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Goldman Sachs' Incredible Trading Returns are Literally Unbelievable

Wednesday, August 5, 2009, 9:49 AM

A long while ago (September 2008), I wrote an article entitled " The Greatest Looting Operation in History"  and followed it up with another entitled "America is Being Looted."

What shocked me at the time was how brazen the perpetrators were being in their efforts, almost as if they had no fear of being exposed or being asked any hard questions.

In an article that came out today, this was confirmed to an extraordinary degree.

The Goldman touch

Goldman Sachs $100 Million Trading Days Reach Record in Quarter
By Christine Harper

Aug. 5 (Bloomberg) -- Goldman Sachs Group Inc. made more than $100 million in trading revenue on a record 46 separate days during the second quarter, breaking the previous high of 34 set in the prior three months.

Trading losses occurred on two days during the months of April, May and June, compared with eight days in the first quarter, the New York-based bank said today in a filing with the U.S. Securities and Exchange Commission.

There is no possible way in a free market system where everyone has the same advantages and information for Goldman Sachs to sport a win-to-loss ratio of 46-to-2.  Ergo, Goldman Sachs is running a gigantic scam at everyone's expense while the SEC, the Fed and everyone else politely looks the other way.

There are mountains of evidence pointing to the fact that markets trade in inherently unpredictable ways.

Because of this, really extraordinary traders are those that can keep their noses slightly, but consistently, above water. Turning in a win-loss ratio of 60/40 is considered extremely good.  Getting to 70/30? Best to stop now and write a "trading guru" newsletter selling your system while it still works.  But 80/20?  Now you are just on a lucky tear that will soon be reversed in a humbling way.  Given this, what would we say about a 96.9 to 3.1 ratio? (Thanks DavidC for the correct figures here).

That's what Goldman Sachs' daily win-loss ratio works out to and it speaks of something other than "being good" or "being lucky." This is just comparing Goldman Sachs' $100 million "win" days against their total number of losing days and I admit I have no idea what their actual win/loss ratio looks like on a trade-by-trade basis.  But on a daily basis alone, this sort of performance cannot be chalked up to anything but an unfair advantage.

Anybody with even a minor appreciation of statistics knows that this represents something other than "being good." This represents an unfair advantage to a degree that is truly mind-boggling.

If this seems esoteric and therefore perhaps unimportant to you, I would like to point out that when it comes to trading, someone's win is somebody else's loss. Trading is a zero sum game.

Money is not created through the act of trading.  It would be a mistake to think that Goldman Sachs somehow created this money through the act of their trading genius. For Goldman Sachs to win $100 million in a day of trading means that somebody else lost $100 million.  Most likely a huge collection of somebody elses.  

I would suggest that the most probable source of these funds, the ultimate loser, is the taxpayer.

This means that as Goldman wins, you lose, I lose, and our future gets diminished so that a pathetically small number of already obscenely rich individuals can continue to game a rigged system to their obvious and magnificent advantage.  While I am sure that somebody, somewhere has convinced themselves that it is a good thing to allow Goldman Sachs to recapitalize itself in this way, obviously rigged markets are not a good idea for a country that depends on the willing flow of foreign funds, and they are also certain to misallocate capital.

Moving along, one thing I truly despise is when unfounded statements or opinions are inserted into an article and presented as fact such as this example.

Goldman Sachs’s trading results reflected the firm’s willingness to take on more risk during the period.

No, the results do not reflect "the firm's willingness to take risk."  This is more likely than not a direct quote from the Goldman Sachs PR department.

If all a firm needed to do to enjoy outlandish trading results was to "take on more risk" then they'd all do it and - presto! - everyone would have higher trading profits!

That's just not how things work, unfortunately. Anybody who is turning in a ratio of winning-to-losing trading days of 46-to-2 is not trading in a fair and competitive manner.

Instead we might reasonably conclude, knowing what we know about how equities markets are supposed to work, that 46-to-2 reflects an unfair advantage, not a taste for risk, as the scribe put it. One could reasonably re-write that sentence to read:

"Goldman Sachs’s trading results reflected the firm’s clever use of lobbying funds and influence to skirt the rules that everyone else abides by. Their gain was your loss. "

What these trading results tell us, as clearly as one could ever hope in this day and age, is that Goldman Sachs (and likely other major recipients of bailout money) is gaming the system to their benefit and everybody else's loss.

I suppose it would be even clearer if we received individual, hand engraved notices informing us of this fact, but, for me, the presence of only 2 days of trading losses in an entire quarter is more than sufficient.

America, you are being looted, and the pirate's name is Goldman Sachs.

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50 Comments

JAG's picture
JAG
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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Dr. M, your personal PM allocation is looking more and more reasonable with each passing day.

Jeff Borsuk's picture
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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

WOW! ...how outrageous is that?

Part of me is saying "...that just can't be so in this country". The other part is getting angry.

Jeff

 

DavidC's picture
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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Hello Chris,

The data states that GS made more than $100m on 46 days and losses on 2 days. In other words they made gains on the other days but just not as great.

I've done a (very) quick calculation and between 1st April and 30th July there are 65 working days (I haven't accounted for bank holidays). So GS's actual win-to-loss ratio is 63 to 2 (96.92%).

DavidC

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

This is just unbelievable...

I have heard this store from other sources, but to hear it here makes it REAL.  Thanks.

cmartenson's picture
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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

DavidC - great points.

So what we know is that GS enjoyed 46 days with more than $100 million in gains, 17 days with less than $100 million in gains, and 2 losing days.

So we might guesstimate that they "made" somewhere around $5 billion.

