Where Was Goldman's Supplementary Liquidity Provider Team Yesterday? A Recap Of Goldman's Program Trading Monopoly

Tyler Durden's picture

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nope-1004's picture

Goldman is the gov't and the gov't is Goldman.  This casino version of crony capitalism is corrupt to the core.

That's why Timmay, Ben, and Osama (oops... made a keyboard entry error, I work at Shitigroup!) need to be put in prison.



cossack55's picture

I assume you mean the "fat finger" was the middle one.

jeff montanye's picture

note that the second ranking trader of principal shares, wedbush, was convicted of securities fraud last year.

saima's picture

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dark pools of soros's picture

when is ZH going to enter the political realm?  All these current players have their pawns in the game so all the brilliant spotlighting research isn't going to enact anyone in power to do anything since they already have their marching orders.

And what would the agenda be? What is a 'free' market?  The muscle enforces (or ignores) the rules... its all brains here so recording history is all that is going on..  and we all know which history eventually gets printed anyway

dcb's picture

does anyone find this information inetersting in light of the fact that while the senate was denating too big to fail we had our meltdown and as far as I know only one firm has a program that can be used to manipulate the market according to a united states attorney general.

Same firm would be broken up, and same firm has a vitual trading monopoly on the NYSE

pan-the-ist's picture

Someone else brought up that the last time there was an 800 point drop they were debating TARP.  The banksters are rubbing our fucking noses in it.

Selah's picture

What about that program that was stolen from GS?

The one that could be used to manipulate markets in "unfair ways"




Cheeky Bastard's picture


Leaders of the eurozone finally agreed Friday night to activate the project for financial assistance worth 110 billion euros to Greece for a period of three years and declared ready in principle to "strengthen" the financial discipline, according to a European diplomatic source.

"The Heads of State and Government approved the project loan to Greece, this was not the problem," said the source.

Source: http://www.kathimerini.gr/4dcgi/_w_articles_kathremote_1_07/05/2010_336462

Party on bitches, party like its 1999 and you got  free blowjobs from all 1998 Playmates.

Markets up 999900009% Monday morning ...

Crab Cake's picture

additional source

Eurozone leaders approve Greece aid package


Greece is saved.  Next country please.

nope-1004's picture

For now.

Extend and pretend is the new norm.

CD's picture

Another wild-eyed, utterly lunatic idea:

Cast your minds and charts back to late February, 2009. BO just sworn in, markets in controlled fall, US financials in near-free fall. 2/20 is the specific day I have in mind, as I was stopped out of a (admittedly dumb) position in BAC as the share price executed a maneuver eerily similar to yesterday's action -- went down to $2, then spiked right back up in minutes. I tuned out of the market for a few weeks after that, so don't remember how many other such occasions happened. Not long after, fearless leader, the Oracle and others subtly and not so subtly suggest that buying stocks may once again be a good idea. Then, on 3/9/09 the market begins its magical meltup. Now:

-midterms are a short 6 mos. away -- no catastrophic failure allowed until then

-Greece bailed out, ECB to begin its own version of QE, didn't BOJ also throw a few more logs onto the fire?

-Serious, meaningful regulation of financial industry more or less off the table in US

-QE2 has never gone away as the next (necessary) step to prevent the dreaded 'double dip'

The big boys have the playbook (ARE the playbook). While yesterday's events are by no means random or 'accidental', the feline has many a coat of fur. There may be/are several concurrent reasons to 'neglect to prevent' downspikes like the one we just saw.

Cheeky may be more right than I dare contemplate. If any of the above is anywhere near true and the model we saw last spring is reused, maybe another 100 pt drop in the S&P later, we could witness the astounding resilience of the US economy (and financial innovation, don't forget that) with the next leg up towards Dow 36K. Bring on the broads and the blow...

i.knoknot's picture

March 3, 2009: The oracle (not the omaha one...)


just an amazingly prescient fellow, i guess...

AnAnonymous's picture

Mrs. Merkel also declared that new this economic situation should lead to modifications in treaties.

People betting on a demise on the Euro should never forget the stake:

euro collapse vs a furthering of the EU.

