Former Goldman Programmer Sentenced To 97 Months

stevegee58 writes "Former Goldman Sachs programmer Sergey Aleynikov was sentenced to 97 months in prison for stealing source code used in Goldman's high-frequency trading algorithms. Aleynikov was convicted late last year in Manhattan federal court."

Comments

how much is that in seconds?

[negrace]

how much is that in seconds?

Re:how much is that in seconds?

[zadintuvas]

255 085 152 seconds source

Re:how much is that in seconds?

[gilleain]

The original sentence was only 4 years, but an unfortunate combination of some faulty leap year code and Y2K errors caused a misprint on the court documents, and IT support won't help change it back...

Re:how much is that in seconds?

[Daniel Phillips]

Wouldn't microseconds be more relevant?

Shame

[Anonymous Coward]

It's a shame this is the only guy from GS who went to jail...

Re:Shame

[KillAllNazis]

People are all born ignorant but stupidity must be taught.

Re:Shame

[Hognoxious]

If the same principle applied to this as it does to bank losses, every US resident would have to serve about five sixths of a second in jail.

Re:Shame

[nanospook]

You sound angry, have you talked to your mom lately?

Re:Shame

[M8e]

You mean educated stupid?

Re:Shame

[PopeRatzo]

So Goldman Sachs is pissed that someone that works for them stole something? Well, that's a switch.

America, how I love thee...

It's like the story of two con men who worked together on a scam, then, when they were splitting up the take, one says to the other, "You wouldn't cheat me, would you?"

Re:Shame

[omfgnosis]

But it's going to be a lovely day when we realize that we're the ones being stolen from, we're the vast majority, and if we can be stolen from so much for so long, we must have a lot to our credit, and we can do without the thieves.

Those who should get 97 months...

[dargaud]

...are those who USE this algorithm.

Re:Those who should get 97 months...

[Anonymous Coward]

No, they should be shot dead.

Re:Those who should get 97 months...

[yorugua]

You mean to do this: http://www.cpeterson.org/2011/03/10/why-gas-is-so-expensive-today-hint-its-not-libya/

from TFA:

in 1991, J. Aron—the Goldman subsidiary—wrote to the Commodity Futures Trading Commission (the government agency overseeing this market) and asked for one measly exception to the rules.

The whole definition of physical hedgers was needlessly restrictive, J. Aron argued. Sure, a corn farmer who bought futures contracts to hedge the risk of a glut in corn prices had a legitimate reason to be hedging his bets. After all, being a farmer was risky! Anything could happen to a farmer, what with nature being involved and all!

Everyone who grew any kind of crop was taking a risk, and it was only right and natural that the government should allow these good people to buy futures contracts to offset that risk.

But what about people on Wall Street? Were not they, too, like farmers, in the sense that they were taking a risk, exposing themselves to the whims of economic nature? After all, a speculator who bought up corn also had risk—investment risk. So, Goldman’s subsidiary argued, why not allow the poor speculator to escape those cruel position limits and be allowed to make transactions in unlimited amounts? Why even call him a speculator at all? Couldn’t J. Aron call itself a physical hedger too? After all, it was taking real risk—just like a farmer!

On October 18, 1991, the CFTC-in the person of Laurie Ferber, an appointee of the first President Bush—agreed with J. Aron’s letter. Ferber wrote that she understood that Aron was asking that its speculative activity be recognized as “bona fide hedging”—and, after a lot of jargon and legalese, she accepted that argument. This was the beginning of the end for position limits and for the proper balance between physical hedgers and speculators in the energy markets.

To look at this another way—just to make it easy—let’s create something we call the McDonaldland Menu Index (MMI). The MMI is based upon the price of eleven McDonald’s products, including the Big Mac, the Quarter Pounder, the shake, fries, and hash browns. Let’s say the total price of those eleven products on November l, 2010, is $37.90. Now let’s say you bet $1,000 on the McDonaldland Menu Index on that date, November 1. A month later, the total price of those eleven products is now $39.72.

Well, gosh, that’s a 4.8 percent price increase. Since you put $1,000 into the MMI on November 1, on December 1 you’ve now got $1,048. A smart investment!

Just to be clear—you didn’t actually buy $1,000 worth of Big Macs and fries and shakes. All you did is bet $1,000 on the prices of Big Macs and fries and shakes.

But here’s the thing: if you were just some schmuck on the street and you wanted to gamble on this nonsense, you couldn’t do it, because your behavior would be speculative and restricted under that old 1936 Commodity Exchange Act, which supposedly maintained that delicate balance between speculator and physical hedger (i.e., the real producers/consumers). Same goes for a giant pension fund or a trust that didn’t have one of those magic letters. Even if you wanted into this craziness, you couldn’t get in, because it was barred to the Common Speculator. The only way for you to get to the gaming table was, in essence, to rent the speculator-hedger exemption that the government had quietly given to companies like Goldman Sachs via those sixteen letters.

Re:Those who should get 97 months...

[bmo]

>But what about people on Wall Street? Were not they, too, like farmers

The difference between Wall Street and the farmer next door, is that the farmer creates wealth. The Wall Street trader does not create wealth. At all. Ever.

The argument fails on its first premise. Argument is invalid.

--
BMO

Re:Those who should get 97 months...

[sjames]

100% of this could be solved with a simple rule. Each time you buy, a random number is consulted. If your number comes up, you get physical delivery, ready or not. If you don't want your swimming pool and bath tub filled with crude oil, you'd better be a legitimate buyer and not just a commodities gambler.

None of the trading actually does the economy any good at all, it judt drives up prices fro consumers while driving them down for producers while the traders skim off the top.

