Wednesday, July 29, 2009


I was at the bank today, depositing my measly earnings from working at nearly subsistence levels, complaining about how slow things are. The banker pointed to the T.V. and said "The markets are moving up. Looks like we're in the beginning stages of a recovery." I asked him if he thought that this was really what was happening and asked if he had been following the reports about front running, Goldman Sachs and market manipulation. He was shocked and wanted to know where he could find out about this. Even the bankers aren't paying any attention.

He said that the uptick in the market was due to the good earnings reports that were recently released. Now, he admitted that the earnings reports that showed increases in profit mostly were reflecting cost savings through layoffs. He said that he didn't know how these companies would stay in the black when the next reports come out. He admitted that laid off employees were not going to be out spending thus demand for products and services should decrease. But the market is over 9000 so everything is coming up roses. He said that the stimulus money was being injected back into the economy by the banks. I asked him if his bank was lending a whole bunch of money out and he said no. Yet he still believes the banks are putting the money out so that small businesses can expand and the country can grow. He believes the government propaganda and not his own eyes.

I posted the snippets below just so that the rest of us can start to understand the lies we are being sold. If you are invested in the market, just be aware that it is not reflecting reality, it is reflecting the manipulations that benefit the big players. Sure, there's money to be made, as long as you get out in time. This manipulation has created an environment that is unstable. I believe that when it comes apart it will do so quickly. With the weakness that really exists in the economy, I don't think we are going to see anywhere close to Dow 14,000 this time around. So, enjoy the ride, just make sure your parachute is properly packed.

" using Goldman 360 a client voluntarily allows Goldman to provide keystroke by keystroke data of everything the client does, even if that includes launching trades via REDI, to Goldman for the internal business purposes? The third thing everyone on Wall Street agrees on is that "internal business purposes" usually (and in Goldman's case, almost exclusively) means proprietary trading."

"Front-running takes place when a bank or broker-dealer– say, Goldman, Sachs — executes a trade for its own account before filling its customer’s order. Since a large enough trade (executed by institutional investors, for instance) can actually move the price of the security in question, front-running can be a very profitable activity. It’s sort of like fast-food insider trading. It is common knowledge that front-running on Wall Street is rampant, and I interviewed more than one person for my recent Rolling Stone story who accused Goldman of front-running its big clients in all sorts of arenas, from the internet IPO years to the commodities markets."

"Goldman Sachs just raised the S&P target for 2009 to 1,060. Why? It's not because things are "really" getting better. And it's not because they would be buyers in this market. No, it's because they need to pump this market, so they can dump their shares to you . . . at inflated prices that will be big losers for you."

"Another plus is if the bank tells the feds the security of the U.S. financial markets is at stake. This brings us to the strange tale of Goldman Sachs Group Inc. and Sergey Aleynikov."

"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.”

"Federal authorities contend the computer codes and related-trading files that Aleynikov uploaded to a German-based website help this major financial institution generate millions of dollars in profits each year."

"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."

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