Spartacus's picture

What I do know about the crash at this point is by having read a book of the "memoirs" of a turn of the Century trader, in which he details exactly how to accomplish that in the market. Basically the crash was engineered. you get a lot of money (in this case I believe $16B). you have not made a whole lot since 2008, and the market is bullish and oversold. Then you wait for an uncertain day that starts as a sideways downward move (in this case of about 200 points), you wait for the 2:30 pm when the circuit breakers are off. You go leisurely preparing short positions on weak instruments all over the place: options, futures, etc. Then wait for a news, any news and start a system shock by shorting one single (or a couple) of low volume weak stocks. The market will start rapidly to move down and as it does, catches in the way all those programs and stoplosses in an seemly infinite move, Stop introducing money because your job is done. Wait until the drop made significant profit and start to cover your position. thats what makes a beautiful v shape we saw yesterda

saima's picture

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Gubbmint Cheese's picture

brain... hurts... too much information... I find it far easier to believe in the V shaped recovery.

there's no place like home.. there's no place like home..


/friday afternoon snark

Problem Is's picture

Cheesy... We ain't in Kansas anymore...

It Will Never Be:
Same as it ever was... Your climbing home value
Same as it ever was... Your climbing 401k
Same as it ever was... Ever increasing HELCO limit...
Same as it ever was... A new deadman lease on an SUV every year

Same as it ever was...
As desperately as the Amerikan middle class want it to be...

Robert J Moran's picture

You are asking Osymandias to dismantle itself... I think 'self-dismantling' (if there is such a word) would NOT take place without a fight, or a collapse and rebuild by different 'interested parties' (that would be the rest of us) Soldier on Zero Hedge! Please, soldier on!

Crab Cake's picture


I met a traveller from an antique land
Who said: "Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shattered visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:
`My name is Ozymandias, King of Kings:
Look on my works, ye mighty, and despair!'
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away".

-Percy Bysshe Shelly

velobabe's picture

your cool!

ZH member's, are VB's new textbooks of learning.

i swear, i have my dictionary and wikipedia as close as any gun would be.

Crab Cake's picture

I like his wife better.

Wait, that sounded bad....

She did write Frankenstein though, Mary Shelly that is.

Believe it or not she would sit in on informal book club/brainstorming sessions with her husband, and a group of people that included Lord Byron; that's where she developed the idea for the book. 

If you are looking for some other great poetry...

My favorite of all time is, The Rime of the Ancient Mariner by ST Coleridge.

Do Not Go Gently Into That Good Night - Dylan Thomas... Gives me faith that I will have the courage to die well.  Fantastic.

Poe is awesome, and William Blake is pretty kick ass too. 

Wow. I'm so not ZeroHedge material.  How did I end up in here?

Fuck you Fed/oligarchs/corrupt government/corporations for making me learn/making important this boring crap! Bless you Tyler for your bringing light into the darkness on a daily basis, and having/allowing the space for a great group of eclectic people to interact and learn.  I remember when I first started researching and reading (blogspot ghost), I drooled on the keyboard a few times, but I haven't given up.  It's too important. I came only armed with basic university economics mac/mic, stats, retirement investment training, and NOW... I'm a man. :) Thanks ZeroHedge. 

chindit13's picture

Actually, you ARE Zerohedge material. 

What I find most interesting about this community is that it is largely a collection of people who do read and are well informed.  They're folks not just looking for soundbites, but who will pour through TD or Marla's long pieces, or CogDis' long missives (here's a pot calling a kettle...) out of a desire to learn.  When Cheeky isn't ranting, he lets on that he is quite the educated soul and a fountain of knowledge.  Hephas seems to be a bio-engineer.  There's plenty of traders, both equity and fixed income, and a seeming abundance of code writers.  Read the posts of those who write and little snippets come out about who everyone is.  I would guess the demographics on this site are very advertiser friendly, though I also suspect many of us have long ago sworn off the world of perpetual consumption (but we'll click on the ads!).

So go ahead and quote Yeats or Byron or any Bloomsbury type, or Aristophanes for that matter, and I'm guessing you'll have an audience.

Janice's picture

Dang, I just quote Popeye.  I must be CNBC material.

i.knoknot's picture

it's all about the context. there's wisdom in popeye - you jest gotta know where it be hiddens...

jkruffin's picture

Bank stocks lead the collapse next week guaranteed!!  They have been lagging the fallout this week, but not next week.

Cleanclog's picture

I agree that bank stock collapse next week has high likelihood, especially if some hedge funds bust and everyone becomes wary of exposure and banks lending to each other (already in play in Europe where most banks are lending to each other through the ECB so no counterparty risk).

Also, with actions in Gold and Oil and currencies and jumpy equities, another algo trigger could go crazy any time.  No curbs to prevent.  No more throttles than yesterday.

