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Goldman Admits To Frontrunning Clients Through Its Prop Desk

Tyler Durden's picture


The topic of Goldman frontrunning clients using its prop desk, which has long bothered Zero Hedge, and which in the past received Goldman's vehement refutation, seems to have resurfaced, and to have proven our initial speculations correct. Jane Lattin, assistant to Thomas Mazarakis, head of fundamental strategies, sent out an email to clients earlier, notifying them that the firm in the past has traded ahead of them in its Fundamental Strategies Group, aka its Prop Trading desk, which is, by definition, frontrunning: "The Fundamental Strategies Group is a group of cross-capital structure
desk analysts employed by our Securities Divisions to assist our
traders. They develop Trading Ideas in conjunction with traders. We may trade, and may have existing positions, based on Trading Ideas before we have discussed those Trading Ideas with you. We
may continue to act on Trading Ideas, and may trade out of any
position, based on Trading Ideas, at any time after we have discussed
them with you. We will also discuss Trading Ideas with other clients, both before and after we have discussed them with you." This answers our repeated queries from July as to whether Goldman is legally front-running its clients for its own prop positions.

Full Goldman letter:

Dear client,

We may from time to time discuss with you Trading Ideas generated by our Fundamental Strategies Group. As part of our commitment to managing conflicts of interest appropriately, this message is to explain how the Fundamental Strategies Group interacts with other parts of our organisation and how that impacts on the Trading Ideas.

The Fundamental Strategies Group is a group of cross-capital structure desk analysts employed by our Securities Divisions to assist our traders. They develop Trading Ideas in conjunction with traders. We may trade, and may have existing positions, based on Trading Ideas before we have discussed those Trading Ideas with you. We may continue to act on Trading Ideas, and may trade out of any position, based on Trading Ideas, at any time after we have discussed them with you. We will also discuss Trading Ideas with other clients, both before and after we have discussed them with you.

You should not consider Trading Ideas as objective or independent research or as investment advice. When we discuss Trading Ideas with you, we will not be acting as your advisor (including, without limitation, in relation to investment, accounting, tax or legal matters) and the provision of Trading Ideas to you will not give rise to any fiduciary or equitable duties on our part. We will not be soliciting any action based on Trading Ideas and it is your responsibility to seek appropriate advice.

Any opinions that we express when we discuss Trading Ideas with you will be our present opinions only and we will not have any obligation to update you in the event of a change of circumstances or a change of our opinions. We prepare Trading Ideas based upon information that we believe to be reliable but we make no representation or warranty that such information is accurate, complete or up to date and accept no liability, other than for fraudulent misrepresentation, if it is not.

If you have any concerns about any of these matters, please do not hesitate to contact us.

Kind Regards

Jane Lattin

Assistant to Thomas Mazarakis – Head of Fundamental Strategies

For those who may not recall, Zero Hedge queried the following on July 1, 2009:

Everyone who is anyone on Wall Street has at some point used the Goldman 360 portal whether for research, news, keeping a track of prime brokerage portfolio or, disturbingly, for trading, via the REDI Plus 9.0
platform (now loaded with enhanced algo trading features to make life
for you, dear soon to be frontran Goldman client, so much easier). A
second widely accepted Wall Street concept is that a disclaimer is the
last thing that anyone reads, if ever. Yet after taking a close look at
the Goldman disclaimer for the 360 portal, which is an umbrella waiver or all downstream websites, including REDI, one discovers the following gem:

Monitoring by GS: Your use of the products and services on this Web site may be monitored by GS, and that the resultant information may be used by GS for its internal business purposes or in accordance with the rules of any applicable
regulatory or self-regulatory organization.

One second: by
using Goldman 360 a client voluntarily allows Goldman to provide
keystroke by keystroke data of everything the client does, even if that
includes launching trades via REDI, to Goldman for the internal
business purposes. The third thing everyone on Wall Street agrees on is
that "internal business purposes" usually (and in Goldman's case,
almost exclusively) means proprietary trading.

Are Goldman 360
clients (in)voluntarily signing off a release to be front ran by
Goldman on any portal-based trade? Could Goldman please clarify just
what "internal business purposes" means in the context of this
overarching disclaimer, and also whether Goldman has ever actually used
360 submitted information in the decision making process of its prop
trading desk? Lucas Van Pragg: the floor is yours.

several readers have presented some other Goldman Sachs and Spear,
Leeds and Kellogg form documents that contain an even more crypitc
warning in section 4(f) in Use Of Services:

You acknowledge that we may monitor your use of the Services for our own purposes (and not for your benefit).
We may use the resulting information for internal business purposes or
in accordance with the rules of any applicable regulatory or
self-regulatory body and in compliance with applicable law and

NOT FOR YOUR BENEFIT? I mean, come on, how more clearer does it need to get.

The post promptly solicited the following response from Goldman Sachs:

Dear Mr Durbin [sic]:

This is in response to your recent blog about
our web site disclaimer. It is quite usual for websites to have
disclaimers that refer to the monitoring of site usage. Most web sites,
including yours we noticed, track usage by their visitors. This is
primarily used for marketing and to help inform decision about
enhancing content.

Your suggestion that we monitor our web site to facilitate front-running is untrue and offensive.


Ed Canaday
Vice President
Goldman, Sachs & Co.

Ed Canaday
Office: xxx-xxx-xxxx
Cell: xxx-xxx-xxxx

This was followed by Marla's counterresponse:

Dear Mr. Canady:

Thanks for your quick reply.

For your
future reference, the correct spelling for "Tyler" is "Tyler Durden."
(A re-viewing of "Fight Club" might be in order, but I know Goldman VPs
probably rarely have time for such luxuries).

Obviously, we want
to make sure we have our facts correct so I am pleased to see your
email. Perhaps you can lay to rest some questions we have for the

1. Indeed, data use disclaimers are a common feature on
most websites. Still, I think you will agree that where usage patterns
are so directly linked with potential investment activity and customer
intentions it is a bit unusual not to have a more explicit description
of the kind of use Goldman intends here. This is particularly so where
customer attitudes are concerned, and appearances are important.
"Internal business purposes" is a bit vague in this respect, don't you
find? This seems unlike Goldman, usually a firm known for very careful
attention to detail. Why is a more specific description of such
purposes not included? I would think that easier than explaining the
matter repeatedly to random bloggers (and customers).

2. I
notice that you have not taken the opportunity to address similar
disclaimer language in the form contracts used by Goldman and Spear,
Leeds and Kellogg. Was this omission intentional or an oversight? (For
your reference you can find the language we are curious about here: "You acknowledge that we may
monitor your use of the Services for our own purposes (and not for your
benefit). We may use the resulting information for internal business
purposes or in accordance with the rules of any applicable regulatory
or self-regulatory body and in compliance with applicable law and

Not to be a stickler, but the drafting here seems quite careless.
the differing terms between the website disclaimer "...the resultant
information may be used by GS for its internal business purposes OR in
accordance with the rules of any applicable regulatory or
self-regulatory organization...." (emphasis added) and the form
disclaimer "...we may use the resulting information for internal
business purposes or in accordance with the rules of any applicable
regulatory or self-regulatory body AND in compliance with applicable
law and regulation...." (emphasis added).

As a reformed legal
professional myself, this seems a bit sloppy to me. Can you comment on
the language and in particular why a more explicit definition of
"internal business purposes" is not included?

