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Letter To Senator Charles Schumer - Ban Goldman's SIGMA X Dark Pool

Tyler Durden's picture





 

Dear Senator Schumer,

You recently approached SEC head Mary Schapiro with some very valid concerns about Flash trading, and the potential for investor abuse by advance looks to select market participants ahead of the general order pool. Your crusade was subsequently enjoined by such equity market luminaries as Robert Greifeld, president and CEO of the Nasdaq Stock Market, who had this to say regarding not just Flash trades in particular, but numerous other components of market topology, whose sole purpose is to obfuscate natural order flow and to provide loopholes for dominant market players to extract inefficiencies (i.e., scalp regular investors) arising from established and SEC-endorsed mechanisms of efficient market circumvention:

"Flash orders, which are a fundamental part of high-frequency trading, are but one symptom of the current evolving market structure. Nasdaq OMX is concerned that the securities industry appears
willing to accept more and more ‘darkness’ and limits on the
availability of order information. Instead, the policy goal should be
clear: to eliminate any order types or market structure policies that
do not contribute to public price formation and market transparency.”

"The industry has a unique opportunity at this time to take a hard look
at dark order types and the underlying market structure issues that do
not support public price information
.”

Senator Schumer, while Zero Hedge applauds your initiative, the truth is that the wrongdoing in the context of potential investor market abuse runs far deeper and is much more pervasive than you realize. And while one can highlight the merits of the Op-Ed published in the New York Times earlier by quant titan Paul Wilmott entitled "Hurrying Into The Next Panic" (a recommended read for you and your staff), which notes numerous frightening implications brought about by the domination of Hiqh Frequency Trading, let us stick within the context of advance looks, which is at the basis of your letter seeking the ban of Flash-like behavior.

Zero Hedge would like to highlight that while your letter to Mary Schapiro indicated your concern with such market actors as DirectEdge, BATS and Nasdaq, the truth is there are substantially larger and more dangerous "fish" on which you should focus your attention.

As a primary example, I would like to refer you to Goldman Sachs' dark pool, SIGMA X.

As evidence I present an analytical paper prepared by none other than Goldman Sachs, compliments of the Bank Holdings Company's GSET (Goldman Sachs Electronic Trading) division.

 

 

While I recommend you read the full report and other related literature (especially if you wish to understand why VWAP or Volume-Weighted Average Price is such a critical concept in modern trading), I would like to bring your attention to page 6 of this report, and in particular the following sections:

"The child orders generated by Goldman Sachs algorithms interact with SIGMA X liquidity."

...and...

"When a client routes a marketable order through SIGMA, the smart router first exposes the order to SIGMA X liquidity."

This basically means that as a Goldman algo strategy splits an incoming block trade into smaller (child) components, these orders will first be advance-exposed to Goldman's own prop strategies which get a "first look" (no pun intended) at the order flow to dispose of as they desire. Additionally, due to the flashing advance window, Goldman implicitly knows in advance of a potential spike in order flow - in other words if there is a size buyer or seller of any given particular stock - an incalculable edge in today's market, allowing one to potentially take advantage (frontrun) of forced buyins and unwinds and major block trades.

This provides the firm with a material advantage over other market participants.

In order to get a sense of the size of this potential abuse, as Goldman itself discloses, SIGMA X traded over 123 million (matched-only, single counted) shares daily in May, over 600 million per week. This is a staggering amount of shares over a cumulative extended period of time, and could potentially provide the firm with a substantial unfair advantage over other participants.

Furthermore, Goldman is a dominant Program Trading market player on the New York Stock Exchange, by virtue of its participation in the NYSE's Supplemental Liquidity Provider program. As publicly disclosed, Goldman traded over 796 million principal shares (for its own benefit, not as an agent) in the prior week alone, almost double the next largest market participant Credit Suisse which traded a total volume of just over 420 million shares.

Whether or not Goldman can implicitly take advantage of the advance looks Goldman receives compliments of its own dark pool, SIGMA X, and then subsequently reroutes this informational advantage to trades executed on the NYSE, and other exchanges and ECNs, is also a very pertinent question.

However, even if acting in a vaccum exclusively within the confines of SIGMA X, Goldman's modus operandi begs the question: if, as your letter discloses, you believe Flash-like behavior is a detriment to investors, we encourage your team to focus its attention on this matter. The potential abuse in the context of SIGMA X, is substantial, and much more so if it is not confined to the dark pool exclusively.

In conclusion, SIGMA X was conceived and brought to market via Spear, Leeds and Kellogg: I would like to present to you the form contract with Goldman that new customers have to sign when they agree to engage SLK for any client purposes. I bring your attention to the highlighted area:

Zero Hedge is happy to answer any questions at your convenience. You may contact us at sigmax@zerohedge.com

PS. In case readers are having trouble grabbing the original document, here is the link to the file saved internally.