Re:Those who should get 97 months...

[Gorobei]

Well, that seems rather a stupid idea, unless your plan is to shut down the market for all but the big players. Or maybe you think stuff like storage tanks cannot be rented.

Here's a hint: all the big speculators in oil also have contracts out on oil tanker leases, barges, storage facilities, etc. If you ever see a Wall St commod desk, your mind will be blown. Realtime tracking and modeling of all energy in the world: tanker locations and speeds, electrical generating facilities realtime status (yes, a firm installs magnetometers near all generators and sells the data,) and in-house meteorologists to cover short term forecasting.

Re:Those who should get 97 months...

[sjames]

I want to shut the market down for all but actual producers, consumers, and distributors actually transporting product. The problematic speculators are not prepared to take physical delivery and then sell and deliver to someone with an actual use of the oil. If they can and regularly do, they are then distributors, not commodities speculators. They get to deal with realities like oil takes up space and food spoils if it sits in a warehouse, and that makes them behave more reasonably. Note that this includes futures. If you buy a future, you take delivery (at least if your number comes up)

If, as you claim, they're all already set up for physical delivery, then what are you complaining about?

Yes, I know storage tanks can be rented. I also know that speculators have no intention of doing so when they grab cash out of a transaction while contributing nothing of value.

Re:Those who should get 97 months...

[Gorobei]

I want to shut the market down for all but actual producers, consumers, and distributors actually transporting product.

But how can you do that, and why would you want to? Oil prices, for example, are affected by nat gas prices, so it is not a closed system. Additionally, speculation injects capital, so the market doesn't freeze in response to short term shocks.

The problematic speculators are not prepared to take physical delivery and then sell and deliver to someone with an actual use of the oil. If they can and regularly do, they are then distributors, not commodities speculators. They get to deal with realities like oil takes up space and food spoils if it sits in a warehouse, and that makes them behave more reasonably.

But, if you try to punish speculators with random rules, firms will arb out the problem by providing one stop shopping that deals with your edge cases (for a fee, of course.) This is largely why exchanges exist in the first place: make it easy for people to transact without the messiness of physical delivery, etc.

Note that this includes futures. If you buy a future, you take delivery (at least if your number comes up) If, as you claim, they're all already set up for physical delivery, then what are you complaining about? Yes, I know storage tanks can be rented. I also know that speculators have no intention of doing so when they grab cash out of a transaction while contributing nothing of value.

My complaint is that what you are proposing (forced physical delivery) is exactly the risk that exchanges already mitigate (e.g. the London metals exchange has warehouses to handle and manage physical delivery.) There is no reasonable way to make the threat of physical delivery a barrier to trading commodities - that's a major reason why exchanges exist in the first place.

There have been numerous attempts to ban exchange trading (futures) of physical products (e.g. Japanese rice, USA commods.) These measures have never achieved anything other than to make the big market players become de facto exchanges with cartel power.

Re:Those who should get 97 months...

[sjames]

We know what a pure speculator is, someone who, unlike a distributor, has no warehouse and unlike a broker, has no buyer lined up when he makes a buy, and unlike a consumer, has no use for the commodity other than to sell it's futures.

I have heard the excuses about injecting capital, liquidity, etc, but it just doesn't ring true. Demand for commodities doesn't go away and supply rarely does. The high speed traders on Wall Street make similar claims but that rings false as well. The economy got along better without them both for decades.

If you have a better idea to push the pure gamblers out and allow the business of matching sincere buyers and sellers together, I am open to suggestion. I suppose we could just shoot them, but that seems a bit drastic :-)

Re:Those who should get 97 months...

[khallow]

The Wall Street trader does not create wealth. At all. Ever.

Creates markets, provides liquidity, expedites trades. There's the value and consequently, the wealth that Wall Street creates.

Re:Those who should get 97 months...

[khallow]

The economy got along better without them both for decades.

But that was before the bleeding hearts killed the golden goose. You need sensible, low levels of regulation and considerable reduction in entitlement spending in order to have an economy that would grow at the US's old rates in the 50s and 60s.

If you have a better idea to push the pure gamblers out and allow the business of matching sincere buyers and sellers together, I am open to suggestion. I suppose we could just shoot them, but that seems a bit drastic :-)

Here's the better idea. Doing nothing solves the non-problem.

Re:Those who should get 97 months...

[sjames]

Those issues are orthogonal. The economy overall has done well enough except where inadequate regulation allowed Wall Street to sink it while they lined their own pockets with taxpayer money. The problem is that too much of it got skimmed off by non-productive parasites in the market.

In the '50s and '60s taxation was more progressive, meaning higher rates and less loopholes for the richest segment. The people with the sense of entitlement are mostly those who could honestly retire right now and live out their lives better than most Americans can honestly aspire to. Perhaps it's time to inject the stimulus at the bottom for a change. Move the tax brackets so nobody making less than 100K has to file and you'll see a vibrant economy in no time.

The economy is a construct of man, it has no rights and no life of it's own. It exists to serve all of the people, never the other way around.

Re:Those who should get 97 months...

[khallow]

The economy overall has done well enough except where inadequate regulation allowed Wall Street to sink it while they lined their own pockets with taxpayer money.

In other words, the regulation was "inadequate" because it existed. Can't line your pockets with taxpayer money, if you don't have access.

In the '50s and '60s taxation was more progressive, meaning higher rates and less loopholes for the richest segment.

There's no evidence that the effective tax rate for the richest has changed since the Second World War (and taxation hasn't been progressive at the highest levels for a long time). Back then, they would have used trusts or manipulated taxable income to some other category. Tax avoidance is cheaper than tax payment.

