[Strangelet]

are you guys following this goldman sachs thing?

So apparently they have cornered the market in not only commodities hedge investments but also "program trading" and is also at the heart of a program called the "Plunge protection team", a government program to provide liquidity to markets in the time of a crash. Both systems require super fast (microsecond) event driven trading based on complicated math.

So this russian guy wrote it but then decides to download the code and go work for some other company for a bunch more money. gets caught, and all of a sudden goldman sachs is not even on the nyse list of high activity brokers, even though around 40% of all trading is program trading and they dominate that system with their new software, making up to 100 million in profits a day.


I mean this shit is fucking insane and I'm hoping it causes more a stir in the american public than a hollywood movie where sandra bullock runs from the shadowy APOCALYPSE INC. and learns an important lesson about love.

Up until about two weeks ago, Matt Taibbi's favorite Goldman Sachs' market observers, the folks over at the Zero Hedge blog, had been continually commenting over the past six-plus months about how Goldman had all but cornered the market on program trading within the NY Stock Exchange. (Program trading is the automated stock trading via computers by firms specially authorized by the NYSE to facilitate same.) Clearly, according to Zero Hedge publisher Tyler Durden, something was up

Speculation is running rampant throughout the blogosphere tonight regarding matters as diverse as the fairly well-known fact that Goldman is at the heart of the government's Plunge Protection Team, a/k/a the "President's Working Group On Financial Markets," (thus making this a matter of so-called national security, since the "PPT" group, created during the Reagan administration, is supposed to step in and prevent our markets from crashing), to the possibility that Goldman could have easily been "frontrunning" the rest of the market due to the implementation of their exceptionally fast proprietary code, identifying others' market-making trades and strategies, then acting upon them for Goldman's own benefit, executing in-house trades before the third-parties' trades were even concluded.

In the 5 days immediately preceeding his departure from "Financial Institution" (potentially GS), Sergey allegedly downloaded 32 megs of ultra top-secret quant trading proprietary code, that, according to Special Agent McSwain's affidavit, he then proceeded to encrypt and upload to a website in Germany, with a UK owner. One can only imagine the value of this "code" not only to Goldman but to the highest bidder. After all, from the affidavit: "certain features of the [code], such as speed and efficiency by which it obtains and processes market data, gives the Financial Institution a competitive advantage among other firms that also engage in high-volume automated trading.The Financial Institution further believes that, if competing firms were to obtain the [code] and use its features, the Financial Institution's ability to profit from the [code]'s speed and efficiency would be significantly diminished." Needless to say, many others are now also likely hot on the trail of the code.

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.