 


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Wed, 07/29/2009 - 16:26 | Link to Comment Project Mayhem
Project Mayhem's picture

Nice work

Wed, 07/29/2009 - 16:26 | Link to Comment Anonymous
Wed, 07/29/2009 - 16:40 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:11 | Link to Comment Anonymous
Wed, 07/29/2009 - 16:27 | Link to Comment buzzsaw99
buzzsaw99's picture

Only in Goldman's world can you add liquidity by taking money out.

Wed, 07/29/2009 - 18:40 | Link to Comment VegasBD
VegasBD's picture

Ha! Thats a good way to put it

Wed, 07/29/2009 - 16:28 | Link to Comment Alexander Supertramp
Alexander Supertramp's picture

Namaste, you righteous bastards.  "Every generation needs a new revolution," said Thomas Jefferson.  Thanks for your part in leading ours. 

Wed, 07/29/2009 - 16:28 | Link to Comment Anonymous
Wed, 07/29/2009 - 16:32 | Link to Comment Anonymous
Wed, 07/29/2009 - 16:43 | Link to Comment Anonymous
Wed, 07/29/2009 - 18:04 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

i third that and if i might add that ZH is in the financial blogosphere what Gutenberg's press machine was in .... well the sphere of books, and i have no doubt whatsoever that there is a Pulitzer prize stashed somewhere in the following years for this blog and its creators ...

Wed, 07/29/2009 - 18:17 | Link to Comment dnarby
dnarby's picture

How cool would that be if a Pulitzer was given to someone who remained anonymous.

 

If they took it to their grave...  Talk about creating a freakin' legend.

Wed, 07/29/2009 - 18:42 | Link to Comment VegasBD
VegasBD's picture

The character Tyler Durden will eventually bring down the credit markets. love it.

 

Wonder if Chuck Palahniuk reads zero hedge?

 

Wed, 07/29/2009 - 20:49 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

use your imagination, there is always someone to pick up the prize without breaking the true identity of TD

Thu, 07/30/2009 - 01:31 | Link to Comment aldousd
aldousd's picture

Rosie

Wed, 07/29/2009 - 23:24 | Link to Comment Anonymous
Wed, 07/29/2009 - 16:35 | Link to Comment kote
kote's picture

More Street Smart SIGMA X goodness:

http://gset.gs.com/cgi-bin/upload.dll/file.pdf?z0212210az518c49e6267b482...

How long til they take these offline do you think?

Wed, 07/29/2009 - 16:37 | Link to Comment Oso
Oso's picture

already happened.

Wed, 07/29/2009 - 16:42 | Link to Comment kote
kote's picture

WOW.  Google cache of the same URL below.  It actually was there.  It took 2 minutes for them to take it down... and it's been up for months at that URL.

http://www.google.com/url?q=http://docs.google.com/gview%3Fa%3Dv%26q%3Dc...

More also at http://gset.gs.com/gset/education/thought.asp

Wed, 07/29/2009 - 16:43 | Link to Comment Project Mayhem
Project Mayhem's picture

holy **** it's now deleted off docs.google.com   (click download on the cached page and see what happens)

 

Tyler you better have some backup copies of this little monster

Wed, 07/29/2009 - 16:44 | Link to Comment kote
kote's picture

Still up at the thought link posted above.  Check the third page.  Very weird.

Wed, 07/29/2009 - 17:44 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:50 | Link to Comment Project Mayhem
Project Mayhem's picture

thanks, that worked

Wed, 07/29/2009 - 20:59 | Link to Comment agrotera
agrotera's picture

NO coincidence--there is alot of history getting rewritten, and facts suppressed.  I have noticed it a few times on wikipedia, but i just thought my memory was off, until i read the deepcapture.com essay on how the whole naked short selling scandal that they helped to expose, is being blocked from report on wikipedia.

Wed, 07/29/2009 - 16:44 | Link to Comment Cow
Cow's picture

ummm... how about ...already

Wed, 07/29/2009 - 16:50 | Link to Comment kote
kote's picture

Hey Cow, the bear beat you to it.  Just sayin' :)

Also, to GS, THAT WASN'T A CHALLENGE.  But, I'm still impressed.

Wed, 07/29/2009 - 17:28 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:05 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:20 | Link to Comment kote
kote's picture

Looks like you're right.  However, it doesn't make any sense at all to be doing this.  Security through obscurity?  Force internal sites to use dynamic code to recreate the links every few minutes?  When it's already publically available and cached?

Whatever.  Someone got a nice bonus for the implementation I'm sure.

Wed, 07/29/2009 - 21:44 | Link to Comment We Are Legion
We Are Legion's picture

Yeah... someone NOT the IT person who made it...

Wed, 07/29/2009 - 16:34 | Link to Comment Veteran
Veteran's picture

Killer as always

 

As an aside, saw on Bloomie ol' Obama said we is at the beginning of the end.  Think a Churchill quote, (paraphrased of course because my memory is shot) might be more appropriate:

This isn't the end, or even the beginning of the end.  It is perhaps the end of the beginning. . .