And using the more accurate 63 to 2 win/loss ratio changes the result to 96.9 to 3.1.   Doesn't change it much, does it? (I've amended the post above to reflect this...thanks)

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Chris,

I share your sentiments that collectively we are being ripped off by Wall St and the Fed.  In the heat of the financial crisis, Bernanke stated that "we" have to save Wall St. in order to save Main St.  Nonsense.  After thirty eight years of fiat money and finance capitalism, its very clear that the few on Wall St. benefit mightily while the majority on Main St. get an ever shrinking piece of the economic pie.  And the pie is propped up on ponzi debt.   

Since 1970, nominal GDP has increased at an annualized rate of approximately 7%.  Annualized inflation, as measured by the CPI, since 1970 has been approximately 4.5%.  Hence, 65% of our "growth", and investing for that matter, is inflation gathering/shuffling.  At this point, there is more inflation in the system than actual output.   My father bought his first house in 1970 for ~ $50K.  Today that house is worth ~ $500K.  The house didn't increase in value it increased in price due to inflation.   In fact, with time, structures depreciate so the inflationary gains are even greater than $450k.

Is it any wonder Wall St. inflation shufflers have thrived while the majority have struggled.   And to add insult to injury, Wall St. used its unearned financial influence to increase taxes on wages and consumer goods while decreasing taxes on financial gains that gather inflation tax deferred. 

You want to know why Bernanke fears deflation.  It's not because people will buy less if prices fall.  Look at I-pods and computers - falling prices increase demand.  No, Bernanke knows that finance capitalism and Wall St. (founded on ponzi asset prices) will collapse without inflation. 

Right now CPI prices and wages are falling.  Bernanke can't quickly and easily stop that.  But he knew he couldn't allow asset prices to fall any further so he handed free money to Goldman and others.  I have no doubts Bernanke also spearheaded suspending FASB 157 (mark to market).  Goldman's success is due to a beneficent central bank - now more than ever.  What a sham(e).

Allow me to decode the above mentioned claim from Bernanke:  We have to further decimate the middle class in order to save Wall St..

 

CB's picture
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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

The AsiaTimes has a detailed article on this subject that opens with this:

Quote:

Page 1 of 2
Goldman Sachs, the lords of time
By Julian Delasantellis

Just for the moment, let's pretend that James Cameron's 1984 The Terminator was being made for the first time today, and, instead of the evil robots emerging from the fatally misguided foundries of Cyberdyne Systems, they came from the dark laboratories of Goldman Sachs.

From out of the future, a warrior is sent back in time to warn the present.

"You still don't get it, do you? They'll find your money!! That's what they do! That's all they do! You can't stop them! They'll wait for you! They'll reach down into your bank account and tear its f*&^*^g balance out!"

http://www.atimes.com/atimes/Global_Economy/KH05Dj03.html

It's worth a read as it discusses some of the possible mechanisms used to generate the above mentioned kill-ratio. The author does not mention one interesting quote that appeared in the press regarding the code theft - that "in the wrong hands" the software could be used to manipulate the market...

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

And if that's not enough:

From the Washington Post (you may have to register):

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/03/AR200908...

Excerpt below:

 

Dueling Public Interests In Policing Rescued Firms

 

As the SEC pursues numerous investigations into major financial firms, agency officials say they expect to wrestle with the competing demands of punishing wrongdoing and keeping financial firms healthy to support the economic recovery. In particular, they plan to take into account whether companies have received assistance from the government's signature bailout initiative, the Troubled Assets Relief Program. Officials said they are evaluating the size of fines and redress sought and the impact these could have on the financial system beyond the specific firms.

 

 

In other words, businesses that may have broken the law may not be charged if they owe funds to the government or are expected to contribute to the recovery. So, using that argument,  drug dealers should be left alone because they contribute money to the local economy?!

 

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

I wonder if GS's enormous profits has something to do with GS's program trading methods, and, maybe some government help:

"That wealth is generated on computer systems that can handle greater trading volumes at ever increasing speeds. These platforms often rely on algorithms -- a sequence of instructions used for calculation and data processing -- that can spot unseen opportunities in the market and give their users a huge advantage measured in milliseconds.

For banks such as Goldman Sachs Group Inc (GS.N), the codes are worth a fortune and this value also make them a tempting target for thieves -- as appears to have happened with Sergey Aleynikov, a former computer programer at Goldman arrested by the U.S. Federal Bureau of Investigation last Friday.

...

"If you happen to have built a model that makes you even 200 milliseconds faster than me, you are in a much better position," said Sang Lee, managing director of research and advisory firm Aite Group. "You may be able to trade a thousand times before I even see what's going on and act on it."

http://www.reuters.com/article/ousivMolt/idUSTRE5667JR20090707

"At a court appearance July 4 in Manhattan, Assistant U.S. Attorney Joseph Facciponti told a federal judge that Aleynikov’s alleged theft poses a risk to U.S. markets. Aleynikov transferred the code, which is worth millions of dollars, to a computer server in Germany, and others may have had access to it, Facciponti said, adding that New York-based Goldman Sachs may be harmed if the software is disseminated.

“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said, according to a recording of the hearing made public today. “The copy in Germany is still out there, and we at this time do not know who else has access to it.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=ajIMch.ErnD4

Now, look at this chart of the percent of program trading on the NYSE:  http://www.swampreport.com/investments/program-trading-as-of-total-nyse-volume/ —this is about last time you will see a such chart, because:

"...the NYSE has taken action to make sure that nobody will henceforth be able to keep track of the complete dominance that Goldman Sachs exerts over the New York Stock Exchange. This basically ends our weekly Program Trading updates disclosed every Thursday indicating that Goldman has singlehandedly captured all of NYSE's program trading.