The economy is a construct of man, it has no rights and no life of it's own. It exists to serve all of the people, never the other way around.

Moral bullshit. A tool's value is determined by how well and by whom it gets used. An economy is used by all the members of that economy. And we've known for some time how to run one.

There's no point to reminding me that the economy exists to serve all the people. It just does. And the comment about "the other way around" is supposed to mean that there actually is a way for an economy to "use" people. I don't think you thought that through since you're saying here, that people aren't supposed to serve people or some such (even though division of labor is one of the key advantages of having an economy in the first place).

Perhaps it's time to inject the stimulus at the bottom for a change. Move the tax brackets so nobody making less than 100K has to file and you'll see a vibrant economy in no time.

I believe that almost everyone should pay taxes. At the least, if they don't pay taxes, they shouldn't vote either.

Re:Those who should get 97 months...

[khallow]

Do they create more than they destroy?

Prove they destroy real wealth first, then we'll talk.

Re:Those who should get 97 months...

[sjames]

In other words, the regulation was "inadequate" because it existed. Can't line your pockets with taxpayer money, if you don't have access.

WoW! You didn't just drink the kool-aid, you're mainlining it! In other words it was inadequate because it didn't send crooked investment bankers to jail before their fraudulent bonds crashed the economy and it allowed them to get so big that we were stuck bailing them out (note that was done by a Republican) or fall into an even deeper depression.

There's no evidence that the effective tax rate for the richest has changed since the Second World War (and taxation hasn't been progressive at the highest levels for a long time). Back then, they would have used trusts or manipulated taxable income to some other category. Tax avoidance is cheaper than tax payment.

Wow again! Two can play at that, there is no evidence you're not a new version of Eliza so I win!

If by no evidence you mean other than the actual tax laws in effect back then and written documentation that's unfortunate to your point, then I suppose.

Moral bullshit. A tool's value is determined by how well and by whom it gets used. An economy is used by all the members of that economy. And we've known for some time how to run one.

Apparently not, or have you been asleep for the last few years. As for all members using it, oh yeah, the economy has been sooooo useful to the 10% who are officially out of work and the many others that just gave up.

Quite honestly, you seem to be practicing faith based economics. You present no justification for your position at all, even going so far as to be willfully blind to anything that might bring your position into question.

Re:Those who should get 97 months...

[ardle]

Do they create more than they destroy?

Prove they destroy real wealth first, then we'll talk.

I suspect that this is not easily done.
If someone's going to try, I suggest comparing the spending power of a $ in the hand of someone at the top or bottom of the chain for any given commodity...

Re:Those who should get 97 months...

[bmo]

Liquidity and trades are not wealth. And Wall Street does not create markets. The markets are already there, whether the traders exist or not.

It's moving wealth around.

And skimming off the top, honestly (or dishonestly).

--
BMO

Re:Those who should get 97 months...

[khallow]

it allowed them to get so big that we were stuck bailing them out

The power of your government to give away vast sums of money for transparent excuses, means it tends to happen, no matter how heavy the regulation settles.

I should have said more about effective tax rate. There was a CBO study which indicates that the wealthiest tax bracket has paid a more or less constant tax rate since at least 1979. Hence, my speculation that the wealthiest have probably been paying similar effective tax rates since the Second World War. I recall reading another study on it (which supposedly includes effects of state taxes too), but I've spent about 6 hours fruitlessly looking for it (both today and yesterday night).

Apparently not, or have you been asleep for the last few years. As for all members using it, oh yeah, the economy has been sooooo useful to the 10% who are officially out of work and the many others that just gave up.

This is why I despise the moral cliches that often show up in economics. The unemployment rate is so high because there are a vast number of disincentives for employing people (some which you've espoused before, such as criminally punishing bankers for making mistakes, "fraud" as you put it). A good portion of the unemployed aren't worth minimum wage either. The bottom line is that the "bad guys" in the economy morality play hire people and create wealth when they win. In the absence of any useful direction from people like you, I'll side with the black hats since they, at least, make society a better place.

Re:Those who should get 97 months...

[sjames]

When the black hats win, more crumbs fall from their table to the peons below. The problem is they are getting better at keeping the crumbs for themselves every year. That's why, in spite of the GDP/capita being well more than double what it was in the '60s, it now takes 2 incomes to afford a family home rather than a single income being able to afford 2 homes.

As for your claim that bankers made "mistakes", there is ample evidence that they knew damned well their "AAA bonds" were nothing like AAA. Their own quants were warning them that there were potential systemic effects (such as a drop in real-estate value) that would greatly increase the estimated risk. Normally when you knowingly represent something as substantially better than you know it to be, we call it fraud.

I find your claim that everyone knows what they're doing, nobody did anything wrong, and all we need is to give them a free hand all in the face of absolute proof that not all of those things can be true (or do you claim the economy had no problems at all these last few years?) to be illogical at best.

So what do you propose to do with the workers who "aren't worth minimum wage"? Do we hire a few to throw the others into the dumpster when they starve to death in the streets or do we give them those evil nasty entitlements? Keep in mind that faced with starvation, they may decide to pillage rather than die quietly in an alley.

It's worth noting that if we allow employers to pay less than it takes for a person to remain ready to work and make up the difference out of tax money, we are effectively giving the employer a handout just as surely as if we maintained their factories for them.

Re:Those who should get 97 months...

[khallow]

When the black hats win, more crumbs fall from their table to the peons below. The problem is they are getting better at keeping the crumbs for themselves every year.

You could always run your own productive business. That works pretty well too, at least as long as the obsession over black hats doesn't cripple your ability to run a business.