 

Wed, 07/29/2009 - 16:36 | Link to Comment dark pools of soros
dark pools of soros's picture

why just Sigma X?  ban ALL dark pools

Wed, 07/29/2009 - 16:44 | Link to Comment rickets
rickets's picture

Further, no more invisible orders via ECNs which allows participants to step in front of what others see as the best bit/offer.  I also have to ask if multiple ecns/marketcenters are really a good idea.  One centralized marketcenter - with no competition, would make a flatter, more fair marketplace.  The more avenues for execution the harder to regulate and the higher the chance of inequality.  Now, I say that knowing that means someone has to run it fairly...which is an issue....

Wed, 07/29/2009 - 16:51 | Link to Comment Anonymous
Wed, 07/29/2009 - 16:36 | Link to Comment newera22
newera22's picture

Great post. Reading between the lines here, I suspect that Schumer may not be as benevolent as you think. In fact by pointing out some bad apples he may be finding a way that protects his key backers. I will leave it at that.

Wed, 07/29/2009 - 17:12 | Link to Comment Anonymous
Wed, 07/29/2009 - 18:47 | Link to Comment Anonymous
Thu, 07/30/2009 - 01:35 | Link to Comment aldousd
aldousd's picture

Tyler and friends you have to love it. You have the smartest people in the room walking around town with shirts on that say "Zero Intelligence."  Like they're all like little Hugh Axtons.

Wed, 07/29/2009 - 19:08 | Link to Comment milkum bilkum pc
milkum bilkum pc's picture

My exact thought..., or could be they are so dumb that they stepped in the crap before looking and now opened up further inspection of GS and others.... One can only hope on the latter.

Wed, 07/29/2009 - 16:39 | Link to Comment ToNYC
ToNYC's picture

Perhaps it might be simpler to note that even the sharpest minds couldn't possibly be thinking about anything in 30 msec..they only feel comfortable trading 123 million shares in a day for its own account when there is zero risk..and they thus have exactly no need to hedge..duh! they are zero hedgers! VAR can be astromonical because the divisor is close to zero..packet drop errors only.

Too simple for the unRegulators?..too Big to be Challenged..the Joseph Jett effect at Kidder Peabody - 1994

What is the sound of a whistle-blower in a vacuum?

 

Wed, 07/29/2009 - 16:37 | Link to Comment Project Mayhem
Project Mayhem's picture

Yeah don't forget Baikal and Turquoise  ;)

Wed, 07/29/2009 - 16:39 | Link to Comment ptoemmes
ptoemmes's picture

As good as I have read from you especially, as a novice at best, I understood it.

 

Pete

Wed, 07/29/2009 - 16:40 | Link to Comment silencedogood
silencedogood's picture

Dennis Kneale,

If your station ACTUALLY did research instead of waiting for reuters and the AP to put stories out you can parrot...you may actually get a viewing audience.  The CNBC 'Money Honeys' are spectacular but basicly lip syncing a story put out by Reuters or the AP is NOT analysis.  Dennis, you are old enough to remember Milli Vanilli...try to learn from their mistakes!

-Silence Dogood

Wed, 07/29/2009 - 16:42 | Link to Comment molecool
molecool's picture

Kick ass letter, Tyler - these guys are picking a fight with the masters in obfuscation - plus they have half of Congress at their beck and call. Schumer and his crew will need all the help they can get to make a case that is 'politically too inconvenient' to pass up. Not sure if this ever goes anywhere - whenever we think the heat is on those cats don't seem to break a sweat.

Wed, 07/29/2009 - 16:41 | Link to Comment Miles Kendig
Miles Kendig's picture

There is ample history in Washington of seemingly friendly persons who, in fact end up end up acting as as an agent provocateur.  I hope that Senator Schumer is in fact looking to assist in reclaiming the prospect of free markets from those that now hold them hostage.  However, of all the folks in the US Senate that could address this issue Schumer is one I would have lingering questions about.  Tread cautiously.

Great letter!

Wed, 07/29/2009 - 17:01 | Link to Comment Anonymous
Wed, 07/29/2009 - 16:46 | Link to Comment Anonymous
Wed, 07/29/2009 - 16:48 | Link to Comment Comrade de Chaos
Comrade de Chaos's picture

"it appears the original link to the paper was taken down within 10 minutes of this post."

priceless, hm, someone does pay attention :) . if only they knew what ZH does or does not know :) , keep them guessing!

Wed, 07/29/2009 - 17:15 | Link to Comment kote
kote's picture

Dymanically updated link available at http://gset.gs.com/gset/education/thought.asp

Wed, 07/29/2009 - 18:48 | Link to Comment Comrade de Chaos
Comrade de Chaos's picture

p.s. I mean GS and not the Senator Schumer.

Wed, 07/29/2009 - 16:54 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:05 | Link to Comment RobotTrader
RobotTrader's picture

Yet another banner day for the Sigma X, Dark Pools, Prop Desk A, and Prop Desk B at Goldman Sachs.