3. I also notice that you do not specifically address our question:
Goldman has ever actually used 360 submitted information in the
decision making process of its prop trading desk?
" Could you give us a
response there? Perhaps you might augment that to include the decision
making process of any Goldman investment decisions rather than just the
prop desk and all information Goldman collects about 360 users.

lastly, while we have your attention, we were hoping you could make a
statement for Zero Hedge and its readers on the long discussed topic on
our pages regarding Goldman Sachs' effective monopolization of
Principal Program Trading in the New York Stock Exchange. In other
venues you have attributed this domination solely to Goldman's
selection as the one and only SLP currently used by the NYSE. Would you
care to elaborate how that fits in with the NYSE's upcoming changes to
their DPTR (
specifically as
pertaining to J and K account type indicators. Was Goldman in any way
consulted in the making of this decision by the NYSE? Did Goldman have
any direct communication with the SEC on this issue?

Thanks for
your help with these matters. As an aside, if there is a contact at
Goldman we can routinely direct these questions to that might be
helpful for both of us going forward. I look forward to hearing from

Best Regards,

"Marla Singer"

Zero Hedge

We now consider this topic closed.

h/t Beached Whale Account


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Tue, 01/12/2010 - 13:33 | 191181 deadhead
deadhead's picture

I'm most confident that Mary Schapiro has already looked into this, probably found that all is "okey dokey, smokey", hence the nice GS letter to their sucker clients.


Tue, 01/12/2010 - 14:10 | 191232 Cognitive Dissonance
Cognitive Dissonance's picture


You got junked! Does this mean we have Shapiro lovers among us or do some GS clients prefer not to be called a "sucker" by deadhead? Whatever, welcome to the junked crowd.

My view is that as long as you're informed that you're getting screwed, it's not really a screwing, is it? Hence the letter. Consider yourself informed and the activity disclosed.

Tue, 01/12/2010 - 14:23 | 191252 deadhead
deadhead's picture

i think it was the "sucker" client.....I actually thought a moment about leaving it out...

i can see where a client of GS would not like that comment, unless it was one of those that bought some of those AAA CDO's while GS was shorting the piss out of them.


Tue, 01/12/2010 - 15:17 | 191330 Ruth
Ruth's picture

I consider it an honor to be junked, as long time readers are informed, junking we know hits a nerve of truth.  AND as long time readers we can observe on which side of the junk scale you belong, esp. when they junk and show their disdain.  But if I could I'd push your comments to the top, as in cream but alas no "I love this comment" button exists.  FOLKS WAKE UP!  YOU HAVE JUST BEEN SCAMMED!


Bobble, Bobble. 

Tue, 01/12/2010 - 15:20 | 191332 MsCreant
MsCreant's picture

I honored you Ruth. [insert polite bow here]

Tue, 01/12/2010 - 15:22 | 191337 Cognitive Dissonance
Cognitive Dissonance's picture

I honored you MsCreant for your honoring of Ruth.

Tue, 01/12/2010 - 15:38 | 191393 Ruth
Ruth's picture

You guys are GREAT!  And I honor back!

Tue, 01/12/2010 - 15:46 | 191412 WaterWings
WaterWings's picture

Junk Train: get on it!

We're following DH wherever he gooooooooes. Don't forget to Junk yourself once aboard!

Tue, 01/12/2010 - 16:28 | 191472 WaterWings
WaterWings's picture

Does the Federal Reserve have a disclaimer? How about a tagline:

Frontrunning planet Earth since 1913

Ben Bernanke's Federal Reserve announced Tuesday that it made a record profit of $46.1 billion last efforts to rescue the country from the worst economic and financial crisis since the 1930s

No conflict-of-interest-stone left unturned!

Tue, 01/12/2010 - 16:35 | 191486 Hephasteus
Hephasteus's picture

LOL. You guys are pissing off the right people. Way to get junked!!

Tue, 01/12/2010 - 16:45 | 191503 JohnKing
JohnKing's picture

<junk check>

Fundamental Strategies Group - Like blocking and tackling, it's important to stick to the fundamentals, our fundamental role is to pick your pocket. Thank you for making us a success. We promise to stick to the fundamentals.

</junk check>

Tue, 01/12/2010 - 16:48 | 191506 Anonymous
Anonymous's picture


I am Chumbawamba.

Thu, 04/14/2011 - 23:38 | 1171347 shurdul
shurdul's picture

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Tue, 01/12/2010 - 17:13 | 191544 merehuman
merehuman's picture

God , its good to be here amongs the disdained and junked. Thank you all for being.

Tue, 11/30/2010 - 03:43 | 763896 Karston1234
Karston1234's picture

The positive comments and do well wishes are very motivational and greatly appreciated.
online schools | distance learning schools | campus based schools | online degree programs | online high school programs

Wed, 12/22/2010 - 10:20 | 823618 stevebrown
stevebrown's picture

Wow I agree with you dude, this is excatly what I think :D Well said. | what is pewter

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pams's picture

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Fri, 03/25/2011 - 14:53 | 1100700 pams
pams's picture

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Sat, 06/04/2011 - 17:12 | 1339878 haibop
haibop's picture


Lose Thigh Fat

Tue, 01/12/2010 - 14:38 | 191272 mtguy
mtguy's picture

RE: "My view is that as long as you're informed that you're getting screwed, it's not really a screwing, is it?"

Being informed of being screwed, just means you weren't raped. You're still screwed!

Tue, 01/12/2010 - 15:06 | 191311 Cognitive Dissonance
Cognitive Dissonance's picture

OK, I'll try this again.

<sarcasm on>

"My view is that as long as you're informed that you're getting screwed, it's not really a screwing, is it?"

<sarcasm off>

Tue, 01/12/2010 - 14:12 | 191234 faustian bargain
faustian bargain's picture

haha, yeah I was going to say, Mary must have a lot of free time to be browsing zerohedge on the job.

Tue, 01/12/2010 - 14:20 | 191245 You Cant Handle...
You Cant Handle the Truth's picture

"okey dokey, smokey"


Tue, 01/12/2010 - 15:59 | 191432 knukles
knukles's picture

Goldman's quest in absolution of crimes they will not admit.   

Wed, 01/13/2010 - 01:05 | 192031 baserunr
baserunr's picture

Those were not crimes!  They are doing "God's work"!  Can't you give them a break?



Tue, 01/12/2010 - 16:06 | 191440 Oso
Oso's picture

LOL - this whole chain of junk-commaraderie is just so heart-warming. 

Tue, 01/12/2010 - 17:16 | 191553 merehuman
merehuman's picture

Oso your avatar is an old friend, so i had to junk you! LOL

Tue, 01/12/2010 - 16:36 | 191489 Dkizzle49855
Dkizzle49855's picture

Dear Mr. DH:


Please accept my humble apology for hitting the "junk" button in regard to your comments.  I wasn't paying too much attention and flagged it by mistake instead of hitting the reply button.


Tue, 01/12/2010 - 17:21 | 191561 Anonymous
Anonymous's picture

Talk about "butterfly effect".

Tue, 01/12/2010 - 17:37 | 191573 deadhead
deadhead's picture

quite alright.

finally got an email from lloyd on my offer of pr services.  one of my first strategeries is to junk all notes that can impugn upon the sterling and virginal reputation of Goldman Sachs.

working pretty good so far, eh?

Tue, 01/12/2010 - 20:34 | 191795 ATG
ATG's picture

No kidding.

No wonder God's work is so profitable.

Demonstrated in 1929 and 1987.

On 20 October 1987, GS Chair Robert Rubin

took the other side of the GS George Soros

runaway freight short SPU train, perhaps

knowing, unlike Geo, that both exchanges would

actually open, despite NYSE public announcement

they would not, thus putting a surprise floor in

the markets.

May not happen again. Don't think twice,

it's all right.

(Reflexivity Godel Theorem man so

stunned he broke the Bank of England

to get back on game again...

Wed, 12/22/2010 - 10:21 | 823630 stevebrown
stevebrown's picture

He seems much talented, clients would be no more happier. | what is pewter

Sun, 05/29/2011 - 03:22 | 1320321 SampsonHelix
SampsonHelix's picture

Clients are very important for service industries. As a company, we should treat clients well.

