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Is A Case Of Quant Trading Sabotage About To Destroy Goldman Sachs?

Tyler Durden's picture




 

Major developing story: Matt Goldstein over at Reuters may have just broken a story that could spell doom for if not the entire Goldman Sachs program trading group, then at least those who deal with "low latency (microseconds) event-driven market data processing, strategy, and order submissions." Visions of swirling, gray storm clouds over Goldman's SLP and hi-fi traders begin to form.

Back-up: This week's NYSE Program Trading report was very odd: not only because program trading hit 48.6% of all NYSE trading, a record high at least since the NYSE has kept tabs on this data, and a datapoint which in itself was startling enough to cause some serious red flags as I jaunt from village to village in what little is left of Europe's bison country, but what was shocking was the disappearance of the #1 mainstay of complete trading domination (i.e., Goldman Sachs) from not just the aforementioned #1 spot, but the entire complete list. In other words: Goldman went from 1st to N/A in one week.

Even more odd, this "disappearance" comes hot on the heels of what Zero Hedge reported could be potentially a major change to the way the NYSE provides its weekly program trading report. Of course, Ray over at the NYSE immediately replied to Zero Hedge that all was going to be same as always ... Odd, maybe he meant that all is back to normal except the reporting of Goldman's trades. Either way, it might very well be time for proactive readers to again contact the two employees publicly disclosed by the NYSE as lead-contacts on the issue.  Readers will recall that it was these same two who were previously steadfastly assuring anyone who would listen that there would be no change at all in data reporting.

Robert Airo, Senior Vice President, NYSE Euronext at (212) 656-5663 or
Aleksandra Radakovic, Vice President, NYSE Regulation at (212) 656-4144

Alas, the just released weekly data proves that either theirs was a material misrepresentation of facts, or Goldman simply suddenly decided to stop transacting with the NYSE, or, what would be even more sinister, Goldman notified the NYSE to scrap all their trading data from the prior week. Why would they do that?

Goint back to Matt Goldstein's story. In a nutshell, on Friday, one Sergey Aleynikov was arrested at Newark airport by FBI agents, as he was coming back from a trip to Chicago (maybe visiting his new employer), on what are basically industrial espionage charges. Sergey, or Serge as his Linked-In account identifies him, was VP of equity strategy over at 85 Broad (or maybe 1 New York Plaza, his detailed Bloomberg Bio page has disappeared) had the following responsibilities at Goldman Sachs according to Linked-In:

• Lead development of a distributed real-time co-located high-frequency trading (HFT) platform.The main objective was to engineer a very low latency (microseconds) event-driven market data processing, strategy, and order submission engine. The system was obtaining multicast market data from Nasdaq, Arca/NYSE, CME and running trading algorithms with low latency requirements responsive to changes in market conditions.
• Implemented a real-time monitoring solution for the distributed trading system using a combination of technologies (SNMP, Erlang/OTP, boost, ACE, TibcoRV, real-time distributed replicated database, etc) to monitor load and health of trading processes in the mother-ship and co-located sites so that trading decisions can be prioritized based on congestion and queuing delays.
Responsible for development of real-time market feed handlers, order processing engines and trading tools at a Quantitative Equity Trading revenue-making HFT desk.

If the allegations are true, it looks like Goldman's hi-fi quant trading desk was thoroughly penetrated by a "spy", and as readers will recall, Serge(y)'s description of his job duties mirrors what Mr. Ed Canaday conveniently provided to Zero Hedge as a description of Goldman's SLP program. (Sources connected with the office of the United States Attorney have confirmed to Zero Hedge that Aleynikov was at one time or another a Goldman employee.").

The plot thickens: per FBI agent Michael McSwain's sworn deposition, Sergey quit a firm described as "Financial Institution" in the affidavit, which according to circumstantial evidence and according to Goldstein is none other than Goldman Sachs, on June 5, at that time earning $400,000 annually. As Matt reports, he proceeded to move to a Chicago firm engaged in "high volume automated trading" where he would make 3x his $400k salary (Hey Getco, is it time for a formal release at least denying you guys had anything to do with this, cause if you did it might not look that hot. No matter, we have reached out to our sources in law enforcement to confirm or deny Getco's, and Goldman's, involvement: once we get a response we will immediately advise our readers).

In the 5 days immediately preceeding his departure from "Financial Institution" (potentially GS), Sergey allegedly downloaded 32 megs of ultra top-secret quant trading proprietary code, that, according to Special Agent McSwain's affidavit, he then proceeded to encrypt and upload to a website in Germany, with a UK owner. One can only imagine the value of this "code" not only to Goldman but to the highest bidder. After all, from the affidavit: "certain features of the [code], such as speed and efficiency by which it obtains and processes market data, gives the Financial Institution a competitive advantage among other firms that also engage in high-volume automated trading.The Financial Institution further believes that, if competing firms were to obtain the [code] and use its features, the Financial Institution's ability to profit from the [code]'s speed and efficiency would be significantly diminished." Needless to say, many others are now also likely hot on the trail of the code.

What is probably most notable, in less than a month since Sergey's departure from [Goldman?], the FBI was summoned to task and the alleged saboteur was arrested and promptly gagged: if anyone is amazed by the unprecedented speed of this investigative process, you are not alone. If only the FBI were to tackle cases of national security and loss of life with the same speed and precision as they confront presumed high-frequency program trading industrial espionage cases... especially those that allegedly involve Goldman Sachs.

Now the real question here is, does [GS?] feel lucky? Because the code has supposedly been in the hands of an outsider for over a month, one might suspect that anyone who wanted to has had ample opportunity - if the holder(s) wished to sell... Would that have anything to do with the even weirder than usual market action over the past 2-3 weeks: after all it is the very Goldman Sachs (which may or may not be the target of this program trading industrial espionage) which is the primary SLP on the world's biggest stock exchange.

Another major question: do Goldman and the NYSE not have a fiduciary responsibility to announce to both shareholders and any interested parties if there has been a major security breach in their trading operations? Certainly this seems like a material piece of information: given that program trading accounted for 49% of all NYSE trading last week, and Goldman as recently as one week ago represented about 60% of all principal program trading, will this be called an issue threatening the National Security of the United States. Shouldn't all market participants be aware that there is some rogue code in cyberspace that can be abused by the highest bidder, who very likely will not be interested in proving the efficient market hypothesis?  What will happened when said bidder goes about trying to front run none other than the "Financial Institution" [GS]?

The complete affidavit can be downloaded from this post here, and is also provided Scribed below as this could (and likely should) become a matter of National Security. Zero Hedge will closely monitor this situation from the European hinterland and provide updates as they come. For really interested readers, we recommend tracking any potentially new developments on the forums and message boards over at Wilmott.

Lastly, a quick question to lawyers among our readers: what if any is the likelihood that Goldman will be forced to provide associated discovery if this were to become an extended legal case?

