tinfoil.jpg[/img]

[pablonite]

$this->bbcode_second_pass_quote('Armageddon', 'D')efinition of Tin Foil : Everything that is not said on Fox News.

[smallpoxgirl]

$this->bbcode_second_pass_quote('Daphne64', 'S')ounds plausible, both in terms of technical possibility and Goldman's willingness to do it it.

[Jotapay]

$this->bbcode_second_pass_quote('smallpoxgirl', 'T')he thing that just blows my mind is that someone posts a completely unsubstantiated rumor on an anonymous blog site and because it's plausible within an hour 15,000 CTers are repeating it all over the web. Just because something is plausible doesn't mean it's true.

[Jotapay]

$this->bbcode_second_pass_quote('pablonite', 'I')f anyone can shed some light on this anomaly it would be much appreciated!

[NTBKtrader]

July 24, 2009 Stock Traders Find Speed Pays, in Milliseconds By CHARLES DUHIGG:
It is the hot new thing on Wall Street, a way for a handful of traders to master the stock market, peek at investors’ orders and, critics say, even subtly manipulate share prices. It is called high-frequency trading — and it is suddenly one of the most talked-about and mysterious forces in the markets.

Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else’s expense.

These systems are so fast they can outsmart or outrun other investors, humans and computers alike. And after growing in the shadows for years, they are generating lots of talk. Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed. High-frequency trading is one answer.

And when a former Goldman Sachs programmer was accused this month of stealing secret computer codes — software that a federal prosecutor said could “manipulate markets in unfair ways” — it only added to the mystery. Goldman acknowledges that it profits from high-frequency trading, but disputes that it has an unfair advantage.

Yet high-frequency specialists clearly have an edge over typical traders, let alone ordinary investors. The Securities and Exchange Commission says it is examining certain aspects of the strategy.

“This is where all the money is getting made,” said William H. Donaldson, former chairman and chief executive of the New York Stock Exchange and today an adviser to a big hedge fund. “If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage.”

For most of Wall Street’s history, stock trading was fairly straightforward: buyers and sellers gathered on exchange floors and dickered until they struck a deal. Then, in 1998, the Securities and Exchange Commission authorized electronic exchanges to compete with marketplaces like the New York Stock Exchange. The intent was to open markets to anyone with a desktop computer and a fresh idea.

But as new marketplaces have emerged, PCs have been unable to compete with Wall Street’s computers. Powerful algorithms — “algos,” in industry parlance — execute millions of orders a second and scan dozens of public and private marketplaces simultaneously. They can spot trends before other investors can blink, changing orders and strategies within milliseconds.

High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there.

High-frequency traders also benefit from competition among the various exchanges, which pay small fees that are often collected by the biggest and most active traders — typically a quarter of a cent per share to whoever arrives first. Those small payments, spread over millions of shares, help high-speed investors profit simply by trading enormous numbers of shares, even if they buy or sell at a modest loss.

“It’s become a technological arms race, and what separates winners and losers is how fast they can move,” said Joseph M. Mecane of NYSE Euronext, which operates the New York Stock Exchange. “Markets need liquidity, and high-frequency traders provide opportunities for other investors to buy and sell.”

The rise of high-frequency trading helps explain why activity on the nation’s stock exchanges has exploded. Average daily volume has soared by 164 percent since 2005, according to data from NYSE. Although precise figures are elusive, stock exchanges say that a handful of high-frequency traders now account for a more than half of all trades. To understand this high-speed world, consider what happened when slow-moving traders went up against high-frequency robots earlier this month, and ended up handing spoils to lightning-fast computers.

It was July 15, and Intel, the computer chip giant, had reporting robust earnings the night before. Some investors, smelling opportunity, set out to buy shares in the semiconductor company Broadcom. (Their activities were described by an investor at a major Wall Street firm who spoke on the condition of anonymity to protect his job.) The slower traders faced a quandary: If they sought to buy a large number of shares at once, they would tip their hand and risk driving up Broadcom’s price. So, as is often the case on Wall Street, they divided their orders into dozens of small batches, hoping to cover their tracks. One second after the market opened, shares of Broadcom started changing hands at $26.20.

The slower traders began issuing buy orders. But rather than being shown to all potential sellers at the same time, some of those orders were most likely routed to a collection of high-frequency traders for just 30 milliseconds — 0.03 seconds — in what are known as flash orders. While markets are supposed to ensure transparency by showing orders to everyone simultaneously, a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee.

In less than half a second, high-frequency traders gained a valuable insight: the hunger for Broadcom was growing. Their computers began buying up Broadcom shares and then reselling them to the slower investors at higher prices. The overall price of Broadcom began to rise.

Soon, thousands of orders began flooding the markets as high-frequency software went into high gear. Automatic programs began issuing and canceling tiny orders within milliseconds to determine how much the slower traders were willing to pay. The high-frequency computers quickly determined that some investors’ upper limit was $26.40. The price shot to $26.39, and high-frequency programs began offering to sell hundreds of thousands of shares.

The result is that the slower-moving investors paid $1.4 million for about 56,000 shares, or $7,800 more than if they had been able to move as quickly as the high-frequency traders. Multiply such trades across thousands of stocks a day, and the profits are substantial. High-frequency traders generated about $21 billion in profits last year, the Tabb Group, a research firm, estimates.

“You want to encourage innovation, and you want to reward companies that have invested in technology and ideas that make the markets more efficient,” said Andrew M. Brooks, head of United States equity trading at T. Rowe Price, a mutual fund and investment company that often competes with and uses high-frequency techniques. “But we’re moving toward a two-tiered marketplace of the high-frequency arbitrage guys, and everyone else. People want to know they have a legitimate shot at getting a fair deal. Otherwise, the markets lose their integrity.”

http://www.nytimes.com/2009/07/24/busin ... nted=print

[Niagara]

Once upon a time, the stock market was a place where people actually invested in companies that they wished to own a share of. You saved up, bought some shares, got your certificate then safeguarded it for your grandkids.

Warren Buffet once said that if the stock market closed for a couple of years, it shouldn't matter to most investors.

I guess Goldman Sachs isn't like most investors.

[lowem]

A speaker at the systems engineering symposium I've just attended said that financial engineering gives engineering a bad name. I fully agree. I've always thought they were up to no good. Looks like it's tens of billions of dollars worth of no good every year. Good money, though.

So call me silly or idealistic but I've always tried not to work at these financial institutions and so far I've managed to avoid getting employed by them. If it was the last job around I might be singing a different tune but hey at least for now I'm still trying

[lowem]

A second thought on the topic - got a trader friend, a couple, actually, who try to do stuff like scalping the markets with their desktop or laptop machines. I'd suppose they are both too slow by roughly two orders of magnitude.

0.03 second? Hard to beat when your round-trip ping response time tends to be higher than that. From what I gather, the Big Boys' machines were/are sitting right next to the actual trading machines in the same server room. For all we know ping latencies might actually register as 0ms (too fast to measure).

[rangerone314]

$this->bbcode_second_pass_quote('lowem', 'A') second thought on the topic - got a trader friend, a couple, actually, who try to do stuff like scalping the markets with their desktop or laptop machines. I'd suppose they are both too slow by roughly two orders of magnitude.

0.03 second? Hard to beat when your round-trip ping response time tends to be higher than that. From what I gather, the Big Boys' machines were/are sitting right next to the actual trading machines in the same server room. For all we know ping latencies might actually register as 0ms (too fast to measure).