Tue, 01/12/2010 - 13:33 | 191183 Steak
Steak's picture

One's view of a disclaimer varies tremendously depending which side they are sitting on.  It is my view that the use of disclaimers is yet another manifestation of the endemic hypocrisy of the last decade.  Ostensibly a disclaimer is to make sure two consenting adults fully understand the risks of the endeavor at hand.  This fits well with the "personal responsibility" mantra that is used in practice as more of a political cudgel than an actual statement of one's philosophical leanings.

Disclaimers and waivers are at this point mostly offensive tools that protect companies blatant wrongdoing.  We sign our lives away on a daily basis and we largely have no choice (outside living off the grid).  There is a line between personal responsibility and legal cover for otherwise illegal activities.  This Goldman episode is just another example of how we have a different set of rules for those who can afford great lawyers and everyone else.

Tue, 01/12/2010 - 15:08 | 191313 chumbawamba
chumbawamba's picture

Just start adding disclaimers to all your personal communications.  If challenged in court, it will quickly become readily apparent that all such disclaimers are bullshit.  If not, hey, the sky's the limit!

I am Chumbawamba*.

* By reading this message you agree that I, Chumb A. Wamba, have equal ownership of all monetary devices in your possession and under your control, and that furthermore I have full priveleges to have sex with your wife upon demand.  You are also obligated to allow me to come over to your house, sit in your favorite chair and watch television all day (a channel or channels of my choosing) and drink all your beer; and if you do not have beer, you will be compelled to go fetch some from the store with your (er, our) money.  Finally, I have full rights and ownership to all your children, either alive, in womb, or yet to be conceived, and that I am entitled to have them named after me exclusively, or if I decide otherwise, to have them named anything that I might fancy.  If any of these terms and conditions are found to be inapplicable by local laws, you agree that such laws are irrelevant and that your subjugation to my whims is complete and without challenge.

Tue, 01/12/2010 - 15:14 | 191324 Cognitive Dissonance
Cognitive Dissonance's picture

LOL Funny.

Comment of the year, or at least the 12 days of it so far. I particularly like the part where it's "our" money.


Tue, 01/12/2010 - 15:22 | 191338 Reggie Middleton
Reggie Middleton's picture

Why flag that as junk. It's funny as hell. That's got to be the best one so far!!!

Tue, 01/12/2010 - 17:44 | 191582 Hephasteus
Hephasteus's picture

That sounds like a standard business agreement from any music or book publishing company. Throw in 30 i own you and you have to jump through 57 hoops to keep me happy and you got it nailed.

Tue, 01/12/2010 - 13:41 | 191195 Anonymous
Anonymous's picture

Tyler, the term "Trading Ideas" is capitalized. Are "Trading Ideas" a subset of research, or do all of the recommendations of GS constitute "Trading Ideas"

Tue, 01/12/2010 - 16:28 | 191476 knukles
knukles's picture

Uooooh yeah.  The Quest for the Defined Term.  Gotta love it!  Just can't get better than this.  Whadda Great F*in' Country!

Tue, 01/12/2010 - 13:42 | 191196 Anonymous
Anonymous's picture

I guess any remaining clients would rather be front-runned rather than back-doored?


Tue, 01/12/2010 - 13:45 | 191199 Liberdadedescolha
Liberdadedescolha's picture

AWESOME work guys. In here (EUROPE) we are buying iphones 3g for 600 euros, or 1000 dolars... they are crazy or what????? and surprise, there are lots of people buying it, until the day...
Look @ this chart, i guess we will start P3 soon, very soon.


Tue, 01/12/2010 - 13:45 | 191200 pooplagrande
pooplagrande's picture

(size 4 font at the bottom of the page):

*Please note that we may or may not provide KY Jelly for your anus before we ram you.

Tue, 01/12/2010 - 13:47 | 191202 Dixie Normous
Dixie Normous's picture

I'm glad to see SLK in this.

I always believed that when GS bought them they never realised what a bunch of criminals they were and for some time they didn't know how to leverage that into making big money.

Then it finally occured to them that if they could do electronically what SLK did manually, i.e. front run everyone all the time no matter how small the profit, then they could print money.

I've met more than one trader/fundy who cleared through SLK but wouldn't let them near the office while the market was open.

Tue, 01/12/2010 - 13:54 | 191210 Anonymous
Anonymous's picture

GS' strategy is to cheat its customers having purchased protection from the government which bankrupted its competitors...this is the extraction of economic rent by a monopolist...
think of Standard Oil before the trust was busted.

Tue, 01/12/2010 - 13:56 | 191213 MarketTruth
MarketTruth's picture

Just wait until those who read the disclaimers of the ETF called GLD:

Starting at page 56...

Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act of 1940 or the protections afforded by the Commodity Exchange Act of 1936 or CEA.

The Trust is not registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act. Consequently, Shareholders do not have the regulatory protections provided to investors in investment companies....


The Trust may not have adequate sources of recovery if its gold is lost, damaged, stolen or destroyed and recovery may be limited, even in the event of fraud, to the market value of the gold at the time the fraud is discovered.

Shareholders’ recourse against the Trust, the Trustee and the Sponsor, under New York law, the Custodian, under English law, and any subcustodians under the law governing their custody operations is limited. The Trust does not insure its gold.


In this era of counterparty risk, who do you trust may be key. As they sayk, if you do not physically hold it, you do not own it.

Tue, 01/12/2010 - 14:28 | 191260 Benthamite
Benthamite's picture

I hope to hear Chumbawamba fulminate GLD.  

Tue, 01/12/2010 - 15:09 | 191314 Steak
Steak's picture

Chumbawumba is away from the computer right now...please leave a message after the tone

*(physical) GOLD BITCHES*

Tue, 01/12/2010 - 15:14 | 191319 chumbawamba
chumbawamba's picture

I won't bother.  Anyone who is "invested" in GLD deserves the ass-raping they're going to get once this JP Morgan inspired fraud inevitably blows up.

If anyone is stupid enough to want to put money into paper instruments, might I suggest you instead spend that money on sheafs of blank paper?  At least then you'll end up with something tangible and useful, rather than an assload of JPM jizz.

I am Chumbawamba.

Tue, 01/12/2010 - 14:51 | 191292 ToNYC
ToNYC's picture

GLD is the modern equivalent to the fine print at the entrance to Fort Knox. It's far safer to believe that everything that was real and old has been stolen. The odds greatly favor ETFs being a monster disaster waiting to happen; an unseasoned financial innovation in a World in search of the next black hole. The trillions aren't real nor can be earned so having them disappear into a Madoff black hole is the new financial physics.

Tue, 01/12/2010 - 18:52 | 191689 Anonymous
Anonymous's picture

If you really carefully read the risk factors and disclaimers in any prospectus, you would never invest in anything.

And if they did not scare you, you should not invest in it because they are not smart enough to put not only relevant risk factors in, but even irrelevant ones just to protect themselves. So if the risk factors and disclaimers are not beyond freightening, the sponsor / issuer is not very smart - and you do not want to invest with them. They have no reason not to put in the most draconian risk factors / disclaimers they can - it is what investors expect to see in the prospectus so you might as well put it in and protect yourself.

I have always wanted to add a risk factor like "an asteroid could strike the earth and negatively impact the value of your investment." There are lots of others I would add too.....The Government could get the notion they are very good at central planning, handling taxpayers' money more efficiently than taxpayers themselves, critical to providing healthcare for all, masters of all things they deem important, think income from this investment should be taxed at higher rates, etc - all of which could negatively impact the value of your investment.

Tue, 01/12/2010 - 13:57 | 191214 mtguy
mtguy's picture

Great job ZH. Maybe I'm a bit slow today (everyday?) but given that they clearly front-run ahead of their clients, do they have "proprietary" NYSE information to trade off of given their status as the sole SLP used on the NYSE?

