Goldman Principal-To-Agency Program Trading Ratio Hits Record 22x

It has been a while since we revisited Goldman's domination of NYSE program trading courtesy of the SLP. For the past two months we have been waiting for additional information from the NYSE on what other firms are currently SLP vendors to the exchange. By the lack of any data from the NYSE we can only assume that Goldman is still the defacto monopolist in SLP, and in essence the primary privileged DMM on the NYSE. One wonders with liquidity "back to normal" when the NYSE, SEC and Goldman will agree to disassemble the SLP program so that the market can go back to its efficient old-school ways (this is rhetorical). As the data suggests, Goldman Sachs & Co. now has a staggering 22-to-1 ratio of principal to agency transactions: in the last week Goldman traded 662 million shares in principal capacity (instead of blaming all of this on Goldman's prop trading cash machine, we would love to be able to break down how much of this is attributable to SLP, but a reborn NYSE which believes in nothing but transparency will simply not provide that data). Taking into account GSEC adds another measly 10 million agency shares doesn't change the big picture that out of the top 10 NYSE firms, Goldman trades the third lowest amount on an agency basis. Goldman's casino is now not even pretending to trade on behalf of clients, as all of its money is made on FICC spreads and volumes (aka trading monopoly).

Maybe one of these days Goldman Sachs can do a philanthropic, non-profit seminar on how to ramp futures every single day in the 11pm-3am block. That, or how to use taxpayer money to pay for a trunk line straight into the Marriner Eccles buildling.

Comments

[spekulatn]

Hey TD, who the fook do you think you r homie?? What'sthis taking a whole hour between posts shi*?? You trippin dude. Don't scare me like that.... I thought the sack sent the spooks to gitchya.

[MsCreant]

Nice make over spekulatn!

[primus]

"I know I could slit my wrists and people would cheer," he says. But then, he slowly begins to argue the case for modern banking. "We’re very important," he says, abandoning self-flagellation.

"I’ve got news for you, if the financial system goes down, our business is going down and, trust me, yours and everyone else’s is going down, too."

~Lloyd Blankfein

And there you have it, right from the horses mouth.

http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6907681.ece

[Anonymous]

Just the fact that he said "I know I could slit my wrists and people would cheer" means he's been thinking about it. Could be a cry for help? Maybe the idea that anyone besides himself enjoying anything he does is what's stopping him.

[MsCreant]

Nah. Sociopath does not care that deeply. A narcissist would though. Sociopath tries to think of the right thing to say to get you to let him have his way, that is as far as his empathy goes. He is incapeble of connecting to his/her fellow human beings.

[basehitz]

. . . from the horses ass.

[geopol]

A little clip,,,the honest system, a historical view

http://video.stumbleupon.com/#p=mvkfoe4lqc

[lizzy36]

Goldman is to busy taking their own brand of philanthropy (and pr) to the streets of NY.  Three hundred employees (one wonders if Lloyd will be blessing the less fortunate with his presence) are helping the Salvation Army to serve the 10,000 free Thanksgiving dinners across New York City.

The irony is that the number of free dinners being provided is up 10x over the amount provided last year. Proving that the fundamentals of supply & demand are not completely dead.

http://www.cbsnews.com/stories/2009/11/20/business/main5724228.shtml

[JohnKing]

Let them eat turkey!

[primus]

Goldman should be thankful they haven't completely collapsed the system yet and that the braindead public remains subdued.

If they ever run out of turkeys, the crowd will demand pork, and there are plenty of pig-men to go around.

[MsCreant]

Lizzie,

Hell of a post. My mind is reeling. If I am the press, I am so wanting to be a fly in the wall.

• Will the employees see themselves as having caused some of the pain they are in the midst of putting bandaids on?
• Will some of them freak and not even be able to do the job? As in "Eeeeewie, they're poor. They don't wear designer clothes. Eeeew!"
• Will some of them not be able to do the job because they cannot "lower" themselves to serve anyone?
• Will some of them sprout empathy and not be able to do their jobs any more (a real green shoot).
• Will some just cry?
• Will some swear a quiet revenge on their bosses who made them do this?
• Will some get it, then go back to work on Monday, compartmentalize the experience, and live a life of quiet desperation, knowing what they know, but unable to break out?
• Will some go back to work, understanding that GS is a pox on society, and decide to use safe means to start tipping ZeroHedge off to any of the dishonest practices that they are aware of? tips [ at ] zerohedge [ dot ] com

[lizzy36]

MSC,

I suspect that GS employees will undertake this charitable endeavour for the same reason they donate money to the United Way or to certain political campaigns:  because the powers mandated it. 

As near as i can tell, most people live a life of quiet desperation, sacrificing their lives for their lifestyle.  But them i am dark and cynical about such things. 

Truth is never pure and rarely simple. 

[Anonymous]

Wasn't the SLP extended for another 6 months, until 11/30/2010? Therefore, it's ready to expire? Or is it the gift that will perpetually keep on giving?

[Assetman]

Yeah... and I've wondered what justification the NYSE uses to support another extension.  Do they have evidence of broader participation, as they have promised in the recent past?  Because it appears to me that Goldman is still dominating on overall NYSE volume.

[knukles]

WTF good are anti-trust laws if not applied to apparent trading dominance?

[Anonymous]

I take this to mean goldman trades about 27% of the entire market. 835/3100

I consider this data very impt, but it is much less than when they were doing even more manipulation

[Anonymous]

Principal trading is not the same as Proprietary trading. Principal trading means you are making a market, you are willing to buy what someone else comes to you to sell, and you are willing to sell what someone else comes to you to buy, as opposed to an Agency trade in which you act as a go between and earn a commission. Both agency and principal are different forms of market making, albeit principal has more risk (and potentially higher returns). But neither is the same as proprietary trading, in which you come up with your own strategy of what you want to buy and sell.

The ignorance of the posters is amazing. This has nothing to do with proprietary trading. It is just showing what approaches different banks take towards market making.

[Zippyin Annapolis]

Keep it up Tyler and Duncan will send Chuck Schumer after you!

[Anonymous]

Agreed with 138075
Principal trading will no doubt be client facilitation trading, whether that is a stop out at a specific benchmark or strike, or will relate to all the HF and high frequency trading flows that are contracted on swap/give up etc. Look at GS and CS, its all about their high speed DMA offering

[RB1]

Agreed with #138075.

Principal trading also relates to client trading, in that it relates to guranteed strike/benchmark facilitation to clients. Also looking at CS numbers it will relate to the capacity that GS and CS act when facilitating High Freq and Hedge Fund DMA flows, via swap, give up etc which are principal transactions.

[Anonymous]

Thanks My Dear
Trading