Here’s something to give the conspiracy buffs a total breakdown: Combine these stories from Bloomberg, Daily Kos, and Zero Hedge, and you can reach a rather unsavory conclusion:

•  Goldman Sachs’s $100 Million Trading Days Hit Record

FBI Arrest Opens Goldman-Sachs’ Pandora’s Box

Intraday Observations

“Incredibly Shrinking Liquidity” as Goldman Flushed Quant Trading

What is the inference of potentially illegality here?

“That Goldman Sachs may just possibly have used security access codes and built a system to acquire trading information PRIOR to transaction commit time points at NYSE.

The profitability of this split-second information advantage would have been and could have been extraordinary. Observed yielding profits at $100,000,000 a day. [summary to address complaints with respect to complexity.]

GS has special access inside the system from its status assisting the Working Group on Financial Markets (colloquially the Plunge Protection Team) created by Presidential Order two decades ago. GC also acts as Special Liquidity Provider for NYSE.

With 60% dominance of NYSE program trading, what’s good for Goldman defines what shows as overall market performance.”

There is likely to be more info about this trickling out over the coming days and weeks. Stay tuned . . .

>

Hat tip Bill King

Sources:
Goldman Sachs’s $100 Million Trading Days Hit Record
Christine Harper
Bloomber, May 6

http://www.bloomberg.com/apps/news?pid=20601087&sid=a7HGVAn8w73Y&

FBI Arrest Opens Goldman-Sachs’ Pandora’s Box
bobswern
Daily Kos, Jul 06, 2009

http://www.dailykos.com/story/2009/7/6/750420/-Breaking:-FBI-Arrest-Opens-Goldman-Sachs-Pandoras-Box

Intraday Observations
Tyler Durden
Zero Hedge, JULY 8, 2009

http://zerohedge.blogspot.com/2009/07/intraday-observations.html

“Incredibly Shrinking Liquidity” as Goldman Flushed Quant Trading
vets74
Daily Kos, Jul 07, 2009

http://www.dailykos.com/storyonly/2009/7/7/750786/-Incredibly-Shrinking-Liquidity-as-Goldman-Flushed-Quant-Trading

Category: Legal, Quantitative, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

92 Responses to “Is Goldman Stealing $100 Million per Trading Day?”

  1. aitrader says:

    And contrary to what would happen to you or me (i.e. straight to the hoosegow and throw away the key), these folks will quietly step out of GS and into a cakewalk job at the US government paid for with your tax dollars!

  2. [...] Kos The brother of our former President accused Obama of misleading voters during his campaign. Is Goldman Stealing $100 Million per Trading Day? – ritholtz.com 07/09/2009 Here’s something to give the conspiracy buffs a total breakdown: [...]

  3. austincompany says:

    Just another example of why people have lost faith in government and capitalism.

  4. VennData says:

    Wow, $25B-30B a year (if they don’t count weekends.) Then it’s a multiple of their income and nearly all of their revenues, they’re going to have a big problem with the IRS since they must be hiding the income for everything else they’re doing…

    http://finance.yahoo.com/q/is?s=GS&annual

    … so they probably have the secret codes to the IRS too? Not to mention “The Nuclear Football”

    Note to self: When Zero Hedge and the Daily Kos agree on a conspiracy… laugh out loud.

  5. Bruce in Tn says:

    OT but this is what Redbook was telling us Tuesday….

    http://finance.yahoo.com/news/Retailers-report-weak-June-apf-2907239043.html?x=0&.v=2&sec=topStories&pos=1&asset=&ccode=

    Retailers report weak June sales

  6. KidDynamite says:

    oh Barry, I’m begging you – please don’t go this route – let the tabloid blogs run with these stories, and you can report it on the 3 sigma event that it turns out true.

    GS printed money in Q1 – those $100MM trading days are a truly REMARKABLE number, but they are almost certainly a result of 1) cupcake unwinds courtesy of AIG and 2) rebounding marks on portfolios – BOTH of which are in fixed income land.

    note: i have absolutely no affiliation with GS

  7. dead hobo says:

    I can live with opportunistic theft on Wall Street. Madoff type characters are parasites but they can only prosper when lazy and stupid people come into vast wealth. Yes, the SEC is criminally liable in this case, but, on a smaller scale, it just goes to show stupidity and money don’t mix well. This type of thievery will always exist in one form or another.

