Matt Taibbi says Goldman's (NYSE:GS) response to recent allegations of frontrunning its clients...
Jul. 04, 2009 5:01 PM ETThe Goldman Sachs Group, Inc. (GS)GSBy: Eli Hoffmann, SA News Editor10 Comments
Matt Taibbi says Goldman's (NYSE:GS) response to recent allegations of frontrunning its clients is so vague as to condemn: "His letter, if anything, is such a classic non-denial denial that it really just confirms everyone's worst suspicions."
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Market Sniper
12 Jul. 2009
Well, seems that they did. Had codes allowing them to front run trades. Estimated fuly implimented, could garner GS an additional $100,000,000 a DAY in profit. Funny how this stuff comes out.On Jul 05 02:26 PM DrBenway wrote:> All I said that every commercial Web site collects information about
> its users and usually has some sort of a disclaimer written by its
> lawyers which may sound weird to a casual reader. I cannot possibly
> think about any plausible scenario where users' usage of a Web site
> provided enough information to figure out the future trades. If this
> were the case, Google and Yahoo would be in program trading business,
> as they have infinitely more information about their users.
>
> The weird claim that GS can data-mine its (probably measly) Web traffic
> to front-run the trades is just absolutely laughable for anyone who
> understands the Internet technologies and finance.
>
> All you get is a cookie, a referrer URL, and an IP address in your
> Web server log that you can match sometimes to a geographic area
> or an ISP (it is difficult to even figure out who owns the originating
> network). If a user is registered, you can match up this information
> to the data voluntarily provided by the user during the registration
> process. It takes a truly paranoid or uninformed mind to think that
> this can be the basis of algorithmic trading (or front-running the
> orders, or any other nonsense).
>
> I am not necessarily defender of GS and I do believe that they got
> a really sweet deal with the AIG bailout, but garbage like this ruins
> the legitimacy of a good debate.
>
> On Jul 04 07:33 PM Market Sniper wrote:
> its users and usually has some sort of a disclaimer written by its
> lawyers which may sound weird to a casual reader. I cannot possibly
> think about any plausible scenario where users' usage of a Web site
> provided enough information to figure out the future trades. If this
> were the case, Google and Yahoo would be in program trading business,
> as they have infinitely more information about their users.
>
> The weird claim that GS can data-mine its (probably measly) Web traffic
> to front-run the trades is just absolutely laughable for anyone who
> understands the Internet technologies and finance.
>
> All you get is a cookie, a referrer URL, and an IP address in your
> Web server log that you can match sometimes to a geographic area
> or an ISP (it is difficult to even figure out who owns the originating
> network). If a user is registered, you can match up this information
> to the data voluntarily provided by the user during the registration
> process. It takes a truly paranoid or uninformed mind to think that
> this can be the basis of algorithmic trading (or front-running the
> orders, or any other nonsense).
>
> I am not necessarily defender of GS and I do believe that they got
> a really sweet deal with the AIG bailout, but garbage like this ruins
> the legitimacy of a good debate.
>
> On Jul 04 07:33 PM Market Sniper wrote:
DrBenway
05 Jul. 2009
All I said that every commercial Web site collects information about its users and usually has some sort of a disclaimer written by its lawyers which may sound weird to a casual reader. I cannot possibly think about any plausible scenario where users' usage of a Web site provided enough information to figure out the future trades. If this were the case, Google and Yahoo would be in program trading business, as they have infinitely more information about their users. The weird claim that GS can data-mine its (probably measly) Web traffic to front-run the trades is just absolutely laughable for anyone who understands the Internet technologies and finance. All you get is a cookie, a referrer URL, and an IP address in your Web server log that you can match sometimes to a geographic area or an ISP (it is difficult to even figure out who owns the originating network). If a user is registered, you can match up this information to the data voluntarily provided by the user during the registration process. It takes a truly paranoid or uninformed mind to think that this can be the basis of algorithmic trading (or front-running the orders, or any other nonsense).I am not necessarily defender of GS and I do believe that they got a really sweet deal with the AIG bailout, but garbage like this ruins the legitimacy of a good debate. On Jul 04 07:33 PM Market Sniper wrote:> Hey Doc, might want to read the orginal article. The case laid out
> is irrefutable. That is why Gollum Sucks has not been able to refute
> the allegations. Does not take a genius to figure out what is going
> on here. Goldman Sacks alumni are at EVERY economic choke point in
> this economy and the Obama administration (also the Clinton and Bush
> administrations!). They have bought and paid for Congress as well.