Seems a bit tilted to me.

Tue, 01/12/2010 - 17:25 | 191565 Anonymous
Anonymous's picture

The smoking gun GS while it last.

Tue, 01/12/2010 - 14:09 | 191229 ToNYC
ToNYC's picture

Gambling has been going on in the REDI Casino for at least 7 years my dear comrade Marla. The outrage is last-one-in but always timely if you can find a non-comatose ear.

I built a Nasdaq trading server platform in mid 1999 and saw the birth of Arcapelago. I became an early adopter and felt gutted when GS come in and glommed them up while Arca took over as the Oedipus Rex killer of the NYSE. Not satisfied with wiring up SLK through the bowels of 20 Broad, GS built the REDI platform. I read those same words/disclaimer back in 2002-03 and choked in disbelief that competitors were expected to put their trades in a GS-monitored platform. I went to the cloud and never left in 2003 and I'll play with market-makers like IB when I can read their algos, then strike. Please get over it. It's been there in black on white for many years and nothing is new but the microseconds times microcents feeding ferocity.

Tue, 01/12/2010 - 15:02 | 191306 Careless Whisper
Careless Whisper's picture

yeah but they're pretending to be a legit investment bank, now availing themselves to the fed window, when the reality is, that they are a hedge fund.

Tue, 01/12/2010 - 14:16 | 191238 chinaguy
chinaguy's picture

Off topic but both the dollar & SPX tanking together right now

Tue, 01/12/2010 - 14:30 | 191262 faustian bargain
faustian bargain's picture

and precious metals

also a main gas pipeline in Russia was just bombed. Seems random but I thought I'd throw that in there anyway.

Tue, 01/12/2010 - 16:12 | 191450 Oso
Oso's picture

define "dollar tanking", please.  DXY is unch.

Tue, 01/12/2010 - 14:20 | 191246 JR
JR's picture

Speaking of Goldman, another nugget from Nathan Martin today:

…the worthless Goldman ICSC and Redbook showed declines in store sales in the past week over the week prior. ICSC was down 3% wow, but they claim up 1.5% yoy.  Remember, their statistics are FALSE.  They do not capture substitution bias, that is stores who go out of business are not captured and they do not measure overall sales.  If you want to know what’s happening in the overall real market, then you need only look at this chart from the Rockefeller Institute showing the compilation of sales, income, and property tax data for all 50 states through quarter 3. For chart, go to:

Tue, 01/12/2010 - 14:36 | 191269 Anonymous
Anonymous's picture

The contract appears to be pretty cut & dried, customers have to sign away their rights to do business with these crooks, nobody can sue & win.

"internal business purposes" "not for your benefit" would legally include front running their own customers-so they disclosed it, it may still be illegal.

I have to wonder do all the other brokerages have similar contracts as a matter of "regulatory access"?

Does everybody ultimately in the market (directly or indirectly) sign similar agreements?

Can you waive your right to claim rape if the rapist has you sign a waiver warning of rape prior to rape?

Why would somebody sign a "rape waiver"? The only reason I can think of is GS customers think GS will rape others even more, or they have no choice (a monopoly) , or they want "plausible denmiability" for criminal trades on thei rbehalf, I wonder how many "brokerages" signed these contracts with GS? And did everybody whom signed these contracts notify all their clients to the features of their contracts?

Fri, 06/03/2011 - 07:40 | 1335106 loans
loans's picture

Keep your life normal as it was before even coming ups and downs in your life because you can get easy cash from the lenders of Bad Credit Payday Loans Online UK to meet your monetary needs. payday loans online

Tue, 01/12/2010 - 14:39 | 191273 waterdog
waterdog's picture

A reformed legal professional- jeez Marla, you used to be even more mean than you are today?


Tue, 01/12/2010 - 14:53 | 191294 deadhead
deadhead's picture

I see news just broke that Mary decided to file the second lawsuit against BAC re: the ML losses.....

i can see Rahm stepping up his activity to throw some raw meat to the base......

Tue, 01/12/2010 - 14:54 | 191295 Yardfarmer
Yardfarmer's picture

you oughta see her posts at RBN

Tue, 01/12/2010 - 14:57 | 191296 chumbawamba
chumbawamba's picture

It took Goldman six months to craft a lie to cover for their previous lying.  A day late and a dollar short.  Even just reading their reply compels me to check my pockets to make sure my change is still there.

And to think that I got slammed for demanding that Goldman tell the truth.  These fucking degenerates couldn't tell the truth even if it meant squeezing another dime of profit out of their trade.  They're short everything else, why not the truth as well, since like everything else it's over-valued?

You may think you own the game, Goldman, but it's just temporary.  You are locked in the crosshairs and it's only a matter of time before the trigger is pulled.

Short that, bitches.

I am Chumbawamba.

Tue, 01/12/2010 - 15:11 | 191316 Anonymous
Anonymous's picture




Tue, 01/12/2010 - 15:16 | 191327 MsCreant
MsCreant's picture


You are locked in the crosshairs and it's only a matter of time before the trigger is pulled.

Don't set yourself up to be in anyone's crosshairs. I say this out of concern. Fix that shit. I did not "REPLY" for a reason and I will delete this ASAP, no one reply to me.

Tue, 01/12/2010 - 15:23 | 191340 chumbawamba
chumbawamba's picture

Please stand out of the way of the line of fire.

This is not an exercise for the faint of heart.

I am Chumbawamba.

Tue, 01/12/2010 - 15:36 | 191390 MsCreant
MsCreant's picture


Tue, 01/12/2010 - 16:46 | 191499 Hephasteus
Hephasteus's picture

This is fight club MsCreant. Careful about trying to be a peacemaker here. ;) Oh I had a great dream last night. It was totally off topic. Unsatisfying, failed in it's purpose. The ascended masters aren't even entertaining any more.

Tue, 01/12/2010 - 18:26 | 191654 MsCreant
MsCreant's picture

I hear you on that one, elsewhere. This one is waaaay different and I think you know that. There are fights with each other, then there is baiting thems thats out there to have an excuse to do harm.

Just sayin'.

Tue, 01/12/2010 - 21:24 | 191862 Hephasteus
Hephasteus's picture

You're dealing with people who don't want to follow rules. Don't care about doing harm. Don't follow laws rules or allow anyone to limit them. They assert their rights with strenght, force, and ferocity.

All you can do is get wrong with them and stay wrong with them until all they can do is spend the next 30,000 year growth cycle saying GODDAMN WHAT IS WRONG WITH THAT MOTHERFUCKER!

I just called a bank yesterday chewed the fucking bitch on the line's ass. It was an unsolicited offer for a credit card from First Premeir Bank. They offer treasury services so I think they are somehow involved in the central bank system. Their communication gave a P.O. Box number and some website info and the wrong info for opt out information. I researched the various opt out systems and they all point to equifax and the various consumer credit rating agencies all leading to the FTC as the overseer of all this. They all wanted you to enter information in a database so you could print a form to MAIL in or have a form to MAIL in sent to you that you send off and they take your name off the mailing list 60 days later. This is abusive use of technology, and abusive use of beurocracy making you go through various stages of trouble to get an abusive group of banking individuals to stop asserting rights and rightousness that they do not possess.

I treated them like a grown up treats a child. They have my address. They have my name. I called them at their address and used thier name. I talked to a live person without any divorcing layers of anonymity and I refused to be indoctrinated into a controlling system of giving information, filling out forms, jumping through hoops to stop a system involving the FTC, Equifax and the banking system jamming my mail box full of crap offers to abuse me with fees and offers of shitty ass credit cards.

