Everybody panic! Goldman Sachs looses doomsday machine!

[Kuya]

... But why does Goldman have a code that can collapse the markets?

Aleynikov, 39, is the former Goldman computer programmer who was arrested on theft charges July 3 as he stepped off a flight at Liberty International Airport in Newark, New Jersey. That was two days after Goldman told the government he had stolen its secret, rapid-fire, stock- and commodities-trading software in early June during his last week as a Goldman employee. Prosecutors say Aleynikov uploaded the program code to an unidentified Web site server in Germany.

It wasn’t just Goldman that faced imminent harm if Aleynikov were to be released, Assistant U.S. Attorney Joseph Facciponti told a federal magistrate judge at his July 4 bail hearing in New York. The 34-year-old prosecutor also dropped this bombshell: “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.”

All this leaves us to wonder: Did Goldman really tell the government its high-speed, high-volume, algorithmic-trading program can be used to manipulate markets in unfair ways, as Facciponti said? And shouldn’t Goldman’s bosses be worried this revelation may cause lots of people to start hypothesizing aloud about whether Goldman itself might misuse this program?

Goldman isn’t commenting publicly about any of this, though it seems the bank’s bosses want us to believe there’s no need to worry. On July 6, Dow Jones Newswires quoted a “person familiar with the matter” saying this: “The theft has had no impact on our clients and no impact on our business.” Note that this person was so familiar with Goldman that he or she spoke of Goldman’s clients as “our clients” and Goldman’s business as “our business.”

By comparison, last Saturday, while most Americans were enjoying the Fourth of July holiday, Facciponti was in court warning of looming threats to Goldman and the financial markets.

Meantime, it would be nice to see someone at Goldman go on the record to explain what’s stopping the world’s most powerful investment bank from using its trading program in unfair ways, too. Oh yes, and could the bank be a bit more careful about safeguarding its trading programs from now on? Hopefully the government is asking the same questions already

So umm, yes. Apparently Government Sachs has been warning in court that the code could collapse the markets, but Sachs officials have been saying that everything is fine. Meanwhile, one of the biggest banks in the world apparently has a code that can be used to manipulate the market... Right.

[tyven]

idk man

[Kuya]

Kind of funny how quick they got the FBI in there. Or maybe the FBI just takes doomsday machines really seriously.

[guartz]

so an automated trading system will spell ruin to us all?

I don't, what is this?

[guartz]

Kind of funny how quick they got the FBI in there. Or maybe the FBI just takes doomsday machines really seriously.

Right. Bankers and Government have no ties whatsoever.

Though it's a nice illustration of who is in bed with whom.

[_chuchu]

One bot to rule them all :<

Does software used for purposes like the ones GS have to be compliant with any federal regulation and what is this code?

No need to worry, but having the code is dangerous? wat? I think that they just wanted to have the guy caught/monitored asap.

[_chuchu]

Right. Bankers and Government have no ties whatsoever.

Though it's a nice illustration of who is in bed with whom.

right. wall street having the gov't by the balls would be somewhat correct

[oldoldman]

The world at your fingertips!

[guartz]

Does software used for purposes like the ones GS have to be compliant with any federal regulation and what is this code?

Normally software like that just issue buy/sell orders. x100

They way they work is that market data is fed to them, say, via candle stick charts, and based on its programming, it makes judgments when to enter and exit the market (buy or sell)
based on predetermined ques.

Now they lose as much as they gain, except a good program would win more then it loses, since bots don't have emotions, they don't take risks, just one calculated purchase after another.

[Kuya]

By the way, i want you guys to pay all your attention to this silly EVERYBODY PANIC story about Government Sach's doomsday machine and completely ignore these other things that don't matter

You should read none of those things i linked because they are completely boring as opposed to this doomsday machine that is really serious.

