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Gasparino Clarifies Liquidity To Attacking Bloggers Who Bother GE
CNBC seems hell bent on clarifying what liquidity is. Oddly there was no commercial for JPM's Highbridge or Sigma X to follow the segment. Charlie - one sympathizes with having to butter up Van Praag. However, as you are digging into the other side of the story, can you ask your buddy Lucas just why is it that Goldman had to get a Fed VaR exemption and go with the toothless SEC as its risk regulator. This would make for some truly insightful reporting.
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Charlie has been compromised.
ROTFLMAO
i just listened to TYLER on Bloomberg Radio. Site seems to be avoiding this. What's up? you weren't that terrible.
do you have a link? trying to get one
did they run fight club again or did you actually come out of your oxygen bubble?
'on behalf of their clients'??????? then why the fuck doesnt it show up on the NYSE data
Who do you blame? Gasparino? Goldman? Bernanke?
Keep in mind, up to 2008 all of what is transpiring now in 'Financial- world' was also taking place, just not so visibly. The question is how blatant does the fraud needs to get before there is action?
I guess never. America 'needs' GS as a distraction, just like it needed Bonnie and Clyde.
In this case, I blame Charlie. He had an opportunity to break-out from his Ambac rumoring personna and build some credibility.
Instead, Goldman said, "Hey, Chuck, we'll be glad to feed you some more breaking news / insider trades for you to release at 3:30p.m. if you'll just keep your fucking mouth shut."
Another journalist sells their soul for being fed exclusive info to report. Not surprised a bit Charlie did it. He's always had a hardon to scoop anything about the elites.
Bernanke and Goldman by far. Duh. We know the fraud exists, but action? No such luck.
good finance articles
opinion articles
stock market blog
finance articles
finance opinions
When Goldman says they are 90% trading for clients isn't that an agency trade? And Principal would be on the firm's behalf? And hasn't ZH been posting an absurd amount of principal trading by GS?
I'm trying to understand all this mess, and what gasparino is saying doesn't seem to add up.
also, the math problems to post a comment are confusing. and I like to think i am good at math.
i concur. I don't have enough fingers to complete most of these questions
Never trust a man who can count to 1024 on his fingers.
--CS
lmao
My guess is that a large portion of the "Principal" trades that Goldman advertises in the NYSE Programs Report are actually equity swap transactions. An equity swap is where a client want "the economic performance of" say IBM. But they don't actually buy the stock. Goldman sells them a contract guaranteeing the performance of the stock. Meanwhile they go out and hedge their risk in the contract by buying the stock for their own account, which they will then sell when the client wants to sell. Most hedge funds, especially the ones that trade a lot prefer this arrangement, supposedly it simplifies that back office operation on their end. Goldman has the most dominant electronic trading offering of any sell-side firm.
Perhaps. But when you are conducting a billion shares of transactions a week out of your principal account (we're talking NYSE only, mind you), I don't think you can even come close to reconciling this. Unless you can name me a "client" that does 40% of all NYSE volume activity doing equity swaps. I think "large portion" is stretching it a bit.. and a pretty wild guess at that.
Look, even Goldman admits to its high volume activity as "liquidity providing" for market participants. They make money providing supplemental liquidity for the NYSE whether they are prop trading or not-- they are getting paid on the volume and the spread. And they pretty much can't deny the extent they've been doing HFT. It's a sweet deal, especially when low cost taxpayer money is there to be borrowed. Goldman doesn't refute any of this.
Since our good GS friends turned in a cool $3 billion plus this quarter, it might not be to difficult to narrow down where those profits are going. We've see the quarterly press release, but inspecing the 10-Q might reveal more about just how much prop trading is filling the coffers.
My "guess" would be "a lot'.
Gas-bag-arino looks half tranquilized. ...either he had a rough night or was short the market last week.
WASHINGTON—Some of the biggest recipients of the government's $700 billion financial bailout, including Bank of America and Morgan Stanley, increased their spending on lobbying in the second quarter as Congress began to look closely at revamping the rule system for financial institutions.
http://www.breitbart.com/article.php?id=D99IE2BO0&show_article=1&catnum=4
Alrighty then.
Does Goldman need to borrow money cheaply from the Fed to trade on behalf of clients?