    Unfortunately, Madoff is small potatoes compared to the creeping institutionalized theft that has permeated Wall Street over the past 10 or 20 years, but mostly in recent years. The oil thieves are still considered only an unlikely theory in some idiotic circles. Unfortunately, those circles control US finance. GS and others can, according to US prosecutors, manipulate markets without fear … only those who steal the code they use to manipulate markets have something to worry about.

    Big banks get their inside people into regulatory agencies and these folks protect them from within.

    Complicit business news media helps, using such stupidity as “Green Shoots’ and “Lost Less Than Expected!!!’ to shill for the thieves. Their slavish support is so common as to be satirized and accepted as normal instead of outrageously shameful.

    Uncle Stupid decides to pump the markets with taxpayer money (yes, unproven but pleeaase, tell me how iBanks get $250,000,000 to pump the market using SPY in one big transaction, multiple times, sometimes daily, over the past couple of months? ), cynically believing that a rising market and theft from other traders will ignite a market of sheep? (Theft from other traders = if you win in the stock market then someone else loses. It’s a zero sum game. Only inflation hides this fact somewhat. Now it’s government supported theft.)

    Until the people regain control of the financial institutions and markets and government agencies that have become so thoroughly corrupted in recent years, the market is only a place to play betting games on your PC using brokerage accounts because it’s cheaper than flying to Las Vegas. And it’s not even an honest game. You just have to guess on which direction the theft will run today and bet with or against it.

  8. wally says:

    I see that a few readers would rather not believe it. To them: can you disprove it? Is it possible?

    In other words: do you KNOW it is not a rigged game? The burden of proof in this case is not on the accusers, it is on the people who run the house. If you want customers, you’ve got to run a straight operation.

  9. Jonathan Weil says:

    Goldman Sachs Loses Grip on Its Doomsday Machine
    http://www.bloomberg.com/apps/news?pid=20601039&sid=aFeyqdzYcizc

    Never let it be said that the Justice Department can’t move quickly when it gets a hot tip about an alleged crime at a Wall Street bank. It does help, though, if the party doing the complaining is the bank itself, and not merely an aggrieved customer.

    Another plus is if the bank tells the feds the security of the U.S. financial markets is at stake. This brings us to the strange tale of Goldman Sachs Group Inc. and Sergey Aleynikov.

    Aleynikov, 39, is the former Goldman computer programmer who was arrested on theft charges July 3 as he stepped off a flight at Liberty International Airport in Newark, New Jersey. That was two days after Goldman told the government he had stolen its secret, rapid-fire, stock- and commodities-trading software in early June during his last week as a Goldman employee. Prosecutors say Aleynikov uploaded the program code to an unidentified Web site server in Germany.

    It wasn’t just Goldman that faced imminent harm if Aleynikov were to be released, Assistant U.S. Attorney Joseph Facciponti told a federal magistrate judge at his July 4 bail hearing in New York. The 34-year-old prosecutor also dropped this bombshell: “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.”

  10. markp says:

    wally,
    the burden of proof is on the accusers.
    It’s human nature in any game for the losers to cry foul, but unless you prove something is actually foul, it’s only sour grapes.
    Most of the comments on these other blogs are actually very funny – they are awfully similar to comments in tech blogs against Microsoft (and more recently Google). Bill Gates is the devil, etc. Please…
    No affiliation with GS whatsoever.

  11. KidDynamite says:

    @Wally – I need to run, but here’s a quick proof that GS is not stealing $100mm a day:

    we know their principal program trading volumes: up to roughly a Billion shares a week (dont’ get confused by last week’s big bump because of the Russell Rebal).

    now, never mind that not all of this is high frequency stat arb… even if you assumed they make 1c per share on these trades, that’s $10mm a week. the actual number is probably much less than 1/2c a share. And no – i have no interest in debating if i think $250mm a year is “fair” for GS to make with their quant model.

    the massive numbers in the bberg article regarding $100mm days are the result of AIG sloppily unwinding positions, which is no less atrocious – and is what people SHOULD be upset about.

  12. emmanuel117 says:

    Thanks for the explanation. It does seem more plausible.

  13. leftback says:

    Agreed with Kid Dynamite that GS is gaming the system in far more traditional ways, via all their Govt insiders.