But even with the toned-down headline, it looks as if the AIG treatment is, again. all about special dealing on behalf of Goldman. Recall that Goldman CEO Lloyd Blankfein was the only Wall Street executive invited in to work with Paulson on the terms of the original rescue. These guys are completely shameless, and for good reason. There are no repercussions from this sort of cronyism, not even recrimination in the media.

As the group, led by Treasury Secretary Henry M. Paulson Jr., pondered the collapse of one of America’s oldest investment banks, Lehman Brothers, a more dangerous threat emerged: American International Group, the world’s largest insurer, was teetering. A.I.G. needed billions of dollars to right itself and had suddenly begged for help.

The only Wall Street chief executive participating in the meeting was Lloyd C. Blankfein of Goldman Sachs, Mr. Paulson’s former firm. Mr. Blankfein had particular reason for concern.

Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.....

Ignore all of that because it is of no consequence to this doomsday machine news that is way more interesting and fun to see.

[Kuya]

Boy the Fed sure does have a lot of ex Goldman Sachs employees.

[Khamsin]

What is it supposed to be? Some advanced day trading AI that watches everything at once and instantly buys when something starts to go up, and sells when something starts go down? Or something else?

I don't see what's wrong with it, as long as its individual actions are legal. That is, if a person with superhuman computational power and quick reflexes could do the same thing using the services that are already in place to buy/sell/etc. then why are they concerned? If it gives someone an advantage because they're using an AI to make better decisions, then it just means they're using the system in the most efficient way possible and everyone else better step up their game.

Unless the stock system was set up assuming, and counting on, people failing so others could succeed, rather than as a way to get businesses going faster and stimulate economy with more/better investment opportunities.

[guartz]

Is there a reason you are linking us 2008 articles, Kuya?

[Kuya]

Is there a reason you are linking us 2008 articles, Kuya?

Not at all. I believe it is better to just ignore that post i made and discuss this straight forward article about doomsday machines. The conspicuous closeness between the government and Goldman (or the financial sector as a whole) is most certainly not what i'm getting at.

I apologize for the confusion.

[_chuchu]

Normally software like that just issue buy/sell orders. x100

They way they work is that market data is fed to them, say, via candle stick charts, and based on its programming, it makes judgments when to enter and exit the market (buy or sell)
based on predetermined ques.

Now they lose as much as they gain, except a good program would win more then it loses, since bots don't have emotions, they don't take risks, just one calculated purchase after another.

Right, I'm aware of how it functions, but the program losing on purpose is the threat putting clients/Goldman at risk? I don't know what's missing unless they can manipulate other systems they shouldn't be in the first place lol

[guartz]

Right, I'm aware of how it functions, but the program losing on purpose is the threat putting clients/Goldman at risk? I don't know what's missing unless they can manipulate other systems they shouldn't be in the first place lol

Well, then it's safe to assume that its just a pointless fear/panic.



Kuya, what the hell are you talking about? Did you just figure out the financial system in America is communist or something? It's been long known.

[Kuya]

Right, I'm aware of how it functions, but the program losing on purpose is the threat putting clients/Goldman at risk? I don't know what's missing unless they can manipulate other systems they shouldn't be in the first place lol

That's the point. This is a smokescreen. What i'm not sure of is what they're trying to do here.

Kuya, what the hell are you talking about? Did you just figure out the financial system in America is communist or something? It's been long known.

Oh i know you know, but you're no fun at all.

[Kuya]

It's kind of funny how this everybody panic routine sounds exactly like the everybody panic please bailout the banks deal back in october/november.

[guartz]

it's pretty low on the MSM radar, not sure it fits into your smokescreen routine.

[Kuya]

Hmmm. You're right. I wonder if Bloomberg is just picking up on tax payer anger.

edit: Actually, now that i think about it. We never discussed how the bailout was a complete and utter failure and how it would be more accurate to say that it was orchestrated by the financial sector to make out like bandits. I remember us having a bailout thread, but there was never a followup discussion on what is now regarded by most economists as Americans getting bamboozled. It just sort of fell under the radar, much like it did in the MSM.