Goldman Sachs Has First Perfect Quarter With Zero Trading Loss • Hacker News Board

Re: Goldman Sachs Has First Perfect Quarter With Zero Trading Loss

#31

Post by borisk » Mon, May 10, 2010, 4:02 PM UTC

KonaB wrote: post #19

cwp wrote: post #14

Earlier quoted context omitted.

So everyone who criticizes Goldman is stupid? Is that by definition, or is there an intelligent critique out there that hasn't yet been made? What, if anything, would cause you to criticize Goldman? What, if anything would cause you to laugh at Goldman? These aren't sarcastic rhetorical questions, I really want to know. From where I'm standing, it seems that Wall Street is deeply corrupt, and Goldman's success comes…

Thanks for the intelligent comment. Finally! I am not against intelligent critique of GS, the government, whatever. In fact, such critique is required to ensure the proper functioning of the system, closing the feedback loop and providing the required checks. What I am against is Pavlovian unintelligent critique, and one sees a lot of that when the topic is Wall Street. And even though a lot of HN'ers are deeply know…

.Replace("GS", "Pirates")

Re: Goldman Sachs Has First Perfect Quarter With Zero Trading Loss

#32

Post by cturner » Mon, May 10, 2010, 4:04 PM UTC

marltod wrote: post #13

Front-Running is currently a legal tactic in trading. GS seems to be very efficient at it. And the 1/8th point higher you have to pay when you buy a stock isn't that much anyways.

This comment and the upvotes demonstrate the problems with financial stuff in this forum.

Go to the wikipedia page for front-running. The first sentence says that it's illegal. The first sentence. And indeed it is. Thus, it's quite a claim to say that GS make money from it.

Marltod, where did you get all this from?

Re: Goldman Sachs Has First Perfect Quarter With Zero Trading Loss

#33

Post by yummyfajitas » Mon, May 10, 2010, 4:08 PM UTC

borism wrote: post #28

yummyfajitas wrote: post #26

Earlier quoted context omitted.

This is complete nonsense. Front running your client's trades is completely illegal. Front running on an exchange is not even possible unless you hack the exchange computers (also illegal). The first person to place an order at a given price on a given exchange wins. The only sort of front running which is legal is guessing ahead of time what a third party might do and placing orders before they actually do it. I.e.,…

not very reliable source, i know, but try http://www.google.com/search?q=goldman+sachs+front+running

The top link just links to a criticism of flash orders, which are not front running at all [1]. Could you be more specific in your links?

[1] I'm undecided about whether I think front running is fair, but flash orders are a separate issue.

Re: Goldman Sachs Has First Perfect Quarter With Zero Trading Loss

#34

Post by pwhelan » Mon, May 10, 2010, 4:11 PM UTC

px wrote: post #4

pwhelan wrote: post #2

Impressive feat. I guess that stat arb and whatnot is easier now because people are no longer leveraged to move the world and the margins can be a bit tighter. I would be interested to see loss days compared to a quarter of total gain/loss.

They didn't have a single trading day in which they made less than $ 25 million. And they had 35 days over $100 million. http://www.sec.gov/Archives/edgar/data/886982/00009501231004... (net revenues are in millions)

I guess I wasn't clear. I mean compared to other quarters where they (or other firms) made similar or greater amounts of money. Is the constant winning a side product of less risky bets, less leveraged & more fearful markets or...?

What is it about this particular time that has allowed them to do so well? (and where can I get me summa that!) I guess we won't know since we don't work there...

Re: Goldman Sachs Has First Perfect Quarter With Zero Trading Loss

#35

Post by KonaB » Mon, May 10, 2010, 4:14 PM UTC

borisk wrote: post #31

KonaB wrote: post #19

Earlier quoted context omitted.

Thanks for the intelligent comment. Finally! I am not against intelligent critique of GS, the government, whatever. In fact, such critique is required to ensure the proper functioning of the system, closing the feedback loop and providing the required checks. What I am against is Pavlovian unintelligent critique, and one sees a lot of that when the topic is Wall Street. And even though a lot of HN'ers are deeply know…

.Replace("GS", "Pirates")

I can't. The trademark is already registered ;-)

http://en.wikipedia.org/wiki/Pirate_Capital_LLC

Re: Goldman Sachs Has First Perfect Quarter With Zero Trading Loss

#36

Post by mikecane » Mon, May 10, 2010, 4:18 PM UTC

mikecane wrote: post #18

"...how is that possible that they only make money?”