> Even a top ranked Democratic Senator admitted to that very recently
> saying that indeed, that is the case. Not a conspiracy at all. Right
> out there in the open for anyone with eyes to see. Do you have a
> Level 2 trading screen? If you did you would have seen GS, JPM and
> MS hitting each others offers and reoffering during this entire bear
> market rally. Main reason for NO volume! I trade everyday and have
> seen it constantly. Who do you think is the main broker for the Fed
> and the PPT? Why Goldman Sacks, if course. Take the blinders off.
> Nohing new about this. Al Capone was overheard to say after taking
> a tour of Wall Street....I am in the wrong racket!
> is irrefutable. That is why Gollum Sucks has not been able to refute
> the allegations. Does not take a genius to figure out what is going
> on here. Goldman Sacks alumni are at EVERY economic choke point in
> this economy and the Obama administration (also the Clinton and Bush
> administrations!). They have bought and paid for Congress as well.
> Even a top ranked Democratic Senator admitted to that very recently
> saying that indeed, that is the case. Not a conspiracy at all. Right
> out there in the open for anyone with eyes to see. Do you have a
> Level 2 trading screen? If you did you would have seen GS, JPM and
> MS hitting each others offers and reoffering during this entire bear
> market rally. Main reason for NO volume! I trade everyday and have
> seen it constantly. Who do you think is the main broker for the Fed
> and the PPT? Why Goldman Sacks, if course. Take the blinders off.
> Nohing new about this. Al Capone was overheard to say after taking
> a tour of Wall Street....I am in the wrong racket!
Moon Kil Woong
04 Jul. 2009
I think you must assume every company data mines its information. Of course this also means clients information. What you see as clicking and entering stock tickers to keep track of, others see as disclosing your interest in buying, selling, or a free disclosure of the stocks you own. A broker can't say, hey this guy is good, I watch his portfolio and copy it. A data miner can say thei, "Every stock this guy puts up drops 75% of the time without fail. He seems to be a very accurate shorter." There is no laws to prevent them from tracking or mirroring your queries and searches.So always beware. If you're paranoid use random accounts on MSN, Yahoo, etc. to track stocks. There are too many people with too many fake aliases to target you. The best they can do is probably track general broad based public interest in given stocks (unless it's thinly traded). Anyway folks, welcome to the jungle and the digital age. Putting numbers and RFID tracking is completely uneccesary. People are great at taging and tracking themselves as long as you are hosting the services they use to communicate and gather information.
N
Neil459
04 Jul. 2009
Since GS chose not to describe how they use the data, everyone else has to assume they use it to the max advantage. All the web site people people have to do is leave the database accessible. No manager has to force its use, therefore none are responsible. But its seems plausible that it is happening.On Jul 04 06:19 PM DrBenway wrote:
> I do not understand how simple collection of Web site statistics
> represents front-running. Just about every single commercial Web
> site, probably including seekingalpha.com, my bank Web site, my company
> corporate Web site, collects statistics about its users that is used
> for commercial purposes (mostly advertising) and has a disclaimer.
> I do not understand how simple collection of Web site statistics
> represents front-running. Just about every single commercial Web
> site, probably including seekingalpha.com, my bank Web site, my company
> corporate Web site, collects statistics about its users that is used
> for commercial purposes (mostly advertising) and has a disclaimer.
Market Sniper
04 Jul. 2009
Michael, got another little tid bit for you. Know who Larry Levine is?Well know S&P pit trader. Made the comment that all week it as slow with 100 lot being a BIG trade. All of a sudden on Wednesday afternoon, in marches Goldman Sacks with a 8,000 lot SELL order! Front ran the unemployment release for the next day. Ya, you guessed it, the market went down. Now I know some good traders but these guys are NEVER wrong. Only ONE possible conclusion from that!On Jul 04 07:41 PM Michael Young wrote:> At first I thought it was incredible. Then, when you dwell on it
> for a little longer and start putting the pieces together, it starts
> to make sense, who is doing what, who is benefiting, who is paying,
> who is getting rich, who is being screwed. If you think hard enough,
> for long enough and look at the evidence, it starts to make sense.