    In other news, LB thinks there is a chance of a 2-3% short squeeze today. We seem to have entered another downward leg, which means that a lot of people are now short, which means that better than expected news can….

    (you know the rest of the script)

  14. Mike in Nola says:

    How else they gonna fund $20B in bonuses? We know they can’t make that much honestly.

  15. Transor Z says:

    @Wally:

    In real-life courtrooms, questions to witnesses that begin “But isn’t it possible that . . .” are per se objectionable because anything is possible so they necessarily call for speculation.

    Defense attorney: But Professor Hawking, isn’t it possible that my client fell through a wormhole at the same exact second that his evil Bizarro World counterpart fell through a wormhole into our world, engaged in insider trading . . .

    Prosector: Objection.

    Judge: Sustained.

    Not to pick on you, Wally, because a lot of people approach things that way — demanding that the other side prove a negative when they smell a rat. But the burden will be on the accuser, not the defendant for something like this.

  16. Mike in Nola says:

    lefty:

    Agree with you on the possible short squeeze. Green shoots machine on high on CNBC this morning. Looked like Becky had a vibrator under there after only 500k+ people got laid off and Target sales only fell 6.2%. Am short and sitting tight.

    BTW, for those who are in constrained by retirement plan managers from buying individual long treasuries and must buy funds, I stumbled across some American Century funds with low expenses that might do as a proxy: BTTNX, BTTRX and BTTTX. Don’t remember which is which, but they are 5, 10 and 15 year maturies. Charts look like they follow corresponding treasury prices reasonably well. Bought a little of the longest for the wife. Of course yields are up. May buy her some more.

  17. dead hobo says:

    leftback Says:
    July 9th, 2009 at 8:58 am

    We seem to have entered another downward leg, which means that a lot of people are now short, which means that better than expected news can….

    (you know the rest of the script)

    reply:
    ————-
    Bad News: A vomit inducing impenetrable wall of stench that will cause your skin to fall off and lungs to dissolve. May cause a sell off.

    Better Than Expected News: A vomit inducing impenetrable wall of stench that will cause your skin to only blister. Will cause crazy buying of stocks.

  18. Transor Z says:

    Franklin, let me head you off at the pass here, buddy:

    565k = short holiday week

  19. Marie Antoinette says:

    It occurs to me that this story (whatever its final parameters) will have a major impact on popular opinion for the simple reason that 99% of Americans have no idea that Wall Street has become nothing more than Las Vegas East by the takeover of the quants in recent years. It no longer has much relationship to the “real” (tattered) economy.

    These guys are bookies and numbers runners and Washington exists only to serve them.

    When America wakes up to THAT fact, watch out.

  20. call me ahab says:

    BR Says-

    “That Goldman Sachs may just possibly have used security access codes and built a system to acquire trading information PRIOR to transaction commit time points at NYSE.”

    hmm . . .I’ve wondered that for a while. . .but maybe it was done with the tacit approval of the USG?

    DH Says-

    “You just have to guess on which direction the theft will run today and bet with or against it.”

    it may also turn people away from a rigged game

  21. DeDude says:

    “Just another example of why people have lost faith in government and capitalism”

    But if government would take capitalism wring its neck and throw it 6 feet under then we could at least keep our faith in government ;-)

  22. CapitalistCanuck says:

    I for one welcome the spin machine… at least until I can unload my SSO at $25 lol

  23. KD,

    makes a good point–AIG, the readily provable Problem, an unending Honey-Pot tied directly to the USTreas, goes, largely, uncovered/ un- thought of..

    their Fire-Sale of Hartford Steam Boiler, to the Euros/Germans, was Crime, enough, and, hardly, singular..

    but, no worries, Mr. & Mrs. 401(k) di-vestor are, still, merrily, funding the ‘font of the perpetual bid’.

  24. leftback says:

    Mike, LOL, Becky DOES have a vibrator on set, and it goes off when Buffett calls.
    I don’t think today would be more than a snap-back 2-3% head fake, giving shorts a chance to reload.

    FYI, Vanguard has several duration-specific funds that track Treasuries fairly well.
    Enjoy the squeeze and no doubt we will all talk technicals again about 3pm.

  25. doug says:

    ‘it may also turn people away from a rigged game’

    which games are NOT rigged? seriously…..