Goldman is making money trading on behalf of clients. And they do not need to borrow money from the Fed to trade on behalf of clients. So if anything, being profitable trading for clients is an argument for cutting their access to Fed funds, especially if filling clients' orders really accounts for 90% of their trading activities as they claim.
agency - acting as broker by completing trade on behalf of client in the markets.
principal - acting as dealer by selling from or buying and adding to firm inventory/position in the security, not necessarily on behalf of clients.
in GS's case, I would say that principal trading is rarely, if ever, on behalf of clients.
Tyler, When do we get to start opening up chapters nationwide so all can meet and discuss mechanisms for advocating and demonstrating for change. All this stuff online is easily dismissed by politicians. However, when one starts shouting at them from in front of their offices....people start to listen. Either lead, follow, or delegate this task. I hope you actually WILL lead in this task. Your BLOG is opening up peoples EYES to the rampant corruption in our government and how it has destroyed our financial system and destroyed peoples lives. Be happy to help...
-Regards
Silence
concur.....pressure needs to be applied to
crooked goldman sachs employees in congress
.......which is just about all of them....i
would love to see chris dodd, barney frank,
ringel, pelosi, and reed all in orange jump suits.
These two comments are interesting:
Gasparino: "One of the reasons the Fed has given them this designation [BHC] is so they can trade, they can make some money trading, and that will provide liquidity for their clients."
Gasparino: [Goldman says] "Listen, we don't need deposits to borrow cheaply, we do have the Fed, we do have the access to the discount window…"
In essence, Gasparino reports that the Fed has hired Goldman to provide liquidity, and in return Goldman gets to borrow for nothing at the discount window and reap profits from HFT. This certainly jives with Tyler's reporting on Goldman's portion of program trading, Goldman's involvement in SLP, Goldman's angst about Serge and the FBI's rapid response.
Who needs depositors when the Fed has your back? Anyone wonder now why the market just goes up? Anyone wonder now why Goldman has a record quarter? Calling this a clusterfuck would give it unwarranted cachet.
FYI - Later on Gasparino said that he was being attacked by bloggers for supporting Goldman. :)
Kneale?? lol remember
Goldman's noble "providing liquidity" cause is the same one that Ken Griffin at Citadel was touting to Congress last year. He was only down ~40% for the year.
That's because providing liquidity to the market is a risky business. It is basically a zero sum game with a finite amount of money to be made between all of the liquidity providers. The more there are, the less each one can make. The total amount of money to be made ebbs and flows depending on demand for liquidity, which comes from investors who need or want to trade in a hurry. Most individuals who trade think the stock market is like a vending machine, you put the money in, the stock just comes out of a vacuum. Actually, any time you want to trade, a real person or business has to take the other side of your trade. People who want to do very large trades have to pay a lot for liquidity, to a block dealer like goldman, or to HFT's who provide it in very tiny increments. It's not a conspiracy. Liquidity providers are the only reason anyone can seriously consider investing in equities, and the fewer there are, the worse off the average investor is. Imagine if equities were like real estate where you pay a 6% fee to a broker any time you want to trade. And to those who have a problem with the math questions, please give up trying to understand.
Providing liquidity certainly is a risky business, no doubt. So is taking massive counterparty risk with AIG CDO's.
My sense is that our "friends" at Goldman are covered as far risk management goes, if recent history provides a guide. A half cent of incentive from the NYSE isn't a bad carrot to overlook the risk taking, either.
With a lot of IBs out of the large volume block business, it make one wonder if Goldman is also getting higher spreads on uber-volume HFT activity.
minus (-29) equals 25
what the hell kinda question is this????????
christ, I trade stocks, I am not a freekin math Phd
I am gonna have to get it wrong 3 times before I get an easy one.
Damn integers
If I understand this correctly... GS provides liquidity for the pension funds and mutual funds who "want to trade", and the pension funds and mutual funds, in return, give GS $3-billion a quarter. At that rate, can anybody work out how long it will take for the pension funds and mutual funds to go broke? Should baby boomers be concerned?
With 24 Trillion in Gov't backstops baby boomers ought to be plenny concerned!
I think the Math question to post filters out the Mozilo types
I didn't realize that Goldman was such a chariable organization. Where can I donate?
Liquidity: a bid of size, existing solely in a dark pool and for less time than a Higgs boson at the Hadron Collider, aimed at both extracting a prefered customer from an uncomfortable position as well as preventing anything in the way of true price discovery in the market, fully backstopped by the full blind faith and to the discredit of the US taxpayer, and which yields not only kudos and thanks to the Almighty Godman Sacrements, but also a quarter cent rebate per share from one of the many in the flock who bow to 85 Broad St. five times a day.