Didn't Goldman-Sachs just admit that their super secret computerized trading program gave them an unfair market advantage?

Playerslight: As long as they aren't inside trading (not that I believe they aren't) it's not technically an unfair advantage. They were gaming the programmed trading of other companies on Wall Street, which is perfectly legit. Day trading is a chump's game anyway, when you're going up against guys like that.

seems kind of unfair tho, don't you think?

Weaver95: seems kind of unfair tho, don't you think?

arbitrage isn't necessarily illegal or bad for the market. such are the advantages of being an 800lb gorilla on wall street.

Good article on automated trading:

http://www.themistrading.com/article_files/0000/0348/Toxic_Equity_Trading_on_Wa l l_Street_12-17-08.pdf

Sorry for no linking.

ThrnPhl: Good article on automated trading:

http://www.themistrading.com/article_files/0000/0348/Toxic_Equity_Trading_on_Wa l l_Street_12-17-08.pdf

Sorry for no linking.

i'm getting a 404 not found.

Weaver95: seems kind of unfair tho, don't you think?

How are you arguing against that? Goldman Sacks is playing the system.

thomps: Weaver95: seems kind of unfair tho, don't you think?

arbitrage isn't necessarily illegal or bad for the market. such are the advantages of being an 800lb gorilla on wall street.

yeah, but it's still not exactly a level playing field.

Weaver95: yeah, but it's still not exactly a level playing field.

very few industries have level playing fields between large institutional players and solo practitioners. why should finance be any different?

Try again:

http://www.themistrading.com/article_files/0000/0348/Toxic_Equity_Trading_on_Wa l l_Street_12-17-08.pdf

Weaver95: yeah, but it's still not exactly a level playing field.

So it seems like you're arguing for regulation.

somehow a couple spaces got in the word "wall" - works once you take those out (see below). thanks for the link, i'll give it a read

http://www.themistrading.com/article_files/0000/0348/Toxic_Equity_Trading_on_Wa l l_Street_12-17-08.pdf

thomps: somehow a couple spaces got in the word "wall" - works once you take those out (see below). thanks for the link, i'll give it a read

http://www.themistrading.com/article_files/0000/0348/Toxic_Equity_Trading_on_Wa l l_Street_12-17-08.pdf

weird, the filter must be adding those speces for some reason.

Just noticed there are spaces in 'Wall' that need to be removed.

a direct line to the US Treasury through AIG Hank Paulson and Tim Geithner

Playerslight: Sensors indicate a ideological singularity forming in the Farkiverse off the port bow.

He's basically arguing for regulation so all methods of trading are equal. I'm scared.

GAT_00: Weaver95: yeah, but it's still not exactly a level playing field.

So it seems like you're arguing for regulation.

1. i'm not 'arguing' anything.
2. i'm wondering how this furthers market competition.

look - like any good libertarian capitalist, I believe that competition leads to healthy markets. Remove competition, and you get stagnation, monopolies and market distortions. It just seems to me that Goldman-Sachs has found a quasi-legal way to eliminate competition and nobody seems to care.

UNC_Samurai: It's something I heard Harry Browne once say: Libertarians can appreciate regulation to the end of "equality of opportunity", meaning government regulation is fine when it's intention and outcome is to keep people from being barred fair opportunity to pursue improvement.

The problem with our current form of government 'regulation' is that it's designed to create artificial government backed monopolies. you just pay your lobbyists to arrange things with the right people in D.C. and you get your little government mandated right to rape, loot and pillage your sector of the market. The only time the fed gets cranky is if you overstep the bounds of your letter of marque.

Weaver95: look - like any good libertarian capitalist, I believe that competition leads to healthy markets. Remove competition, and you get stagnation, monopolies and market distortions. It just seems to me that Goldman-Sachs has found a quasi-legal way to eliminate competition and nobody seems to care.

yeah but every one of their trades has two sides, so all they are doing is increasing the number of trades and exploiting inefficiencies in the market. doesn't this, then, increase competition since it increases trade volume?

thomps: yeah but every one of their trades has two sides, so all they are doing is increasing the number of trades and exploiting inefficiencies in the market. doesn't this, then, increase competition since it increases trade volume?

no.

Weaver95: thomps: yeah but every one of their trades has two sides, so all they are doing is increasing the number of trades and exploiting inefficiencies in the market. doesn't this, then, increase competition since it increases trade volume?

no.

well argued.

thomps: Weaver95: thomps: yeah but every one of their trades has two sides, so all they are doing is increasing the number of trades and exploiting inefficiencies in the market. doesn't this, then, increase competition since it increases trade volume?

no.

well argued.