The Fed and Treasury Department successfully sold another huge chunk of Treasuries today, thanks to Goldman's dunking of all commodities, which promptly put a bid up on the U.S. Dollar and U.S. Treasuries.

Note the dollar rally today.  The Chinese Plutocrats must be giddy.  Geithner and Goldman now under their thumbs, China is now able to dictate currency market direction.

Of course, they obliged by lapping up today's Treasury issues like a dog lapping up barbeque sauce off of Tony Roma's ribs thrown out onto the sidewalk.

The Chinese are like dogs.  Give them enough, and they will eat and eat and eat without stopping.  Like the Chinese adding more and more and more to their vast horde of U.S. Treasuries.

Looks as if the same crowd of little old ladies who shucked off their canes and walkers to buy oils, golds, fertilizers, infrastructure, emerging markets, etc. turned tail and immediately stampeded out of the casino after Geithner started a small grease fire in order to spook the herd back into the "safety assets".

That's what happens when billions and billions under management is now daytraded on a 5-minute chart, and long positions are immedately converted into short positions within hours.

Meanwhile, while inflation assets were being dumped, looks as if everyone decided that the next best place to hide was in bombed out, government-owned, junk banks like Citigroup and near bankrupt retailers like Pier 1.  It really doesn't matter what the firm's prospects are, if the market is having a bad day, money will pile into anything and everything that is going up.

And don't forget Cramer's call for $20 oil.  All the car manufacturers and airlines were up big today.  I expect a lot of funds will be piling on those stocks tomorrow.

Everyone will be staring bug-eyed at the screens tonight, scanning and checking out what to buy tomorrow now that 100% of their commodity positions have been offloaded.

 

 

Wed, 07/29/2009 - 17:13 | Link to Comment aldousd
aldousd's picture

You certainly have a way with words Robot.

Wed, 07/29/2009 - 17:25 | Link to Comment dark pools of soros
dark pools of soros's picture

its more the dots he connects under the guise

you should see the desperate longs of those junk banks cheer today as if they still could score the winning touchdowns of years gone by

 

in time they will look back and feel it was just a mindless summer dream

Wed, 07/29/2009 - 17:20 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:35 | Link to Comment Miles Kendig
Miles Kendig's picture

With the added plus for China that pressure on commodities pressures iron ore pricing, the Aussie and redirects some of the froth from their lending activities...

Wed, 07/29/2009 - 17:59 | Link to Comment deadhead
deadhead's picture

What a treat....a great post by TD and excellent, excellent memorandum to Sen. Schumer and the Robo daily summary.

Alas, I stimulated the economy today by buying a Compaq 15.7 laptop at WalMart (they were $298, a genuine steal in my opinion).  Naturally, will purchase spy during the a.m. low tomorrow and sell at 3:59 p.m. to pay for said computer.

 

 

 

Wed, 07/29/2009 - 19:21 | Link to Comment Ags Nightmare
Ags Nightmare's picture

Hey, Wndy...been a long time. It's still all about "words". I'm blown away how quick the crooks are back to chasing trash can lids down the street. Jimmy Jones could wave a bag of dog poo over his head and the Cramericans would line up to buy it and four months ago he was curled up in a fetal position.

This is gonna end badly...again.....

 

Wed, 07/29/2009 - 17:08 | Link to Comment curbyourrisk
curbyourrisk's picture

Excellent work...but definitely above his pay grade!!!!!

Wed, 07/29/2009 - 17:08 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:11 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:11 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:17 | Link to Comment buzzsaw99
buzzsaw99's picture

Exactly.

Wed, 07/29/2009 - 18:10 | Link to Comment deadhead
deadhead's picture

I've commented about the senior Senator from NY custom previously and I certainly cannot disagree with your thought.  As has been said before, politicos like Schumer will absolutely eat their own if the momentum shifts enough and Schumer will start chomping like a homeless guy on a tenderloin at Sparks.  The key is for the momentum to keep moving and from where I sit, I cannot read any liberal blog/Obama worshipping/Democratic junkie site that doesn't bash the shit out of wall st., banks, with GS being the poster boy.  Hell, one little proof of the fact that the light is too bright on GS is the price they paid for TARP warrants vs. their peer group.  They have massive PR problems, they know it, and are very concerned.

I meant to add from a NY perspective, there are lots of NYers who detest Wall St. and understand the havoc that they have caused.  Those folks are Schumer's ticket and he knows it.

Keep fightin' TD.

Wed, 07/29/2009 - 22:10 | Link to Comment Miles Kendig
Miles Kendig's picture

Time for some folks to begin linking the real estate market in NYC to GS and like firms as the summer turns to fall turns to winter.  A steady stream of articles remining folks that the reason the just lost another 8-10% in the just passed quarter on their property is because of THEM...

Your are quite correct that on all of the pro administration sites there is an ever growing chorus of GS bashing and this needs to be fostered, supported and enhanced.

