So THIS is how Goldman Sachs is gaming the market?

[happy_liberal]

Recently we posted a required reading analysis by Nanex in which the market trading analytics firm presented irrefutable evidence of quote stuffing by HFT algorithms in tens of stocks, in which thousands of cancelled quotes would reappear each second with a definitive periodicity and regularity, around the time of the May 6 flash crash. Aside from the fact that it is illegal to indicate a quote without a trade intent, this form of quote stuffing is in fact manipulative when conducted by HFT repeaters in specific "shapes" as it actually moves the NBBO actively higher or lower, in cases pushing the bid/offer range up to 10% higher without even one trade ever having occurred...

Today, courtesy of Nanex we demonstrate that this type of illegal stock manipulation continues rampant to this very day, and the SEC still fails to acknowledge that it is precisely the HFT market participants that persist in destabilizing stock prices

http://tinyurl.com/2g9o6e3



BATS "Batsicles". BATS price cycling through a large price range, each intermittent with a stub quote, drop it down and start over


NASDAQ "Ask Mountain". Symbol IAU. Over 56,000 quotes in 10 seconds, all with same Ask Price and the Ask Size increasing or decreasing by 1 (to almost 40,000!).




Goldman Sachs has first quarter with no trading losses
May 11, 2010|Bloomberg News

Goldman Sachs Group Inc.'s traders made money every day of the first quarter, a feat the firm has never accomplished before.

Daily trading net revenue was $25 million or higher in all of the first quarter's 63 trading days, New York-based Goldman Sachs reported in a filing with the Securities and Exchange Commission on Monday. The firm reaped more than $100 million on 35 of the days, or more than half the time.

http://articles.latimes.com/2010/may/11/business/la-fi-goldman-20100511

[depakid]

1. This is just part and parcel to the willful failure to return accountability under the rule of law

to pre-Bush norms.

Expect to see a lot more of this sort of behavior in every sector of the economy- and in government.

[happy_liberal]

2. "The firm reaped more than $100 million on 35 of the days"

When they take that money from the stock market, who loses? Someone is losing that 100 million every day.

These are 401ks being stolen from, at a time when the economy is ruining enough lives as it is.

This is so unacceptable and just ABSURD!, but people are going to have to get MAD and start SCREAMING about this.

[Lucky Luciano]

4. Commissions and bid/ask spreads do make a lot of money - especially

In this day and age where billions of shares trade each day.

[Warpy]

3. This is why we need transaction taxes!!!!

I can think of no other way to end the profit in HFT than to eat up those tenths of cents repeated a thousand times a minute than by charging a tax on every single one of them.

If we don't get it, we're fucked, the market is OVER.

[AnArmyVeteran]

10. It's not the only way to stop this lawlessness. Check my post #9 in this thread....

[Warpy]

15. The problem is that gaming the market through HFT isn't illegal

and you'd have a very difficult time of trying to levy fines or jail time on anyone doing a legal activity. I also don't see it being declared illegal, although that massive 15 minute drop a couple of months ago should have awakened everybody to the problem it creates and how quickly the market could be completely devastated.

However, a small transaction tax that wouldn't create much of a blip for ordinary traders would cripple HFT and that has a chance of passing.

That's what I want to do to the smartest guys in the room, pull the rug out from under them by cutting down the profit so far that this stuff is no longer useful.

Until and unless that happens, the market is being rigged by a handful of men and their mainframes and no one else at any level has a chance.

[happy_liberal]

17. Placing a bid without the intent to buy is illegal

and that is what they are doing.

5,000 bids per second.

This is a brand new discovery and should be spread far and wide. What they are doing is VERY illegal.

[Warpy]

20. They're joined by every other hedge fund out there

with enough of a computer system to do the same stupid thing. They couldn't make their money legally, so this is the sort of thing they're turning to.

[Statistical]

28. How exactly do you prove they had no intent to sell?

Transaction tax is the simplest way to simply make this kind of manipulation unprofitable.

Wouldn't even need to be very much 0.1 to 0.25 cents per share would make all this HFT simply unprofitable. It would cost then 10x to 100x what they make per share in taxes.

Make 0.001 cents per share in profit * billion shares = $10 million. Sweet. Get taxed $250 million. Ouch.

HFT would disappear overnight. Compare that to the complexity of proving in a court of law the person didn't have the "intent" to sell.

[AnArmyVeteran]

19. I agree with you, but laws still need to be passed ...

I agree with you, but laws still need to be passed to prevent them from even considering dreaming up scheme after scheme to rig the market. And why should people who produce absolutely nothing for society be allowed to make such huge profits? I believe anyone working in the financial sector should be taxed at such a high rate no matter how much they stole they would have it taken in taxes and given back to the people.

We have a crisis in values in this country. A thug sitting behind a computer dreaming up a financial scheme that produces zero jobs and zero products can make millions with a few key strokes on his computer. If he was taxed at 90 percent on that million at least he wouldn't be able to keep most of the ill gotten money he essentially stole.

I've long contended that a migrant worker who picks fruit and vegetables for 12 hours a day produces more for society than tens of thousands of those white collared 'geniuses' who sit behind their computers producing absolutely nothing. They take from society, they don't do anything for society.

It is a national security issue to allow 25 percent of our economy to be in the hands of a relatively few people in the financial sector. I agree with your idea, but we need to also add laws and then penalties that put those kind of people in prison for long periods of time when they try to screw the average American.

I'd love to pull the rug out from under them and then put bars in front of them...

