IS GOLDMAN MANIPULATING THE MARKETS

GOLDMAN MARKET MANIPULATION
http://www.dailykos.com/story/2009/7/14/753229/-Stock-Manipulation-by-Goldman-Sachs:-Control-of-the-Stock-Market,-Control-of-Government

GEITHNERS FAVORITE BANK GOLDMAN SACHS.I WONDER HOW MANY TRILLIONS NOT BILLIONS THEY REALLY GOT FROM THEIR CLOSE FRIEND GETHNER.OH THEY GOT MOST BY TRADING AND THEY HAD A MANIPULATION COMPUTER AS IT CAME OUT IN THE NEWS.NO WONDER THEY GAINED 33% BY MANIPULATING THE MARKETS AND ROBBING AMERICANS FROM THEIR RIGHTFUL STOCK MARKET MONEY.

Goldman profit and pay surge in blowout quarter By Steve Eder And Joe Giannone – JULY 14,09

NEW YORK (Reuters) – Goldman Sachs Group Inc said quarterly earnings surged 33 percent on blowout trading results, trouncing expectations and putting the bank on pace for windfall bonuses that could draw more unwanted public scrutiny.The results continued Goldman's extraordinary rebound from the near meltdown of the U.S. banking industry last fall.Just nine months after the U.S. Treasury bailed out the nation's largest banks with $125 billion of taxpayer money, Wall Street's biggest surviving securities firm topped forecasts as improving markets fueled trading profits.

Goldman also blew the lid off compensation. It set aside $6.65 billion for salary, bonuses and benefits in the quarter, up by nearly half from the quarter ended in May last year.That puts the average Goldman employee on pace to earn more than $900,000 this year. Chief Executive Lloyd Blankfein, senior officers and star traders will likely receive tens of millions of dollars.The U.S. government wanted to make sure that the banks are making money, so they do make money, said Francis Campeau, a broker at MF Global Canada in Montreal.The flip side is now one could argue they're making too much.Goldman reported net income for common shareholders of $2.7 billion, or $4.93 a share. That compares with $2.05 billion, or $4.58, in the quarter ended May 30, 2008, before the bank switched to a calendar-year schedule.Analysts on average had forecast earnings of $3.49 a share, according to Reuters Estimates.

Goldman shares were fractionally lower in midday trade after rising 2 percent on Monday. The shares are up nearly 80 percent this year, compared with a 24 percent rise in the NYSE Arca Securities Broker/Dealer index.Goldman, the first major U.S. bank to report second-quarter results, said trading income nearly doubled from a year ago, while its equity underwriting business produced record revenue of $736 million. Goldman's traders thrived in an environment of wide price swings, robust demand and fewer rivals.There's less competition out there,Chief Financial Officer David Viniar told reporters in a briefing.In a subsequent interview, Viniar told Reuters he could not predict whether the firm could keep up the pace all year.I wouldn't tell you we will have this level of earnings every quarter,he said.It is very hard to know how the company will perform over the rest of the year.In a conference call with analysts, he elaborated: The environment is still a very tricky environment ... We're not out of the woods.The financial crisis wreaked havoc on Wall Street last year, collapsing Bear Stearns, sending Lehman Brothers into bankruptcy, and forcing Merrill Lynch into a shotgun wedding with Bank of America Corp.Goldman's second-quarter investment banking revenue of $1.44 billion was down 15 percent from a year ago but rose 75 percent from the first quarter.They look like a blowout to me, but I don't think it should be a big surprise to anyone, said Keith Davis, an analyst at Farr, Miller & Washington.The environment is very conducive to the type of things they do. Spreads are very wide, fixed-income and equity issuances have been pretty strong.

William Smith, chief executive of Smith Asset Management, said, Things are very fragile, but they manage to make money in all environments, which is what you're supposed to do.Goldman has come under fire for its government connections and fat-cat profits, seemingly sailing through a deep recession shortly after accepting $10 billion of taxpayer bailout money and benefiting from a host of other government programs. The bank incurred a one-time $426 million charge in the second quarter related to repaying the government. Viniar said there was no timeline for buying back stock warrants issued to the government under the Troubled Asset Relief Program, or TARP.He did not comment on how the government's intervention impacted Goldman, observing only that the firm is not immune to public sentiment.The bank has been under fire from lawmakers and public advocates, including a highly caustic cover story recently in pop culture magazine Rolling Stone. We know it. We see it. We don't like it,Viniar said.We believe we are doing good things. We are helping the economy recover. I don't like reading bad things about Goldman Sachs.(Writing by Joseph A. Giannone; Reporting by Steve Eder, Elinor Comlay, Juan Lagorio and Jonathan Spicer; editing by John Wallace)

AND HERES THE STORY ABOUT GOLDMAN HAVING A SECRET MANIPULATION OF THE MARKETS COMPUTER PROGRAM,SINCE PEOPLE NEED PROOF OR THEY SAY YOUR A LIER.