AR's picture

UPDATE  /  Entitled:  There is NO MARKET  ----------------------------


We aren’t the smartest guys, but, we do have some 30+ years of experience in the business and were around in 1987 when similar markets exerted themselves. Back on February 22nd, we submitted a posting on ZH (see below).  For those who missed it, ignored it, or would like to refresh their thoughts, we again copied the post below.  Good luck everyone…


No Change In The Regime: Volume Dismal In Yet Another Green Day


LINK:               http://www.zerohedge.com/article/no-change-regime-volume-dismal-yet-another-green-day#comment-240616



by AR
Posted originally on Mon, 02/22/2010 - 16:35

It's slow today, so I'll add to your comment. I've repeated this story over the last 6 months from time to time, and I'll do so again here. Back in June 2009, a colleague of ours (a $5+ Billion dollar hedge fund) traveled to Europe on a meet-n-greet, money raising campaign. At the time, he returned and said "there is 50% LESS MONEY out there to invest." I presumed his observation was due to lost investments, the meltdown, margin calls, etc..  Then, a month later (keep in mind they are large) he told us, "...there is no market..."  I said, what do you mean there is "no market?" He literally said, there is no market. What he meant was, they could not find market participants to take the other side of their trades -- literally. Bid/Ask spreads were huge, and there was no liquidity anymore for them initiate trades as they’ve done in the past (or, much less).

Since then (the last 4-6 months) all of us, have now discovered, exactly what he was talking about. There is NO MARKET (period). Volume is gone. Government, computers, quants, algos, HFT's -- whatever you want to label them – now are said to dominate 70% of all volume today. Thus, keep in mind too, that they dominate 70% of "today's volume" (which on the above premise, is 50% LESS than the real volume the market traded before the credit crisis).

So, think about all this. One, there is 50% less real volume. 70% of the existing (50%) volume is computer led. Thus leaving, theoretically, only 15% of the actual volume in today's markets being "true or real volume" (when compared to volume prior to the crisis).  Only 15%.  So... now we see the problem with the market's today. This is a huge structural shift (and problem). We don't see it getting better in the short-term.  Interesting dilemma. Good luck everyone... 



PS:  Finally, to DeadHead… If you happen to read this, one, you’ll know what I’m talking about. And two, I sent you an email a couple of weeks ago to your Gmail address.  Try picking up the email and respond accordingly. I hope you’re well buddy. Good luck DH.

i.knoknot's picture


except the schmucks throwing that 'top-of-the-market' hot-potato back and forth, for 40 +points a day, nobody wants anything to do with any of this market.

so, you are spot-on in the *effectively* 'no market' assertion, but i would argue that there is a *dangerous* pseudo-market using what's left of those FED MBS purchases and weekly american 401K auto-deposits, taking advantage of the low volume, to prop/prop/prop up the market for the bailout masters upstairs.

witness yesterday... there are effectively *no* limit-buy orders under the top right now. *no* support. hell, there's no resistance. they don't dare take anything off the table, because to sell means one of the potato players stopped buying. ask any market-maker how many limit buys are "waiting for deals" 7-10% under current prices. functionally none. a few day/swing traders, maybe.

what's a 'good deal' mean anyway? find some FA that supports current prices. find a correlation that holds for more than a week. find a TA graph (fibs, etc.) that actually hasn't been distorted to meaningless given there are only 7 players and none of them are responding to value, but rather politics.

"no market" is an understatement. the PTB bet is that they can inspire enough confidence to support their propped up market *after* they've moved the market up on low volume, making some pennies on every front-run transaction. then they can pay off their nasty mark-to-myth before it gets called by the real market. problem is, it's their only bet, and it's a bet against the intelligence of those with money to protect - *not* the masses at large. i believe they will lose that bet in the ugliest of ways. and we may go down with them. this sucks.

america is simply loaning/trusting the various defaulted banks (treserve, etc.) some interest-free time to get their sh#t together... too bad most americans don't realize that the banks will never get it together - the math says "no". worse, most americans don't even know they're even making that loan. kinda like SS, but the fuse on this one is much closer, and the bomb, much bigger.

there *is* a market, one that no thinking person should be anywhere near. it's not 'if', it's 'when' it will collapse. and that's not a wish, it's math.

walküre's picture

I agree.

But to say there's no support or resistance is wrong.