[unkachuck]

5. K&R....I'm going to sit back and watch capitalism destroy itself....n/t

[happy_liberal]

8. Unfortunately many people's lives are being destroyed.

Capitalism isn't the problem. It is greed and apathy.

[Starry Messenger]

29. Capitalism rewards greed.

It is definitely the problem. Human adapts to their environment, we need to get rid of the environment that allows Sachs, et. al. to keep people on this treadmill. The apathy towards that is what we must overcome or you are right, many people's lives being destroyed.

[Hydra]

30. Capitalism most certainly is the problem

Motive? Profit.

Any other motive? Nope.

Supposedly there are all of these great side benefits, but where are all of them? There's no incentive to make create those side benefits.

"Profit" brought us the Gulf Oil Disaster. "Profit" brought us the highway robbery that was the bailouts. "Profit" will destroy the Health Care system.

Sound like fun to you?

[happy_liberal]

27. When we all fall down it will be too late

you inspired me to post this song
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8862495

"Is there no reason we can't change? When we all fall down it will be too late"

[riderinthestorm]

6. The stock market is rigged, no question about it.

"Goldman Sachs Group Inc.'s traders made money every day of the first quarter, a feat the firm has never accomplished before."

This sentence leaps out at me. If all of Goldman Sach's traders made money, every single day for 3 months straight, there's something seriously fishy on Wall St. That isn't normal, typical or even productive. That means their computer models are basically doing the trading in nanoseconds, and the "traders" are simply fast computer operators who are confirming the execution of the trades that the computer models are designing.

Anyone who believed for a moment that their money would do well in stocks is now fooling themselves. Unless you are one of the lucky few to have access to that precious computer code, you are gambling with the devil and you will never win.

[happy_liberal]

7. but now most of their 'trades' are not even executed, they use the computer to manipulate the price

As I understand it, they are making illegal bids to lower the price to where they want to buy it.

[AnArmyVeteran]

9. This problem could be solved OVERNIGHT with a 3 Strikes & you're out laws for the rich.

Instead of any current laws which fine any offenders token fines they should be jailed 1 year for every $100,000 stolen. If they steal 20 million they get life in jail. You would see these kinds of crimes disappear.

The current token fines are always a fraction of what they stole. If they steal a million they pay a fine of $10,000. What crook wouldn't steal a million knowing they would only have to pay a paltry $10,000?

And we need another law too. Any white collar criminal caught breaking laws three times would get automatic life in prison. There are three strikes and you're out laws for the poor and middle class, so why not for the rich?

I don't know about the rest of you, but I'm getting sick and tired of soulless and corrupt thugs stealing billions and receiving zero punishment. It's despicable how there aren't any real laws on the books to put these people in prison serving hard time with other thieves and murderers.

A staggering 25 percent of our economy is in the financial sector, yes TWENTY FIVE PERCENT! That means that the people in 25 percent of our economy produce absolutely nothing for society, no manufactured goods, no food, no clothing, no nothing. All they are is a big middleman racket that takes money others earn through sweat and hard work. Having an economy that allows 25 percent to be in the financial sector is a great threat to our country. We've seen what happened when a handful of banks virtually destroyed our economy. After a lot of protests, these same banks are the same size they were before. Obama and the democrats in congress did NOTHING to reduce their size. They left the same people in place and the same system in place, with minor, token changes. They never addressed the root problem of the oversized financial sector.

Because of the size of the financial sector and because no real regulations with teeth were passed our entire country is very vulnerable and could face total financial ruin with the next wave of corruption that sweeps through the financial sector.

We spend trillions on defense to protect ourselves from non-existent enemies, but nothing to stop white collar criminals who could destroy the economy of our country. That is a security risk and poses a threat to our very existence. But politicians of both stripes did nothing to correct the problem. It's because they are both OWNED by the same criminals in the financial sector.

In ancient Athens, Diogenes walked around with a lantern trying to find an honest man. He never did. He could spend his entire life on Wall Street and never find one honest man. And he could also mill through the halls of congress or the White House and he still wouldn't find an honest man who is willing to do what is right to protect our country and our people.

They are all for sale, every last one of them. And we the people are going to have our lives destroyed because of the lack of honesty, courage and integrity among almost everyone in government.

Goodbye the USA, you were great while you lasted. But you were stabbed in the back by corrupt people in government and business.

[happy_liberal]

11. I like it

:applause:

[rucky]

12. This is an idea I could get behind.

[cutlassmama]

23. That 25% needs to be stopped

[Blackhatjack]

13. Goldman traders made money every day of the first quarter, a feat never accomplished before.

"Goldman Sachs Group Incs's traders made money every day of the first quarter, a feat the firm has never accomplished before."

Kinda says it all ... any doubts the system is rigged?

[Blackhatjack]

14. Just Imagine if Bush Had Privatized Social Security... Goldman Would OWN IT by Now. n/t

[happy_liberal]

18. seriously

:rofl:

[Blackhatjack]

16. Same as Madoff's ponzi scheme, he always made $$ every quarter... Just like Goldman traders. n/t

[flyarm]

21. and who has this White House surrounded itself with ..oh yeah Goldmans Sachs crooks!

[laughingliberal]

22. K & R nt

[Greyhound]

24. K&R. One of them, yes. There are a wide variety of ways they are allowed to scam the system.

[happy_liberal]

25. How many lives have been ruined by these a##holes?

Who are the terrorists now?

[Sebastian Doyle]

26. Criticism of Goldman Sachs will soon be off limits

seeing is how they are the Clintons' in-laws now.