In an information memorandum released on June 24 (09-31), the NYSE Regulation team has announced the Decommissioning of the Daily Program Trading Report (DPTR)."

http://www.zerohedge.com/article/nyse-halts-transparency-feels-goldman-program-trading-disclosure-unnecessary

"A couple of months ago, we also learned through Zero Hedge that Goldman had profited greatly from a sweetheart deal with the federal government concerning a new program instituted by the Feds known as "The Supplemental Liquidity Provider" Program ("SLP"), launched this past  Thanksgiving, which was supposed to provide "market liquidity" (i.e.: an ongoing, active market) for selected groups of 500 different NYSE stocks per SLP participant.  As Durden pointed out to all who were interested, it certainly appeared to him that Goldman was the only active participant in the program.

http://www.dailykos.com/story/2009/7/6/750420/-Breaking:-FBI-Arrest-Opens-Goldman-Sachs-Pandoras-Box

 Of course, GS itself would never use their program to manipulate the market "unfairly."

Of course,GS would not have told the NYSE to stop the DPTR.

Of course, the federal government would not be using the SLP and GS as a means to manipulate the market (e.g., plunge protection team) . 

Or, would they?

 

Headless's picture
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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

A $100M/day for the next year will have transferred about 1/12 of the combined value of two of the nation's largest pension funds (CalPers and CalSTRS: http://www.latimes.com/business/la-fi-calpers22-2009jul22,0,5416427.story) to the upper scum at GS; in twelve years, they will have it all--every last penny. This seems like a system that will last a long time...

And if the money ain't comin' from such places, it ain't comin' from nowherz!  Zerosum.

People "just don't get" GS--and well over a million of 'em wont be gettin' any pension because they don't get GS. Not that the people should be required to get anything: that was supposed to be the function of our "legal" system.

I, for one, have reached a level of rage that I never knew possible; I'm sure there are those who feel at least as angry, but who truly have nothing left to lose. I'm fairly confident that Goldman has created at least a small cadre of Timothy McVeys out there: some scattered individuals, some small and, maybe, large groups. This can't possibly go on for much longer without there being some horrific consequence...

And the real problem here is not that people "just don't get GS," it's that GSians are so insulated in their artificial golden cocoon that they "just don't get" reality. I'd bet my life savings this is coming to a  head within a very short period of time. The time when I felt like I was one of the few who got GS has obviously come to a jolting end; now, it's who doesn't get it?

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

This article by a former Goldman insider helps to shed some light on Goldman's new found "luck". 

http://www.motherjones.com/politics/2009/07/how-you-finance-goldman-sachs’-profits

I know of two sure fire ways to always make money gambling.  The first is to cheat .  The second is to be the house/bookie and match bets. 

 

 

 

 

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Money is not created through the act of trading.  It would be a mistake to think that Goldman Sachs somehow created this money through the act of their trading genius.

 

True, but money was probably "created" via the leveraging that probably took place before the "bets" were placed.  If you're going to game the system to the tune of a 95%+ winning percentage, then you might as well do it with as much borrowed money as possible.  It would be interesting to see the extent to which they leveraged their assets during this very fortunate streak. ;-)

Brian

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Hi All

I love how GS and the Banksters are getting exposed as the unconscionable crooks they are from many sources now.

Got this in the mail from goldmansachs666.com.....maybe one of you eloquent writers can send in your thoughts?

 

Reality TV Wins - I get a lot of comments, emails and phone calls about how mad people are, but it is the kind of mad that passes as soon as their favorite Reality TV show comes on.  Sad, but that's the facts.
 
Maybe it's time to start an electronic petition, with verified email addresses, names and mailing addresses.  I mean a real petition, and not the silly nonsense we see so much of on the Internet.
 
Goldman Sachs Petition Challenge - So if there is a college student, grad student, attorney or sharp cookie out there that wants to draft a petition, we will put together the mechanism to get it on the Internet through this blog and hundreds of other blogs and media sources.  I will have a couple of editors review what (if anything) we receive, and we will compile one comprehensive petition.  As the signatures are collected, we will make sure they get to the right folks in Washington and the right media outlets. 
 
Media Requests - I have turned down all recent media requests, but if the Petition drive falls into place, I will spend the time and effort to make this a national effort. 
 
So think about it.  If you can write a decent petition draft, or you want to put your money where your mouth is, pay someone to write it . . . and we'll do the rest. 
 
You can email drafts to me at [email protected]  

Wake up America.  You are allowing an elite group of Banksters and Economic Royalists destroy the very fabric of the United States of America and the future of your children and grandchildren. 

 

Contributors - If you want to write, post or edit posts on www.GoldmanSachs666.com or www.JPMorgan666.com , please contact me: 

 
Mike Morgan - (772) 260-5448
[email protected] 
CB's picture
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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

bsm20, check out the MotherJones article linked by Angry Saver for some answers and more ugly facts - like the fact that GS asked for, and was granted by the FED, a reserve capital requirement wavier:

Quote:

To understand this particular giveaway, look back to September 21, 2008. It was a frenzied night for Goldman Sachs and the only other remaining major investment bank, Morgan Stanley. Their three main competitors were gone. Bear Stearns had been taken over by JPMorgan Chase in March, 2008, Lehman Brothers had just declared bankruptcy due to lack of capital, and Bank of America had been pushed to acquire Merrill Lynch because the firm didn't have enough cash to survive on its own. Anxious to avoid a similar fate, hat in hand, they came to the Fed for access to desperately needed capital. All they had to do was become bank holding companies to get it. So, without so much as clearing the standard five-day antitrust waiting period for such a change, the Fed granted their wish.

Bank holding companies (which all the biggest financial firms now are) come under the regulatory purview of the Fed, the Office of the Comptroller of the Currency, and the FDIC. The capital they keep in reserve in case of emergency (like, say, toxic assets hemorrhaging on their books, or credit derivatives trades not being paid) is supposed to be greater than investment banks'. That's the trade-off. You get access to federal assistance, you pony up more capital, and you take less risk.