Support for PG was at $39 which is *only* 35% below trading value. LOL

If the market went down 35%, I'd go in both feet. My money is on the side and I'd think that there are many others waiting for the drop to get in.


i.knoknot's picture

you are ultimately correct. i say that in a very loose manner, in the broader context of my point.

e.g. any company who goes below 'book' is a target for me, so i believe in resistance/support - in a natural market.

but - re:PG, i don't believe *anything* we saw yesterday had to do with natural market valuation. really. it wasn't 'resistance-in-waiting' that stopped that collapse, it was somebody finally getting to that 'red-button' that poured a zillion buy @ market orders into the system.

god, i would have loved to have seen the faces and heard the phone calls that led to that moment.

unless... they did it on purpose. resistance doesn't count then either... 998 - just under 1000...

the current market has just enough familiarity to fool us into believe in it... but it is truly broken behind the veneer.

bernie madoff had a nice office in a nice building... visitors believed what they saw.

PG is still a good company... we just can't tell how good the markets really believe it is right now.

(edits for rephrasing)

chindit13's picture

"there are no bids"

That is a key point.  I dislike the man and hate to use his phrase, but when the tide went out Thursday the market could see the buy side was naked.

I may have suspected as much before, but now when I look at the bid/ask at various prices on the screen, I know it's a mirage.  There are no real bids, or precious few.  Everyone who wants to be long is long.

Take a wildly long market, no real bids, and a slew of computers all running the exact same algo, and the recipe exists for a forty percent down week.

It is hard to believe that the major players may not be cognizant of that fact, but if they let the VIX drop to 16 like it did a few weeks ago, it seems even the big players fail to grasp the possibilities.  It is either that or else they have been told by Bernanke that he's got the downside.

When I look at the coordinated nature of how all the markets in just about every asset class started tanking at the same time on Thursday, I cannot help but think that maybe one of the more mercenary hedge funds was doing a test run of a Doomsday Machine, knowing that aggressive selling in a world with no buyers could take out 20-30% across the board across the world.

ayanni's picture

What happened to DeadHead?  Anyone know?

CD's picture

[nevermind] see AR's comment above

Common_Cents22's picture

Yep, you have a few experienced poker players that know each other sitting at a table.  When they run out of new fresh meat to rip off they will have to play with themselves.  If they can't entice any new idiot, they will eventually turn on each other.  If you sit down to a poker table, look around and don't see the idiot, you are it.

JuicyTheAnimal's picture

This market is like a poker table, everyone is a cheater with cards up their sleeves, Goldman has the aces and all of them have guns pointed at eachother under the table.  Scene ends like Inglorious bastards and we are collateral casulties.  

Marley's picture

Anyone come up the thought that perhaps HALs circuit breaker openned for 25 minutes yesterday?  Perhaps what we saw for 25 minutes was reality.

faustian bargain's picture

That's my theory.


**edit: or rather, the first half of that 25min was reality. The second half was reality getting the heave-ho.

ZerOhead's picture

I agree... someone was sending a message here... the message is that without them there is nothing underneath this market but air...


Just don't look down!

Marley's picture

When, if ever, has the DOW, in it's history, dropped 10% in 25 minutes?

A Nanny Moose's picture

Does May 6th 2010 count as history yet?

Iguanadon's picture

My baseless theory is that with the 10% circuit breakers in place to shut down the markets, someone programmed the robots to start buying at the 9% mark and see if it keeps the markets afloat.  If not, bail quickly and let the circuit breakers do their thing.

A_MacLaren's picture

Except there are no circuit breakers after 2:30 PM ET, until the loss is 20%


The halt for a 10% decline would be one hour if it occurred before 2 p.m., and for 30 minutes if it occurred between 2 and 2:30, but would not halt trading at all after 2:30. The halt for a 20% decline would be two hours if it occurred before 1 p.m., and between 1 p.m. and 2 p.m. for one hour, and close the market for the rest of the day after 2 p.m. If the market declined by 30%, at any time, trading would be halted for the remainder of the day.

Fraud-Esq's picture

absolutely. Timmy was in a hearing too, kept looking down at Blackberry. We've seen a glimpse of reality twice, 08 drop and yesterday. No underlying bid.  

nope-1004's picture

That's the story, that he looked down at his BlackBerry and said "That can't be right".

My question would be:  What makes a no volume melt-up "right", yet a correction not right?

Timmay.... you're up!

Please explain... what is so unnatural about the force of gravity bringing something or someone on cloud 9 back down to earth?



Strider52's picture

HAL had to reboot due to a "Critical Windows Update". It was down for a few minutes, and the matrix collapsed into reality. I bet they are paying an engineer buku bux to make it triple-redundant, with a load-share and a UPS (not the shipping company, an Uninterruptable Power Supply) battery / generator.

  After all I've read here, I'm sure it was a computer F-UP.