 

 

 

major hat tip Matt Goldstein of Reuters

 

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Sun, 07/05/2009 - 17:51 | 4654 Anonymous
Anonymous's picture

i KNEW I should have shorted (or otherwise bet against) GS two months ago. Damnit.

Sun, 07/05/2009 - 21:03 | 4709 Arm
Arm's picture

Don't be so unhappy.  I shorted two months ago and am about to expire worthless

Sun, 07/05/2009 - 18:14 | 4656 maui73
maui73's picture

Tyler . This is a huge story . thx for your great work.

Mon, 07/06/2009 - 00:47 | 4769 andy55
andy55's picture

Agreed -- incredible work and dilligence, TD and all others on this story!  Your work makes me feel like America is not yet totally lost! 

Sun, 07/05/2009 - 18:19 | 4657 svendthrift
svendthrift's picture

So, Monday morning comes a ban on shorting bankster stocks?

Sun, 07/05/2009 - 18:19 | 4658 Anonymous
Anonymous's picture

bah-BOOM! 4th of july fireworks?

/w.r.t the CAPTCHA -math is hard! ;)

Sun, 07/05/2009 - 18:22 | 4659 Anonymous
Anonymous's picture

OMG, Paulsonator hacked the skynet. The field of Finance hasn't been that exiting and scandalous since at least 1929. : (

Sun, 07/05/2009 - 18:23 | 4660 Anonymous
Anonymous's picture

Does anyone want to bet one-fity that LEH is somehow involved?
rofl

Sun, 07/05/2009 - 18:30 | 4661 Anonymous
Anonymous's picture

Finkle is Einhorn.

EINHORN (bold) is Finkle

Mon, 07/06/2009 - 13:13 | 4826 Talkhard
Talkhard's picture

He kissed a man too?!?!

Sun, 07/05/2009 - 18:31 | 4662 Comrade de Chaos
Comrade de Chaos's picture

Found "his" (names match)  website, he must be a cybernatic mechanism ...

http://alsen.livejournal.com/

 

let the robot wars begin : )

Thu, 07/09/2009 - 07:15 | 5511 Anonymous
Anonymous's picture

uh he probably hid the source code in those images using steganography: http://en.wikipedia.org/wiki/Steganography

Sun, 07/05/2009 - 18:32 | 4663 Anonymous
Anonymous's picture

I can't wait to see the liquidity on Monday morning. Will GS pull their bidz for their SLP programs? The storm is brewing bigger and bigger.

Sun, 07/05/2009 - 18:37 | 4664 ScepticalMind
ScepticalMind's picture

Enormeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee!!!!!!!!!!! (at french for enormous....)

Sun, 07/05/2009 - 18:37 | 4665 pinkboxtrader
pinkboxtrader's picture

I read through the PDF and either this guy is the dumbest software guy making 400k/yr or it was just a mistake in uploading some parts of the source code. He gets a new job offer then in his last week of work decides to upload the critical code to a repository machine using https? And the smoking gun is his shell history and a copy of the script he left on his desktop? Any software guy with half a brain trying to steal even $100 would have transported out the source in a much more obfuscated manner. This is all assuming that 'Financial Institution' had blocked all abilities to transfer the files onto physical portable media without logging the exact content while inside the facility. Of course if security were this important then why was the 'top secret' code on a machine connected to the Internet? I'm not sure if the story adds up if there was a malicious intent. Or maybe the code in question isn't really that important and this is just a scare tactic to keep the other nerds afraid of leaving the family. If it is something good I sure hope it starts showing up on the public torrents. Maybe give 'Financial Institution' a taste of what being on the wrong side of insider information is like.

 

Either way I hope it puts the scare into big institutions relying on this kind of information control for their financial edge (or even viability). In the game of greed, how much do you pay the nerd who creates you a cash generating black-box? Well in theory it should just about be the value of the incoming cashflows minus cost of capital. If not you'd better worry about how easy that edge can disappear for an incrementally higher bidder. Background checks, patriotism and legal enforcement tougher than theft of trade secret can barely contain top secret government data. In the Capital Markets Casino with no allegiances firms should seriously worry about non-equity partners who do the critical work which must remain secret to be effective.

Sun, 07/05/2009 - 18:45 | 4667 Anonymous
Anonymous's picture

Yeah, this idiot didn't know use of HISTFILE="" and doesn't know .bash_history is under $HOME and is always backed up, at least daily!

Mon, 07/06/2009 - 00:56 | 4770 andy55
andy55's picture

Well, you have to remember there's a variety of engineer/CS people out there...  Physics, finantial, and math guys, as you know, often can be weak on the workstation/code side.   In fact, as a software engineer that's managed all kinds of minds, it's random how talented of a theorist a guy can be while his shell/workstation level of knowledge is low.

Mon, 09/07/2009 - 18:30 | 61751 Anonymous
Anonymous's picture

Right on the mark p/b/t. A couple of other facts which seem to support that view: (i) the code he actually uploaded was less than 5% of the total module size (and apparently he had the entire module on his machine--not too surprising given he was the lead developer); (ii) he uploaded the code to a plain-vanilla cut-rate hosting outfit, to an account with his name on it that he had had for some time--not to some shadowy server in St. Petersburg under account name "condor." and (iii) he's a ballroom dancer (excuse me--a competitive ballroom dancer) for godsake.

Sun, 07/05/2009 - 18:38 | 4666 Bubby BankenStein
Bubby BankenStein's picture

Wow!

No matter what the outcome will be, this could be written into the climax of a blockbuster drama titled "Chernobyl Syndrome"

Sun, 07/05/2009 - 18:52 | 4668 Anonymous
Anonymous's picture

Why is this not on any Main Stream Media? Not even Reuters has the story, only its blog carries it. Creepy, so much for Free Press in America.
We are all doomed.

Sun, 07/05/2009 - 18:52 | 4669 Anonymous
Anonymous's picture

his title was Vice President of equity strategy, anyone who knows anything about banking knows the title of VP is given out more easily than a cup of free coffee....

he's a nobody who got a new job (prob on false premises) and decided to take some work product (his or others) with him to his new employer....

IT group monitored his computer, see what he did...reported it to the Feds...

picked him up real easily as he used credit cards to book his plane tkts....

doom for trading group....i dont think so, but i so wish

with Paulson at the helm and Bernanke in their back pocket they can even probably just back day a months worth of trading to fleece the avg job

the game is rigged

Sun, 07/05/2009 - 22:05 | 4731 Arm
Arm's picture

Anybody who knows anything about banking knows that operations are basically run by senior analysts and middle managers (VP's and associates).

Directors, and MD's are the happy faces to sell to clients.   So yes, this VP would be in fact the operational coordinator for that trading group.  That would make his knowledge very significant.

