Goldman Scams

The Wall Street Journal is asking “Goldman Sachs Quant Code Case: How Big a Deal Is It?”  The short answer is that it’s not a very big deal at all. Why? Let me count the ways. Oh, but where do I begin.

Firstly it’s Goldman Sachs, so they’ll get away with whatever it is. Just look at how its former CEO behaved when on loan to the United States Treasury. Hank Paulson admitted to bullying Bank of America CEO Ken Lewis into swallowing the regurgitated mess of what was once Merrill Lynch. He has admitted to market manipulation on a scale that Martha Stewart never dreamed of, yet he still walks the streets as a respected member of society. I don’t really need to go into this do I? I didn’t think so. It looks like you also know this new ordeal won’t be a big deal.

Secondly, whatever super quant gizmo software is supposed to be jeopardized, you can be sure there’s nothing to it. Remember the highly publicized and fully disgraced Quant space of nanosecond black box trading algorithms that could take advantage of any market under all conditions? We see how far that got the quant funds. Witness this:

The platform is one of the things that gives Goldman an advantage over the competition when it comes to the rapid-fire trading of stocks and commodities. Federal authorities say the platform quickly processes rapid developments in the markets and, using secret mathematical formulas, allows the firm to make highly profitable automated trades.

See what I mean? It sounds just like the hype that got a lot of people to throw a lot of money at the quant funds to begin with. Now that cash has disappeared into the black box only to reappear in the managers’ bank accounts. The fact that federal authorities are now advertising Goldman Sachs’ secret mathematical formulas just goes to show how in control Goldman Sachs really is.

The criminal case has the potential to shed a light on the inner workings of an important profit center for Goldman and other Wall Street firms. The charges also raise serious questions about the safeguards that Wall Street firms deploy to protect these costly-to-build proprietary trading systems.

The only important profit center for Goldman Sachs is insider connections, bribes, intimidation and trading its partners’ positions against its clients’ positions. Guess whose positions come out better.

The charges also didn’t raise any questions about the safeguards Wall Street firms deploy to protect these costly-to-build proprietary trading systems. Before anyone goes off and reads what they think is Goldman Sachs’ lost playbook, they had better realize the only reason Goldman Sachs lost the play book is because they wanted you to find it.