Thu, 07/30/2009 - 04:07 | Link to Comment Anonymous
Thu, 07/30/2009 - 04:09 | Link to Comment Anonymous
Thu, 07/30/2009 - 04:14 | Link to Comment Anonymous
Wed, 07/29/2009 - 19:04 | Link to Comment GoldmanSux
GoldmanSux's picture

An astute comment.

Wed, 07/29/2009 - 19:58 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:15 | Link to Comment Anonymous
Thu, 07/30/2009 - 02:45 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:21 | Link to Comment Anonymous
Wed, 07/29/2009 - 20:41 | Link to Comment Alexander Supertramp
Alexander Supertramp's picture

Brilliant find, thanks.  Sweet to see "the market" itself starting to do some of the work.  More of this + ZH + a whistleblower or two = just maybe a snowball's chance in hell after all.  This GS spokeswoman Andrea Raphael was a busy lady today, also crafting the corporate line for the GS compliance attorney arrest in buzzsaw99's post 18693 below.  Come on Andrea, punch the clock for the day and go off-line and share some of the real deal with TD.  Please?

Wed, 07/29/2009 - 17:24 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:24 | Link to Comment Soldier of Fortune
Soldier of Fortune's picture

The hilarity of TD's post script is timeless........P.S. FU Goldman you can view it on ZH....lol

Wed, 07/29/2009 - 17:26 | Link to Comment buzzsaw99
buzzsaw99's picture

From acrossthecurve:

Goldman Sachs ( purportedly a well connected and well informedand powerful bond firm domiciled in lower Manhattan) put out a piece today in which the firm called for higher bond yields.

They suggest that relative to other asset classes that the risk premium built into the Treasury market is too high and should decline to reflect less risky conditions. Here is a relevant excerpt:

* UST yields have room to rise.  Financial conditions have eased
> significantly over the last month.
> * Risk premium on the UST curve is high relative to other asset
> classes.  As a result, flatteners may be attractive.
> * The strong participation in June’s front-end auctions is likely not
> the start of a new trend.

I would humbly suggest that it is possible that the Treasury market has the correct story and the other markets are wrong.

Talk about sniveling duplicitous drivel! Waa! We need bigger yields for the bonds that are getting stuffed down our gullets. Waa! Somebody buy these equities!

Wed, 07/29/2009 - 17:38 | Link to Comment Anonymous
Wed, 07/29/2009 - 18:13 | Link to Comment deadhead
deadhead's picture

Great story! 

Wed, 07/29/2009 - 21:44 | Link to Comment SWRichmond
SWRichmond's picture

now THAT is fucking funny.  thanks for sharing this!

Wed, 07/29/2009 - 22:12 | Link to Comment Miles Kendig
Miles Kendig's picture

WhoT!

The deep strike is hurting em.... Hit them harder and harder...

Wed, 07/29/2009 - 17:43 | Link to Comment Anonymous
Wed, 07/29/2009 - 22:59 | Link to Comment agrotera
agrotera's picture

Hear-Hear!!!

Wed, 07/29/2009 - 17:47 | Link to Comment Anonymous
Wed, 07/29/2009 - 18:17 | Link to Comment deadhead
deadhead's picture

18668....a great reminder, particularly for those who might be too young to have lived through this.

I would add that the crucial matter was the fortitude and patriotism of 'deep throat' and the risks he took to assist W&B. Deep throat is a hero in my book.

For those potential 'deep throats' out there, just go to your public library, get a gmail account, and send what you know to  tips at zerohedge dot com

 

Wed, 07/29/2009 - 22:19 | Link to Comment Miles Kendig
Miles Kendig's picture

Better yet, buy a netbook with cash and use it in a public, or better yet an open "private" WiFi zone... Library usage is more easily traceable... Keep it generic and use it only for the task at hand. Protect yourself from those that would destroy free markets and you for the commission NYSE will give them for transacting a share on their exchange.

I remember delivering the Seattle PI during those days and the should never be forgotten.

Wed, 07/29/2009 - 22:21 | Link to Comment Anonymous
Wed, 07/29/2009 - 23:05 | Link to Comment agrotera
agrotera's picture

You took the words out of my mouth--i was going to say that Tyler and Marla are our modern day Woodward and Bernstein!!! This is not just a political and moral crime, it is exponentially larger in that it also involves a dollar value bigger than any crime (other than the big bank bailout heist that is in process )

Wed, 07/29/2009 - 17:47 | Link to Comment Anonymous
Wed, 07/29/2009 - 17:53 | Link to Comment kote
kote's picture

order flow from Mom and Pop doesn't end up in these dark pools, it's institutional order flow.

So... dark pools remove liquidity from where Mom and Pop have access to it, and they segment it off to where only institutional players have access (for a premium).  You're right.  Nothing to see here.

Wed, 07/29/2009 - 18:30 | Link to Comment Anonymous
Wed, 07/29/2009 - 18:02 | Link to Comment Veteran
Veteran's picture

Maaaan, you may not work for GS but you have the same elitist prick mentality.  JPM?