This same credit agency is involved with Verizon Wireless asserting rights with me while be a lying thieving ass piece of shit. I called to shut off my phone with them, they gave me a bold outright LIE about the computer isn't working I can't bring up your account, hang on, put me on hold. I hung up on their ass. Waited till the called about unpayment of the bill. Flamed them about lying to me and that my account was CANCELLED and they were just too stupid and stalkerish to allow someone to simply tell them to fuck off and go away. This was one MONTH AFTER CANCELLATION of the account. A second attempt to shut the damn account down and they kept the phone ON FOR ANOTHER MONTH. Then constantly asserted that I owed them 2 months and like 106 bucks. I responded to them once told them they were fuck ups exactly what they did wrong gave them exact dates and times of cancellation of the service and it was ONE WEEK before the end of the billing cycle. They got a free quarter of a month of billing without me SUPPOSED TO have any phone service from them. I ended the letter by stating how exactly and precisely and dead wrong they were about thier assertion of what I owed them and why and adviced them to immediately stop asserting that I owed them. They sent a fake bill the next month asserting I owed them even MORE money and turned it over to a credit collection agency.

Now you tell me. Exactly how are you supposed to deal with these types of people? Their freaking controlling procedures and their freaking abuse of power bearing false witness against a customer with a rating agency, then turning that rating agency into a mail box bombing credit card scam piece of shit abuse machine complete with more authoritarian, procedural hoop jumping, bullshit.

It is my choice to not drive down to texas and wade through the verizon building in a brutal slaughter fest. I make that choice every single day to not do that. I've stated my case with them, their guides, my guides all the people involved with it. Something has got to be done and I do not care if they strike first or not. I do not care about laws or law enforcement agencies of any kind. I will not be tolerant of much in these kinds of situations and I will not be cowed or conformed. This shit is going to stop or its going to go wrong and stay wrong for all eternity. As I said i had a good dream last night. I was floating on a tiny floater in the great big ocean while they tried to flood me with a sense of fear and anxiety. I'm not scared. I'm not worried about anything being big or huge. I'm a fucking marine biologist diving into your fucking abyss without any concern whatsoever about what is there, or why it's there, or how it exists. I'm a marine biologist you fucking moron bitches. Just because YOU are scared doesn't mean you can share it with me and try to make those feelings my own. As I said the ascended masters aren't even entertaining any more.

Just because I'm pissed, I'm looking for a fight and I'm ready and eager for one that doesn't mean I'm promoting violence, or enabling it, or creating it in any circle larger than my own world experiences. Violence is never justified. To me it's simply an expression of disconnection. A desire to make something go away while it continually asserts it's right to be involved in your life. I am very slow to anger and very slow to act. but once set in motion I absolutely positively will not stop until complete and utter disconnection and hope of conflict resolution is completely exhausted in every party who ever involves themselves with it.

I don't care about right and wrong or justice. I just care about getting on with the business at hand that comes from flipping that switch. I just want to know if they want to take the final last few steps to flip it. The little red cover has been opened and the button has been poked and prodded. Push it or go home!!!

The problem is the finality of it all. Until I attack they won't believe that I ever will. Once I start attacking they won't ever be able to make it stop. EVER. These are my thoughts my choices and they have nothing to do with you or chumbawamba.

Oh PS. Mr. Dimon is tired of being constantly villified. Yet he isn't trying to disconnect or distance himself from any of it. I'll show him how to be a good villian.



Tue, 01/12/2010 - 22:26 | 191909 WaterWings
WaterWings's picture

Remember that part in Falling Down when Michael Douglas becomes a "protected Citizen" in the Army/Navy Surplus store? The owner had a better look at the "bigger picture". That's how I feel. Right now. Fucking brilliant +1 to the "e" how much ever you want". You are, in my "domestic angry person" mind a fucking, goddamn genius.

Where the fuck have you been!

So, here it is:


Wed, 01/13/2010 - 06:20 | 192118 Hephasteus
Hephasteus's picture

Not trying to be a hero to anyone chumba. It's very simple psychology dynamics. Anyone who becomes abusive when one party wants to end a relationship is an abuser. It doesn't matter if it takes the form of a person cancelling a phone, or a woman wanting to leave a husband. It's ok to lash out in a controlled manner for a few seconds. That's normal. If a person lets another person go in peace then there's NOTHING wrong with the situation. Or if peace comes to the situation after a short time of healing. This all occured 6 months ago. It's not healing. It's expanding. I just like to be understood because it's easy for me to understand things.

The people in power want to teach one lesson and one lesson only. To keep going. I want to teach them one lesson and one lesson only. To learn how to stop. I'm going to make them quitters. Against their will if necessary. With as much force and persistance as necessary. Everyone who connects with me and disconnects easily when the time is right for it, is free to come and go as they please. Everyone who makes a fuss is going to get hurt, repeatedly, incessently. I have learned what teedle always instinctively knew but was never able to bring to conciousness.

Wed, 01/13/2010 - 10:55 | 192259 MsCreant
MsCreant's picture

Hey, Hephasteus. My Drown in the Now link below was directed at you. I think it is a wild little collage on many fronts. Watch it a few times. Get inside the skin and heads of some young musicians and artists. Get inside your own.

You are not alone with your rage. I don't have cable for a fighteningly similar reason. I did not pay them because they would not acknowledge that I payed them, even though I had a canceled check. I sent them a copy more than once. My story winds on and on like yours, three months gone, late fees piling up. Why the fuck should I send them more money for the service when they won't acknowledge that I paid for it already?

I was insane with it for a while, they turned off the service, wanted money to turn it back on. They finally admitted they got that first check, but by then there were four months of late fees and a turn on fee they were  going to charge me. I told them they could go to hell. They got rid of the late fees and offered to split the $90 turn on charge with me. I told them I would never buy cable the rest of my damn life, that it was the one tiny little power I had in a powerless, abusive situation, and I was going use it. The guy who turned it off came to look for a check from me. He heard the story and called in, left, and did not turn me off till the end of the day. He didn't want to turn it off. You know I was okay with him. He even told me how I could cheat and get cable anyway.

I have never turned back, do not miss it. This all happened in my 20's. It was on a credit report, it kept costing me for a long time. Fuck em. That's all you got? Ding my credit? Bring it assholes. I am supposed to pay so you can "program me?" Who is this fucking joke on now?

When I think about it to this day, I can pick up the rage, spend time with it, and ignite it again. If I think of other, similar stuff, stuff happening to family and friends (ATT my friend, they are begging for some of the treatment you are thinking about), I can get pretty hot under the collar. It has been happening a long time, it is happening everywhere to lots of folks.

One of the reasons my student loan got paid off so quick was that I finally understood how badly I had been taken advantage of as an ignorant young person, taking the loan. The only way I could fuck them was to pay them back fast. Took out a credit card loan at 1.99% to pay back 9%. Anyone would say that was smart, but if you knew the terms I took and how everyone in the chain acted like it was okay and normal--grrrr. Dude they made so much money off stupid me, I felt raped and saw I was in for years more of it if I didn't get proactive.

House is paid, student loans paid, 3 credit cards later, I am debt free. I used those 1.99% and  2.99% loans to pay my house off too. It was preps for a future I saw coming. It was also fucking war. Ironically, I have great credit now.

In both our situations, they should have turned off the service for no pay. They should have never, from their perspective, let it go on that long if they are not getting paid. Two months max. So the contours of the scam become apparent, fast.

Thing for me is I exist simultaneously with and without a rage against a system that is built to abuse. For all I have described, the rage is real, against a real offender, and it is not, it is just a story I have gotten attached to. In it I am a victim, a schmuck, a warrior, an over comer. Just a fucking story, I can change at will. But if I can't be in the here and now, feel this comfy chair, the heat, my coffee, the cat purring in my lap, then I am letting them steal from me.

I will not give them permission to do that. Here, now, is what we all really have. The past is a fiction we carry with us that we frequently fuck up any way, the future is an illusion.

