mannfm11 wrote:I believe ...
Someone has to explain to me ...
which I suspect ...
My best guess ...
that's all any of us can do. as an investment bank, they're opaque. i dont think that even the bank examiners even know. btw i'm no GS fan. i think that they're a plague on this country with their lobbying dollars and campaign contributions. how does the ballot box compete with that?
i think that in addition to the paper, they have winning market making strategies (commendable) and winning (for now) prop trading strategies. we just cant know how leveraged they are. no one knows. what i just can't buy is that they have a magic wand that levitates markets appreciably, even though they'd like us to believe it.
EDITED TO ADD:
if they do have the magic wand, there are people who can prove it. maybe sergey can. but if he could, they wouldn't be roughing him up like this. it's just a meme.
anatomy of a meme
a meme is just a lively rumor. rumor's dont rely on truth for their vitality, merely the remote possibility of truth. what a meme requires is enough believers to suspend their disbelief to feed on the bait that the meme provides. a meme can be thought of as a fishing lure with baited hooks.
this particular meme, the computer program trading meme, states the possibility that computers have been programmed to manipulate markets. it provides a number of nearly primal baited hooks ...
1) the economic jealousy/class struggle hook. us against them and they have the money.
2) the automation/computer aversion hook. "those goddam computers. pretty soon, they'll be running the world"
3) the "mysterious sinister forces at work" hook.
4) a hook for do-gooders intent on defeating injustice wherever it's rumored to be.
5) last but by no means least is the bigotry hook. Goldman Sachs is currently the largest participant in computer program trading.
to GS's credit, they were aware enough to realize that they can capitalize on this. they'll milk every drop out of this.