Crime & Federalism

High Frequency Trading, Goldman Sachs, Stop-Loss Orders, and Accenture (ACN)

Imagine you had a stop-loss order in on Accenture for $36.  Average investors always put in stop-loss orders to prevent them from suffering a catastrophic loss on a stock.  Regular investors, however, do not have computer algorithms that can buy in sell the same stock every millisecond.  

An average investor in Accenture literally had his stock stolen from himself today.  The stock dropped from from $41.09 to $.04 - triggering your stop-loss order at $.04.  After all, the stock didn't take a normal drop from $41.09 to $38.52 to $36.  Instead, it fell off a cliff to...

...Four cents.  

One of Goldman Sachs' algorithm picked up your shares for four pennies in the second that your stop-loss order was triggered.  That the stock immediately returned to it's market value means nothing.  You shares are gone.

Goldman wins, you lose.  I'll give you ten-to-one odds that Goldman Sachs made over $100 million today.  Want to take the other side of the bet?  

Goldman Sachs did not win because they are smarter than the average investor.  They won because they manipulate the stock market through its high frequency trading (HFT) programs.

Look at this chart, and explain to me why Goldman Sachs traders should not be hanging from stop lights on Wall Street?  People are worried about illegal immigration in Arizona when traders are robbing people in plain sight.

Goldman Sachs has already confessed its crimes to AUSA Joseph Facciponti, who said that: "The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways."

This is what a market manipulated in unfair ways looks like:

 

Trading Glitch was Coincidence

Just four days ago, traders were complaining about a lack of market volatility.  

NO ONE COMES OUT and says this -- because it is like wishing for a train wreck -- but many traders secretly long for a return of volatile volatility. For the past 18 months, volatility has declined, making it difficult to generate outsized returns.

If the financial markets were to convulse, stock prices would paroxysm, options prices would inflate with fear, and all this would create enormous trading opportunities. In essence, everyone really wants to recreate the volatility conditions that allowed many investors to realize massive, once-in-a-lifetime returns when the Standard & Poor's 500 Index bottomed in March 2009, and then surged higher.

How many billions of dollars did Goldman Sachs earn today by deliberately manipulating your 401(k)s?  How many more coincidences do people need before realizing that Wall Street isn't a gambling casino: It's an outright fraud.

Wall Street State of Mind

[Those of you who have never had the grand pleasure of knowing Wall Street people should read this.  That Wall Street only exists because of massive taxpayer give-aways doesn't even enter their minds.  Enjoy this glass of undistilled narcissism -  Mike.] 

We are Wall Street. It's our job to make money. Whether it's a commodity, stock, bond, or some hypothetical piece of fake paper, it doesn't matter. We would trade baseball cards if it were profitable. I didn't hear America complaining when the market was roaring to 14,000 and everyone's 401k doubled every 3 years. Just like gambling, its not a problem until you lose. I've never heard of anyone going to Gamblers Anonymous because they won too much in Vegas.

Well now the market crapped out, & even though it has come back somewhat, the government and the average Joes are still looking for a scapegoat. God knows there has to be one for everything. Well, here we are.

Go ahead and continue to take us down, but you're only going to hurt yourselves. What's going to happen when we can't find jobs on the Street anymore? Guess what: We're going to take yours. We get up at 5am & work till 10pm or later. We're used to not getting up to pee when we have a position. We don't take an hour or more for a lunch break. We don't demand a union. We don't retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is on your dinner plates, we'll eat that.

For years teachers and other unionized labor have had us fooled. We were too busy working to notice. Do you really think that we are incapable of teaching 3rd graders and doing landscaping? We're going to take your cushy jobs with tenure and 4 months off a year and whine just like you that we are so-o-o-o underpaid for building the youth of America. Say goodbye to your overtime and double time and a half. I'll be hitting grounders to the high school baseball team for $5k extra a summer, thank you very much.

So now that we're going to be making $85k a year without upside, Joe Mainstreet is going to have his revenge, right? Wrong! Guess what: we're going to stop buying the new 80k car, we aren't going to leave the 35 percent tip at our business dinners anymore. No more free rides on our backs. We're going to landscape our own back yards, wash our cars with a garden hose in our driveways. Our money was your money. You spent it. When our money dries up, so does yours.