That's why, in spite of the GDP/capita being well more than double what it was in the '60s, it now takes 2 incomes to afford a family home rather than a single income being able to afford 2 homes.

Real estate is an arms race where the natural cap is how much home you can barely afford.

So what do you propose to do with the workers who "aren't worth minimum wage"? Do we hire a few to throw the others into the dumpster when they starve to death in the streets or do we give them those evil nasty entitlements? Keep in mind that faced with starvation, they may decide to pillage rather than die quietly in an alley.

Pay them less than minimum wage. Seems better than tossing them in the dumpster when they starve.

Re:Those who should get 97 months...

[sjames]

You could always run your own productive business. That works pretty well too, at least as long as the obsession over black hats doesn't cripple your ability to run a business.

That will work so well when everyone runs their own business and nobody is anyone else's employee. It doesn't sound like it will scale very well though, and not everyone finds business to be their strong suit.

Real estate is an arms race where the natural cap is how much home you can barely afford.

So, apparently is everything else, and there's your problem.

Pay them less than minimum wage. Seems better than tossing them in the dumpster when they starve.

So you figure it's fine that they cannot afford adequate food, clothing and shelter and that medical care is just a dream? I'm sure those shanty towns will be quite attractive. The regular gunfights in the street will be quite entertaining as well. We can all sit on the hillside above (behind the electric fence of course) and watch the pretty muzzle flashes like fireflies. Just hope nobody "down there" figures out that bolt cutters and rubber gloves are free for the stealing. Enjoy it while it lasts since one day your job will go away and you can join in the "fun".

There you go

[countertrolling]

This should have Wall Street 'scared straight' by Monday.

This would make sense...

[MickyTheIdiot]

...if all the top Goldman CEOs were put in jail for 8 years for their stunts that put the country into a major recession.

Re:This would make sense...

[slick7]

...if all the top Goldman CEOs were put in jail for 8 years for their stunts that put the country into a major recession.

A public execution in lieu of a football season would make everyone's day.

Re:This would make sense...

[pitchpipe]

Keep fucking dreaming! The only people who serve time when committing crimes in the U.S. are those without money.

Re:This would make sense...

[sweatyboatman]

Aleynikov was getting paid $400K/year and had just been hired away by another company at 3 times that salary. Nowhere near the upper echelons of wealth, but certainly not someone who could be described as "without money".

He doesn't deserve 8 years. I can't imagine Goldman really wanted this to go to trial. I wonder if his legal counsel was particularly incompetent or if he was just thickheaded enough to insist on a trial for a crime he admitted to.

Re:This would make sense...

[nomadic]

Also keep in mind GS was known for ridiculous bonuses, too.

Re:This would make sense...

[Teun]

It was the relying on a single source of, especially, foreign energy.

Re:This would make sense...

[russotto]

A public execution in lieu of a football season would make everyone's day.

Why "in lieu of"? Shouldn't take any longer than halftime.

Re:This would make sense...

[Darinbob]

Execution might be too much. But there should be some penalty that is a deterrent, and a punishment that is felt. The punishment they did get is like asking a shoplifter who walked out with arms full of merchandise to return a candy bar.

The mafia could learn a thing from these guys about how to avoid consequences.

Re:This would make sense...

[khallow]

Execution might be too much. But there should be some penalty that is a deterrent, and a punishment that is felt.

We're seeing it. Your humiliation and occasional financial ruin is the collective punishment that the global public deserves for going along with this idiocy.

Bankruptcy is the deterrent for the banker and those who are supposed to be controlling him. After all, the number one reason they aren't being punished is because they didn't commit a crime in the first place.

Re:This would make sense...

[slick7]

>

The mafia could learn a thing from these guys about how to avoid consequences.

They did, the Italian government has no death penalty, it's just too bad it's not the same for an organization that doesn't exist, at least anyone is willing to talk about.

Stool Pidgeon

[cosm]

How many Goldman employees went to jail for stealing taxpayer dollars?

Re:Stool Pidgeon

[countertrolling]

Well, if you consider a cabinet position to be like prison, quite a few

A little crazy...

[SomePgmr]

Pushing the code off to a free hosting service is highly questionable, even if he claims he meant to be moving OSS and screwed up. But wow... 97 months for "interstate transportation of stolen property"? If it's still the case that he didn't use or distribute that source, and even cooperated all along... that seems awfully harsh.

Didn't actually "steal" anything

[sideslash]

I wish we could get away from using the words "steal" and "theft" to describe making a copy of somebody's data. You could call it a copyright violation, or a violation of a legally-enforced monopoly. Both of those descriptions create a more accurate understanding for the public of what's going on than the word "stealing" does.

If you sneak into a library, take a book, and never return it, everybody would agree that you "stole" the book. But if you take home a library book, type up a copy for yourself, then return the original book to the library, would most people describe that as "stealing"? More to the point, should you go to prison for 8 years?

Re:Didn't actually "steal" anything

[mcavic]

A book isn't the same as a piece of source code. How about if you sneak into someone's house, find a patent application, memorize it, and then file the patent yourself?

should you go to prison for 8 years

For copyright a violation? No. For theft of unpublished intellectual property? Yes.

Re:Didn't actually "steal" anything

[sydneyfong]

A book isn't the same as a piece of source code. How about if you sneak into someone's house, find a patent application, memorize it, and then file the patent yourself?

Given the number of dead obvious patents filed and accepted, and upheld... I thought this was legit.

Re:Didn't actually "steal" anything

[sideslash]

How about if you sneak into someone's house, find a patent application, memorize it, and then file the patent yourself?

Well, if the only thing you take with you when you leave the house is the knowledge stored in your head, you still haven't "stolen" anything in the way I prefer to use the word. The original owner still possesses all the property he did before you entered his house -- you haven't deprived him of any of it.