 

Sun, 07/05/2009 - 23:03 | 4744 Anonymous
Anonymous's picture

I'm in IT myself. Perusing his linkedin profile shows to me that he was at the top of this specific field. Some intense technologies and experience on his resume. This guy would be quite sought after if he delivered even half of what was listed in his profile.

Sun, 07/05/2009 - 18:54 | 4670 Anonymous
Anonymous's picture

i agree with #4669. There is too much corruption. Business as usual will continue. Disconnect with reality will continue.

Sun, 07/05/2009 - 19:00 | 4672 Tyler Durden
Tyler Durden's picture

Here are examples of what happens in traditional quant trading IP cases:

http://www.reuters.com/article/mergersNews/idUSN1915944520070619

http://iapps.courts.state.ny.us/webcivil/FCASJcaptcha?forward_url=/webcivil/FCASSearch%3FtxtIndex%3D600909/2009%26cboCounty%3D30%26from%3DY

The FBI was involved in exactly zero of them. This was supposed to be a statement. Of what nature, it remains to be seen.

Sun, 07/05/2009 - 19:28 | 4674 channel_zero
channel_zero's picture

TD: you clearly conflating a couple of stories.  Story 1 is the volume disappearing. Story 2, guy possibly steals code.  Mixed up in there is your heated conspiracy thinking.

You are as distracted as most are by the alphabet soup this guy was spewing.

SNMP

You can't do anything sub-second with SNMP anything. Period.  It just doesn't work that way. You can notify an admin a service has stopped, or something like that.  There's no heat here.

Erlang/OTP

Now, erlang is something that can possibly do sub-second stuff on its own.  I would be very surprised a VP is the algorithym guy.  Would he have access to the code? Probably.

boost, ACE, TibcoRV

This is software engineering sploog  for some C++ libraries and a message passing framework.  TibcoRV will get your sub-second trades.  But the magic is in the C++/erlang code. 

BTW, why mix them?  That's a baaaaad combination.  If he actually has a coding background, it's probably in C++ because Erlang doesn't have much in the way of textbooks or Sun/Microsoft to promote it in schools.

real-time distributed replicated database

More sploog.  This guy's a Veep.  Other than getting a presentation from the coders, he probably doesn't have a clue.

Can a competitor do something **quickly** with the code?  Depends on how good the shop is that will port the code.  This guy would only be instrumental in that he might have taken the code.  Is this some secret/magic code that precious few are capable of doing?  Not at all. 

Is GS evil?  Sure, but this is side-show stuff.  The mainstream media knows a good story.  This isn't one of them.

Sun, 07/05/2009 - 20:51 | 4703 Anonymous
Anonymous's picture

If what you say is true the Financail Institution would have left it to internal security.

The Financail Institution chose to make this a matter of public record.

Sun, 07/05/2009 - 20:55 | 4706 Anonymous
Anonymous's picture

Were they hoping it would be buried in the fog of the Southern District?

For use in their defence at a later date?

Sun, 07/05/2009 - 21:01 | 4708 Alcuria
Alcuria's picture

"SNMP You can't do anything sub-second with SNMP anything. Period. It just doesn't work that way. You can notify an admin a service has stopped, or something like that. There's no heat here."

Nonsense. We use SNMP to alert us when certain thresholds are reached on WAN links, and we use SNMP SETs to make various adjustments based on which specific threshold is reached. I can assure you it happens sub-second And when using SNMPv3, this occurs in an authenticated, encrypted manner

Mon, 07/06/2009 - 02:26 | 4788 channel_zero
channel_zero's picture

We use SNMP to alert us when certain thresholds are reached on WAN links

As do we.  Does the *whole* process happen in 10th's of seconds?  No.  Link fails>router fires SNMP message>SNMP server recieves message, then maybe even fires off a SET back to the router and sends a notification via snmp.  In less than 1 second? No.

Among other things, the other side of the transaction would timeout.

Sun, 07/05/2009 - 21:38 | 4720 Anonymous
Anonymous's picture

The code that was stolen here does not guarantee microsecond execution. The code contains behavoral heuristics and proprietary algorithm to execute the next trade. The stuff that guarantees microsecond execution is the kernel along with messaging protocols.

Sun, 07/05/2009 - 21:44 | 4721 Anonymous
Anonymous's picture

By gathering the information I have an urge to post the platform that they are using, but I shall leave it for everyone to guess.

Sun, 07/05/2009 - 21:52 | 4724 FischerBlack
FischerBlack's picture

Well, CNBC has picked up the story.  http://www.cnbc.com/id/31750907. And they know a good story, as you say...

But you're missing the point, anyway -- and it has nothing to do with conspiracy theories. Goldman can't go back to trading using this code now that it's out there. It will take some time for them to go to Plan B -- I don't know how long. In the meantime, no Goldman PT, no liquidty, get ready for the volatility. If this story is true, the chances of a market liquidity event have just gone up significantly.    

Mon, 07/06/2009 - 07:25 | 4804 Anonymous
Anonymous's picture

> More sploog. This guy's a Veep. Other than getting a
> presentation from the coders, he probably doesn't have a > clue.

Yeah. Where'd you get that? I'm a VP (associate director, whatever..) at another random financial organisation, and I write custom compilers. You don't have to lose touch till you get to Director. ;)

Mon, 07/06/2009 - 07:38 | 4806 Anonymous
Anonymous's picture

VP = Director in most US IB's.

I've worked with VP's and SVP's who still code daily, and are damn good at it. Usually it's the SVP's who get the $400k pay packet, not VP's, but possibly this guy annoyed someone on the promotions board so didn't get the title.

In any case, odd behaviour. Everyone knows not to do this kind of stuff. Amazed that GS allow this stuff through their firewall/proxy servers.

Sun, 07/05/2009 - 19:22 | 4675 akreitman
akreitman's picture

He should upload the code to wikileaks, that will level the playingfield!

Sun, 07/05/2009 - 19:26 | 4676 Anonymous
Anonymous's picture

Meh. Goldman Sachs(Teflon Bank) is like John Gotti(the Deflon Don).

Sun, 07/05/2009 - 19:27 | 4677 Bubby BankenStein
Bubby BankenStein's picture

A few questions:

Did GS shut down operations based on this code due to the breach?

Could this breach have anything to do with the extended session July 2?

Is the FBI on it because of GS influence, or is it such a serious threat that their hair is on fire?

Is the possibility of others adapting the code to their operations a game changer?

Is this a smoke screen?

 

 

Sun, 07/05/2009 - 19:27 | 4678 Anonymous
Anonymous's picture

futures turning rederer, has the worm turned??

Sun, 07/05/2009 - 19:33 | 4679 Anonymous
Anonymous's picture

smoke screen.