  26. The Curmudgeon says:

    I don’t really care how much money per day GS is making, if they are doing it honestly, but there is this, another excertp from Jonathan Weil’s story, linked above:

    It wasn’t just Goldman that faced imminent harm if Aleynikov were to be released, Assistant U.S. Attorney Joseph Facciponti told a federal magistrate judge at his July 4 bail hearing in New York. The 34-year-old prosecutor also dropped this bombshell: “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.”

    Oops. I bet the 34-year-old prosecutor is getting a blistering ass-chewing about now, and has been for the last several days. If Goldman possesses such a program as he alleges was stolen, why does anyone, anyone expect that it was not being used by Goldman exactly as he described? Everybody that trusts that possession of a such a program in Goldman’s hands would not yield market manipulations in “unfair ways” needs to go sit in the corner with a dunce cap on. There’s no need for a conspiracy theory here. It is out there in plain sight. What will be interesting as this case unfolds is whether Facciponti is allowed back in court. I’m waiting on the retraction of his claims from the US Attorney. Then I’ll know for sure that what he said is true.

  27. To be clear, GS is, certainly, not Caesar’s Wife. Though, w/in AIG, there are are foot-, finger-, thumb-, palm-prints, to, well, and thoroughly, Convict, both AIG, and GS–for as many Crimes as a competent Prosecutor could care to count..

  28. 2nd ‘are’= enough

    nice proofreading..

  29. constantnormal says:

    the proof of the pudding will come from competent 3rd-party examination of the code, and that would be the code which was stolen, *not* the sanitized version that Goldman provides for examination.

  30. Mike in Nola says:

    lefty:

    the PCRA that I got the money into to get it away from the limited choice of various load funds in her basic 403b plan is at Schwab. Unfortunately, Vanguard Funds incur a fee when traded at Schwab. I guess Bogle doesn’t kick back enough from the .25% fees. American Century can afford more at about .5%.

  31. call me ahab says:

    doug-

    I don’t know dude- the list may be much shorter if you tell me which games ARE rigged

  32. call me ahab says:

    plunge in jobless claims explained-

    “General Motors Corp. and Chrysler LLC closed some plants in May and June, earlier than the normal summer shutdown period for retooling factories, as they entered bankruptcy, said Abiel Reinhart, an economist at JPMorgan Chase & Co. in New York. As a result, auto workers filed applications for jobless benefits earlier than usual, pushing down claims for July.”

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a2FgXlysEcK4

  33. constantnormal says:

    Just wait until Sergey decides to turn states’ evidence, and testify about the code he wrote, and what it is capable of doing. That’s when he will get hit by a bus on his way to the courthouse.

    Does nobody wonder who he (allegedly) sold the code to? And why he (allegedly) sent it to Germany? KGB/Stasi/Russian mob?

    And if he wanted to make a ton of money, why not replicate his earlier work in writing the code for those folks? Seems like he could get a bit more money that way (although that might bring him into much closer proximity to the sort of people nobody wants to get close to), as a contract coder for hire. The only answer I can see is that the buyers wanted something they could put into play immediately (or at least ASAP), and having the finished product would allow them to tinker with it a bit and get on with making money.

    The alternative, more serious possibility is that having the exact source code of the software allows them to analyze it for weaknesses that a virus/worm might be designed to exploit, so they could insert their own control over the Goldman tool at will, by remote control, as it were. That way they would be immune from obvious security measures like changing passwords or encrypted authentication codes.

  34. AmenRa says:

    @ahab

    Transor Z said it earlier. It was a holiday week. So only four days of filing claims. If an economist doesn’t recognize this then they’re in the wrong field.

  35. Transor Z says:

    I’m going to recommend that anyone here under the age of 40 who hasn’t seen it go out and rent the movie “All the President’s Men.” Robert Redford and Dustin Hoffman play Woodward and Bernstein.

    It’s compressed and dramatized for Hollywood, but it’s got some nice take-aways that serve as an antidote for conspiracy paranoia:

    1. The CIA contractors who engaged in domestic spying and broke into Watergate were morons. Yes, believe it or not, the fabled “Intelligence Community” has its own generous share of hacks and doofuses.

    2. Powerful people still subscribe to KISS principles. You can hire morons to do your bidding when you aren’t afraid of prosecution. You hedge against prosecution by spreading money/favors/threats around.