Now, if you rush to beat him to filing the patent application, then you are certainly guilty of fraud. You're probably also guilty of trespassing in his house. He could make a great case for a civil lawsuit against you on many grounds, including making the case that any financial benefits you reap were both unfair and a result of malicious action against him, and that he therefore deserves to collect some amount of damages. But I don't see how you have "stolen" anything from him, except in a metaphorical sense, or if you prefer in an "indeterminate" sense, based on theoretical future benefits which the law has no business presuming to guarantee.

Re:Didn't actually "steal" anything

[sideslash]

Some copyright violations result in more financial harm to the copyright owner than others, and I never said we should abolish copyright law. But in your scenario, Google wasn't actually dispossessed of any of their property. So I'd prefer to avoid using the word "stealing" to describe making a virtual copy of their data. I am aware that the law is happy to refer to copyright violations as theft, but the case is not hard to make that lawmakers haven't elegantly tracked with the progress of technology over past decades (in fact, they could usually be described as clueless).

Re:Didn't actually "steal" anything

[sideslash]

Hey, you've finally picked an example that includes actual theft (assuming you are the same AC). If the money disappears from my account as a result of your actions in copying my passwords, then yes, Virginia, you were accessory to theft. But merely knowing my passwords or telling other people my passwords is not theft per se.

Re:Didn't actually "steal" anything

[Antique Geekmeister]

This was "trade secret" algorighms, not "copyright infringement". It was part of the crown jewels of Goldman Sachs business, and our convicted felon took it with him to his start up. What, precisely, did you think they were offering him triple the salary _for_ if not for his knowledge of these technologies and these algorithms?

Now, the whole "high speed trading" needs to be halted outright. The idea that a few microseconds difference in access to such information is being used to fund billions of dollars of profit on the margins of who can process the numbers to buy, or sell, the stock first while the profit is greatest is insider trading with computers, and it's incredibly dangerous because there _will_ be feedback loops, and phase delays in them _will_ become outrageous positive feedback loops which _will_ make the market thrash at unexpected moments. The only reliable protection is the classic one, which most of us learned when we first studied mechanical, electronic, or software feedback cycles. Damp the system.

But that would eliminate a lot of glamorous projects at these larger investment firms, and _those_ are critically tied to bonuses of a lot of very excitable "trend setters" at such firms. Don't expect this to happen until after several more crashes and trashes due to this kind of unstable trading.

Re:Didn't actually "steal" anything

[shentino]

In theory, once you get busted for burglary, the patent application itself would count as prior art because the guy who filed wasn't the same one that filled it out.

Re:Didn't actually "steal" anything

[shentino]

You're guilty of aiding and abetting.

Re:Didn't actually "steal" anything

[shentino]

Actually, I'd call it treason and/or espionage.

Things escalate in a hurry when foreign sovereignties get involved.

Re:Didn't actually "steal" anything

[BeanThere]

If an employee took Google's search engine and data center management code and used it for personal gain, I would call it "copyright infringement with damages", NOT "stealing", because facts don't actually change just because you get emotional about something. If the personal gain was selling the code to the Chinese government, then there may be other additional crimes, but none of them would be "stealing" either. Google would lose, but the loss wouldn't be due to "theft", the loss would be due to "damages". Try to keep a clear head.

Re:Didn't actually "steal" anything

[mcavic]

But I don't see how you have "stolen" anything from him, except in a metaphorical sense, or if you prefer in an "indeterminate" sense, based on theoretical future benefits which the law has no business presuming to guarantee.

I see your point - but yes, future benefits can be stolen. The law recognizes the value of intangible property, corporate secrets, etc. See: http://www.telegraph.co.uk/finance/markets/2809408/Ex-Coke-secretary-jailed-for-Pepsi-conspiracy.html

what prison?

[romanval]

is this a white collar 'campus' prison with conjugal visits, or a federal pound-me-in-the-ass prison?

linkedin profile

[Anonymous Coward]

http://www.linkedin.com/in/aleynikov

are we really getting the whole story?

any goldman sachs excutives going to jail

[Dan667]

for any of their abuses?

Re:any goldman sachs excutives going to jail

[Colin Smith]

Almost.

Their bonuses were a little smaller last year.
 

Re:any goldman sachs excutives going to jail

[zippthorne]

Smaller than what? What they're going to be next year?

Now now

[Moraelin]

Now now... I know those guys are hated, and caused a global recession to line their pockets, and were giving themselves gigantic bonuses just as they were being bailed out by the government, and all, but that's no excuse to go back to barbaric times. Two wrongs don't make a right, ok? There's no reason to deprive the people of football for that.

Do what the Romans used to: have the executions at halftime :p

Re:Now now

[HornWumpus]

Executions? Have them fight it out. One gets to live.

Re:Now now

[AK Marc]

Two men enter. One man leaves.

Re:Now now

[sjames]

Celebrity Death Match: Financial Edition! Let's get it on!

Re:Now now

[Moraelin]

Barbaric to suggest that someone who wittingly and deliberately took the country to the brink of insolvency and then lied, deceived and manipulated the so-called democratic process in the country to divert billions if not trillions of dollars to his industry (if one can call banking an industry), himself and his colleagues should be held accountable??

Heh. *WHOOSH*

Now we know who can't read more than one sentence, eh? :p

The whole joke setup is that I start as if I were going to protest the executions, but then it turns out I was protesting the "instead of football" part. The "barbaric times" I was talking about were obviously those without football.

Of course, if you could read up to the third sentence, you'd already know that. So I doubt that this message will do any good either.