Goldman didn't like the last part. It makes most of its money speculating, or trading. So it asked the Fed to be exempt from what's called the Market Risk Rules that bank holding companies adhere to when computing their risk.

Keep in mind that by virtue of becoming a bank holding company, Goldman received a total of $63.6 billion in federal subsidies (that we know about—probably more if the Fed were ever forced to disclose its $7.6 trillion of borrower details). There was the $10 billion it got from TARP (which it repaid), the $12.9 billion it grabbed from AIG's spoils—even though Goldman had stated beforehand that it was protected from losses incurred by AIG's free fall, and if that were the case, would not have needed that money, let alone deserved it. Then, there's the $29.7 billion it's used so far out of the $35 billion it has available, backed by the FDIC's Temporary Liquidity Guarantee Program, and finally, there's the $11 billion available under the Fed's Commercial Paper Funding Facility.

Tactically, after bagging this bounty, Goldman asked the Fed, its new regulator, if it could use its old risk model to determine capital reserves. It wanted to use the model that its old investment bank regulator, the SEC, was fine with, called VaR, or value at risk. VaR pretty much allows banks to plug in their own parameters, and based on these, calculate how much risk they have, and thus how much capital they need to hold against it. VaR was the same lax SEC-approved risk model that investment banks such as Bear Stearns and Lehman Brothers used, with the aforementioned results.

On February 5, 2009, the Fed granted Goldman's request. This meant that not only was Goldman getting big federal subsidies, but also that it could keep betting big without saving aside as much capital as the other banks. Using VaR gave Goldman more leeway to, well, accentuate the positive. Yes, Goldman is a more risk-prone firm now than it was before it got to play with our money.

Which brings us back to these recent quarterly earnings. Goldman posted record profits of $3.4 billion on revenues of $13.76 billion. More than 78 precent of those revenues came from its most risky division, the one that requires the most capital to operate, Trading and Principal Investments. Of those, the Fixed Income, Currency and Commodities (FICC) area within that division brought in a record $6.8 billion in revenues. That's the division, by the way, that I worked in and that Lloyd Blankfein managed on his way up the Goldman totem pole. (It's also the division that would stand to gain the most if Waxman's cap-and-trade bill passes.)

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

(Edit:  I see I was late to this particular story as the crack team here was posting all about it as I was writing about it.  The edit involves shrinking my post so as not to be repetitive).

An important component of this story as written by a former GS alum and printed in Mother Jones on July 28.  Please pay special attention to the last paragraph:

On February 5, 2009, the Fed granted Goldman's request. This meant that not only was Goldman getting big federal subsidies, but also that it could keep betting big without saving aside as much capital as the other banks. Using VaR gave Goldman more leeway to, well, accentuate the positive. Yes, Goldman is a more risk-prone firm now than it was before it got to play with our money.

I think this explains much.  My read on the entire situation is that the views of GS, et al., are so comprehensively expressed in the halls of power, that is was a foregone conclusion that the public "solutions" would be hopelessly intertwined with the private financial health of GS, et al.

Essentially, GS is being entirely rational.  If given the opportunity to play a game of "heads I win, tails you lose" I too would lever up, apply maximum risk and go for it!

That's what they are doing and, while rational, it is amoral, immoral and wrong.

This crisis is not over, not by a long shot.  It will be over when these animal spirits are exposed as fraudulent and crushed.  So far, not so much.

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

From Briefing.com

Goldman Sachs CEO tells employees to avoid making big-ticket, high-profile purchases - NY Post :

NY Post reports co CEO has warned his employees to avoid making big-ticket, high-profile purchases as the gold-plated Wall Street co hunkers down amid a firestorm of public and political anger over outsize bonus payments. According to sources at the bank, Blankfein says purchases should be toned down in light of the billions in bailout money that banks, including Goldman, have gotten from Uncle Sam. A source within the bank said Blankfein first began calling for an end to the conspicuous consumption late last year, but has stepped up his campaign in recent weeks as the White House has sought to rein in compensation and as the co has gotten dinged by a pair of high-profile magazine articles. "This is a sensitive time for us, and [Blankfein] wants to make sure that we're not being seen living high on the hog," said one Goldman exec.

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Well,

I heard it on Bloomberg radio today about GS 100 million dollar days.......

As soon as I got home I came here to get on this site and see what Chris et. al. had to say.........

I wasn't disappointed!

SO, what is a father to do that has kids to educate and cloth and feed?

I am calling my tax guy tonight to find out how bad a hit I will be taking to expunge myself of the market. ie. 401K 101K

Lack of trust? Confidence? The announcers today on the radio were almost cheering GS for those gluttonous results. And, doing so with OUR money. Hey, how much of that profit will the taxpayers be seeing? I mean, after all, it WAS our capital, right?

C.

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Wow.... now I know why GS is slowly becoming known as Gold in Sacks all over the internet...!

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Angry Saver writes:

I share your sentiments that collectively we are being ripped off by Wall St and the Fed.  

Just those two?

Who are the stewards of our money supposed to be?

Inflation has to be insidious for it to be a hidden tax against the people.  Also, do you think people would stand for more debt if they knew the correct debt figures? The Fed has accomplices:

  • The BEA which calculates GDP, (a leading edge indicator,) 30%-40% greater than what it is. When we earn a lot a little debt doesn't scare anyone, the BEA has turned us into a borrower whose income is cooked
  • The BLS which uses seasonal adjustments, Birth Death Modeling, and U3/U6 classifications to halve the unemployment statistics that investors use
  • The BEA which calculates inflation backing out gas and food
  • The government for keeping 63 trillion in debt off balance sheet and another 13-24 in bailouts off balance sheet
  • The government for allowing social security to be spent from a trust fund which has been watered down to a three ring binder in a file cabinet
  • The SEC for giving GE the equivalent of a parking ticket for it's blatant violation of the Sarbanes-Oxley Act. Section 802: Criminal penalties for violation should have included 20 years
  • The government for not repealing an act gone bad 96 years ago, an act in violation of our Constitution

First I blamed Congress, now I wonder if it is a collective 308 million people who are too busy and too understanding and most of all kept in the dark by off balance sheet confusion and fuzzy math. 308 million people who elect stewards not for stewardship but for the promiss of something for nothing.