Wed, 07/29/2009 - 19:23 | Link to Comment Anonymous
Thu, 07/30/2009 - 09:29 | Link to Comment Veteran
Veteran's picture

Here's where you are wrong, tough guy.  Labeling the people of America as 'lynch mob' masses spoon fed garbage as they are cleary too unintelligent to understand the issues at large.  Your pretentious attitude lies at the heart of all that is wrong with the financial industry writ large.  Wall Street did more to destroy this country than Al Qaeda.  Think the gubment sent me to fight the wrong enemy. . .

Wed, 07/29/2009 - 18:36 | Link to Comment Anonymous
Wed, 07/29/2009 - 19:10 | Link to Comment Alexander Supertramp
Alexander Supertramp's picture

So testy elitest Anon guy!?  This is about much more than just dark pools, dim wit.  "Everybody needs a bosom for a pillow," Fatboy Slim advises.  Just take it easy man, and see if maybe you can't get lucky tonight.  Perhaps that'll help with your nasty little case of myopic pathologies, or at least enlarge and clarify your sorry-ass perspective. 

Wed, 07/29/2009 - 20:51 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

+ 100 million

Wed, 07/29/2009 - 21:57 | Link to Comment Anonymous
Wed, 07/29/2009 - 22:22 | Link to Comment Miles Kendig
Miles Kendig's picture

The fact is that this track will let anyone race including you on the same terms.  Can you say the same for the track you are advocating?

Wed, 07/29/2009 - 19:13 | Link to Comment Anonymous
Wed, 07/29/2009 - 19:31 | Link to Comment Anonymous
Wed, 07/29/2009 - 20:20 | Link to Comment Alexander Supertramp
Alexander Supertramp's picture

Is this Anon "Tell me where I am wrong instead of resorting to name calling" the same one who also posted "FUCK OFF"?   Register and log-in please so we can avoid this identity confusion.  Until then, let's go bowling.

Wed, 07/29/2009 - 21:07 | Link to Comment Anonymous
Wed, 07/29/2009 - 21:46 | Link to Comment SWRichmond
SWRichmond's picture

Like the institutions that manage Mom and Pop's 401(k) funds?  Yeah, really, I mean, who cares?

Wed, 07/29/2009 - 21:58 | Link to Comment Anonymous
Wed, 07/29/2009 - 23:34 | Link to Comment Anonymous
Wed, 07/29/2009 - 23:18 | Link to Comment agrotera
agrotera's picture

Your leave off significant details and glibly dismisses this discussion without any reason other than that you don't agree with it and you back your objection singularly with a statement that you are"NOT a GS employee", and throwing this entire discussion into the category of "GS lynch mob"--how unfortunate for you to be so blind-sighted as to what is right and wrong.

Market fragmentation is also an issue, and not necessarily separate.

Wed, 07/29/2009 - 23:50 | Link to Comment Deferred Comp
Deferred Comp's picture

It is all part of the same set of forces that have contributed to the current unstable structure of the equity marketplace.  The very systems that were sold to everyone as the ultimate means to provide investors with natural liquidity and reward displayed interest have proven to be an abject failure.  Instead, average lot size is now smaller than many years ago.  Liquidity providers are incented to game a rebate structure for their own reward at the expense of their clients.  Pure buyers and sellers are now subject to predatory bots generating trades and quotes in computer time .  And to top it all off, for a nominal fee, exchanges are offering preferential data streams .  How is dark liquidity better when it is not represented in the NBBO ?  If interest can no longer be displayed, how can you argue that internal pools provide better execution ?  Goldman Sachs is a hedge fund a bank and an SLP .   How can you defend them when it is obvious that they position themselves as an agent of change at everyone's expense ?  Market fragmentation has been created to benefit certain interests at the expense of the greater good of the marketplace.

Wed, 07/29/2009 - 18:02 | Link to Comment Anonymous
Wed, 07/29/2009 - 18:25 | Link to Comment buzzsaw99
buzzsaw99's picture

[GS lawyer accused of being a perv.]:

 

http://www.bloomberg.com/apps/news?pid=20601127&sid=aQsnlTfp60Kg

 

Degenerates all.

Wed, 07/29/2009 - 18:28 | Link to Comment Project Mayhem
Project Mayhem's picture

fail

Wed, 07/29/2009 - 18:52 | Link to Comment Arm
Arm's picture

Actually that is entrapment.  The police setup a dummy account and sent her into chatrooms to bring in men. 

What charge exactly do they hope to bring?  Sex chatting with a police officer posing as a minor?

Wed, 07/29/2009 - 19:01 | Link to Comment buzzsaw99
buzzsaw99's picture

It looks bad for GS, that's all I care about.

Wed, 07/29/2009 - 19:06 | Link to Comment deadhead
deadhead's picture

buzz...while respecting your free speech rights.....

1. it is an allegation and means nothing until final adjudication.

2. the accused's employer has nothing to do with this.

3. this type of "goldman" or "wall street" story has so very little to nothing to do with the issues being discussed on this and other financial blogs.  If TD ran this as a headline story, I suspect he would be laughed at and taken much less seriously.  I would join that crowd in a moment and at this juncuture I have a very high degree of respect and esteem for TD.

