Commentaries

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Sergey strikes back

The case of Sergey Aleynikov, the former Goldman Sachs programmer charged with stealing some of the top secret code to the investment bank’s high-frequency trading program, is going on the offensive.

Aleynikov has filed a subpoena on his former employer, seeking access to some information–mainly his personnel file. And Goldman has responded by filing a motion in federal court to quash the subpoena. Goldman filed its motion on Aug. 6, a source familiar with the matter says.

A hearing on Goldman’s motion to put the kibosh on Aleynikov’s request for documents will be heard Monday afternoon beofre Judge Paul Crotty.

The hearing on Aleynikov’s motion comes as the attorney for the former Goldman employee and federal prosecutors continue to work towards trying to reach a potential plea deal in the case.

It’s not all golden at Goldman

It’s hard to find much to quibble about with Goldman Sachs’ second-quarter performance–at least from a dollars perspective.

You just don’t expect to find many landmines in a 10Q, when an investment firm manages to take in more than $100 million in revenues from trading on 46 days. 

Goldman’s commercial junk pile

Goldman Sachs, as I’ve pointed out before, has done a good job reducing its exposure to commerical mortgages by selling off potentially troublesome loans well ahead of the curve.

But it appears what’s left in Goldman’s commercial mortgage bin is all but untradeable, if not potenially toxic.

from Rolfe Winkler:

Buffett’s Betrayal

When I was 14, Warren Buffett wrote me a letter.

It was a response to one I'd sent him, pitching an investment idea.  For a kid interested in learning stocks, Buffett was a great role model.  His investing style -- diligent security analysis, finding competent management, patience -- was immediately appealing.

Buffett was kind enough to respond to my letter, thanking me for it and inviting me to his company's annual meeting.  I was hooked.  Today, Buffett remains famous for investing The Right Way.  He even has a television cartoon in the works, which will groom the next generation of acolytes.

Geithner: Look forward in anger

So Timothy Geithner went ballistic and started throwing around some obscenities during a meeting at the Treasury over the slow pace of financial regulatory reform.

Well, good for him. It’s about time someone in the Obama administration got a little red in the face over the financial crisis.

Goldman needs to lose Gekko image

So, Goldman Sachs has a “Gordon Gekko feel to it” according to an executive at Brand Asset Consulting. In a survey of leading U.S. brands, the market research firm has reached the conclusion that the investment bank’s stature has been diminished in the eyes of the public by recent events.

Somehow, this fails to do justice to the emotions the name Goldman <GS.N> stirs in the breast of the average American.

Will Sergey cut a deal?

It looks like federal prosecutors may be trying to cut a deal with alleged Goldman Sachs high-frequency trading code stealer Sergey Aleynikov.

Today was the day for prosecutors to indict Aleynikov, who was arrested on July 3 on the theft charges. But in a court filing, prosecutors told the presiding magistrate judge that they need another 14 days to continue discussions with Aleynikov’s lawyer about a “possible disposition.”

High frequency fuzzy math

One of the many mysteries swirling around high-frequency trading is just how profitable the lightning-fast buying and selling of stocks, options and commodities really is.

The Tabb Group, a financial services industry research firm, recently estimated that the 300 securities firms and hedge funds that specialize in rapid-fire algorithmic trading took in some $21 billion in profits last year. But when pressed on how it arrived at this figure, Tabb representatives won’t say.

Morgan Stanley keeps Goldman from top M&A slot

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USBROKERS/RESEARCH-CITIGROUPDespite top billing for M&A involving European companies as well as Asia-Pacific and Japanese corporates, Goldman is not top of the league tables for global M&A for the year to date.

Instead it is long-time rival Morgan Stanley leading the pack, capitalising on a sizeable advantage in deals involving U.S. companies. Goldman is in second place in the worldwide ranking and JP Morgan third.

Wall Street meets The Matrix

Michael Durbin is no Wall Street rebel. But Durbin, who has been on the front lines of
high-frequency trading (HFT) since its early days, isn’t afraid to buck the industry line that lightning-fast trading of stock, options and commodities poses little or no risk to the stability of the markets.

Durbin says it’s reasonable to wonder whether Wall Street’s unfettered embrace of algorithmic automated trading could be setting the stage for a future meltdown.

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