Up until recently certain companies had advanced access to the orders other investors made, ahead of the transaction. Today it looks like the SEC may be making a move to ban the practices.
By placing servers with special detection and fast trade programs on them next to the computers that run exchanges like the New York Stock Exchange, companies like Goldman Sachs could determine very quickly what orders were coming through the system.
Taking an advantage of a delay from when an order is entered by someone like me and when it hits the market, the company could read order and then go in and buy the equity themselves just in time to mark it up a very small amount to then sell it me for a guaranteed, albeit small profit.
This is one form of computerized flash trading. Very recently one company, Goldman Sachs accounted for about 48% of all trade volume on the market through these types of trades, and flash trading in general. The practice allowed the company, to rack up billions in profits that many in the market feel are unethical and against the general principals of free market exchange in that it grants specific players an unfair advantage.
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Showing posts with label Goldman Sachs. Show all posts
Showing posts with label Goldman Sachs. Show all posts
Tuesday, August 4, 2009
Thursday, September 25, 2008
Letter to My Congressman. NO Bailouts
Congressman Inslee,
I'm writing you today on an issue that I feel is a part of a defining moment in this country's history.
There are massive shifts occurring in credit markets right now and those shifts are going to have a significant impact on our ways of life.
The Administration via Secretary Paulson has submitted a ridiculous bailout legislation plan that it appears many in congress are taking seriously. Senator Dodd has even crafted legislation that, while significantly cleaning up Paulson's proposal, still follows in lock step.
I've heard members of congress in hearings talking about how it's up to the administration to explain why this bailout is necessary, as if the throngs of angry constituents don't understand.
I want you to know, Congressman, that I do understand. I understand and I am angry. I am angry as I was when we launched the Iraq war, when we passed the patriot act, and when I saw that FEMA had almost no plan or competence to handle the aftermath of Hurricane Katrina.
I understand that our economy is in deep trouble. That a massive deleveraging event is taking place. I understand that this means we will be facing a lot of hardship in the years to come.
But I also can see that there is nothing that can, or should be done about his deleveraging, other than to take measures to make it orderly and to work to support our fellow citizens when the time comes.
Paulson's plan is flawed in so many despicable and obvious ways. But in one core way it is flawed that should stand out.
The plan is guilty of trying to keep "the debt party" going, when there is no reasonable cause to assume that it should.
The debt bubble has eroded much of our economy. While we enjoyed the temporary benefits of massive leverage much of our industry was displaced through movements to other labor markets. We've been lax in exploring new technologies in energy production, and energy efficiency. But it is that very sort of productivity that we find ourselves desperately in need of now.
We are in trouble, and there is a way to deal with the trouble that helps us begin growing new and better institutions that can help us rise out of this decline. But the bailout proposal is not only thievery and economic terrorism on the Administration's part, it is also a denial on the part of others who would like to keep us in the dysfunctional state we've been in.
Congressman, I don't think I'm the only constituent who understands.
Please filibuster any bailout proposal.
Thank you,
Caleb Mardini
contact your senator now.
contact your representative now.
I'm writing you today on an issue that I feel is a part of a defining moment in this country's history.
There are massive shifts occurring in credit markets right now and those shifts are going to have a significant impact on our ways of life.
The Administration via Secretary Paulson has submitted a ridiculous bailout legislation plan that it appears many in congress are taking seriously. Senator Dodd has even crafted legislation that, while significantly cleaning up Paulson's proposal, still follows in lock step.
I've heard members of congress in hearings talking about how it's up to the administration to explain why this bailout is necessary, as if the throngs of angry constituents don't understand.
I want you to know, Congressman, that I do understand. I understand and I am angry. I am angry as I was when we launched the Iraq war, when we passed the patriot act, and when I saw that FEMA had almost no plan or competence to handle the aftermath of Hurricane Katrina.
I understand that our economy is in deep trouble. That a massive deleveraging event is taking place. I understand that this means we will be facing a lot of hardship in the years to come.
But I also can see that there is nothing that can, or should be done about his deleveraging, other than to take measures to make it orderly and to work to support our fellow citizens when the time comes.
Paulson's plan is flawed in so many despicable and obvious ways. But in one core way it is flawed that should stand out.
The plan is guilty of trying to keep "the debt party" going, when there is no reasonable cause to assume that it should.
The debt bubble has eroded much of our economy. While we enjoyed the temporary benefits of massive leverage much of our industry was displaced through movements to other labor markets. We've been lax in exploring new technologies in energy production, and energy efficiency. But it is that very sort of productivity that we find ourselves desperately in need of now.
We are in trouble, and there is a way to deal with the trouble that helps us begin growing new and better institutions that can help us rise out of this decline. But the bailout proposal is not only thievery and economic terrorism on the Administration's part, it is also a denial on the part of others who would like to keep us in the dysfunctional state we've been in.
Congressman, I don't think I'm the only constituent who understands.
Please filibuster any bailout proposal.
Thank you,
Caleb Mardini
contact your senator now.
contact your representative now.
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