Sun, 07/05/2009 - 19:34 | 4681 Anonymous
Anonymous's picture

When there was a scandal about some Salomon Brothers traders making illegal bids for treasuries, several senior executives (Meriwether, Gutfreund, and Strauss) were forced to resign for failing to promptly disclose the illegal bids.

Why shouldn't GS and NYSE executives be forced to resign for failing to disclose theft of SLP code to the public? Far more money is at risk through the theft of SLP code than from a pidling treasury auction.

Sun, 07/05/2009 - 19:49 | 4686 lgevik
lgevik's picture

CNBC picked up the story...  http://www.cnbc.com/id/31750907

Sun, 07/05/2009 - 20:41 | 4702 agrotera
agrotera's picture

Yea, and it is candy coat, and gloss over any significance as if all that matters is whether big daddy's quarterly earning will be hurt by the story!

Sun, 07/05/2009 - 19:54 | 4687 maui73
maui73's picture

http://www.cnbc.com/id/31750907

 

but the this line is missing from the cnbc.com  article :"..The Zerohedge blog was all over this controversy a week ago..."

 

 

Sun, 07/05/2009 - 19:55 | 4688 Anonymous
Anonymous's picture

You've got it all wrong Tyler.

Serge actually works for the Russian Mafia, long active in stealing credit card info and other such small financial potatoes (which the Russians have been good with for centuries). The Mafia is in cahoots with a Russian plutocratic family involved in Russian stock markets. Together they plan to use the high-speed code to beat the Americanskis at their own Kapitalist game, including GS.

Or it could be the KGB? Remember the "great grain heist" of the early 1970s (?) when Russian authorities broadly spoke of the great wheat crop coming in that year. Meanwhile, they were quietly buying wheat futures through intermediaries knowing their crops were totally wiped out. When the crap hit the fan, the Russians paid for the wheat they needed from the futures they bought. Talk about "material misrepresentation!"

Watch: Serge will be paid nicely for the few years time he spends in jail, and all his considerable lawyer's and wife's expenses will be covered from unidentifiable European sources. His wife will return to Russia to rejoin her family after her "horrible" experience in Amerika.

Man, it's a great novel if not the truth!

Sun, 07/05/2009 - 20:00 | 4690 orange juice
orange juice's picture

oooh well if they had it for a month it was probably old anyways. I remember reading somewhere that algorithms older than ~3 months just aren't relevant anymore, so I'd be surprised if this code was integral to what GS is running now.  Anyway, in the last few weeks we've seen tops begin to form in all markets... so we were long overdue for some gearshifting.

 

Now it's time to see the GS SLP run some short progs.

Sun, 07/05/2009 - 23:52 | 4758 JohnKing
JohnKing's picture

Scoring algos could be old in days or minutes but the basic framework of data collection> indexing> storage> serving would probably have a longer shelf life.

 

 

Sun, 07/05/2009 - 20:07 | 4691 Anonymous
Anonymous's picture

boom goes the DYNAMITE!

Sun, 07/05/2009 - 20:15 | 4692 Bubby BankenStein
Bubby BankenStein's picture

Firmly place a tin foil hat on your head:

Serge's CV claims significant expertise in telecommunications routing, skills potentially valuable in routing / replicating exchange traffic through the back office of select secret trading systems in real time.  Such skills could also contribute to "Communications Glitches".  

Sun, 07/05/2009 - 20:22 | 4693 Moe Speeks
Moe Speeks's picture

Excellent News Story Tyler, as usual.

Break this wide open to the world.

Sun, 07/05/2009 - 20:25 | 4695 Anonymous
Anonymous's picture

I may not get some stuff, but to me it can be as simple as the market is going lower now that godlman hasn't been keeping it up. Still manipulation in my books.

can they be doing trades in their dark pools, thereby now managing to keep it out of the records? This would be very Goldman like

Sun, 07/05/2009 - 20:29 | 4696 Anonymous
Anonymous's picture

My conspiracy mind is racing with new plots and twists. A couple of weeks ago Tyler mentioned the GS having a trading platform that COULD be used to front run other trading houses.

Maybe this guys software has some code that shows that is part of their 'formulas'.

Sun, 07/05/2009 - 20:32 | 4697 Anonymous
Anonymous's picture

What happens if this guy has the goods on GS illegal trading and is willing to turn material over to the Feds?

Sun, 07/05/2009 - 21:07 | 4711 Anonymous
Anonymous's picture

He dies.

Sun, 07/05/2009 - 21:38 | 4719 Bubby BankenStein
Bubby BankenStein's picture

Ok, but if info he has sent to others lives on, then what is to be gained other than punishment?  I guess the question is who gets punished.

Mon, 07/06/2009 - 07:25 | 4802 Anonymous
Anonymous's picture

I couldnt help but laugh hesterically at the respose "He dies".

Not because he was joking, but because it is true.

Sun, 07/05/2009 - 20:33 | 4698 Anonymous
Anonymous's picture

After all that Goldman has stolen form the American people instead of Jail this guy should be getting a congressional medal of honor and a presidential pardon.

He can come to my house anytime and the drinks are on me.

Sun, 07/05/2009 - 20:38 | 4700 agrotera
agrotera's picture

to Tyler and anyone else who may be able to enlighten me please:

I see the tie in with the inquiry to mr. canaday, but what i would like to know, if this case proceeds, wouldn't it also be fruitful and important to know the activities of the presidents working group to make sure there aren't any insider exercises there either--even if you take away what the rest of the world is trading, when the PPT puts in the orders, if goldman has a way of playing off of that, since these trades are "supposedly" about protecting our national interests, wouldn't it be important to get transparency of the actions of the pres working group in order to check this as well? 

I think it is time all of America knows about the the presidents working group, and questions need answering, and transparency needs to be provided.

Sun, 07/05/2009 - 21:14 | 4712 Anonymous
Anonymous's picture

The President's Working Group does not "put orders in".

It merely advises the President on what orders to put in.

The President is entirely responsible for the order, New World or otherwise.

Sun, 07/05/2009 - 21:32 | 4718 agrotera
agrotera's picture

Sorry Anonymous,   I meant, the agents that act on behalf of the President's Working Group who then execute orders.  I think it has been suggested that the primary dealers are secondary agents, and the primary agents that make the orders to execute the President's Working Group's agenda, are private funds...do i have this wrong?

Sun, 07/05/2009 - 20:52 | 4704 My cognitive di...
My cognitive dissonance's picture

Excellent job Tyler. It'll be interesting to see how this plays out tomorrow. 

Sun, 07/05/2009 - 20:58 | 4707 KidDynamite
KidDynamite's picture

sadly, that CNBC (Reuters) version ( http://www.cnbc.com/id/31750907)  of the story basically copies TD's version, complete with erroneous details "The case against Aleynikov may explain why the New York Stock Exchange moved quickly last week to stop reporting program stock trading for its most active firms.".  It should be clear to anyone who is paying attention that the NYSE absolutely did NOT move to stop reporting the program trading numbers.   TD - i have to say though - it looks like they BLATANTLY plagarized your post on this.