    3. Entropy is the way of the universe. Too-clever-by-half schemes come unraveled over time. This is because, to some extent, ALL people are morons. The mystique around rich powerful people in shiny black limos wearing shiny black glasses and flying in shiny black helicopters and working in shiny black skyscrapers is a myth. It is, in fact, a luxury car commercial trope. When you come right down to it, they are all morons, too, without exception.

  36. The Curmudgeon says:

    I wonder if Goldman will use any of the profit derived from its superior management of risks to pay back the money we taxpayers funneled to it through AIG, from Bloomberg:

    July 9 (Bloomberg) — Goldman Sachs Group Inc. is on track to beat its 2007 trading-revenue record, enabling it to boost compensation by an estimated 64 percent from last year, according to Bank of America Corp. analyst Guy Moszkowski.

    Goldman Sachs has “unmatched risk-taking/risk-management skills in a market that strongly rewards these because of decline in competitor risk appetite,” Moszkowski wrote in a note to investors today. The New York-based firm “appears on track to accrue significantly more comp than ‘08, despite little change in headcount.”

    Six months ago, Goldman Sachs was supported by $10 billion from the U.S. Treasury and relied on government guarantees to issue debt. Moszkowski predicts the company will reap $26.45 billion from trading this year, a gain from $25.36 billion in 2007 when the firm shattered Wall Street profit records.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a6qIBznBttBc

    ~this feels like 2007 all over again. that turned out well for us~

  37. I-Man says:

    Man… why you gotta get me all fired up first thing in the AM?

    I had begun to put my emo to bed on this whole shitstorm.

    Now I’m thinking I may as well buy some GS to hedge my FAZ.

    Whats the point in fighting the beast?

  38. call me ahab says:

    following up on TZ’s observation re morons-

    Citigroup says re AIG-

    “Our valuation includes a 70 percent chance that the equity at AIG is zero,”

    I’ll go out on a limb and say 100% chance

  39. @constantnormal http://www.ritholtz.com/blog/2009/07/is-goldman-stealing-100-million-per-trading-day/#comment-191479

    Just wait until Sergey decides to turn states’ evidence, and testify about the code he wrote, and what it is capable of doing. That’s when he will get hit by a bus on his way to the courthouse.

    Man, you stole my thunder. Sergy better get talking to a couple dozen cub reporters(better make that bloggers) who are looking to make their big break into journalism(because something tells me one guy alone will not live to make it to press). I was thinking that Sergy were to die of a heart attack while in custody.

    I’m wondering too if this all was not his plan. Getting arrested just helped to blow the scandal into the media eyes and now the hounds are on to the story. I mean with data tracking how would they not know he was doing what he was doing? If not, maybe he is a pawn for someone to do that same thing. Public sentiment has been souring on GS for quite some time now and maybe some other market players have found a way to get public sentiment over the top.

    …or this could be a plan by some financial elites to offer up GS as a sacrificial lamb so that the public’s eye is turned the other way in a sleight of hand maneuver. Or maybe he is a government mole trying to trigger that same said public indignation. Just throwing out ideas here folks to get those thinking caps going. ;)

    Who needs mystery novels? The world of high finance is entertaining enough…….except for the fact that is is costing every US citizen tens of thousands in interest payments :(

  40. The Curmudgeon says:

    @Transor Z:

    Another good conspiracy movie is “Shooter” with Mark Walhberg, who plays an ex-Marine sniper coaxed out of retirement to ostensibly help protect against an assassination attempt on a foreign dignitary, but actually so he could be framed for the crime.

    The plot is plausible because it doesn’t take much imagination to buy into it if you understand the depravity of the human heart, and that morals have no meaning against power. Of course the US government would readily cast aside one of its own in order to accomplish its purposes. It does it all the time. People will do anything, no matter how depraved, to protect or expand their power or property. The more powerful they are, the more depraved they can act.

    I’ve seen it many times over the course of my professional career. There is simply no lie too fantastic, no action too outrageous, when a person or group wants something or feels threatened they might lose something.

    I’ve learned through the years that you can never be too cynical. If the information that I receive, which is filtered a hundred times over before I get it, indicates that, for example, GS might be manipulating the markets, then I just assume that they are. Human depravity knows no bounds.