July 5th, 2009 A Goldman trading scandal? Posted by: Matthew Goldstein

While most in the US were celebrating the 4th of July, a Russian immigrant living in New Jersey was being held on federal charges of stealing top-secret computer trading codes from a major New York-based financial institution—that sources say is none other than Goldman Sachs.The allegations, if true, are big news because the codes the accused man, Sergey Aleynikov, tried to steal is the secret code to unlocking Goldman’s automated stocks and commodities trading businesses. Federal authorities allege 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 apparently gives Goldman a leg-up over the competition when it comes to rapid-fire trading of stocks and commodities. Federal authorities say the platform quickly processes rapid developments in the markets and uses top secret mathematical formulas to allow the firm to make highly-profitable automated trades.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 federal charges also raise serious questions about the safeguards Wall Street firms deploy to protect their proprietary trading systems.

The criminal case began to unfold on the evening of July 3 when Aleynikov was arrested by FBI agents at Newark Liberty Airport, after returning from Chicago. Aleynikov had just started a job with another firm in Chicago, after leaving the big firm in NY in early June. It appears the financial institution allegedly victimized by Aleynikov had alerted federal authorities that its former employee might be up to no good.On July 4, Aleynikov was processed on a theft of trade secrets charge in a criminal complaint that was filed in federal court in Manhattan. As of this afternoon, he was still being held in federal custody pending posting of bail.A Goldman spokesman declined to comment on the incident. A spokeswoman for the US Attorney in the Southern District of New York didn’t comment. Authorities reportedly took all the computers from Aleynikov’s home in New Jersey.Sabrina Shroff, Aleynikov’s lawyer, says the facts will bear out that her client is innocent. She’s hoping he will be released from custody soon.His wife, Elina, says her husband is innocent. Speaking in a phone interview from the couple’s New Jersey home, she says her husband worked hard for Goldman Sachs and has been a good citizen–noting he’s lived in the US for 19 years. She seems mystified that federal authorities would arrest him on the eve of a holiday.The Federal Bureau of Investigations, in charging Aleynikov, says he began working for the major financial institution in May 2007 as a computer programmer and left in early June. That would appear to match the description of a man named Serge Aleynikov, as it is listed on the social networking website LinkedIn.The bio information for Aleynikov on LinkedIn says he joined Goldman in May 2007 and was vice president for equity strategy. The bio says he was responsible for development of a distributed real-time co-located high-frequency trading platform. In his own words, he goes on to describe the platform as a very low latency (microseconds) event-driven market data processing, strategy and order submission engine.

The case against Aleynikov may explain why the New York Stock Exchange moved quickly in the past week to alter its methodology for reporting program stock trading. Goldman often was at the top of the chart–far ahead of its competitors.On the week ending June 19, Goldman, for instance, was ranked first on the NYSE program trading list. But on the week of June 22, Goldman mysteriously didn’t appear on the list of the top 15 firms at all. It simply vanished without any explanation. Then the NYSE announced it would change some of the data for calculating the trading report. The Zerohedge blog was all over this controversy a week ago.And now Tyler Durden of ZeroHedge has come in with his own excellent analysis of this strange, strange criminal case. I highly recommend reading it.It’s possible Goldman asked the NYSE to alter some of its reporting methodology after the firm discovered that someone may have infiltrated the proprietary computer codes it uses.

Here’s the way the criminal complaint describes the Goldman trading platform:

The Financial Institution has devoted substantial resources to developing and maintaining a computer platform that allows the Financial Institution to engage in sophisticated high-speed, and high-volume trades on various stock and commodities markets. Among other things, the platform is capable of quickly obtaining and processing information regarding rapid developments in these markets.Meanwhile, federal authorities appear to believe Aleynikov, who has lived in the US for more than a dozen years but frequently travels back-and-forth to his native Russia, may have had help. The German website that Aleynikov allegedly uploaded the stolen information to is registered to a person in London. That, of course, gives rise to speculation about this all being a case of international espionage.This case is quickly unfolding and there’s plenty more information to unearth about Aleynikov. For instance, it appears that he and his wife are competitive ballroom dancers–there are some videos of them on youtube.com. The job he took in Chicago, according to the criminal complaint, paid nearly three times more than his $400,000 salary at Goldman.

Which Chicago firm hired Aleynikov? Inquiring minds want to know. But you can rule out the giant hedge fund conglomerate Citadel. It’s not them.Also there’s more to learn about anyone who might have been helping him and the fallout this may have for Goldman. When he was arrested, Aleynikov told the FBI he only intended to collect open source files on which he had worked, but later realized that he had obtained more files than he intended.But authorities say after he uploaded the files he encrypted them and erased the program he used to encrypt them.It’s not clear why the authorities and apparently Goldman waited so long to move on Aleynikov, even though they knew he had uploaded the information weeks ago.One question investors need to ask is whether this incident will have any impact on Goldman’s second-quarter earnings. The alleged wrongoing by Aleynikov took place at the beginning of the month–although it’s not clear if it had any material impact on automated trading.Update: The NYSE has not stopped reported program trading results. Instead, it’s altered the method it uses for putting together that report.