Now wait one minute here. That quote was from the post itself. That someone down-voted it leads me to suspect GS has trolls here. Stop it.

Re: Goldman Sachs Has First Perfect Quarter With Zero Trading Loss

#37

Post by KonaB » Mon, May 10, 2010, 5:47 PM UTC

anamax wrote: post #29

KonaB wrote: post #8

Earlier quoted context omitted.

The joke is no longer amusing. Everyone is attacking GS, from utterly clueless uneducated morons to utterly devious dumb politicians with a private agenda. By attacking GS in such a gratuitous manner, one reminds others of such tragicomedy.

> Everyone is attacking GS, from utterly clueless uneducated morons to utterly devious dumb politicians with a private agenda. The above assumes that all attacks are baseless. The SEC charges appear to be trumped up but GS was a major beneficiary of the AIG bailout. GS should lose money when it's counter-party risk assessment is wrong, as it was in the AIG case.

Not quite. Populist and pavlovian attacks are baseless. But intelligent ones are not. Personally, I not only distrust the SEC, but I also believe that "should" is a word to be left out of the discussion. What matters is what can be implemented, not what is morally right. It's like realpolitik applied to the context of Wall Street.

Re: Goldman Sachs Has First Perfect Quarter With Zero Trading Loss

#38

Post by anigbrowl » Mon, May 10, 2010, 5:49 PM UTC

KonaB wrote: post #19

cwp wrote: post #14

Earlier quoted context omitted.

So everyone who criticizes Goldman is stupid? Is that by definition, or is there an intelligent critique out there that hasn't yet been made? What, if anything, would cause you to criticize Goldman? What, if anything would cause you to laugh at Goldman? These aren't sarcastic rhetorical questions, I really want to know. From where I'm standing, it seems that Wall Street is deeply corrupt, and Goldman's success comes…

Thanks for the intelligent comment. Finally! I am not against intelligent critique of GS, the government, whatever. In fact, such critique is required to ensure the proper functioning of the system, closing the feedback loop and providing the required checks. What I am against is Pavlovian unintelligent critique, and one sees a lot of that when the topic is Wall Street. And even though a lot of HN'ers are deeply know…

If GS has an information edge and rapes everyone else on a regular basis, maybe the prey should leave the market. It's a winner-take-all scenario, whether we like it or not.

Hardly the definition of a well-functioning market. Pretty much all economists agree that monopoly outcomes are a bad thing.

What I find unsettling about this report is the supposed consistency of GS - they came out ahead of the market every single day? Really? The phrase 'too good to be true' springs to mind.

Re: Goldman Sachs Has First Perfect Quarter With Zero Trading Loss

#39

Post by KonaB » Mon, May 10, 2010, 5:53 PM UTC

moe wrote: post #15

What value does GS provide in return for those $25MM? My underlying question would be: Are they a symptom of a systemic flaw (basically a parasite) or does their role in the financial ecosystem somehow justify that kind of profits?

What makes you assume that one's profit / revenue / compensation is a measure of the value one created? There's no central authority accounting for the "value" being created. The whole notion of "value" is itself highly subjective. Personally, I find it distasteful when hedge funds justify their profits by claiming that they make markets more efficient. No, no, no. No one works 100 hours per week to make markets efficient nor to add any value to society. People work in order to make money, because having money is great, and the more money one has, the better it feels. It's legalized looting. It's not what you deserve, it's what you can take for yourself. No excuses, no regrets.

Re: Goldman Sachs Has First Perfect Quarter With Zero Trading Loss

#40

Post by mixmax » Mon, May 10, 2010, 6:00 PM UTC

paulitex wrote: post #25

moe wrote: post #15

What value does GS provide in return for those $25MM? My underlying question would be: Are they a symptom of a systemic flaw (basically a parasite) or does their role in the financial ecosystem somehow justify that kind of profits?

Liquidity, mostly. They are 'market makers'. If you're a big {pension, real estate, rrsp}fund and want to make a trade, say a purchase, you need to call your trader directly. The trader will sell you some of their own (if they have it on their books), or will contact other people who they think may have extra supply on your behalf. They are the 'grease of the economy'. In theory, it makes markets run smoother, which…

The thing is that it goes both ways. The liquidity that they provide can just as quickly be pulled back as we saw during the Lehman collapse. I'm not sure it provides value.