Is Goldman Sachs Manipulating the Market?
Source: http://feedproxy.google.com/~r/ContrarianProfits/~3/85KPnra2QTw/18840Posted on Wednesday, July 8th, 2009 | In Market Commentary
This, a day after news hit that someone had stolen a “code” Goldman uses to do high-frequency program trading. According to Assistant U.S. Attorney Joseph Facciponti…
- “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,”
Of course, Goldman isn’t the only group out there using high-frequency program trading. If Goldman’s code could manipulate the market, couldn’t other codes do the same? Of course they could. And here’s what the SEC had to say about it…
The Securities and Exchange Commission believes institutional money managers are “sophisticated” enough to trade against the machines without further regulation.
“We don’t want to curtail liquidity,” said Gene Gohlke, associate director for the SEC. Gohlke said it’s up to the managers themselves to make sure other traders aren’t manipulating their models.
The SEC, tasked with preventing market manipulation from destroying the retail investor, is turning a blind eye to what’s happening in the market in the name of “liquidity”.
What bastards.
During the entire market fall the SEC has given the appearance of actually caring about you and me. They banned short selling and are on the verge of reinstating the uptick rule.
But that’s not where the money is. The money is in program trading. Program trading alone could move the markets far more easily than a few short sales.
Of course, the members of the SEC don’t have you and I buying them box seats to the Yankees games or bottles of Dom just for being “nice”. The loyalty of the SEC has already been bought by those with money – institutions like Government Sachs.
Last 5 posts by Contrarian Profits
- The Biggest Financial Deception of the Decade - January 7th, 2010
- Bernanke’s Folly – Bursting the Housing Bubble or ‘Why more regulation isn’t the answer’ - January 6th, 2010
- Commercial Real Estate – why now’s the time to buy! - January 4th, 2010
- The Trade of the Decade - December 29th, 2009
- The Real Story Behind Solar Energy in 2010 - December 28th, 2009
ContrarianProfits.com is a financial news and opinion website with a twist. As investment guru Rick Rule puts it, “You are either a contrarian or a victim.” In the financial world, most people are losers because they just don’t know what game they’re playing. They think they can just get “into the market” along with everyone else, do what everyone else does, and they will make money. Not likely. By the time you’ve paid commissions, spreads, fees, taxes – and suffered the consequences of inflation – you’ll be very lucky just to have as much money as you started with.
ContrarianProfits.com is a contrarian site, in the sense that we provide ideas, opinions and recommendations that often run counter to the mainstream financial press. We do this not just to be contrary, but because we’ve realized that Rick is right. You don’t make money by following the crowd; you make money by leading it.
Why is this so? Well, it’s obvious that if you do the same thing everyone else does you’ll get the same results everyone else gets. On average, and over the long run, real investment returns for the typical investor cannot exceed the rate of growth of the economy itself. Everybody can’t get richer faster than everybody else. Real economic growth in the US today averages about 3% per year; if you don’t make any mistakes, that’s about what you can expect. Few people may be satisfied with 3% per year, but most feel comfortable in the middle of the financial herd and are happy to take whatever that gets them. If you’re one of those people, you will probably not like our site. It will make you uncomfortable.
If, on the other hand, you’re willing to look at things a little differently, you’ll appreciate the views of many of our columnists, contributors and visionaries.
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.