Ask a better question next time.

Weaver95: Ask a better question next time.

i'm questioning your assumption that trading on market inefficiencies that would otherwise be ignored is in some way anti-competitive or unhealthy for the market.

thomps: Weaver95: Ask a better question next time.

i'm questioning your assumption that trading on market inefficiencies that would otherwise be ignored is in some way anti-competitive or unhealthy for the market.

i'm wondering why you think it's ok for someone to impose artificially created inefficiencies on the marketplace and then take advantage of the situation....

eqtworld: Weaver95: Remove competition, and you get stagnation, monopolies and market distortions. It just seems to me that Goldman-Sachs has found a quasi-legal way to eliminate competition and nobody seems to care.

What specific part of their program trading do you have a problem with?

the part where they're cheating.

Weaver95: i'm wondering why you think it's ok for someone to impose artificially created inefficiencies on the marketplace and then take advantage of the situation....

how are they imposing inefficiencies? from what i can tell they are just taking advantage of inefficiencies caused by the trading rules of other firms.

Weaver95: the part where they're cheating.

who/how are they cheating?

thomps: Weaver95: i'm wondering why you think it's ok for someone to impose artificially created inefficiencies on the marketplace and then take advantage of the situation....

how are they imposing inefficiencies? from what i can tell they are just taking advantage of inefficiencies caused by the trading rules of other firms.

wrong.

thomps: Weaver95: the part where they're cheating.

who/how are they cheating?

Have you read up on their comments regarding the theft of this trading program they've been using? It's been interesting, that's for sure:

"When US government prosecutors claim that the release of Goldman's secret sauce could potentially expose markets to manipulation, what they're really saying is that some unknown party could use it to out-manipulate Goldman, and possibly even do something more ambitious like frustrate Goldman's platform so that it fails while simultaneously finding some way to short it."

eqtworld: Weaver95: eqtworld: Weaver95: Remove competition, and you get stagnation, monopolies and market distortions. It just seems to me that Goldman-Sachs has found a quasi-legal way to eliminate competition and nobody seems to care.

What specific part of their program trading do you have a problem with?

the part where they're cheating.

I'm still not clear how they were cheating.

I'm not saying they were not or that such a thing would surprise me, I'm just not sure what specific trading method they used that was cheating

read.

Weaver95: thomps: Weaver95: i'm wondering why you think it's ok for someone to impose artificially created inefficiencies on the marketplace and then take advantage of the situation....

how are they imposing inefficiencies? from what i can tell they are just taking advantage of inefficiencies caused by the trading rules of other firms.

wrong.

maybe some context here? at a quick glance this looks like the NYSE is just getting rid of a reporting requirement for program trading?

Weaver95: Have you read up on their comments regarding the theft of this trading program they've been using? It's been interesting, that's for sure:

"When US government prosecutors claim that the release of Goldman's secret sauce could potentially expose markets to manipulation, what they're really saying is that some unknown party could use it to out-manipulate Goldman, and possibly even do something more ambitious like frustrate Goldman's platform so that it fails while simultaneously finding some way to short it."

right, their algorithm capitalizes on other firms' algorithms for trading. it stands to reason then that they could find themselves getting gamed by some other group that uses an algorithm to capitalize on their algorithm for trading. not seeing "cheating" here per say.

/algorithm

I find the scariest part that the government is arguing that the release of the program is damaging to US markets as it could be used by some group to manipulate markets in unfair ways and cause havoc on the financial sector.

But we're totally going to trust Goldman Sachs to not manipulate the market in unfair and destructive ways. Because they're the good guys. And, of course, we're not going to ask too hard how they do it, or really check up on them or anything. We'll just assume they're doing the right thing.

palladiate: I find the scariest part that the government is arguing that the release of the program is damaging to US markets as it could be used by some group to manipulate markets in unfair ways and cause havoc on the financial sector.

But we're totally going to trust Goldman Sachs to not manipulate the market in unfair and destructive ways. Because they're the good guys. And, of course, we're not going to ask too hard how they do it, or really check up on them or anything. We'll just assume they're doing the right thing.

i really hate defending goldman, but i think the argument would be that when they are using the program they are doing so under exchange and government regulation, with compliance officers and lawyer. random dudes in eastern europe would probably not be operating in a similar environment.

Jump you f**kers, jump now.