The difference is, you lived off of it, we rejoiced in it. The Obama administration and the Democratic National Committee might get their way and knock us off the top of the pyramid, but it's really going to hurt like hell for them when our fat a**es land directly on the middle class of America and knock them to the bottom.

We aren't dinosaurs. We are smarter and more vicious than that, and we are going to survive. The question is, now that Obama & his administration are making Joe Mainstreet our food supply…will he? and will they?"

Goldman Sachs is Under Criminal Investigation

Ding dong the witch is (almost) dead:

Federal prosecutors have opened an investigation into trading at Goldman Sachs, raising the possibility of criminal charges against the Wall Street giant, according to people familiar with the matter.

While the investigation is still in a preliminary stage, the move could escalate the legal troubles swirling around Goldman.

Dear Department of Justice lawyers who read this page: I guarantee you that I can make a criminal case against Goldman Sachs.  Call me.  I will work pro bono.  You can have all of the glory.

You should also talk to AUSA Joseph Paul Facciponti.  He's the lawyer prosecuting Sergey Aleynikov on behalf of Goldman Sachs.  At Aleynikov's bail hearing, Facciponti told a judge that Aleynkikov allegedly stole software from Goldman Sachs that could "manipulate markets in unfair ways."

Perhaps you should ask AUSA Facciponti why Goldman Sachs has in its possession software that unfairly manipulate markets.  Perhaps Goldman Sachs should be investigated for having software that unfairly manipulate markets.

Clearly AUSA Facciponti has substantial information regarding Goldman Sachs' illegal trading activities.  Perhaps you should remove AUSA Facciponti from the malicious prosecution of Aleynikov, and instead have him focus on the real criminals inside Goldman Sachs.

Henry Paulson Lied About TARP, Should be Indicted for Perjury

TARP was Supposed to Encourage Bank Lending.

Remember TARP?  The Trouble Asset Relief Program was sold to the American people as a way to resume bank lending to small businesses.  TARP's architect, Henry Paulson, was CEO of Goldman Sachs before becoming Treasury Secretary.

Hank Paulson said of TARP:

During the two weeks that Congress considered the legislation, market conditions worsened considerably. It was clear to me by the time the bill was signed on October 3rd that we needed to act quickly and forcefully, and that purchasing troubled assets – our initial focus – would take time to implement and would not be sufficient given the severity of the problem. In consultation with the Federal Reserve, I determined that the most timely, effective step to improve credit market conditions was to strengthen bank balance sheets quickly through direct purchases of equity in banks.

More lies here.  What happened after TARP?  USA Today reports:

Banks that received federal assistance during the financial crisis reduced lending more aggressively and gave bigger pay raises to employees than institutions that didn't get aid, a USA TODAY/American University review found.

In other words, Wall Street took your taxpayer money and started betting on the stock market.  While small businesses with productive business ideas cannot get credit, Goldman Sachs rolls the dice on the stock market.  

As the bailouts taught us, if Goldman Sachs wins its bets, then its bankers will receive record bonuses.  In fact, Goldman Sachs has already reserved $5.5 billion in bonuses for the first quarter of 2010.  If Goldman Sachs loses its bets, then crooks like Henry Paulson will ensure that we taxpayers bail them out again.

Wall Street Owns Democrats and Republicans.

Lest those of you who are still brainwashed and thus are partisans have forgotten: Goldman Sachs was Barack Obama's top campaign contributor.  Wall Street has also given more money to Democrats than to Republicans.  

The Republicans, instead of capitalizing on the Democrats deep and long-standing connection with Wall Street, are questioning why the SEC has filed a civil lawsuit against Goldman Sachs for fraud.  Republicans are also resisting any reform of Wall Street.  (Though make no mistake: The Democrat's Wall Street reform proposal is anything but.  Moreover, Goldman Sachs literally drafted the reform.)  The Republican party, too, is the enemy of the people.

There is no Greek nor Jew; black nor white; Democrat nor Republican.  There is Wall Street and then there is the rest of us.

When will you mature enough to put aside petty disagreements, and take on the real enemy of the American people?  