> for a little longer and start putting the pieces together, it starts
> to make sense, who is doing what, who is benefiting, who is paying,
> who is getting rich, who is being screwed. If you think hard enough,
> for long enough and look at the evidence, it starts to make sense.
TradingHelpDesk
04 Jul. 2009
At first I thought it was incredible. Then, when you dwell on it for a little longer and start putting the pieces together, it starts to make sense, who is doing what, who is benefiting, who is paying, who is getting rich, who is being screwed. If you think hard enough, for long enough and look at the evidence, it starts to make sense.
Market Sniper
04 Jul. 2009
Hey Doc, might want to read the orginal article. The case laid out is irrefutable. That is why Gollum Sucks has not been able to refute the allegations. Does not take a genius to figure out what is going on here. Goldman Sacks alumni are at EVERY economic choke point in this economy and the Obama administration (also the Clinton and Bush administrations!). They have bought and paid for Congress as well. Even a top ranked Democratic Senator admitted to that very recently saying that indeed, that is the case. Not a conspiracy at all. Right out there in the open for anyone with eyes to see. Do you have a Level 2 trading screen? If you did you would have seen GS, JPM and MS hitting each others offers and reoffering during this entire bear market rally. Main reason for NO volume! I trade everyday and have seen it constantly. Who do you think is the main broker for the Fed and the PPT? Why Goldman Sacks, if course. Take the blinders off. Nohing new about this. Al Capone was overheard to say after taking a tour of Wall Street....I am in the wrong racket!On Jul 04 06:19 PM DrBenway wrote:> I do not understand how simple collection of Web site statistics
> represents front-running. Just about every single commercial Web
> site, probably including seekingalpha.com, my bank Web site, my company
> corporate Web site, collects statistics about its users that is used
> for commercial purposes (mostly advertising) and has a disclaimer.
>
>
> I would love to hear a plausible theory how clicking on a Web site
> links can provide enough information to "front-run" clients' orders.
>
>
> The fact that we are even discussing this paranoid drivel represents
> the sad state of today's affairs where seemingly reasonable people
> want to believe the most outlandish conspiracy theories instead of
> using common sense...
>
> By the way, I loved Goldman's reply to Senator Durbin's request where
> they pointed out the obvious fact that his Web site collects users'
> statistics.
>
> Whom is Durbin front-running???
> represents front-running. Just about every single commercial Web
> site, probably including seekingalpha.com, my bank Web site, my company
> corporate Web site, collects statistics about its users that is used
> for commercial purposes (mostly advertising) and has a disclaimer.
>
>
> I would love to hear a plausible theory how clicking on a Web site
> links can provide enough information to "front-run" clients' orders.
>
>
> The fact that we are even discussing this paranoid drivel represents
> the sad state of today's affairs where seemingly reasonable people
> want to believe the most outlandish conspiracy theories instead of
> using common sense...
>
> By the way, I loved Goldman's reply to Senator Durbin's request where
> they pointed out the obvious fact that his Web site collects users'
> statistics.
>
> Whom is Durbin front-running???
DrBenway
04 Jul. 2009
I do not understand how simple collection of Web site statistics represents front-running. Just about every single commercial Web site, probably including seekingalpha.com, my bank Web site, my company corporate Web site, collects statistics about its users that is used for commercial purposes (mostly advertising) and has a disclaimer. I would love to hear a plausible theory how clicking on a Web site links can provide enough information to "front-run" clients' orders.The fact that we are even discussing this paranoid drivel represents the sad state of today's affairs where seemingly reasonable people want to believe the most outlandish conspiracy theories instead of using common sense...By the way, I loved Goldman's reply to Senator Durbin's request where they pointed out the obvious fact that his Web site collects users' statistics. Whom is Durbin front-running???