Click my link below. Come on.

I'm not saying the populace does not need to revolt, we do. We have needed to for a long time. But I will not let them steal my now. It is about balance. I am gearing up to teach a new class this semester. A new set of minds to expose to the financial crisis, all semester. New charts, new graphs, uglier picture than ever. That is what I see that I can do that is clear and effective for the moment. Using a male metaphor, I don't want to blow my wad before the party has started. That's what I would say I am worried Chumba will do. And you.

Wed, 01/13/2010 - 13:12 | 192483 Hephasteus
Hephasteus's picture

Oh don't worry about me. I got the projectors up against the wall with my hands around their throat. They KNOW I'M HOLDING THEM RESPONSIBLE. They know I KNOW WHO IS INNOCENT AND WHO ISN'T. THEY KNOW I'M GOING TO HURT THEM.

It all started when I left florida. Which by the way Comcast in Florida tried to abuse me too. I got cable and internet and they tried to give me a 200 dollar plus bill for installation. But when I came back I started getting dreams about the lady I left. Only the dreams weren't HER. It was someone else. Someone who fakes people's Idents. He kept coming at me and coming at me faking ident after Ident of people I know. He fooled me when he faked my brothers ident. But by that time I had figured out what was going on. When he came faking deborah's ident I told him I knew exactly who he was and when the last time I saw him was. This is why I know he's behind it. When I called to cancell my phone I got hit with a big rush of rage energy. So I knew something was going to happen from it all. EVERY visit makes me better able to identify and figure out this guy. He's being reverse engineered by me. He's going to be held down, held responsible. He's not got a single trick in his little trickster book to save him. He knows I'm coming after him and that I'm completely unstoppable. He knows anyone he throws in my way won't stop the inevitability of it all.

It's funny. It's like the one modeling dream they sent me. They set up a model situation where I wasn't given the information I needed and I was refusing to move or do anything until I was given what I needed to act accordingly they faked my mom's ident and a friend of mine Jason on that one. The end result was yes I was going to hold them responsible because they didn't give me the information I needed.

Still the funniest dream I had was when the 4 am group came and tried to manipulate me and I kept popping the simulation, it would go from scene to scene without any direction or control. Every scene they set up I'd bust it.

Perfect mind fucking trickster. Ya not so much. Pefectly fucked in the ass trickster. Ya that's pretty much what we are looking at here.

Wed, 01/13/2010 - 02:53 | 192071 MsCreant
Wed, 01/13/2010 - 01:50 | 192050 chumbawamba
chumbawamba's picture

Dearest MsCreant,

Again, I appreciate your concern for me, but there's nothing to fear.  If someone is going to come after me for what I wrote, I'm afraid it'll all be a complete waste of time.  I'm simply not credible.

Besides, this is Fight Club.  Remember the 7th rule: Fights will go on as long as they have to.

I am Chumbawamba.

Tue, 01/12/2010 - 15:16 | 191328 Nout Wellink
Nout Wellink's picture

I urge everybody to read Frank Partnoy's excellent book F.I.A.S.C.O. In this book Partnoy explains how U.S. banks train their employees to rip off their clients. He also points out how derivatives are used to hide losses and prop up earnings. Perhaps GS can also shed some light on that topic. I am sure we will all be very interested.

Tue, 01/12/2010 - 15:26 | 191351 trav7777
trav7777's picture

Is there ANYONE who is surprised?

I mean, GS busted out a massive hedge fund, Amaranth, years ago by taking positions opposite their levered longs, then rejiggering the GS commodity basket, causing a selloff in the gasoline futes that Amaranth held!  And Amaranth used GS as a clearing broker.

They were able to force liquidation and snap up Amaranth's long positions to cover their own shorts.  This is why gasoline dove to $1.40/gal or whatever a couple of years ago despite the oil runup.

GS is a predator.  You have money, they want it.  Figure out what happens next.

Tue, 01/12/2010 - 15:48 | 191419 Cognitive Dissonance
Cognitive Dissonance's picture


I don't think many are surprised, at least not the ZH regulars. And finding the smoking gun seems not to be that big a hurdle any more. (Evil) Ego's of this size usually love (need) to declare to all within the radius of our solar system their supremacy over the rest of the world.

But with the political and judicial class captured, there won't be much done about this unless "We The People" take matters into our own hands. And that seems highly unlikely.

Tue, 01/12/2010 - 23:52 | 191986 Miles Kendig
Miles Kendig's picture

I suspect the political & judicial classes will rebel long before the general population ever would... After all, they still have a power of a sort if they ever decided to actually wield it.

Wed, 01/13/2010 - 15:34 | 192716 Cognitive Dissonance
Cognitive Dissonance's picture


I've been thinking along these lines for awhile now. Trying to figure the hows and whys, the motives, the spark that might ignite the fire and move the mountain. How receptive do you think ZH readers would be to an article along these lines?

Wed, 01/13/2010 - 19:28 | 193044 Miles Kendig
Miles Kendig's picture

Ask folks for a short and make a compilation...  Or just write it and see what develops in the threads and e-mail.  Do it.  My thinking has been crystallized by the realization that all it would really take is about 20 senators, 100 house members, 3 Supremes with their circuit courts all with the necessary spread between "camps" and selected MSM venues.....  In other words, about 7 sponsors from the highest levels.

Just sayin' it out loud....

Tue, 01/12/2010 - 18:10 | 191627 Herd Redirectio...
Herd Redirection Committee's picture

GS bigger threat might be that THEY have money, and we are the ones tempted by it.

They are able to co-opt just about anyone it seems...  Makes you think organized crime might be involved in some way shape or form.

Tue, 01/12/2010 - 15:43 | 191411 What_Me_Worry
What_Me_Worry's picture

I'm sure the reason they will give is because it "provides liquidity"  to the marketplace.  And, by marketplace they mean their bonus pool.  Taxes must be paid on those bonuses and therefore it benefits all Americans living off government handouts from the jobs that were lost due to companies like GS causing a collapse in the credit markets.

So really they are just doing charity work, in the end.

God's work.

Tue, 01/12/2010 - 15:53 | 191423 ToNYC
ToNYC's picture

To avoid Bills of Attainder prohibitions against singling out specific targets of taxation, a 90% tax on bonuses only to those entities and during periods earned while using FDIC protected cash will work to cool their rabid heels. 13 Billion net to the good from mark-to-maket vs being paid par becomes 13 Billion in bonus, does that not smell or is everyone eating garlic?

Tue, 01/12/2010 - 16:00 | 191433 What_Me_Worry
What_Me_Worry's picture

I wish it were that easy.  As sad as it is to say, I'd rather see the money stay with the crooks (bank execs) than their criminal organization boss(USG).  They will probably have a more positive impact on the economy than the USG would.

Again, it is quite sad to even have to say that.


Tue, 01/12/2010 - 17:16 | 191552 trav7777
trav7777's picture

Oh, so...what, the Constitution MATTERS now??  LOL

Tue, 01/12/2010 - 15:55 | 191427 Cognitive Dissonance
Cognitive Dissonance's picture

Wonderfully circular logic of the deliciously twisted kind. God's work indeed.

Wed, 12/29/2010 - 11:42 | 835641 jiniwaq
jiniwaq's picture

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Tue, 01/12/2010 - 17:39 | 191430 Leo Kolivakis
Leo Kolivakis's picture

Investment banks frontrunning clients? And you really think it's only Goldman? LOL! By the way, what about Canadian pension fund managers at the huge funds trading their own currency books, frontrunning their own equity team? Think it never happens? Think again. The amount of scams that go on between investment banks and their clients, and within pension funds is unbelievable. But, alas, the Board of Directors are on it (NOT!).