  41. Mike in Nola says:

    ahab: Re: AIG.

    You are wrong; it’s negative.

  42. constantnormal says:

    @ ahab 10:41 am

    I wonder what the other 30% chance values their AIG equity as being worth? their cost? 150% of cost?

    Gotta love these partial releases of information — always intended to spin the situation, ’cause giving the complete picture would be harmful.

  43. markp says:

    @ call me ahab:
    second that. Maybe the 70% chance of zero refers to Citi’s equity ;)

  44. Andy T says:

    Well, all i can say is this:

    WHEN YOUR TRADING FLOOR ONLY LOSES MONEY 8 OR 9 DAYS IN A QUARTER, YOU ARE NOT REALLY TRADING.

    To put it nicely, they’re “brokering” huge deal flow. To put it not so nicely, they’re front running deal flow.

    I know they’ve got some prop traders for commodities who are extremely good, but even those guys will tell you they lose way more than several days a quarter, and they’re some of the best. The typical profile of GOOD trading book is to make A LOT of money in smaller bursts and then tread water/lose a little bit for most of the time. I know of no trading book that consistently makes money almost every day…

    The only people I know who do that are brokers….or people collecting commissions/fees.

  45. wally says:

    “wally,
    the burden of proof is on the accusers.”

    Let me make the same claim: the burden of proof is on the house. The reason is that we aren’t talking law court here, we are talking a market that invites people in.
    If a supermarket is accused of selling contaminated hamburger, it had better react before the thing works through the courts of law, because it still needs customers to walk in the door tomorow. “The customer is always right” is a succinct expression of that – because loss of the customer’s confidence is the death-knell of a business.
    If Wall Street trading is gamed, I won’t put money there. The same for any form of investment that has an odor about it.

  46. I-Man says:

    Right on AT… you said it.

    “The typical profile of GOOD trading book is to make A LOT of money in smaller bursts and then tread water/lose a little bit for most of the time. I know of no trading book that consistently makes money almost every day…”

    Unless you’re running a ponzi scheme or frontrunning.

  47. Stuart says:

    Where there’s smoke, there’s usually fire although as a general rule I ascribe by the law that the more explosive the issue, the greater the likelihood it’ll be covered up and never heard of again. In this case, too many large vested influence groups have too much to lose if this proves true and hit the mainstream.

    To think these guys received TARP funds and backdoor bailouts via AIG, infuriating is not strong enough. Off with their heads I say.

  48. I-Man says:

    Just wait until some of the firebrand House of Reps folks get ahold of the story…

  49. Transor Z says:

    Random moron of the day #3257: John Buonomo, former Register of Probate of Middlesex County, Massachusetts. Human nature in action.

    Note the furtive glances in the surveillance video. Wonderful. (Mark Hoffer, strike one up for “persistent surveillance ;) )

    http://wbztv.com/local/middlesex.county.register.2.789572.html

  50. danm says:

    Funny how the spirit of the law is totally lost on most Americans today and they wonder why their system is going to hell in a handbasket…

    Of course GS is cheating when you consider the spirit of the law. And I could make a long list of these misdeeds.

    I find it hilarious when people say it’s not illegal, prove it because if you try hard enough, you can always find a loophole.

    If some rule impedes on you ability to make more money a priori, with enough money, you can always get the rules changed so you don’t have to cheat post-priori. I call this stealth cheating.

    It’s because everybody starts debating the semantics instead of stopping the wiesels dead in their tracks that the perpetrators can laugh all the way to the bank­.

    That’s what happens when you look at the trees (laws) instead of the forest (spirit of the law).

  51. cvienne says:

    @I-Man

    “Just wait until some of the firebrand House of Reps folks get ahold of the story…”

    are you kidding me man? Goldie has their checkbooks out already waiting to make re-election campaign contributions to everyone who keeps mum on this…

  52. manhattanguy says:

    My $FAS and $TMV call yesterday turned out to be right. Agree with lefty that we might see 2% upside move at some point.

  53. I-Man says:

    Ah… CV but you may be underestimating the fever pitch that the public might get stirred into as more of the “100 million $ a day” stories get press.

    Nothing like a market selloff to get Joe Public pissed at Wall St.

    You’re probably right though. But those Congress folks will always do whats in their best interest… maybe the contributions will be just that.

