pimpjui

Goldman Arrest Highlights Problem with IP Law

If the developer has coded the spec, he usually ends up knowing the concept better than the person who wrote the spec. He knows what works and what does not work, and why. The theoretical guy who wrote the spec can only hypothesize (until he gets some actual results). GS is going after this guy because it is about code, which can be disseminated immediately and at an exponential rate. In the next month, a sweatshop in India could be running the GS algo. The success of the GS "offspring" you mentioned may have prospered. But even rudimentary factor model analysis of returns would show strong evidence that they were just taking on credit risk and liquidity risk during an environment of easy credit. Throw on top of that that GS was probably their prime broker (and very likely seed investor), these success stories will disappear shortly. Really, offspring hedge funds were probably a lower risk source of revenue for GS that running a prop shop in house. Regarding GS itself , I am sorry, but that comany has lost all respect from an intellectual powerhouse standpoint. Bottom line: they could not take a drawdown, and had to go cap in hand to the government. GS is a now "confidence" play, not a value play.