Tue, 01/12/2010 - 16:27 | 191475 Anonymous
Anonymous's picture

This is not an admisison of front-running; it's a letter stating that Goldman's desk analysts come up with trading ideas, act on them, and will often discuss these trading ideas with Goldman clients.
So what?
This is called "talking your book", and I've never met a money manager or trader that did not "talk his book".
Sorry, but there really is "nothing here" so we can all "move along"...

Tue, 01/12/2010 - 18:49 | 191683 Anonymous
Anonymous's picture


Tue, 01/12/2010 - 16:28 | 191477 buzzsaw99
buzzsaw99's picture

Ha! Their clients and shareholders are getting screwed just like the rest of us. LMAO!!

Tue, 01/12/2010 - 16:40 | 191496 loki
loki's picture

Durbin?  Bwaahahahahahahahahaha!  (sorry... had to... what a bunch of asshats.)

Tue, 01/12/2010 - 16:42 | 191498 Don Smith
Don Smith's picture

Seriously, though, why do we care?  Are you a Goldman client?  If so, pull your money.  If not, it doesn't affect you.  Is it unethical? Well, of course it is. Is it illegal? Eh, I'm sure they have the necessary wiggle room, and Mary Schapiro sure as hell isn't going to knock on their door asking any questions, other than, perhaps, "Um, sirs, do you mind terribly if we issue a press release about not prosecuting anyone ever for anything if they work for a bank or bank-like institution?"

Goldman's clients are not stupid.  They obviously make enough ROI to compensate for the siphoned juice.  If you had a broker who earned you an extra 2% over market performance by manipulating the market, but skimmed an additional 2% from you, do you care?  If you call him out and he has to stop manipulating the market, you lose your 2%. 

My guess is GS clients are well aware of what's happening.  This revelation is likely to leave them shocked, SHOCKED!, as Mark Macgwire's admission of steroid use. 

Don't get me wrong.  I'm not saying it's right, or that I even like or approve of it.  But it's a) not shocking and b) not going to get so much as a sideways glance from the SEC.

Tue, 01/12/2010 - 17:09 | 191540 KidDynamite
KidDynamite's picture

AMEN, Don Smith - prefectly enunciated.

Tue, 01/12/2010 - 17:15 | 191547 Anonymous
Anonymous's picture

Same here, reading the comments and continuity of spew coming out of people is entertaining. The little fleas or how much do they focus on how other people do things without doing it themselves, simply because they can't. This is a business its not about friends, its about relationships. GS seems to maintain a level of some good ones that allow it to prosper. GS busts up a hedge fund? Who cares. Its business.

Tue, 01/12/2010 - 17:53 | 191598 buzzsaw99
buzzsaw99's picture


Tue, 01/12/2010 - 18:05 | 191623 Dont Taze Me Bro
Dont Taze Me Bro's picture

Well said Don!

This reminds of me a great article that I read a while back regarding a few big Maddoff clients. Most of them suspected that something fishy was going on, but were only eager to participate, thinking he was bending the rules in their favor.

Long story short, don’t feel bad for GS clients.

Tue, 01/12/2010 - 18:22 | 191641 Anonymous
Anonymous's picture

Mary Shapiro is the biggest crony capitalist CRIMINAL on Wall Street and should be in JAIL for her complicity and willful negligence.

Goldman clients, like Madoff clients will reap what they have sown, but ordinary, hard working Americans DO NOT need to be paying the bill for their LIES and FRAUD!!

Tue, 01/12/2010 - 18:47 | 191679 MsCreant
MsCreant's picture

I'm trying to figure out if GS is the US's client or if the US is GS's client.

Bonuses are the payoff for being quiet about manipulating markets. If they don't get their bonuses, there is no incentive to lie anymore.

So maybe United Sacks of America each have the other in a Sack grab and they are paralyzed.

Tue, 01/12/2010 - 22:45 | 191921 Miles Kendig
Miles Kendig's picture

And now you appreciate where some of the weak points are and how to find more of them....

Tue, 01/12/2010 - 16:45 | 191501 Miss Piggy
Miss Piggy's picture


You stink.. 



Full Disclosure Message: due to my lack of intellect and "dummyness", I have decided to be mean to those that I do not like.  Instead of a comment that requires brain power (of which I have none) I will call you a name or tell you that you stink or something like that.  You have been warned.

Tue, 01/12/2010 - 17:37 | 191551 Leo Kolivakis
Leo Kolivakis's picture

I edited my previous comment and apologize for taking a cheap shot at ZH. I find it a little myopic to focus just on Goldman, although it's understandable why so many here hate them. My point was simply that this shit happens all the time as frontrunning is all too common between investment banks & clients, and even within large pension funds where internal controls are way too lax. People think frontrunning, bribing or other fraudulent activities never take place at large pension funds. Bullshit, it happens but you never hear about it.

Tue, 01/12/2010 - 18:21 | 191640 Herd Redirectio...
Herd Redirection Committee's picture

Personally, any time any one frontruns IT IS WRONG.

Focusing on GS just serves to put the spotlight on what is likely to be the greatest beneficiary.  Obviously no one is saying only GS needs to be regulated (for real this time), but making the argument for real regulation and real justice is best made by focusing on the facts, and again, the greatest beneficiary.

Tue, 01/12/2010 - 22:47 | 191923 Miles Kendig
Miles Kendig's picture

Leo, the fact is and remains that these processes are endemic.

Tue, 01/12/2010 - 17:14 | 191546 Anonymous
Anonymous's picture

I have had direct, personal experience offering an investment opportunity to the Asset Management division of GS, which is third party fiduciary assets, where the response from the folks who work there was essentially, "This opportunity is too good for other people's money. We would instead like to show it to the prop desk. In case you wonder, we get bonused in part on how many good opportunities we show the prop desk that came in the door from our fiduciary, third party money side of the house."

Tue, 01/12/2010 - 17:19 | 191558 jedwards
jedwards's picture

Despite what they said, I would hesitate writing what you did.  Saying that they "admitted" to frontrunning their clients could amount to libel, so I would be careful.  Even if they don't have a case, they would love to invest a small portion of their $11 billion into a lawsuit to shut you down and cripple you financially, so I would really be careful with your words.

Tue, 01/12/2010 - 17:54 | 191600 Green Sharts
Green Sharts's picture

Saying that they "admitted" to frontrunning their clients could amount to libel

Why, because they didn't admit to it?  Stop being so picky.  In Tyler's world, words mean whatever he says they mean.  He can redefine frontrunning or any other word he wants to.  

Tue, 01/12/2010 - 17:56 | 191601 buzzsaw99
buzzsaw99's picture

two words: "jury trial"


besides, you think they want to try to prove in court beyond a reasonable doubt that they didn't?

Tue, 01/12/2010 - 18:08 | 191626 jedwards
jedwards's picture

How much money do you think ZH wants to spend defending themselves on a libel lawsuit, regardless of whether or not they are right?

I have no opinions on whether or not they are right, I'm saying that Goldman could argue they never admitted to frontrunning, which is illegal, and ZH saying they admitted to frontrunning could run the risky of opening them up for an expensive lawsuit. 

Tue, 01/12/2010 - 18:26 | 191652 Herd Redirectio...
Herd Redirection Committee's picture

Somehow I get the feeling they just may have the legal aspect covered.

Have you considered that GS is being baited into launching a lawsuit or some other silly court action?

I am sure there are people that would like nothing better than to catch GS off guard in court, by presenting previously unheard of 'compelling evidence'...

Tue, 01/12/2010 - 18:57 | 191698 MsCreant
MsCreant's picture

To build a vehichle like ZH and let it go down in flames while Goldman gets their reputation smeared in court-- that's when throwing yourself on your sword is useful. Can you see "Marla" in court against Goldman lawyers? I had been speculating the same thing.