  54. cvienne says:

    @manhattanguy

    Congrats…

    I’m kinda laying low at the moment…I skimmed about 50% off all my short positions yesterday…

    Lefty had me mighty tempted to go with SLW but I had to leave and didn’t have time to study it in any depth…As usual, that was a good call…TBT was a nice call too but I played that a different way…

    I had been holding the Jan 2010 TLT calls at .85 cents…That gamma burst yesterday (from the nice auction) got them up to a buck 65…So a double there gave me the opportunity to take half off, play with the houses money, and reload when the time is right…

    I don’t think I’m going to do much for the next several days…Let the market digest the fact that it’s F***ED and re-load on some shorts…Hopefully that 2-3% rally will materialize…

  55. cvienne says:

    I-Man

    The PUBLIC will only get pissed in the fall when they realize they got fleeced again with the S&P challenging the March lows and meanwhile GS reports record bonuses…

    So I guess basically what I’m saying is…it’s still summer and this news will get tossed in the beachbag…

    Timing, my friend…we’ll re-visit this when the time is right…

  56. leftback says:

    Treasuries have had a bit of a sell-off on profit taking after yesterday’s rally so some of that money may go into stocks this afternoon. LB still thinks there is a good chance of a squeeze getting going today and slopping over into the fag end of tomorrow’s desultory summer Friday trading like the left over beer from the night before.

    Australia are slowly grinding the England cricket team into submission. Lefty is hoping for a breakthrough.

  57. Transor Z says:

    Hey lefty, how did the tanned Aussie beauties thing work out?

  58. cvienne says:

    @lefty

    “Australia are slowly grinding the England cricket team into submission”

    When they get to “tea intermission”, please come back and shower us with more market pearls. I’m counting on your cooperation :-)…

    But I also know that lefty is a wise man and knows that cricket is more important until the 15:00 hour…

  59. donna says:

    They don’t call them the gnomes for nuthin’!

  60. cvienne says:

    @karen

    please enlighten me…

    since last Tuesday, there has been a progression of huge chunks unwinding out of the USO (I count more than a half dozen of them)…

    But it looks like the pattern has stopped and it looks like a nice DOJI hammer is setting up on a DAILY…

    thoughts?

  61. I-Man says:

    That was a weird little flutter of activity…

  62. DL says:

    Andy T @ 11:04

    “I know of no trading book that consistently makes money almost every day”

    I don’t know… maybe some of those computerized trading systems make small amounts of money consistently.

  63. leftback says:

    LB can move the markets that way sometimes… still waiting for the inevitable squeeze to develop.

    Cricket ended for the day with Australia having the better of the day but England still 190 ahead. Transor, since you asked, there really are tanned Aussie beauties but most of the crowd were actually drunks from the night before and a few of the classic cricket junkies: Indian and Bangladeshi IT guys. So I guess that would be no score, dude.

  64. cvienne says:

    @lefty

    Looks to me like when TBT clocks in somewhere around 50.50, they’ll make the switch and you’ll get the EQ squeeze…

  65. Andy T says:

    “I don’t know… maybe some of those computerized trading systems make small amounts of money consistently.”

    That’s possible, but what normally happens with that type of “trading profile” of steady small winners is you get drafts down…so the P&L should look like tiny little steps up followed by occasional “elevator” moves down (day traders profile)…I’ve seen P&Ls look that way…if that was what’s going on there then you here about some “jumbo” down days, and from the sounds of that press release, Goldman is incapable of having big losing days, the occasional ‘write down” notwithstanding.

    Perhaps they have devised some secret trading recipe that allows 87% up days v. 13%down days, but I’m highly suspicious of it….

  66. Whammer says:

    @I-man, I’m holding out some hope for Alan Grayson to kick some butt……

  67. cvienne says:

    @Andy T

    secret trading recipe = FRONTRUNNING

  68. leftback says:

    Andy T: I think GS successes have more to do with the fact that they always seem to smell the government’s latest interventions the night before they happen. This has been the secret of any recent trading successes, in essence to guess which markets the administration will be talking up or down this week. Look at the effects of the comments on commodity position limits, which had more effect on crude than months of looking at supply/demand issues.

  69. Mike in Nola says:

    lb:

    Don’t know if it’s profit taking. Try not to imitate those who give reasons for daily movements. Alternatives:

    The move into treasuries has drawn so much comment, on CNBC and a Guest Author post here, that it is probably scaring some people off. Those comments tell the buyers how stupid they are.