It's time for a cease fire.  Put aside the social issues for two years.  I have my views on abortion, illegal immigration, gun control, and many others.  None of these issues are going to matter once the economy collapses again.  Put aside what is unimportant and focus on what is important.  We can start fighting over this stuff again in 2012.  

John McCain Must be Voted Out of Office for Supporting TARP/Wall Street Theft.

Any candidate who accepts Wall Street money must be voted out of office.  This means traitors like Arizona Senator John McCain, whom Goldman Sachs richly rewarded for his support of TARP.   I am personally supporting J.D. Hayworth - who has many serious issues; but none of that matters now.  Senators like John McCain must be punished for their lies and treason.  McCain, like Henry Paulson, supported TARP.  Therefore, McCain is a traitor unworthy of office.

The American people must send a message: You're either with Wall Street, or you're with the American people.  If you're in with Wall Street, then you'll be out of office.

The only thing stopping change is you.

Summary of the SEC v. Goldman Sachs Case

Good information.

Goldman Sachs is Crying

In its latest 10-K, Goldman Sachs reported:

“The financial crisis and the current political and public sentiment regarding financial institutions has resulted in a significant amount of adverse press coverage, as well as adverse statements or charges by regulators or elected officials.

“Press coverage and other public statements that assert some form of wrongdoing, regardless of the factual basis for the assertions being made, often results in some type of investigation by regulators, legislators and law enforcement officials, or in lawsuits."

Good.  It's working.  Keep talking about Goldman Sachs.  

Sergey Aleynikov Indicted

We'll have more on this false and malicious prosecution later:

Federal prosecutors said Thursday that Sergey Aleynikov, a former computer programmer at Goldman Sachs, had been indicted on charges that he stole proprietary software that the firm uses to make rapid-fire trades in the financial markets.

The indictment accuses Mr. Aleynikov of theft of trade secrets, transporting stolen property in foreign commerce and unauthorized computer access. If convicted of the charges, Mr. Aleynikov would face up to 25 years in prison, the United States Attorney’s Office in Manhattan said.

Prop Trading: How Goldman Sachs Gambles With Your Money

One of the most scandalously delicious ways in which Wall Street cheats taxpayers is through prop trading.  This is good stuff, so stick around.

The Federal Reserve loans money to Goldman Sachs at 0.25% interest.  That's not a typo.  Goldman Sachs borrows money interest free from the Federal Reserve.

Instead of lending that money to small business, Goldman Sachs takes the free money, and makes stock market bets.  That's all "prop trading" is.  Simple stuff.

If Goldman Sachs makes a losing bet (as it did when it gambled with AIG), then we have the Bailouts.  

If Goldman Sachs makes a winning bet, it keeps 100% of the profits.  Goldman Sachs, using taxpayer money, made a lot of winning bets in 2009.  Thus, in a week or so, it will start distributing $23 billion to bankers.  Taxpayers will not share in the profits, even though Goldman Sachs would not exist - let alone be earning record profits - had taxpayers not directly and indirectly bailed out Goldman Sachs.

Why is Goldman Sachs given free money to play the markets?  Wouldn't you like some free money to go day trade?  That's all they do at Goldman Sachs - day trade.  They do it well, but make no mistake: Goldman does not make long-term investments.  They make millions of quick bets each day.  It's high-frequency day trading.

 There is no good reason to give Goldman free money, though there is a reason why the Federal Reserve does.  Goldman Sachs owns Congress and the White House.  Goldman Sachs proves that might makes right.

After a devastating loss in Massachusetts, Barack Obama and other Democrats realized that Americans are tired of Wall Street winning, and the taxpayers losing.  Thus, Obama allegedly is going to prevent Goldman Sachs from taking interest-free loans:

In perhaps his most daring move, he is calling for a modern-day version of the Glass-Steagall Act, which in 1933 separated commercial and investment banking. The new separation would prohibit standard commercial banks from engaging in proprietary trading using funds from their commercial division.

Paul Volcker has been trying for weeks to drum up support — on Wall Street and in Washington — for restrictions similar to those passed in the Glass-Steagall Act in 1933. That law separated commercial banking and investment banking, so that the investment arm could no longer use a depositor’s money to purchase stocks, sometimes drawing money from a savings account, for example, without the depositor’s knowledge.

