Now, let's get to Taibbi's analysis: "One friend of mine put it this way: say Goldman buys a big block of stock from a pension fund in a dark pool. Now they have shares they want to get out of and flatten out their risk. So where do they sell? Well, a big chunk of it might go to the retail schmuck who has no idea what’s going on. He’s buying 1000 shares of whatever at $28, not knowing that Goldman has another 50,000 shares to go. Next thing you know, the schmuck’s shares are at $27.
You don't have to be a professional trader to understand why Taibbi's "friend's" logic is batshit crazy. In fact, I'd expect any intelligent journalist who endeavors to write financial articles with impact to understand this simple concept: If you're Goldman Sachs, your business model is not, has never been, and never will be to buy large blocks of stock from pension funds in dark pools and then unload them on unsuspecting retail "schmucks" at lower prices. Buying at $28, selling at $27. Sounds like a barnburner business plan - sign me up! (sarcasm).
The people who are actively innovating on Wall Street are all involved in the business of gaming the system to take advantage of short-term price swings. The people who invest money for the long-term and stick with their investments are punished in this environment.
Disclosure: I do not, and have never worked for or received any compensation from Goldman Sachs.