Judging from the videos that I saw of the town hall meeting, 308 million people may not know our debt is over 80 trillion and we earn about 8 trillion, or we take in 2 trillion and blow 4 trillion leaving a 2 trillion dollar deficit. They may not know unemployment is 18-21%. But they sure looked like they have had enough.

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Good one Cat- You'd think GS clients would know a high when they see it and take their money and run. Buy low - Sell High.   =))

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

I have little doubt that at the end of the collapse Goldman will be broken up by Volcker.  This will make it look like the criminals were punished.  Nope.  Changing corporate logos doesn't matter at all.  The key individuals will have already parked their wealth in hard assets and offshore accounts.  The key individuals will also probably be in other firms by then and will have found new ways to continue the practice of extracting value from the masses.  Only the thousands of lackeys, the honest folks who think they're doing a good job serving capital markets, who aren't in on the scheme the elitist scum play will suffer a bit as the firm is broken up.  

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Davos,

First I blamed Congress, now I wonder if it is a collective 308 million people who are too busy and too understanding and most of all kept in the dark by off balance sheet confusion and fuzzy math. 308 million people who elect stewards not for stewardship but for the promiss of something for nothing.

Isn't that the definition of, "give them bread and circuses"?

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jerry_lee
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Betting the farm

Life on the farm used to be layed back.

Then I bought some gold and put it in a sack.

Gold in a sack; now who can i thank?

I took it into town and asked them at my bank.

My banker was quite cool about it.

He said,"Don't be a crank.

We'll protect your ass-ets;

The Guard gave us a tank."

Now I'm really thankful about how safe I am...

Not like my goofy neighbor who lost his pension in a scam.

Some Nigerian princess wrote him a long email.

Anyone who falls for that should put themselves in jail.

I can't wait til time to plant my crops and I need me a loan.

I'm sure my banker won't bat an eye when I call him on the phone.

Yes, life is good out on this here farm.

The manure is getting deep.

To think i could have lost it all by gambling on Wall Street.

 

 

 

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LogansRun
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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

 

Edit....

rowmat's picture
rowmat
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The problem is...

95% of the rest of the population don't have a clue of what is really going on.

I challenge you to take to the streets and ask people who Goldman Sachs is and the vast majority will stand dumbfounded, eyes glazing over and respond with stuff like... "Golden stacks?... Oh yeah... that pancake joint!"

The American education system is working just as it is supposed to.

Keeping the population ignorant, dumbed down and mostly compliant.

Those that do get angry will probably just riot in the streets and trash and loot bunch of struggling businesses who have been ripped off by Wall Street anyway.

Face it, the government is owned by Wall Street and predominantly by Goldman Sachs.

And you ain't seen nuthin' yet.

National healthcare reform will usher in a new RFID identity system linked to a database which includes all your banking and financial information... it's already included in the proposed healthcare reform bill.

*(D) enable the real-time (or near real- time) determination of an individual’s financial responsibility at the point of service and, to the extent possible, prior to service, including whether the individual is eligible for a specific service with a specific physician at a specific facility, which may include utilization of a machine-readable health plan beneficiary identification card;

So if the government has access to this information, do you really believe that Wall Street won't?

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Hello RNcarl:

A Roman Empire indeed!

RowMat Writes:

95% of the rest of the population don't have a clue of what is really going on.

I'd have to agree. I think even in that 5% there are those that are just so fed up with things that they are optomistic anything anyone comes up with will solve the mess.

In any event I suspect the 95% will know soon, my late grandmother always went on about the truth coming out.

 

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Emotions Running High

Holy cow, things have been getting heated up on this site this week. I guess we collectively feel very out of control at this point. But then again, how much control over these things do we really have? None. I think its time to take a step back and concentrate on the things we can control, like getting our own house in order.

Analysis beats emotion every time. We will find our solution, if we don't let emotion get in our way.

Now excuse me while I go beat the crap out of my punching bag.

All the best...Jeff

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

 rowmat, I think you're right about the masses...though they will soon know them as villains.  But I think the bigger problem is the bourgeois class.  They think they know what Goldman is...they preach that it's the greatest investment bank which is damn good at its job and deserves the money it makes...just an example of free market competition.  These people are the true dolts of the world.  I can't believe how many top college grad corporate types I've had that discussion with recently.  I hate to say it but Marx was right about those types (obviously there are exceptions...there are plenty of professionals on this site that obviously don't fit the mold).

The RFID system is in the agenda of JPM Chase...their credit card business.  The power a plastic card has over an individual's life is scary and if they can just put the chip in the person instead of the card, all the better...no fraud, 100% trackability/accountability, lower cost.  Goldman wouldn't care about the chips unless they could find a way to make a market on them and profit from it...they're just short-term profit pirates...cap and trade is their big focus for now.

 

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George Carlin ~ 'The American Dream'

I've posted this several times and will continue to do so without apology.

This was recorded in 2005 two years before the economy imploded.

Carlin was absolutely 100% spot on with his observations.

Listen carefully concerning his comments about Wall Street and pension funds.

Alas ol' George is no longer with us but I'm sure if he was Goldman Sachs would have become his public enemy numero uno!!

WARNING!! - Contains explicit language... but it I think you have to agree it is well deserved!!