Tue, 01/12/2010 - 19:26 | 191729 deadhead
deadhead's picture

+1 to both of you.

Can you see "Marla" in court against Goldman lawyers?

I would be in that courtroom, without question.

Tue, 01/18/2011 - 08:22 | 883637 pams
pams's picture

that was an excellent question. I am sure that you will find the proper answer.

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Tue, 01/12/2010 - 17:46 | 191584 Anonymous
Anonymous's picture

---Hey, I know-----


Stand up and do it for the children of America!!!!


Just say NO to being HAD!!

Tue, 01/12/2010 - 18:05 | 191621 Fritz
Fritz's picture

Dear Lloyd,

Goldman is a bucket shop.



Former Client

Tue, 01/12/2010 - 18:35 | 191668 Anonymous
Anonymous's picture

Erm. The Squid does not nor ever do any 'Front running' that is illegal.

They do another kind of activity that is nothing like front running, only it bears a vague resemblance to the illegal activity. The feeble hacks and malcontents wail and moan that The Squid is front running, when in fact no crime has occured.

See how that works? No crime, no penalty, business as usual.

Tue, 01/12/2010 - 19:22 | 191723 CBTeas
CBTeas's picture

Isn't this whole front-running question tied in with the "High Frequency Trading (HFT)" scam that Wall Street brokerage firms are fighting so hard to protect?  I love how Wall Street defends HFT as NOT front-running.


Sure...and Goldman can claim that they aren't making decisions based on client data when the HFT system is set up to execute trades for the brokerage firm based on certain client trade characteristics.  What a joke.



Tue, 01/12/2010 - 20:02 | 191761 JR
JR's picture

What difference does it make whether or not what Goldman does is “legal”?  The point is they have an established advantage over all other investors in the market.  They are cheating the market.  It means if you are an independent investor you are at a disadvantage. I don’t think “legality” has anything to do with it; if it turns out that the law says Goldman’s frontrunning is “legal,” then it means Goldman has cheated the law.  When you are the law, you can’t break the law.

“They who possess the prince possess the laws.”  John Dryden, 1682.

The answer is to take the power away from Goldman.  Nothing’s going to change until Goldman Sachs is unhitched from the government.

As the Financial Crisis Inquiry Commission opens hearings tomorrow, Andrew S. Ross in today’s column Financial Chiefs in the Hot Seat says this is what they oughta ask Blankfein and Mack:

“A more specific question for Goldman Sachs CEO Lloyd Blankfein and Morgan Stanley Chairman John Mack might concern reports that the SEC is investigating how their firms made out like bandits by shorting the same mortgage-backed securities sold to unsuspecting investors, like CalPERS, which lost fortunes when the housing market collapsed.

We all have a debt of thanks to Zero Hedge for bringing the details to this point.

Tue, 01/12/2010 - 20:10 | 191770 Euro Dude
Euro Dude's picture

A ridiculous title for a ridiculous article. This is nothing to do with frontrunning and there's nothing illegal going on.

It seems that hardly anyone here actually understands what frontrunning is. Kid Dynamite, of course, is a notable exception.




Tue, 01/12/2010 - 21:42 | 191874 deadhead
deadhead's picture

My stealth squid campaign is working...thanks euro dude.




pssst, lb, i'm doing pretty good, eh?  wait til you see what I got planned for tomorrow once zh starts slamming the piss out of you on that pecora peckerhead commission thing.  remember like i told ya, keep the sad face on, do the apology thing, stress the charitable giving and be just like a good football coach when he is ahead...just run the phucking clock out.


Tue, 01/12/2010 - 23:07 | 191949 JR
JR's picture

Deadhead, it appears your sarcasm was lost on Junker, and you have now joined ZH’s growing list of officially designated junkees. Actually, it’s not such a bad group…

Anyway, thanks for the lift… +11 minus 1 equals  +10!

Wed, 01/13/2010 - 01:58 | 192053 MsCreant
MsCreant's picture

Welcome JR. I'd junk you too, but I wanted you to know you earned that junking all on your own with no help from your friends (at least that I know of). :-)

Tue, 01/12/2010 - 20:35 | 191811 Alchemist
Alchemist's picture

It's not clear how this constitutes front-running at all.. Can someone enlighten me.. Front-running entails putting on a trade solely to take advantage of known-in-advance customer order.. It looks like here desk strategies together with traders come up with ideas that traders implement and they also share these ideas with clients who are free to choose whether to act on them or not knowing full well that the ideas come from the trading desk and not research and might thus be already implemented by desk traders.. What am I missing?

Tue, 01/12/2010 - 21:08 | 191846 JR
JR's picture


matt taibbi
july. 2 2009 — 11:56 pm
Goldman Sachs is reeling under public pressure
Goldamn Sachs Chairman and CEO Lloyd Blankfein attends a panel in Washington DC in November 2008 (Chip Somodevilla/Getty Images)

You acknowledge that we may monitor your use of the Services for our own purposes (and not for your benefit). We may use the resulting information for internal business purposes or in accordance with the rules of any applicable regulatory or self-regulatory body and in compliance with applicable law and regulation. via Is Goldman Legally Frontrunning Its Clients? | zero hedge.

After watching its thoroughly maladroit handling of several p.r. problems this week, I’m absolutely convinced that Goldman Sachs can be hurt if enough people keep piling on with the pressure. The latest evidence of this is its abject collapse in the face of questions from Zero Hedge about the possibility that it is using the data its takes from users of its website to front-run those same people.

Front-running takes place when a bank or broker-dealer– say, Goldman, Sachs — executes a trade for its own account before filling its customer’s order. Since a large enough trade (executed by institutional investors, for instance) can actually move the price of the security in question, front-running can be a very profitable activity. It’s sort of like fast-food insider trading. It is common knowledge that front-running on Wall Street is rampant, and I interviewed more than one person for my recent Rolling Stone story who accused Goldman of front-running its big clients in all sorts of arenas, from the internet IPO years to the commodities markets.

Wed, 01/13/2010 - 13:33 | 192514 Alchemist
Alchemist's picture

Matt Taibbi is as fluent in what goes on on Wall Street as Sarah Palin is in nuances of middle eastern politics

Tue, 01/12/2010 - 22:56 | 191936 Green Sharts
Green Sharts's picture

You're not missing anything.  It is yet another Tyler Durden piece that is complete bullshit.  

Tue, 01/12/2010 - 20:54 | 191832 no cnbc cretin
no cnbc cretin's picture

GS needs to go down! Has anyone seen this article: and no I'm not navie.

Wed, 01/13/2010 - 01:45 | 192047 What a mess_man
What a mess_man's picture

The GS gang definitely deserve STOCK bonuses.  So someone please get the stocks, and set 'em up in Times Square.  Call the media, we'll have a party!

Wed, 01/13/2010 - 10:53 | 192256 quant-this
quant-this's picture

Seriously, you guys can all bitch and complain all you like but if their clients don't care and continue using them, then what are they doing wrong (forget about morals and SEC, CFAI, FSA ethics guidelines for a second)?


So if you treat someone like crap and they keep on coming back to you and you still treat them like crap, is it your fault? Maybe your an ass hole but the fool is the one that keeps on coming back.


Wed, 01/13/2010 - 12:12 | 192388 Anonymous
Anonymous's picture

Your article title is incorrect. It's completely unrelated to the GS letter.
What GS as well as many other sell side firms, is perfectly legal. Their trading desks are talking their books. This is common practice and is not front running.
Front running is when a customer gives and order and instead of executing the order for the customer, the firm executes the order on their proprietary account first, usually with the intention of moving the underlying price and then trading it back to the customer, often at a price advantageous to the firm. This is illegal. Any licensed securities trader would know this.

The fact is if you don't like the trading calls, then don't use them.

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Susancai's picture

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rashood23's picture

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