Re:Now now

[Moraelin]

Do it the other roman way.

Two men enter... one full lion leaves.

Sadly, that's no longer practicable. If you started feeding bankers to some hungry lion, you'd have the PETA on your case ;)

Clear Message

[aaaaaaargh!]

Well, I think there is a clear message here. If you're a talented programmer, never ever work for Goldman Sachs!

Do not work for GS - just not worth the risk

[alexmin]

This case makes it clear that potential risks involved in working for Goldman Sachs in technical position just not worth the risk. Likely that very few tech people are senior partners which is the only way to make any serious money there. From the circumstances of the case it seems that Aleynikov got sued because he pissed off his manager by taking higher paying position elsewhere and making it known. Unfortunately for him GS has deep connections in the government so banal civil case got blown out into criminal "IP theft" investigation.

Re:Do not work for GS - just not worth the risk

[gravos]

I tend to agree with you, but in this economy I doubt they are going to have any trouble finding workers

GS is a big donor to the right people

[unassimilatible]

A million dollars buys you a lot.

Barack Obama (D)
Top Contributors

University of California $1,591,395
Goldman Sachs $994,795
Harvard University $854,747
Microsoft Corp $833,617
Google Inc $803,436
Citigroup Inc $701,290
JPMorgan Chase & Co $695,132
Time Warner $590,084
Sidley Austin LLP $588,598
Stanford University $586,557
National Amusements Inc $551,683
UBS AG $543,219
Wilmerhale Llp $542,618
Skadden, Arps et al $530,839
IBM Corp $528,822
Columbia University $528,302
Morgan Stanley $514,881
General Electric $499,130

http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638

Re:GS is a big donor to the right people

[Lennie]

I wonder where the University of California gets it's money from.

Re:GS is a big donor to the right people

[Grismar]

Don't get me wrong, I'm not so naïve to believe US politics (or any Western country's politics for that matter) are free of corruption. But you're right there on the other end of the spectrum: making everyone supporting a political cause with money suspect.

If you think that's somehow helpful, power to you, but I don't see how it is. Of course you could be of the opinion that supporting a political cause with money is a bad thing for exactly that reason, but believing that would stop everyone from doing it would be no less naïve...

Re:GS is a big donor to the right people

[cpu6502]

I thought Campaign Laws forbade giving more than $5000. How do they skirt around that rule?

Re:GS is a big donor to the right people

[Anonymous Coward]

From the link: "The organizations themselves did not donate , rather the money came from the organization's PAC, its individual members or employees or owners, and those individuals' immediate families"

GS did not give Obama $1mm. GS Employees did. GS has a lot of Democrats.

Re:GS is a big donor to the right people

[Anonymous Coward]

Legally? Many ways, but a more obvious one is this: http://en.wikipedia.org/wiki/Political_action_committee

Re:GS is a big donor to the right people

[Anonymous Coward]

I wonder where the University of California gets it's money from.

Most of it comes from the state. The state of California spends billions of dollars every year on its 3 public university systems, the lion's share of which goes to the University of California schools (the University of California is a collection of 10 campuses, including UCLA and UC Berkeley). My question is what were they hoping to get out of it?

Re:GS is a big donor to the right people

[Teun]

Ah that's why McCain lost:

Merrill Lynch $373,595
Citigroup Inc $322,051
Morgan Stanley $273,452
Goldman Sachs $230,095
JPMorgan Chase & Co $228,107
US Government $208,379
AT&T Inc $201,438
Wachovia Corp $195,063
UBS AG $192,493
Credit Suisse Group $183,353
PricewaterhouseCoopers $167,900
US Army $167,820
Bank of America $166,026
Gibson, Dunn & Crutcher $159,596
Blank Rome LLP $154,226
Greenberg Traurig LLP $146,437
US Dept of Defense $144,105
FedEx Corp $131,974
Bear Stearns $117,498
Lehman Brothers $114,357

Next time forget about voting, just tally the contributions.

Re:GS is a big donor to the right people

[Teun]

From a site mentioned above:

The organizations themselves did not donate , rather the money came from the organization's PAC, its individual members or employees or owners, and those individuals' immediate families. Organization totals include subsidiaries and affiliates.

Because of contribution limits, organizations that bundle together many individual contributions are often among the top donors to presidential candidates. These contributions can come from the organization's members or employees (and their families). The organization may support one candidate, or hedge its bets by supporting multiple candidates.

Re:GS is a big donor to the right people

[rbayer]

If you read the link where these numbers came from (I know, that would be WAY uncool around here), you'll see that "The organizations themselves did not donate , rather the money came from the organization's PAC, its individual members or employees or owners, and those individuals' immediate families."

Do you really think the University of California as an institution gave $1.5 million to Obama? Of course not, but add up all the generally left-leaning faculty, staff, grad students, and alumni across all the campuses and that number sounds much more reasonable.

Re:GS is a big donor to the right people

[Raenex]

Ah that's why McCain lost:

correlation != cause. McCain got less money because it was obvious he was losing.

Next time forget about voting, just tally the contributions.

Or just watch the polls. The last election wasn't close except for a brief time after the Sarah Palin hail mary.

Re:GS is a big donor to the right people

[bill_mcgonigle]

US Army $167,820
US Dept of Defense $144,105

Wait, WHAT?

Re:GS is a big donor to the right people

[SeaFox]

So in other words, a bunch of people decided to donate money to political campaigns and if we group them based on what companies they're employed by or institutions they're affiliated with this is what we get.

