Archive - Jul 2009 - Story

Max Keiser: "Does the US Secretary of the Treasury work for the people or does he work for the banking system on Wall Street?"

Dr. Paul Craig Reports: "He works for Goldman Sachs."

• What is good for the US apparently doesn't work for the UK: PIMCO refuses to buy BOE's gilts (Bloomberg)
• And speaking of PIMCO, the "frequent flier miles accumulation facilitating" bond manager will not be in the PPIP: hopefully due to pressing conflicts of interest arising from participation in every other single alphabet soup ever created. (Bloomberg)
• One man's personal account of the UBS tax follies (Bruce Krasting)
• Chinese rioting subdued for now (Bloomberg)
• And Chinese full scale intervention has resulted in a 48% jump in car sales. Oh yeah, and new loans have jumped five times since June. Can the world ever operate anymore witout a credit bubble somewhere? (Bloomberg)

China reports a big 48% increase in car sales as many analysts see an end to the economic contagion in China.

The last time Matt Rothman did a holistic analysis of the market two months ago, he observed market dispersion which was at October 1987 levels: investors were buying anything and everything indiscriminately. In his latest Quantitiative Strategies observations, Rothman is noticing a slight return to normalcy as finally there is a slight discrimination between various asset classes. Whether this will persist, now that potential program trading disruptive elements may have been removed (even if temporarily) or whether the return of the 3:30pm SPY/ES microblock buying sprees will result in this fledgling flight to fundamentals being aborted, only the next few weeks will demonstrate.

Summary observations of today's key events.

Still out in the boonies, so a few more days without extended analysis. In the meantime, some more amusement on GoldmanGate: Cryptogon has created a piece of html code that Google queries latch on to when searching for "Goldman Sachs Code Torrent", allowing the sysadmin to track which IPs and firms are querrying this keyword. Interesting results.

The full Aleynikov transcript.

sdf

GATA today urged the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission to investigate the Goldman Sachs Group Inc. computer trading program that, according to a federal prosecutor, the bank acknowledges can be used to manipulate markets.

"Despite massive state interventions in economies around the
world, many corporate leaders and investors act as though
globalization remains the dominant paradigm. That is a mistake."

Some perspectives on why everyone should take out their credit card (preferably one issued by General Electric), dial 1-900-PIMCO and buy as many treasuries as their credit rating will allow them. Also, fast forward to 4:20 for some candid observations on puppeteering regarding PIMCO's most recent personnel addition. Odd that CNBC should be asking such questions.

The NYSE has officially released the correction for its lapse in reporting Goldman Sachs' program trading numbers last week.

Short Answer: It depends, but it could get ugly.

Some recommended afterthoughts from Dave and Matt.

Joe Saluzzi submits: We have talked extensively on our blog and in our white papers about the power of high frequency trading and program trading. We have noted that these trading strategies can move the market quickly during the trading day. We have always suspected that there have been certain major players that can dominate this space. Now comes the case of the stolen proprietary trading code from Goldman Sachs.