Make no mistake: Goldman Sachs is not merely gambling with depositor money.  Goldman Sachs is gambling with your money.  They are not even paying interest on the loan - unless you count 0.25% as interest.  

Will Obama actually do anything?  I used the word allegedly advisedly.  

First, we shouldn't take Obama on his word.  Why is he only now stopping the ludicrous practice of enriching Goldman Sachs at taxpayer expense?  It's not because he wants to; it's because he has to.

Second, Obama could immediately demand that the Federal Reserve stop giving free money to Goldman Sachs.  Chairman Ben Bernanke wants to keep his job.  Obama need only say, "Ben, stop giving Goldman Sachs interest free loans."  End of story.

Why hasn't Obama done so?  How many more months or years will Obama "fight" for reform?  Every day Obama "fights" for reform is yet another day Goldman will play the markets with your money.  

Take nothing Obama says on honor, as he is not a honorable man.  That it took a defeat in a give-away election proves that Obama is a Wall Street shill.  

The election loss has proven that Obama is fearful.  He and the Democrats want to remain and power, and supporting Wall Street is a threat to their remaining in power.  

The President and Congress do not care about you.  They care only about themselves - and their re-election campaigns.  Make it clear to your Congressperson that you will vote against them unless they pressure Obama to stop giving free money to Goldman Sachs.

Writing a Congressperson is usually a frivolous and self-indulgent activity.  Today, however, it matters.  They are paying attention.

For the first time since 9/11, the government is not making us afraid, but instead is afraid of us.  Keep writing and calling your legislatures.  Let them know that free money for Goldman Sachs is bad for America, unacceptable in a democracy, and disastrous to any incumbent's re-election campaign.

Aleynikov Hearing on Monday: Facciponti's Unanswered Questions

Will AUSA Joseph Paul Facciponti indict Aleynikov - who was arrested less than 48 hours after Goldman Sachs reported him for alleging stealing trade secrets?  (When Goldman calls: Arrest first, investigate later.)  Or will Facciponti ask for another 30-day continuance?  When is a federal judge going to stand up to Facciponti?  

Facciponti already lied in federal court.  He made a bad arrest.  Goldman said, "Jump," and he jumped.  Goldman Sachs pimped Facciponti.  Do the right thing, Joe.  Dismiss the case.  You are not Goldman Sachs' personal lawyer.  If you want to work for Goldman Sachs, join the private sector.  Facciponti lacks the moral courage to dismiss the case.  

It's time for a federal judge to force Facciponti to dismiss the case against Aleynikov.  Then the Office of Professional Responsibility needs to open an investigation into Facciponti.  Among other questions:

• Why did you arrest Aleynikov less than 48 hours after Goldman Sachs contacted you?  Is Goldman Sachs on a "priority list," such that you drop everything when they call?
• You said at the Aleynikov bail hearing that Aleynikov stole from Goldman Sachs, software that could "unfairly manipulate markets."  If that is true, why didn't you investigate Goldman Sachs for possessing market-manipulating software?  After all, Aleynikov allegedly stole the software from Goldman Sachs - which means that it's Goldman's software.  Did you investigate Goldman Sachs?  If not, why not?
• At the Aleynikov bail hearing, you said that Aleynikov's "dissemination of [Goldman's high frequency traidng software] program would be a substantial loss to them, a very substantial loss to them."  Yet days later, David Viniar, Goldman Sach's Chief Financial Officer, said: "We still have all of the code.  It is not like the code had been lost to Goldman Sachs. And even if it had been, it is a small piece of our business.”  Were you lying?  Or did David Viniar make a false statement of material fact to the investing public?  
• At the Aleynikov bail hearing, you demanded that Aleynikov be denied bail.  Can you identify any other trade-secrets theft case where the prosecutor sought to have a defendant remanded into custody?  Can you identify any cases involving non-violent defendants where the defendant was remanded into custody?
• Your initial actions towards Aleynikov were extremely aggressive.  Since his arrest, you've done nothing.  Why has there been such a dramatic change in your litigation posture?