That will get the banksters attention!
I frequently trade in the markets. If the allegations of front running against Goldman Sachs are true then it is likely I have been financially harmed by the rigged game Goldman Sachs is alleged to have been playing. If the allegations are true:
I may have paid more for stocks, mutual funds, or ETFs then I should have (ETF definition http://www.investorwords.com/... ).
Front running may have caused me to miss buy moves to the upside causing me to lose out on profitable trades.
Front running may have caused me to miss sell moves to the downside causing me greater losses.
If you buy and sell stocks, mutual funds, or ETFs you may have been harmed by such a GS system.
If you have a 401k invested in these vehicles you may have been harmed.
If you have IRAs or pensions that invest in these kinds of financial instruments you may have been harmed.
The charge ‘FLASH Goldman Code Theft BOMBSHELL?’ as outlined by Karl Denninger in the blog The Market Ticker states:
Goldman Sachs, through access to the system as a result of their special gov't perks, was/is able to read the data on trades before it's committed, and place their own buys or sells accordingly in that brief moment, thus allowing them to essentially steal buttloads of money every day from the rest of the world.
It would mean that Goldman was able to "see" transaction order flow - bid, offer, and execute messages - before they were committed in the transaction stream. Such a "SNIFF" would be COMPLETELY UNDETECTABLE by the sender or recipient of the message.
The implication of this would be that they would be able to front-run any transaction where the data was visible to them, thereby effectively "stealing pennies" from each transaction they were able to front-run.
It has been reported that those pennies might be making for Goldman $100 million a DAY in trading profits.
The DK diaries focusing on this possible crime are from vets74:
http://www.dailykos.com/...
and bobswern (the best financial blogger on DK)
http://www.dailykos.com/...
As reported this story broke when Goldman complained a former employee stole their ‘front running’ trading system. Goldman set themselves up by stating to Assistant US Attorney Facciponti that, "there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways."
There you go – those smartest of asses from Goldman set themselves up for a big class action lawsuit by bellyaching to the US Attorney about what their system could do.
Can we expect Congress to get to the bottom of this? NO! Not when Senator Dick Durbin said the banks own this place (the Congress).
Can we expect the Federal Reserve to look into it? Probably Not. The Fed on transparency according to blogger Bob O’Brien:
I think the defining moment for me was when Bernanke responded to the question from Congress, as to whether the American people (and their elected representatives in Congress) would be told to whom all their tax dollars have been given or lent. That single word summed it up perfectly for me: "No."
Any illusions that the money trust in the US, that collection of bankers and hedge fund managers and industrialists who are the beneficiaries of the systematic looting of the Treasury under the current "emergency" measures, is going to do anything other than precisely whatever it likes, or is going to report to those being looted, was dispelled at that moment.
Secretary of Treasure Tiny Timmy Geithner has been bailing out the banksters by cooking up ways to shovel trillions of dollars into the yawing financial maw of a black hole while millions lose their jobs, go broke, and lose their homes. To this bankster sycophant of a Secretary this kind of trading would be just making the financial system healthy.
Can we expect the President to investigate this? Unless he quickly finds his inner FDR, probably not. As Matt Taibbi wrote in his recent Rolling Stone Goldman Sachs polemic, "Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs — its employees paid some $981,000 to his campaign — sits in the White House."
So it’s time for us the unwashed mob with the pitchforks (thanks for that image Mr. President) to go after these smug, supercilious banksters with a class action lawsuit. Take em down. Too big to fail can’t go on and the political establishment is mostly committed to propping it up.
Bob O’Brien again:
But the truth is that we are witnessing a nation whose policy is being run so special interests can profit at unprecedented levels while the standard of living of the populace inevitably declines to accommodate the transfer of wealth. It is completely deliberate, and not a bit of it is accidental. The smartest guys in the financial world didn't all just get stupid and blow it - that's a facile cover story being propagated by the captured press. They knew exactly what they were doing, they crashed the system to profit at levels it would normally take 50 years of stability to see, and they could give a rat's ass whether you work at Burger King during your retirement as a result.
They win. You lose.
But don't expect to see it in the WSJ or NY Times - those rags are devoted to broadcasting Wall Street's spin on things. That's why you keep hearing about how the heads of the big banks are morons, and how outraged everyone is that they kept their jobs, etc. They aren't morons. They, and their buds in hedge funds and trading desks, made trillions from being "morons." And the reason they are declared idiots over and over, is because there's no prosecuting a guy for being a retard. The smartest guys in the room always pretend to be fools when the prosecutor is around, however they don't have to worry - they long ago bought off the establishment, including the regulators and prosecutors. Nobody but a few token outsider fall guys will see any prosecution - like Countrywide's CEO. But not the head of BofA or Goldman or JP Morgan. They got away with it. And they now are so rich they will never be touched.
Welcome to the Banana Republic of America, brought to you by 300 rich white guys on Wall Street. Game over.
http://thesanitycheck.com/...
Bob might have been a bit pessimistic. They might not only be able to be touched but disemboweled as well!
As Eddie Murphy said in Trading Places, ‘I want a lawyer. Is there a lawyer in the house?’ Any badass lawyers want to make a couple of hundred billion dollars?
Full disclosure: If this scandal is the real deal I’m shorting Goldman Sachs and the rest of the Banksters - BIG TIME.
Of course Goldman will probably be stealing pennies by front running their own demise, but hey you can’t stop Ratso Rizzos in pinstripe suits from doing what they do.
UPDATE:
ctsteve had this down the thread. It's a front page NY Times story for tomorrow's paper:
July 13, 2009
Goldman Sachs Likely to Post Huge Profits, Analysts Say
By GRAHAM BOWLEY and JENNY ANDERSON
Most of Wall Street, and America, is still waiting for an economic recovery. Then there is Goldman Sachs.
Up and down Wall Street, analysts and traders are buzzing that Goldman, which only recently paid back its government bailout money, will report blowout profits from trading on Tuesday.
Analysts predict the bank earned more than $2 billion in the March-June period, thanks to its trading prowess across world markets. If they are right, the bank’s rivals will once again be left to wonder exactly how Goldman, long the envy of Wall Street, could have rebounded so dramatically only months after the nation’s financial industry was shaken to its foundations.
Yeah I wonder............