    The 10 year auction today resulted in a little higher yield, again scaring the weak minded. This last is probably due to the propaganda out of China about a 48% increase in car sales and a little jump in commodities. Of course it’s all due to a monumental increase in lending creating a bubble. I suppose it could work, as long as no one is expected to pay it back.

  70. Andy T says:

    leftback. ” I think GS successes have more to do with the fact that they always seem to smell the government’s latest interventions the night before they happen.”

    Agreed.

  71. karen says:

    @cvienne, i’m sure you can read those candles as well as i can. uso looking oversold, dto and dug looking overbot. all hit either support or resistance.. so we see what confirmation tomorrow brings.. holding my purchases from yesterday.. unless something incredible happens in the next 55 minutes : ) i was more than mystified at the dollar AND crude oil drop today.. for as long as it lasted, anyway.

  72. CNBC Sucks says:

    Don’t underestimate the power of hot chicks as a determinant in GS’s success. Anyone who has ever spent much time near Broad and Wall knows GS has the hottest chicks. And we aren’t talking Becky Quick hot or Erin Burnett hot; I mean hot hot (and super smart too). I am sure it doesn’t hurt to have hot chicks in smelling “the government’s latest interventions the night before they happen”.*

    * I don’t mean anything salacious is happening, but if you are a blabbermouth at the Fed, whom are you going to voluntarily divulge information to – a hot chick or a non-hot chick?

  73. call me ahab says:

    AT/lback

    instead of smell- maybe they can literally taste the latest government moves- since the information may in fact be fed to them before any policy announcements or Fed action

  74. I-Man says:

    Whatcha think kiddies?

    Close at the lows? Or headfake drop down to 882 and bounce?

  75. Andy T says:

    crude oil. Not sure about the USO ETF, but that the Daily candlestick on crude looks more like a neutral spinning top to me….maybe bears just giving it a “breather” for one day. It could be a doji star bottom, but you would have liked to have seen a much longer shadow below the body, indicating a lot of new shorts underwater…I don’t really see that there….

    It’s certainly “oversold” but some of those commodities can stay oversold for awhile….it looks like one of those “falling knives” type deals….

  76. I-Man says:

    Follow the BOSO method on that one…

  77. emmanuel117 says:

    USO had its monthly roll date on July 7.

    http://www.unitedstatesoilfund.com/uso_rolldates.html

  78. cvienne says:

    @I-Man

    Seems to me like today was just all about taking some profits in Treasuries and moving back to cash…

    Maybe the move will come tomorrow?

  79. I-Man says:

    There certainly were some attempts at breakouts today, but none of them stuck. Could be the pump team getting a little nervous?

  80. manhattanguy says:

    Not sure about the last hour, but my expectation is that S&P should see around 895 before the next leg down.

  81. cvienne says:

    So much for that move in miners today…

    came & went just as fast

  82. leftback says:

    Today’s trade was incredibly tedious (even slower than cricket), and tomorrow is a summer Friday, maybe we will see a rally on weak volume in an empty meaningless trade. I’m inclined to just sit tight here. 880 was defended today and 888 served as resistance. No indication that anything very significant is going to happen tomorrow, although we have some deep stops on just in case.

  83. karen says:

    LB, mind your personages… your third person was growing on me, but you were off and on last post.. boredom can mute a person’s intelligence i suppose..

  84. cvienne says:

    I’m going to say one thing…

    Take a look at the WEEKLY charts (going back to the week of 3/17/08 lows after Bear Stearns)…

  85. I-Man says:

    I’ve noticed he’s been interchanging the “we’s” and “I’s” also…

    Must be the early morning beers…

  86. leftback says:

    Sorry, peep. Today was just tedious beyond words. LB is feeling the approach of the Dog Days of Summer.
    What LB needs is a day of sleeping in the sunshine, then drinking Red Stripe in a small dive bar in Alphabet City.

  87. I-Man says:

    Sounds good to I and I.

  88. Thor says:

    Yes LB, don’t give up on the third person yet, I’m enjoying it.

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  90. [...] another day, another possible Goldman Sachs predatory scam. This time it’s due to their special status with the governmental Plunge Protection Team. [...]

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