 

I was the one who posted these weekly PT numbers on Thursday in one of your threads, mentioning that it was impossible for GS to drop off the list.  Even if they completely withdrew their SLP participation, it's a mortal lock that they traded stock for the Russel Rebal.  There is ABSOLUTELY a story here somewhere with the NYSE PT volume this week, but I am guessing it's an error of data omission (also, note the totals on the report:  the total volume is less than the "top 15 member firms" volume - clearly f'd up).  Still - I do hope you get to the bottom of GS's sudden disappearance from the report.

 

the rest of this?  come on - it's an IP suit - it happens all the time.  For you to suggest that the NYSE or GS needs to warn the world that they may have had some intellectual property leak out does a disservice to your reporting.  Let Clusterstock be the tabloid - keep digging on the real stories.

Sun, 07/05/2009 - 21:06 | 4710 KidDynamite
KidDynamite's picture

oh - by the way - as to the question of why the FBI is involved?  Come on  - this one is easy. It's not because the loss of this intellectual property will cause the implosion of the modern financial system - despite what you zealots would like to believe - it's because the defection will potentially result in a loss of profits to Goldman.  If you mess with the FreeMasons, you get burned:  DNFWGS (Do Not Fuck with Goldman Sachs) - sure - they are more than capable of using their nationwide influence to get special FBI involvement on this.

Sun, 07/05/2009 - 21:19 | 4713 Anonymous
Anonymous's picture

What a GREAT country, where we sit back and f*ckin' EAT IT and accept lies, malfeasance, bullshiat and grand larceny and shrug and say "oh well, shiat happens".

Sun, 07/05/2009 - 21:52 | 4723 agrotera
agrotera's picture

hear-hear!  in a banana republics you may have general learned helplessness, but here in the US, we have mass public delusion fed with learned helplessness with a generous coating of hope for everything to magically change (just like the mentality of small children who have magical thinking as one main part of their thought process)

Sun, 07/05/2009 - 21:22 | 4714 Arm
Arm's picture

I am somewhat surprised by the GS reaction.  IP theft happens all the time and would very rarely involve prosecution.  In fact this guy was the VP in charge of the developers, for all practical purposes he knew (should have known) the working principles of all the moving parts.  I know coders love to blow their horn, code is important, but the underlying principles for the trade are much more so.  If this guy knew the trades, he could easily replicate them with a new set of coders.  In fact that is what usually happens, and why quant funds have a hard time keeping their edge.  Thus the reaction is unexpected.  I would love to know if there is anything else in those codes.  

 

If I was GS, I too would be very nervous about executing a code, whose weaknesses are exposed.  I would not expect that particular team to be trading tomorrow.

 

Sun, 07/05/2009 - 21:29 | 4715 Anonymous
Anonymous's picture

Oops... this had to put Cramer on the linoleum with a cheap bottle of Scotch. Reruns this week?

Sun, 07/05/2009 - 21:30 | 4716 Anonymous
Anonymous's picture

Non story

Taibbi-esque in its complete lack of understanding

Sun, 07/05/2009 - 22:03 | 4730 FischerBlack
FischerBlack's picture

LOL, at least they're writing stories instead of one line dismissals of stories.

But your whole "Complete lack of understanding" bullshit is a dead giveaway. Goldmanites are in love with how smart they think they are. I think we've got you pegged.

Sun, 07/05/2009 - 22:06 | 4732 agrotera
agrotera's picture

FisherBlack aka bankshillhunter! Awesome

Mon, 07/06/2009 - 00:19 | 4765 Cursive
Cursive's picture

Do you actually own GS or are you a paid to troll blogsites and type this crap?

Sun, 07/05/2009 - 22:11 | 4726 orange juice
orange juice's picture

o/t SP just got dumped. also noted a lot of contracts that changed hands vol. just disappeared, it registered on the total vol., depth, vap etc. then 5 min later was gone, but you can still see it if you bring up an image

Sun, 07/05/2009 - 22:23 | 4736 jm
jm's picture

OJ:

 

Not able to see the print.  What timeframe are you noting?

Sun, 07/05/2009 - 23:42 | 4752 orange juice
orange juice's picture

it was in a ~15m before i posted.  I've noticed this has happened a lot in the last two weeks but usually it occured around midnight to one est.  It's weird to me because the volume will trickle along and then *bam* a huge block (relative to local vol.) goes through, it'll get filled and then disappear like half an hour later.  I've also seen massive orders go through (40k+ contracts in the bond market) way outside of the current bid/ask that were getting filled while trading was going on at a much higher price.

Sun, 07/05/2009 - 21:59 | 4727 Anonymous
Anonymous's picture

Well Serge doesn't look like a mafia type. He looks like a typical geek.

http://www.youtube.com/user/saleyn

Sun, 07/05/2009 - 22:02 | 4728 Anonymous
Anonymous's picture

This is a fabricated story by the "victim" Goldman Sachs to distract attention from its bubble creating evil activities.

Sun, 07/05/2009 - 22:23 | 4737 agrotera
agrotera's picture

Not if it exposes a long term pattern of frontrunning instead.

Sun, 07/05/2009 - 22:49 | 4740 Anonymous
Anonymous's picture

Good thought. What if frontrunning is done by software instead of a human in the loop ? Surely, that wouldn't be considered illegal. Whom do you pin the blame on ? Do you blame Government Sachs - that would be blasphemous .. With no individual to blame GS can blame the quant and ask FBI to read the miranda rights to the thread that executes that code.

Sun, 07/05/2009 - 22:56 | 4742 agrotera
agrotera's picture

hahaha good one--so much truth in your jest!

Sun, 07/05/2009 - 22:02 | 4729 KidDynamite
KidDynamite's picture

by the way - wouldn't it make all of you foil hatters happy if GS's competetive edge in high frequency trading went away?  what's to complain about?

Sun, 07/05/2009 - 22:06 | 4733 FischerBlack
FischerBlack's picture

Futures are getting pummeled.

Sun, 07/05/2009 - 22:09 | 4734 berlinjames02
berlinjames02's picture

Looks like GS is back to the drawing board to build a new 'black box' so the NYSE can buy it again for twice the price. At least it's slowed them down for a week or so.

 

TD- thanks for breaking/following this story. Maybe you should ask the potential buyer to post the program to ZH? I would love to use the golden goose for a couple days or hours or minutes!! However, I would probably mess up the program and cause the NYSE to receive faulty orders. Maybe this explains why there have been 2 incidents of trading problems in the past month (June 12 and July 2)?

 

 

Sun, 07/05/2009 - 22:21 | 4735 Anonymous
Anonymous's picture

Holy shit...this is good stuff...