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

 Hi Jeff, I agree with your observation that emotion is high, but I don't think emotions are necessarily correlated with feeling out of control...I think fear is the only emotion that is highly correlated with feeling out of control.  I also don't think emotions necessarily get in the way of rationality.  On the contrary, righteous emotions and righteous anger are quite useful and serve as the fuel to make us care enough to do more analysis and come to more rational conclusions. 

Fear is the helpless, out of control emotion.  Anger is more advanced.  For example, a fearful response to seeing an adolescent girl getting mugged on the street is to run and hide, whereas an angry response is to pummel the guy and save the girl.  We're all being mugged by Wall St.  Anger is quite appropriate.  

All that to say, please don't suppress your anger.  Let it guide your mind.  Suppressing it results in a regression back to fear.  

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Re: Emotions Running High

Jag,

 

I agree there do seem to be a lot of emotions coming out on the boards this week. Personally for me the ridiculous GDP announcement  and the cash for clunkers scheme were disheartening. Numbers like rail and water shipments, tax revenues, and unemployment are just ignored in most msm story telling. Most of my friends and family think I'm worrying too much and when someone like Warren Buffet states Obama is the right guy for the job everyone smiles and sings kumbaya. 

It must be human nature to want to look for the best in a situation. In the mean time I'll stay on top of the crisis while my contemporaries watch reality TV. True reality is our societal debt is totally unsustainable and our service based economy serves the elite not the common American. I'm skipping the punching bag and heading for the lake. Hang in there everybody! 

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...
strabes wrote:

 rowmat, I think you're right about the masses...though they will soon know them as villains.  But I think the bigger problem is the bourgeois class.  They think they know what Goldman is...they preach that it's the greatest investment bank which is damn good at its job and deserves the money it makes...just an example of free market competition.  These people are the true dolts of the world.  I can't believe how many top college grad corporate types I've had that discussion with recently.  I hate to say it but Marx was right about those types (obviously there are exceptions...there are plenty of professionals on this site that obviously don't fit the mold).

The RFID system is in the agenda of JPM Chase...their credit card business.  The power a plastic card has over an individual's life is scary and if they can just put the chip in the person instead of the card, all the better...no fraud, 100% trackability/accountability, lower cost.  Goldman wouldn't care about the chips unless they could find a way to make a market on them and profit from it...they're just short-term profit pirates...cap and trade is their big focus for now. 

I think a very high percentage of the population will still never know what really happened even after they have lost their job, house and pension.

Most people just watch the MSM and reality TV so that's about all they know.

Of course many believe that profits are good even though they may be totally ignorant in the methods used to generate them... whether through market manipulation or drug trafficking.

Two quite apparently different forms of criminal profiteering can occasionally have similar outcomes.

Whether or not it is an overdose on CIA sponsored Afghani heroin or a suicide as a result of a vanishing Wall Street retirement plan, they can both be considered the result of 'market forces'.

As for RFID chipping, like it or not we are a 90% cashless economy already.

It is logical to expect that eventually all of our personal and financial history will be linked to a single database via a single identification device that will be required for every aspect of our daily lives.

I believe the newly proposed national health care system will be the catalyst that will be used to create a new national RFID system that will require everyone in the country have a card (initially) then later... www.healthlinkinfo.com

And make no mistake, eventually all of this data will also be linked directly to the financial markets.

Every transaction we make as individuals will be monitored, tracked and reported to the market in almost real time and will be used by the markets to develop even more profit making instruments of financial destruction and control.

Cash, at least for the masses, along with the U.S. dollar as the global reserve currency is nearing the end of its life.

Not so long ago most people thought this whole idea was nothing more than a conspiracy theory and laughable... well how many are still laughing now?

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

There HAS been a lot of well-founded emotion on this site very recently. The truth, when you care enough to dig for it and analyze it, is more than ugly; we all of us who are faithful readers on this fine site now have the complete bold, brazen, in-your-face recognition that we have been left behind on the Titanic. The GSians have taken all of the lifeboats and The Rest Of Us are left listening to lovely music ( the MSM ) as the ocean closes in over our heads....

And what to do with all of the emotion? I'm not sure.

The old bumper sticker comes to mind: IF YOU'RE NOT ANGRY, YOU'RE NOT PAYING ATTENTION.

Sadly, for the moment, at least, it seems that the 95% AREN'T paying attention.

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

 I did RFID consulting for one of the top 10 univerities. Really we slipped over the edge already and without RFID.

Police cars will soon have cameras that read plates, some countries are mounting them on roadways and scanning all vehicles. The average person gets entered into tons of databases all day long, ATM, Convience Shopping Cards, Debit and Credit cards....

RFID has a lot of flaws. Lots of them.

I also do not like a one federal card, liscense, social security anything.

Defcon

Digitized Stalking Is the New World Order

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...
Davos wrote:

 I did RFID consulting for one of the top 10 univerities. Really we slipped over the edge already and without RFID.

Police cars will soon have cameras that read plates, some countries are mounting them on roadways and scanning all vehicles. The average person gets entered into tons of databases all day long, ATM, Convience Shopping Cards, Debit and Credit cards....

RFID has a lot of flaws. Lots of them.

I also do not like a one federal card, liscense, social security anything.

Defcon

Digitized Stalking Is the New World Order

I also worked in the industry for a company that designed and manufactured RFID access control systems.

The biggest headache for the authorities at the moment is the number of separate and disconnected databases that contain information concerning just one individual.

TPTB would prefer if all data was contained in a single centralised (or permanantly linked) database(s) where everything could be easily and quickly cross referenced.

RFID is not a perfect technology by any stretch as the code can be scanned although without being able to link to a database it is not much use.

Implantable chips have an advantage because eventually technology will provide for DNA crosschecking as well which is already in development. Still, someone will always be able to find away around the system if they have the information, and expertise to subvert it.