 

Wed, 07/29/2009 - 19:37 | Link to Comment Alexander Supertramp
Alexander Supertramp's picture

Disagree, (though totally agree it'd be silly for ZH themselves to post as they doubtfully would).  Anyway, anyhow ("legally") to get a peek behind the the GS curtain is the gainer here, entirely seperate from this GS VP dude being an apparent spineless tird.  Before this article you knew this?

Goldman’s global compliance unit has more than 500 professionals including lawyers, accountants, financial analysts, information technology specialists, regulators, management consultants, sales professionals and traders, according to Goldman’s Web site.

(BTW, what the hell are "sales professionals and traders" doing in a compliance department?)

Interesting also how an attorney with the title of "vice president in the compliance division" and three years tenure would not have any "legal duties" according to GS spokeswoman.  All simply adds to our growing pool of reconnaissance, thanks for posting Buzz. 

Wed, 07/29/2009 - 19:56 | Link to Comment Anonymous
Wed, 07/29/2009 - 21:48 | Link to Comment SWRichmond
SWRichmond's picture

"(BTW, what the hell are "sales professionals and traders" doing in a compliance department?)"

Selling compliance?

Wed, 07/29/2009 - 22:51 | Link to Comment buzzsaw99
buzzsaw99's picture

Cut me some slack deadhead, it's a bloomberg link.

Wed, 07/29/2009 - 18:36 | Link to Comment Anonymous
Wed, 07/29/2009 - 21:59 | Link to Comment We Are Legion
We Are Legion's picture

Why would they want that?

Wed, 07/29/2009 - 18:41 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

You are trusting the wrong guy ... and if you do not no why ... ask yourself ... who is Chuck Schumer ... i have a bad feeling about him leading the crusades against GS and HFT ... a real bad feeling ..

Wed, 07/29/2009 - 18:54 | Link to Comment lizzy36
lizzy36's picture

Since you already know i can be a bit bitchy, i will say this (with respect).

Nobody trusts a politician and if they do, they are an idiot.  Does Tyler seem like an idiot to you?

Sending a letter to Schumer, stating your concerns, backed up with facts is a prudent thing to do.  You cannot equate prudence with trust. 

Tyler is but one voice (loud as it is). He is just making sure it is heard.  As far as i can tell he is not getting into bed with anyone, let alone Chuck Schumer.

Wed, 07/29/2009 - 19:10 | Link to Comment deadhead
deadhead's picture

well said lizzy.  as one who has enjoyed your comments for quite some time, I have found you to be direct, honest, and forthright.  Certainly not bitchy.

Wed, 07/29/2009 - 19:14 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

she is not bitchy, she is just a Grammar Nazi ( just kidding Lizzy )

Wed, 07/29/2009 - 19:12 | Link to Comment Cheeky Bastard
Cheeky Bastard's picture

Lizzy, baby, you misunderstood me .. i was not replying that Tyler is getting into bed with anyone, nor did i write my comment having Tyler's letter to Schumer in mind. I was generally expressing my doubt about Schumers intentions, not Tyler's, nor was the main point of my comment to say that Tyler is so naive that he would trust Schumer or any other politician ( RP excluded ). And the comment was more of a thinking out loud than a valid analysis. And i surely do not imply that there are people here who are stupid to believe a politician ( again RP excluded ) ... So, baby, don't go hard on me, i had the best intentions, although to be fair, poorly expressed ..

Wed, 07/29/2009 - 19:44 | Link to Comment Alexander Supertramp
Alexander Supertramp's picture

Bless the wisdom of feminine reason and perspective.  Bring it on Lucy/lizzy, you make this dance floor happen!

Wed, 07/29/2009 - 22:28 | Link to Comment Miles Kendig
Miles Kendig's picture

Yes indeed Lizzy. 

Besides now that TD has done the deal Chuck Schumer, the esteemed gentleman from New York that he is will be unable to say that he had never been provided with credible, factual information on the subject.  TD waited until Schumer stepped out front first.  Exquisite.

Wed, 07/29/2009 - 22:36 | Link to Comment Daedal
Daedal's picture

Chuck Schumer is just shooting at random targets -- he is definitely NOT the go to guy on these matters. Check out Wiki:http://en.wikipedia.org/wiki/Chuck_Schumer

Excerpt: "On April 6, 2005 Alan Greenspan testified to Congress about the enormous portfolio of Fannie Mae and Freddie Mac. Schumer responded to the testimony "I see an analogy to Social Security," Mr. Schumer said. "Social Security has a problem and there are ideologues who want to undo it. Fannie and Freddie have problems, and there are ideologues who want to undo them. But there are ways to fix the problems short of what's been proposed. When the sink is broken, you don't want to tear down the house."