Sun, 07/05/2009 - 22:37 | 4738 KidDynamite
KidDynamite's picture

hey Tyler - since you have the ear of Goldman Sachs, I hope you are posing them the question of "what happened to your program trading volume last week?"    It's a simple question and deserves an answer. 

Mon, 07/06/2009 - 00:23 | 4766 Cursive
Cursive's picture

I second this.

Sun, 07/05/2009 - 22:49 | 4739 old felix
old felix's picture

A hundred years ago the "Masters of the Universe" started to lose control because they didn't understand what their 'experts' were doing.  Now they're losing control of their last secrets, fiat money and the asset bubble machine.  A little Champagne music please Mr. Welk. Wunnerful, Wunnerful!

The following is from

Operating Manual for Spaceship Earth

by Buckminster Fuller, E.P. Dutton & Co., New York. c1963

 

Then there came a time, which was World War I, when the most powerful out-pirates challenged the in-pirates with the scientific and technological innovation of an entirely new geometry of thinking. The out-pirates attack went under and above the sea surface and into the invisible realm of electronics and chemical warfaring. Caught off-guard, the in-pirates, in order to save themselves, had to allow their scientists to go to work on their own inscrutable terms. Thus, in saving themselves, the Great Pirates allowed the scientists to plunge their grand, industrial logistics, support strategy into the vast ranges of the electro-magnetic spectrum that were utterly invisible to the pirates.The pirates until then had ruled the world through their extraordinarily keen senses. They judged things for themselves, and they didn’t trust anyone else’s eyes. They trusted only that which they could personally smell, hear, touch, or see. But the Great Pirates couldn’t see what was going on in the vast ranges of the electro-magnetic reality. Technology was going from wire to wireless, from track to trackless, from pipe to pipeless, and from visible structural muscle to the invisible chemical element strengths of metallic alloys and electro-magnetics.

The Great Pirates came out of that first world war unable to cope knowledgeably with what was going on in the advanced scientific frontiers of industry. The pirates delegated inspection to their "troubleshooter" experts, but had to content themselves with relayed second-hand information. This forced them to appraise blindly-ergo, only opinionatedly‹ whether this or that man really knew what he was talking about, for the G. P.’s couldn’t judge for themselves. Thus the Great Pirates were no longer the masters. That was the end. The Great Pirates became extinct. But because the G. P.’s had always operated secretly, and because they hoped they were not through, they of course did not announce or allow it to be announced that they were extinct. And because the public had never known of them and had been fooled into thinking of their kingly stooges and local politicians as being in reality the head men, society was and is as yet unaware either that the Great Pirates once ran the world or that they are now utterly extinct.

Though the pirates are extinct, all of our international trade balancing and money ratings, as well as all economic accounting, in both the capitalistic and communistic countries, hold strictly to the rules, value systems, terminology, and concepts established by those Great Pirates. Powerful though many successors to the Great Pirates’ fragmented dominions may be, no one government, religion, or enterprise now holds the world’s physical or metaphysical initiatives.


When, as we have seen, the Great Pirates let their scientists have free rein in World War I the Pirates themselves became so preoccupied with enormous wealth harvesting that they not only lost track of what the scientists were doing within the vast invisible world but they inadvertently abandoned their own comprehensivity and they, too, became severe specialists as industrial production money makers, and thus they compounded their own acceleration to extinction in the world-paralyzing economic crash of 1929. But society, as we have seen, never knew that the Great Pirates had been running the world. Nor did society realize in 1929 that the Great Pirates had become extinct. However, world’ society was fully and painfully aware of the economic paralysis. Society consisted then, as now, almost entirely of specialized slaves in education, management, science, office routines, craft, farming, pick-and-shovel labour, and their families. Our world society now has none of the comprehensive and realistic world knowledge that the Great Pirates had.


http://www.bfi.org/node/422

Sun, 07/05/2009 - 22:51 | 4741 Anonymous
Anonymous's picture

Way too funny

Sun, 07/05/2009 - 23:01 | 4743 Anonymous
Anonymous's picture

I wish the FBI worked this fast before 9-11.

Sun, 07/05/2009 - 23:40 | 4751 Anonymous
Anonymous's picture

The trades had trouble settling because the trades weren't there. Goldman was phantom trading with a stupid box in a closet that was set up to directly interact with Goldman. The stupid box in the closet was the market. Goldman was in fantasy land and got frontrunned by the stupid box and Goldman is left holding air. The ultimate naked short (or TUL, as I like to call it)

I already called for Goldman to not exist in August.

Massive fall in markets. Sub 1,000.

Sun, 07/05/2009 - 23:43 | 4753 Printfaster
Printfaster's picture

Explains the queer 15 minutes added on Thursday.  Sompins up.

Tyler, any chance this is international?  Something east of Finland?

Or should I ask Marla?

 

Sun, 07/05/2009 - 23:45 | 4754 Printfaster
Printfaster's picture

Oh yes, and Serge is a canard.  The real leak no one knows about.  Like the fake bearer bonds in Chiasso.

I feel an old Dylan song coming on.  Do you Mr Jones?

 

Sun, 07/05/2009 - 23:58 | 4761 agrotera
agrotera's picture

Strange, that was my first thought when i read the story....the question that ran through my head was i wonder how much goldman paid sergey to do this, and why this expensive diversion?

Sun, 07/05/2009 - 23:48 | 4755 OSR
OSR's picture

VP or not, Aleynikov is the real deal--he's got several patents for his algorithms (although none assigned to GS).

Sun, 07/05/2009 - 23:48 | 4756 abhinavkapur
abhinavkapur's picture

Tyler,

Great post on a sure-to-watch story. Amazing how a piece of finance can become a matter of national security. Especially telling is the response time by the FBI. Maybe they realized the threat to national security and acted accordingly? I'm not familiar with the usual response time for high priority cases, so I'm not sure how it compares.

Keep up the good work ZH, I'll be sure to by some schwag soon.

Sun, 07/05/2009 - 23:49 | 4757 Anonymous
Anonymous's picture

He seems to have some open source programs out there. Hmm, I believe him, just a accident, copying his code.

Sun, 07/05/2009 - 23:57 | 4760 agrotera
agrotera's picture

.

Sun, 07/05/2009 - 23:59 | 4762 dnarby
dnarby's picture

That the FBI jumped on this means one of two things:

 

1.  They, or a good portion, are in the pocket of GS.

 

2.  The Russians want it.

Mon, 07/06/2009 - 00:04 | 4763 Anonymous
Anonymous's picture

Don't stop TD......you got tha MAD SKILLZ

Keep it coming

Mon, 07/06/2009 - 00:39 | 4767 Anonymous
Anonymous's picture

OK, how about this one for Marla?

Serge is the one that found a programming leak that got outside the country and fouling up GS program trading. They inserted some code to help track down the competing jedi knights. He was then detailed to Getco to help them track it down for the Fed trades that Getco was running.