The new coming technology will undoubtably link all financial transactions, drivers licence, cell phone, GPS, car electronics, internet activity, email, utilities, access control, all domestic and international travel, healthcare, banking, taxation (including carbon taxation), education, employment, criminal history, military, firearm ownership, marital status, offspring, (you name it) etc etc to a single, or connected database(s).

Personally I think one of the driving factors for this will be peak oil and the social upheaval caused once it really begins to take effect.

At the moment the GFC has tempered the demand for oil. However if, and when, demand increases again we are all in for a very nasty shock.

I think governments around the world are all grappling with the spectre of peak oil whether or not they are prepared to admit it.

And what is the best way to keep the majority of the population under control in a looming crisis?... make sure you have a method by which you can control them as easily as possible. And financial control can also be utilised as a form of social control which makes it a very powerful instrument.

Although we are getting off topic here the banks/government (I make no distinction here) will be the controllers of this technology and profit from it.

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

"The few who could understand the system will either be so interested in its profits, or so dependent on its favors, that there will be no opposition from that class,

While on the other hand, the great body of the people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests."

 

 

 

 

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

The new coming technology will undoubtably link, drivers licence, cell phone, GPS, car electronics, internet activity, email, access control, all domestic and international travel, healthcare, banking, taxation, education, employment, criminal history, military, firearm ownership, marital status, offspring, (you name it) etc etc to a single, or connected database(s).

Yeah, big picture wise it certainly looks like it is sure heading this way. One of the things that erked me when I read that 1,017 page bill.

I'm kind of wondering if they will make it over the next hurtle or if chaos ensue before they get one database or, one anything together, for that matter.

I say this because I have often envisioned the fallout from a "potential" depression being akin to Huricane Katrina - nationwide (likely world wide). There was a faction 1% maybe 5% (I'm guessing at the figures) of folks that knew that a Cat 5 hurricane hitting a city below sea level would equate to devistation. From recall: That was a storm they saw. I think it is safe to say that a lot of balls were dropped there. I can't imagine what would happen if it were a nationwide (unforseen) event that didn't blow over in 48 hours.

It is kind of comical, I read about all these threats to national security and the biggest threats I see were all appointed by this or a former potus.

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

The goal can't be 1 database...Oracle can't make a database that big.  They don't need 1 database in today's XML/Web services world and the cloud computing standard promoted by google and salesforce.com--an abstraction layer that allows Web services-compliant databases to communicate.

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Kunstler on Gold in Sacks...

     By now, everyone in that fraction of the world that pays attention to something other than American Idol and their platter of TGI Friday's loaded potato skins knows that Goldman Sachs has been caught at another racket in the stock market: front-running trades. What a clever gambit, done with the help of the markets themselves - the Nasdaq in particular - in which information on trades is held back a fraction of a second from public view, while the data is shoveled to the computers of privileged subscribers who can execute zillions of programmed micro-trades before the rest of  the herd makes a move. This allows them to vacuum up hundreds of millions of dollars by doing absolutely nothing of value.  The old-fashioned method used by brokers was called "churning," in which stocks were bought and sold incessantly (by phone) from the portfolios of inattentive clients merely to generate commissions.  In any sensible society - i.e. a society with an instinct for self-preservati

on - it would be against the law and the people doing it would be sent to prison.
    I'm not a lawyer, but I've got to think that the actions at the Nasdaq end - shoveling the data to the privileged subscribers a fraction of a second early - is patently illegal in the first place, since the whole purpose of an exchange is to create a fair trading space. Where both parties are concerned, it should amount to a plain vanilla criminal conspiracy to commit stock trading fraud. Maybe the larger question is: since when did we become a society lacking the instinct for self-preservation - that is, a society bent on suicide?  Or maybe the question is better put to Goldman Sachs's CEO Lloyd Blankfein.
    Since this racket was made public, there has been chatter all over the Web about how angry the American public is about Wall Street in general, and increasingly about Goldman Sachs in particular.  Nobody has summed it up better than Rolling Stone's Matt Taibbi, calling the company "...a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." And Taibbi's fierce article about Goldman Sachs came out weeks before this latest outrage. As we turn the corner toward autumn, President Obama looks increasingly like a dupe, a tool, or a co-conspirator of Goldman Sachs.  If he doesn't instruct the Justice Department to commence investigations of the company, and if he doesn't dissociate himself from their alumni hanging around the White House, the Treasury Department, and elsewhere in the government, he's going to become the object of an awful public wrath.  Obama has no other choice at this point except to clean house - to fire Larry Summers, Robert Rubin, Tim Geithner, and all other former Goldman Sachs employees in positions of power and influence around him.

<MORE>

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...
strabes wrote:

The goal can't be 1 database...Oracle can't make a database that big.  They don't need 1 database in today's XML/Web services world and the cloud computing standard promoted by google and salesforce.com--an abstraction layer that allows Web services-compliant databases to communicate.

By one database I meant the combining of all a persons data into an accessible form where all required information could be accessed by one authority if required... anyway you know what I mean!

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Ha, ha, ha, I don't know, I think they'd tell him to get a new job is more like it.

PS Have you guys read about Morgan Stanley and GE?

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Does anyone think Obama has ANY notion of reining in GS?   Think again.  Guess who was his second largest contributor during the campaign.

http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638

WAKE UP AMERICA

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Goldman Sachs' Incredible Political Connections cont.

Obama Names Goldman Sach's Hormat to State Dept Post
http://www.bloomberg.com/apps/news?pid=20601103&sid=aIGwcAuMUcFI
Hormat will 'serve' as Under Secretary of State for economic, energy and agricultural affairs.