The fact the total of all those donations comes up to 1.5 million for Uni. of California doesn't say anything about the intent of those donations. The list is written to suggest the donations are all concerted efforts to make large contributions to a political campaigns in hopes of favors from the administration, when they really might be nothing more than a coincidental shared opinion on who to support amongst a bunch of individual donors. Nobody's boss said "Here's a $1000, donate it to Obama and say it came from you".

Re:GS is a big donor to the right people

[thebian]

Nonsense!

Do you really think that Obama sends messages to everyone of the thousands of federal judges -- many of whom were appointed by Bush, and all of whom have lifetime jobs -- about every case that they hear? And how many federal charges were even brought against bankers? Under what law?

Do you really think that bribes are paid out in the open so that they can be put on the web for all the people who don't vote to shake their heads at?

I don't know the programmer's case at all, but the sentence does seem outsized for an intellectual property theft. I do believe that it's astounding that all those Wall Street executives just continue to skim off the money they do. But what's that got to do with contributions?

I can see that the connections and business associations between Wall Street firms and government agencies is a lot stronger than those between the Brotherhood of Slashdot Readers and those agencies..

So it works like this: If you want to go back to your nice job at the bank after President X serves his four or eight years, you better make sure X doesn't rock the boat.

The payoff is good will.

Re:GS is a big donor to the right people

[Lennie]

"If you read the link where these numbers came from"

Ohhh, is that what it is for. ;-)

Re:GS is a big donor to the right people

[nbauman]

Nobody's boss said "Here's a $1000, donate it to Obama and say it came from you".

Nobody's boss was stupid enough to say it.

Re:GS is a big donor to the right people

[nbauman]

making everyone supporting a political cause with money suspect.

I suspect that some people support political candidates as a quid pro quo for government favors in return. In some cases, like military contractors, it seems obvious. Their PAC contributes to the Democratic candidate, and to the Republican running against him. What's their motivation? Once in the while politicians go to jail when they get caught on tape admitting it.

But putting straightforward quid pro quo aside, the problem is with the system that requires politicians to raise hundreds of millions of dollars, from the very people they're supposed to regulate, before they can even run for office. Obama raised $1 billion, overwhelmingly from big business PACS and millionaires -- mostly from the same campaign contributors who fund the Republicans, who were hedging their bets.

If you want to run for president on policies that are popular with the voters, and you can't raise $1 billion for a campaign, as Obama did, then you can't get elected.

Of course you could be of the opinion that supporting a political cause with money is a bad thing for exactly that reason, but believing that would stop everyone from doing it would be no less naïve...

Yes, I believe that having elections in which candidates must raise hundreds of millions of dollars is a bad thing. I realize that under the Republican Supreme Court, we're unlikely to stop it.

Re:GS is a big donor to the right people

[nbauman]

Those are the total contributions by people who listed the U.S. Army or the Department of Defense as their employers. Soldiers have a right to contribute to political candidates.

Re:GS is a big donor to the right people

[nbauman]

Nonsense!

Do you really think that Obama sends messages to everyone of the thousands of federal judges -- many of whom were appointed by Bush, and all of whom have lifetime jobs -- about every case that they hear?

No, I think Obama sends messages to federal prosecutors, who are appointed, and who decide whether to prosecute.

Federal judges don't have anything to do with the initial decision to prosecute.

Re:GS is a big donor to the right people

[pclminion]

And, had McCain won in 2008, you'd be posting an equally disturbing list of contributors to his campaign as well... Right?

It was said best in The Hitchhiker's Guide To The Galaxy. I'm paraphrasing, but it basically goes like this: "The function of the President is to divert attention from what's really going on."

The list you posted should be alarming because it names the biggest buys of political power. But you seem to be using it as a stab against the President.

A number of big dicks are fucking you from all angles, and you're focusing your anger on one particular guy. A guy who probably had his idealism beforehand, then was thrown into the roiling cauldron of Presidential Politics and learned what it's REALLY like. You're falling for the red herring just as has been intended. You lose.

Re:GS is a big donor to the right people

[omfgnosis]

And, had McCain won in 2008, you'd be posting an equally disturbing list of contributors to his campaign as well... Right?

Well, I would. They were both bought and sold. Everything else you said about where the power lies is true, which is why that list is pertinent to the discussion. Goldman is guilty of having bought its own immunity. Obama is guilty of having been the schmuck in charge of ensuring that, because McCain couldn't be bothered to muster a better campaign and put himself in the same position. The fact that either of them is bought and sold doesn't excuse their shameful policies. But the fact that Obama is prez and McCain isn't... well, it's a fact.

What do you get out of framing this response as "Obama is just this guy, you know?" You don't strike me as a particular Obama supporter. You don't seem to think that the criticism is invalid. Is it *just* that the criticism lacked a mention of, well, the guy who *didn't* get put in charge of the matters Obama's being criticized for? That's not a very serious problem.

And when it's Palin (or whoever), that's who will be the corrupt prez. Better that we're looking at that list of donors (which isn't going to change much term to term) than just the person holding office with shit politics. The list is exactly the context you're looking for. WTF else do you want?

Re:GS is a big donor to the right people

[thebian]

Yes, you're right. I had the judge and the 8-year sentence on the brain.

But it's more absurd to talk of the prosecutors. Do you think Obama calls each of them up? Sends them an email? Writes a little note? There are a lot of prosecutors if you count all the assistant U.S. attys. The head guys' terms overlap presidents. Many are carried over -- i.e. they are basically nonpolitical. For something as big as the banking collapse, do you think you can shut all of them up?

If you know a prosecutor who thinks his dynamite case against a bank executive has been squelched by the White House, have him call me immediately -- collect. I'll buy you dinner.

You and I may think the bankers are really bad guys, but that doesn't mean they violated the law.