Serge is really a ferret, not a rat. Got to get the animal designations down right.

Oh these black ops stories are so much fun. You can write ten novels on the little bit of the iceberg that surfaces.

Mon, 07/06/2009 - 01:02 | 4771 Printfaster
Printfaster's picture

OK Marla, just to show you how much I love you, how about this one.

Serge is not that sharp.  What he does is send the work to Russia and it gets done there under the best minds in Russia.  They ship the work back to him and he kicks back his salary.

GS and the FBI found out Serge did this when someone in Russia created an anti missile for the GS missile.

Am I getting warm yet?

 

Mon, 07/06/2009 - 01:11 | 4772 My cognitive di...
My cognitive dissonance's picture

 G.S...compromised? What if. Does it change things at the July G-8?

It has an odd mix of Russian, German and English involved.

Mon, 07/06/2009 - 01:21 | 4773 Printfaster
Printfaster's picture

Hey Tyler

I notice that there are twice as many comments over at blogspot as here.

Is there anyway to have one ship instead of two?

Mon, 07/06/2009 - 01:27 | 4776 Marla Singer
Marla Singer's picture

Soon.  Soon.

Mon, 07/06/2009 - 01:27 | 4775 Anonymous
Anonymous's picture

they are showing the "Born Identity" on CNBC. Finny coincidence.

Mon, 07/06/2009 - 01:39 | 4777 Anonymous
Anonymous's picture

I'm a former wall st. programmer that also knows a bit about security.

This guy made $400k a year and didn't know to clear his bash history? I find that HIGHLY dubious. Why the hell would he use the internet to transmit something like this? Just put it on a thumb drive and fed ex it.

Mon, 07/06/2009 - 02:00 | 4780 Socrates
Socrates's picture

Let's make this a Clancy novel....he was SUPPOSED to get caught!

Let the speculation begin.

Socrates

Mon, 07/06/2009 - 02:03 | 4781 Anonymous
Anonymous's picture

He is suppose to get caught while the REAL code is put somewhere else. That 4:15 extension on Friday? How convenient.....

Mon, 07/06/2009 - 02:09 | 4784 Got2balls
Got2balls's picture

I think most GS investors will start cashing out soon. Just my 2 cents.

Mon, 07/06/2009 - 02:33 | 4789 hedgnome
hedgnome's picture

Just imagine the atmosphere of suspicion this boondoggle must create between colleagues at GS. Then again I dont see how they would trust eachother anyways.

Mon, 07/06/2009 - 03:07 | 4790 Anonymous
Anonymous's picture

not to shit on it all, but I do have the feeling Barack Obama will do the best Robert Walpole since Walpole did himself, and allow for GS to get away with WHATEVER they want to?

Mon, 07/06/2009 - 04:23 | 4792 Anonymous
Anonymous's picture

How about if GS wanted to illustrate that anyone would believe anything about their company - see RS article - so set up cold war style bullshit caper with ballroom dancer guy that turns out to give the word ridiculous a good name and which then takes the heat off them when it all falls apart?

Mon, 07/06/2009 - 05:55 | 4794 Anonymous
Anonymous's picture

Could the code concerned involve very efficient packets inspection and filtering functions to capture order data stream in the NYSE's datanetwork. The early captured of the order data thus could be fed to computer application that would front run the order data.

Mon, 07/06/2009 - 06:02 | 4795 Anonymous
Anonymous's picture

Out-f'ing-standing!!

Mon, 07/06/2009 - 06:22 | 4796 Arm
Arm's picture

Let's party like it's 1932

http://www.youtube.com/watch?v=5D-13V7Zqwk

Mon, 07/06/2009 - 06:57 | 4798 kilroy
kilroy's picture

looks like this guy is: just another perl hacker

 

http://search.cpan.org/~randir/Devel-Assert-0.01/

 

sorry, couldn't resist.

 

maybe he didn't want the source code to steal anything, but he wanted to be able to review/re-use logic that he wrote (which probably no longer belongs to him as he wrote it while working for GS so it is now their IP). Regardless, a huge no-no ftp'ing off a server like that.

Mon, 07/06/2009 - 07:27 | 4805 Anonymous
Anonymous's picture

If only the FBI were to tackle cases of national security
----------------------------------------------------------
What makes you think that this isn't viewed as a national security issue? After all, we have the special relationship of GS with the federal governement and their special role at Nyse.

Mon, 07/06/2009 - 07:58 | 4808 hedgnome
hedgnome's picture

Arm that is pure freaking gold.

Sadly I doubt its that simple.

Mon, 07/06/2009 - 07:59 | 4810 Anonymous
Anonymous's picture

Why is this news not on WSJ or MW or Bloomberg. Why only on a blog on reuters ?

Mon, 07/06/2009 - 08:38 | 4813 Anonymous
Anonymous's picture

http://seekingalpha.com/article/146543-7-for-overnight-money-someone-is-...

7% for Overnight Money? Someone Is in Trouble

"Someone" paid 7% for overnight money on the Fed Trading system last night (that "someone" was a bank, by the way.)

This will be claimed to be "ordinary" end of quarter distortions for closing the books.

Don't believe it for a second.

Let's put this in plain language: The discount window is open for any bank that has good collateral at less than 1/10th of that interest rate.

Therefore there is absolutely no reason for any institution to go into the Fed Funds market for overnight money at 7% unless they have no good collateral to post against it and thus cannot go to the window.

So who is it? No idea. And while the amount borrowed overnight at that rate may be tiny, that's not the point - the point is that the last time we saw anything that dramatic was just before it all went "boom" last year.

Yes, I'm sure that end-of-quarter had something to do with it. In fact, I'd be stunned if it did not.

However, as I noted, there's no reason for anyone to pay that if they have good collateral to post at the discount window, given that you can do so for 1/10th or less the price.

Keep your nose to the ground and your eyes open.

Someone (or more than one someone) is in trouble

Mon, 07/06/2009 - 12:23 | 4823 Cindy.Dies.In.T...
Cindy.Dies.In.The.End's picture

Tyler to answer your question, Sure the AG could subpoena or informally request info from GS, but it would most likely be under a protective order, or sealed. I'd watch out for a motion to quash.

 

In house counsel and his flock won't get any sleep tonite or thereafter if this breaks big.

Mon, 07/06/2009 - 12:29 | 4824 Cindy.Dies.In.T...
Cindy.Dies.In.The.End's picture

Tyler: to answer your question, it depends. There may be an "informal process" with a protective orderto keep it on the QT, or a subpoena might go out. Keep an eye out for a motion to quash by GS, perhaps.

 

Either done under seal or a protective order--you won't see crap.

Mon, 07/06/2009 - 14:24 | 4831 Anonymous
Anonymous's picture

the Pirate Mother Ship...