According to Catherine Austin Fitts:
"One of the most sensitive issues in this area will be global efforts to shift seed supply, water, farmland and food supply to centralized control by private investment."

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

America, you are being looted, and the pirate's name is Goldman Sachs.

 

Goldman Sachs is simply the henchmen.  The Kingpin is the State via the Fed and US Treasury department.  Goldman gets away with whatever outsourced State provided tools they can utilize.  Ultimately at the core of it, the State is simply a monopoly on violence and as such, is inherently corrupt, open to lobbying/bribery/special interests/campaign donations and a voting public that focuses on the cut of a leader's jib and $400 dollar haircuts.   The Constitution was supposed to prevent unlimited government, but you cannot restrain a lethal predatory tiger in a paper cage.

The State cannot be reformed.  There is no way to "vote" our way out.  There is no way to protest our way out.  I love this site and the members contributions here, but sometimes I wonder if there isn't too much effort being spent on the mechanics/forensics of the crimes instead of what we can do about it.  Collapse is more likely than reform.

Some people say to me, "OMG!  You are advocating no government!  You're crazy!   Move to Somalia if you want that, and see what it is like!".   I usually ask them how Somalia's strong central government in the past PREVENTED Somaila from collapsing into what it is today, namely a bunch of factions competing to me the *NEW* monopoly government to loot and pillage the citizens.  Dead silence on that one as they put their hands over their hearts and look to the flag with shining eyes to sing the national anthem.

I don't mean to sound preachy nor do I intend to minimize the enormous wealth of good work people do here, but I think it is time we should start moving forward into what to *DO* about it.

I keep sounding like a broken record, but the only solution I have seen that stands a non-zero chance of success is Agorism.  Click the link in my signature to learn more.

America, you are being looted, and the pirate's name is the government.

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Remnant, I agree.  As I learn more about voluntarism, socialist anarchism, libertarian socialism, I find myself becoming more excited about a possibly distant future.  Whereas a future with simply a rejiggered govt, i.e. group of men with money power and guns who are the only ones authorized to use them, doesn't excite me.  

The other thing to mention to those who point to a country like Somalia is to remind them of the British empire's policy of perpetually f'ing with Africa.  Warrior tribes need money to do what they do, so what we see in Somalia isn't just an extension of organic life there.  It's a result of anglo meddling...the funding comes from anglo bankers...they make money by funding both sides to kill each other, and in the process the territory is kept unstable.  Another way the Brits extend their empire without overtly doing so is by training African leaders at Oxford!!  Zimbabwe's Mugabe is an Oxford boy.  He got in bed with the elite.  He learned how much richer he could become by parasitically ruling his people and agreeing to be a de facto representative of the Crown rather than trying to truly lead his people independently.  He learned the ways of the anglo bankers of using inflation to destroy civilizations.  

So the people claiming these are examples of no government couldn't be more wrong.  They are examples of the dangers of empire.  

 

Eye's picture
Eye
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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

crash_watcher,

You put together the same series of thoughts I had begun to construct about a week ago.  Importantly, you substantiated the hypothesis with facts that I was unaware of. 

That the markets are blatently manipulated still does not preclude an independent trader from making a profit.  What the manipulation arguement does explain is the hugh disconnect between economic fundementals and the equities market.

The "Great Reflation Experiment" is nothing more than the looting of this country as Chris has so aptly described.  It is a crying shame.

Eye

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ao
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Posts: 2220
What to do? A start ...

Organize a 10+ million man/woman march on Washington DC to demand change ... REAL change, starting with ending the Fed and proceeding from there.

Organize, mobilize support for, and field a viable third party to oust virtually ALL incumbent bought-and-paid-for politicians on federal and state levels and replace with true representatives of the people.

Compile an accurate list of the involved oligarchy so that, when the appropriate time comes, groups of concerned citizens can approach their residences, respectfully request their presence, and politely ask that they return the funds they "borrowed", with interest.

Sit down, relax, and watch a fanciful movie to ease the seriousness of this all.

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Davos
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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

ao: good fix, but would it work when the bill of the centrury has been boiled down to special interest protester news coverage and political side taking to avoid talking about just how much it would cost and just how it would work?

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

 So i sit here on this saturday evening when most of my peers are out drinking into the wee dawn, contemplating there next drink at the bar, or sitting at home watching there recorded reality shows for the week.  Where did America go wrong?  I have been following goldman sachs ever since I interviewed with them in Business school back in 05, they are beyond scum I personally believe they are part of something even bigger and more global in character. 

 

 

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Re: Goldman Sachs' Incredible Trading Returns are Literally ...

Dear Chris,

Kudos for writing about it. You are absolutely right...there is more to the story than just the fact that the likes of Goldman are taking more risk nowadays. Was that the question of just VaR, why didn't they do so all the while? After all, they have sophisticated softwares to give them thousands of combinations of risk/reward; they could have chosen something better long back. And probably escaped all the credit crisis in the first place.

The most believable explanation is that given the size of Goldman and JPMorgan, they are getting some clues from the government regarding some key announcements before the market gets them? We should not be surprised about this; after all, these big banks are nowadays constantly in touch with the Fed Chairman and Treasury Secy. So if some key decisions are simply hinted about, these banks come and milk the markets.

Goes without saying, this is yet another system of INSIDER TRADING. And like any other insider trading this one destroys the market over the long term. If these banks are earning extra money from trading, after all someone is losing the money on the other side of the trade, since most trading is zero sum game. That means individual investors or small fries like us are being milked for the benefit of big banks.

This is a truly sad story. In India we have a sankskrit saying: In Kaliyuga (the age of Kali) men will suffer these six changes: the liberal man will be poor; the crook will be rich; the sinner will be longlived; the noble will be violently opposed; the wise will be ridiculed, and the king will be of low birth. God save the world from these "Kings of Low Birth."

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