Without identifying anyone in particular, Schumer also suggested that some people who have advanced tougher regulation of the two housing finance companies were really pushing a broader agenda to eliminate the companies and their mission of providing affordable housing. He proposed that the OFHEO raise Fannie Mae and Freddie Mac's conforming loan ("affordable") limits from $417,000 to $625,000, thereby allowing these GSEs to back mortgages on homes prices up to $780,000 with a 20 percent down payment.

Following the meltdown of the subprime mortgage industry in March 2007, Schumer proposed a federal government bailout of subprime borrowers in order to save homeowners from losing their residences.

Schumer's top nine campaign contributors are all financial institutions who have contributed over $2.5 million to the senator."

Wed, 07/29/2009 - 18:42 | Link to Comment Anonymous
Wed, 07/29/2009 - 18:49 | Link to Comment Anonymous
Wed, 07/29/2009 - 21:04 | Link to Comment ToNYC
ToNYC's picture

When GS bought SLK in 2000, I ran a Nasdaq server farm using TradeCast.

I saw GS running the REDI book and could not understand why anyone would have used it.

knowing that..looks like some took longer to get it.

Wed, 07/29/2009 - 18:58 | Link to Comment Anonymous
Wed, 07/29/2009 - 19:02 | Link to Comment Anonymous
Wed, 07/29/2009 - 19:03 | Link to Comment Anonymous
Wed, 07/29/2009 - 19:08 | Link to Comment Anonymous
Wed, 07/29/2009 - 19:12 | Link to Comment Anonymous
Wed, 07/29/2009 - 19:17 | Link to Comment Anonymous
Wed, 07/29/2009 - 20:04 | Link to Comment Alexander Supertramp
Alexander Supertramp's picture

"And nothing that happens at Goldman Sachs -- nothing that Goldman Sachs thinks, nothing that Goldman Sachs feels, nothing that Goldman Sachs does --ever happens by accident."

May they go on believing exactly this, and to the sound of cannons!  Indeed, Compensated Psychopath's are so dimented that they're absolutely incapable of believing anything else.  Lewis, you pompous ass, thank you for so gracefully cementing the real issue at GS that is (note, not "will be") their demise.  It's just a matter of time, Dude...

Wed, 07/29/2009 - 20:34 | Link to Comment Anonymous
Wed, 07/29/2009 - 23:12 | Link to Comment CD
CD's picture

I think some of you may be missing the slight sarcasm in the Bloomberg article/op-ed. Read through, it's worth it, funny as hell.

 

A longer quote from the piece should clarify:

"For starters, the vampire squid doesn’t feed on human flesh. Ergo, no vampire squid would ever wrap itself around the face of humanity, except by accident. And nothing that happens at Goldman Sachs -- nothing that Goldman Sachs thinks, nothing that Goldman Sachs feels, nothing that Goldman Sachs does --ever happens by accident."

Wed, 07/29/2009 - 19:18 | Link to Comment Anonymous
Wed, 07/29/2009 - 19:31 | Link to Comment djchill2
djchill2's picture

Shit man...at least they' ve got their target audience nailed...since women with balding problems are the only ones still watching their bullshit programming.

Wed, 07/29/2009 - 19:19 | Link to Comment RobotTrader
RobotTrader's picture

No doubt, those papers are going to be well beyond the scope of comprehension by Schumer or anyone on his staff.

No different than trying to explain moving averages, RSI, stochastics, etc. to Rodney King or Mike Tyson.

Schumer will simply hand it off to "experts" to handle, more than likely that will be somebody at Goldman Sachs.

LOL....

Wed, 07/29/2009 - 19:37 | Link to Comment djchill2
djchill2's picture

LOL...good one....btw like your avatar...is that chick on CNBC?

Wed, 07/29/2009 - 20:12 | Link to Comment Anonymous
Thu, 07/30/2009 - 00:17 | Link to Comment djchill2
djchill2's picture

As long as she is going bald in the right spots....fuckin' awesome! 

Wed, 07/29/2009 - 19:24 | Link to Comment seedyrum
seedyrum's picture

although Schumer made be helping in this little fiasco what about the others which gave birth to this problem and the many other problems Wall Street had perpetrated on the American population

Wed, 07/29/2009 - 19:43 | Link to Comment Ags Nightmare
Ags Nightmare's picture

I hope this goes beyond sending a sternly worded letter to GS given the track record of the SEC enforcing rules that are on the books.

I will say this. Two weeks ago I was talking to my know it all brother in law day trading junky tying to explain to him how high frequency has been corrupting the markets. He told me to take off the tin foil hat. Two weeks later it's all over the news thanks in part to ZH and he's sending me linked articles about HFT ( so much for the foil ).

Hopefully this gets legs.

 

 

 

Wed, 07/29/2009 - 19:59 | Link to Comment Anonymous
Wed, 07/29/2009 - 20:40 | Link to Comment deadhead
deadhead's picture

18768...I agree that Spitzer could make an enormous dent in the Wall St. crap. 

I would be interested to see the opinions of ZH readers as to who they think would make a great SEC commissioner.

Maybe Marla will refresh the gs/sergey poll and throw one up there with some names that come up going forward.

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