Having tools that allow you to make ultrafast decisions based on instantaneous data from multiple markets certainly seem to give you an unfair advantage. Making a boatload of money has always been possible due to differential "speed". Now how are we supposed to level the playing field? Can I port it to an iphone app?

Mon, 07/06/2009 - 14:53 | 4836 Anonymous
Anonymous's picture

Old Felix - thanks for the excerpt, but if you hadn't told us it was Bucky, I would have sworn it was Philip K. Dick!

And TD - "who very likely will not be interested in proving the efficient market hypothesis?" Nearly sprayed the Diet Coke over the keyboard on that one! Beautiful!

Cramer and Erin just discussed this on CNBC - Cramer dismissed it as nothing, and dissed Fischer Black at the same time. What a short fingered dwarf.

Mon, 07/06/2009 - 16:19 | 4850 Anonymous
Mon, 07/06/2009 - 16:31 | 4852 MyKillK
MyKillK's picture

It really blows my mind that there seem to be so many people who are trying to write this story off as a big nothing-burger.

 

Program trading accounted for 49% of all trading on the NYSE a couple weeks ago. Don't forget that the report, according to the NYSE, "accidentally" left off GS in its entirety, the biggest player! When the NYSE "corrects" the PT report, it'll almost surely be over 50%.

 

Tyler pointed out that GS accounts for as much as 60% of all program trading alone. 60% of ~50% would be about 30%. How could anyone possibly claim that the compromising of computer code that single handedly trades ~30% of all NYSE volume is a non-story?? Who knows how much of the dark pool volume these GS systems are trading as well...

 

If that code is as comprehensive as the (admittedly vague) reports make it out to be, and the code has been successfully distributed to outside parties, this could lead to a massive market crash in a matter of milliseconds. Does anyone know if these ultra high frequency trading platforms are even faster than the circuit-breaker mechanisms?

 

And don't listen to anyone, including the NYSE itself, who is trying to claim that GS being left off the last report was just a "spreadsheet monkey" accident. You'd have to be delusional to think that information like that is manually copied into a table...jesus christ this is 2009. GS was either manually removed for whatever reason, or, as many have speculated, GS halted its PT operations because of the code getting out.

Mon, 07/06/2009 - 16:30 | 4856 FischerBlack
FischerBlack's picture

Of course, today, as Jim Cramer was talking about the GS story, he invoked me by name -- 2:08 in the below video.

 

http://www.cnbc.com/id/15840232?video=1173252890&play=1

Mon, 07/06/2009 - 16:56 | 4877 Anonymous
Anonymous's picture

Thought you passed away - welcome back...
http://en.wikipedia.org/wiki/Fischer_Black

Mon, 07/06/2009 - 16:40 | 4862 Anonymous
Anonymous's picture

I wrote previously that my contact revealed to me that this specialized trading vehicle is the only way wall street/hedge funds make money. He tells me that they all know that it will end soon in a spectacular bust. he can be hired in a nanosecond on wall street or anywhere in the world. These algorithms allow the goldmans to earn billions yet it is highly risky in the aggregate. They trade massive blocks; sometimes against themselves. This leaves them potentially exposed to hundreds of billions in risk that they cannot exit their strategies. They dont have the capital for these trades! The mentality is that the US Feds will back them up because (in his own words) goldman is at the top of the food chain. Now these algorithms are fairly prevalent but not universally available (hence the investigation of the Russian trader). These alogorithm trading departments could soon be trading the same algorithm and hence catastrophe. It will make the 500 billion US$ AIG exposure look like spare change.

Mon, 07/06/2009 - 16:48 | 4869 MyKillK
MyKillK's picture

Yes, you really nailed it. The massive danger of having multiple players trading with the same algorithms is paramount. It's not as simple as GS having competition and levelling the playing field. It's more along the lines of Mutual Assured Destruction...it's a bit ironic that the fellow involved is a Russian!

Mon, 07/06/2009 - 17:10 | 4881 Anonymous
Anonymous's picture

It just does not matter. They wanted s&p 900 today and pushed and puhed even after hours to get it. I have day traded for many years and in the last 3 months can not make money. Tryed an experiment today sent in a short on AXP 40 Shares and watched normal action. then sent in short of 4000 shares and within seconds stock jumped 3 ticks forcing me out with a loss. It is as if they can see the trade placed before anyone and force and push to grab the money. I am threw playing with these criminals. Taking the next few months off and see what is what. Why did GS STOCK GO UP TODAY? All day long could be bought for less and then last hour the push was on. A word of warning you can not compete with this action they know your every move and game you from every angle. We all know s&p earnings 50 usd max = 600-750 s&p but ppt is proping. how long will this go on? opinions please.

Sat, 07/11/2009 - 21:40 | 6400 Anonymous
Anonymous's picture

Agree 100%, it was never a fair game, but these days your money is far safer sitting at a black jack table in Vegas.

Mon, 07/06/2009 - 17:26 | 4883 Anonymous
Anonymous's picture

The goldman sachs trader Russian? Surprised? The majority of PhD Maths and Physics graduates are eastern/central europeans with a few Indians and Chinese. You will barely find a single American in one of these programs. (Now you know why the Us is in decline.) In fact they refer to Simmons' group over at renaissance as the "Russian Mafia' as they have hired every available russian Physicist willing to sell out.

Mon, 07/06/2009 - 17:41 | 4888 Anonymous
Anonymous's picture

My Russian contacts also tell me that it is not coincidental that Obama is in Russia at the same time that the Russian are about to announce discovery of the largest oil field in the world located in Siberia. Oil and alogorithms. Well, the Russians do have the best schoolin'. meanwhile, the Harvard endowment fund has lost billions courtesy of their algorithm traders.

Thu, 07/09/2009 - 11:03 | 5550 Anonymous
Anonymous's picture

And in Russia, you can pay to have your grades inflated....

Mon, 07/06/2009 - 18:41 | 4901 MyKillK
MyKillK's picture

Does your source know who the intended recipients for this stolen code were?

Tue, 07/07/2009 - 02:20 | 5000 Kinbote
Kinbote's picture

Isn't the file sharing service Rapidshare based in Germany? The affadavit says

the server he uploaded to was based in Germany. Is it possible that

is where he uploaded his encrypted tarball? Too bad searching Rapidshare sucks,

I haven't been able to find it. :P

Thu, 09/03/2009 - 00:59 | 57133 Anonymous
Anonymous's picture

Check out this link.

I was contacted by the White House a few weeks ago.

http://www.24-7pressrelease.com/press-release/white-house-curious-about-...

Richard Keane, narrator Stock Shock

http://www.twitter.com/stockshockmovie

Thu, 06/09/2011 - 17:20 | 1355798 sun1
sun1's picture

Its one of the good platform for awareness of people. Keep sharing such stuff in the future too. xbox 360 s

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