After the S&L debacle in the 80s, several of them, big politcal contributors, too, went to jail. Do you think that Bush the elder had higher morals?

Re:GS is a big donor to the right people

[nbauman]

The Bush Administration was unusually aggressive in politically-motivated prosecutions, and the clearest example was the prosecution of Don Siegelman, the former Democratic Alabama governor. The prosecution of Eliot Spitzer, the former Democratic New York governor, was another example of selective prosecution by Republican prosecutors.

I'm not a lawyer, so I can't rattle off the details, but Glen Greenwald is, and he's described the reasons why the people responsible for the savings and loan crisis were guilty of fraud and other criminal activity, and they weren't prosecuted.

The simplest example I know of selective prosecution under the Bush Administration was the Abu Grarib prosecutions, http://www.boston.com/news/nation/articles/2008/01/11/military_prosecution_in_abu_ghraib_scandal_ends/ where they prosecuted the lower-ranking soldiers who followed orders, but didn't prosecute the officers responsible. Graner wanted to testify that officers had ordered him to do everything he was charged with, and they knew about it, but the judge wouldn't permit it and the prosecutors ignored it.

The Obama Administration continued to refuse to investigate or prosecute these felonies.

Re:GS is a big donor to the right people

[pclminion]

What do you get out of framing this response as "Obama is just this guy, you know?" You don't strike me as a particular Obama supporter. You don't seem to think that the criticism is invalid. Is it *just* that the criticism lacked a mention of, well, the guy who *didn't* get put in charge of the matters Obama's being criticized for? That's not a very serious problem.

I guess my criticism is that it's unnecessary to mention names, period. By naming Obama, you had me thinking you are an Obama-hater and that the purpose of your post was to demonstrate the depth of Obama's corruption. I now see that this is not your goal, so I apologize for jumping the gun. But that's really the whole point, isn't it? By naming names you focus attention on the man instead of the general pattern of corruption. I think it would have been better if you hadn't named him.

Re:GS is a big donor to the right people

[pclminion]

And now I'm realizing that you aren't the OP... Not on the ball today. Sorry again.

Re:GS is a big donor to the right people

[omfgnosis]

I should clarify, I'm not the one who you replied to originally. But I think I addressed this already. Obama is the one who is the President who got bribes to do favors for Goldman. If it had been McCain, he'd be the one named. Just because there's systemic corruption doesn't mean that naming *specifics* (not names) is useless; it does no good to say "the system is corrupt, end of discussion", when discussing the consequences of Goldman's contributions to the campaign which actually won. It *underscores* the corruption to highlight the contributions.

Re:GS is a big donor to the right people

[omfgnosis]

It's cool. I responded without saying so, and Slashdot doesn't exactly call out posters' identities very well.

Re:This is stupid

[Anonymous Coward]

Why should it be a civil matter? Would you feel differently if he stole office furniture and had a thriving side business selling that stolen property? How is this different just because it was only a bunch of bits formed into code that can be compiled? Should it really be treated differently than stealing and selling anything else from the company?

Re:This is stupid

[Lord Kano]

Why should it be a civil matter? Would you feel differently if he stole office furniture and had a thriving side business selling that stolen property? How is this different just because it was only a bunch of bits formed into code that can be compiled? Should it really be treated differently than stealing and selling anything else from the company?

Yes, because stealing some tangible property means that the rightful owner loses it. If you have an apple and I steal it, you no longer have an apple. If you have a painting and I copy it a thousand times, you still have your painting.

LK

Re:After finishing his sentence

[AK Marc]

Considering that most people on the sex offenders lists didn't rape anyone and are on for sex crimes that aren't violent or against children (peeing in public, mooning someone, having sex with another student in their high school, taking a nude picture of themselves, and such), I'd not have any problem living next to a registered sex offender, though I admit I'd look to see what their crime was to see if I should care.

It reminds me of the police. Most people would think that living close to a policeman would be safe, but those living with cops are more likely to be beat than those that don't (cops have a higher incidence of domestic violence and, rather than admitting that police work attracts violent sadistic people, the cops blame the tough job of raping our rights, I mean keeping us safe, for it).

Oversentencing

[Pecisk]

I'm usually against conspiracy theories (real life is full of surprises), but such harsh judgment also make me think that prosecution and judge are huge friends with Goldman (it is just a theory, of course - it could be prosecution which feels all warm inside thinking about Goldman and incompetent judge). I mean, stealing code which is not your own is bad, but 8 years?! People with more far reaching consequences don't get even 4! Ok, I know, US is strange place for justice, but come on!

As side note, I think stock market have gone very sideways. If there is any sanity, it will soon leave that chocked up rat race.

Re:Oversentencing

[oh2]

Harsh sentence compared to most violent crimes Id say. Few rape sentences run that long for instance.

Re:This is stupid

[Solandri]

The system is broken, and its because most people are technical laggards and people are just too lazy to fix a broken system.

The system isn't broken. It's working as intended - following the golden rule. He who has the gold makes the rules.

Enough blame to go around for that

[unassimilatible]

I'm no fan of the investment banks - I think they have long passed from capitalists to parasites on real business.

But, in fairness, if the Fed hadn't pumped the credit bubble with low interest rates, Fannie and Freddie hadn't helped by pumping it further by buying endless questionable loans, letting banks make more loans that they simply couldn't have otherwise, and had greedy home "buyers" not bought homes they couldn't afford, thinking they'd flip them anyway for a profit, those derivatives that Goldman traded would have been pretty good investments. Had the ratings agencies been accurate, many of the derivatives would not have been marketable anyway.

A perfect storm of clusterfuck. Plenty of blame to go around.

Re:Enough blame to go around for that

[Pinky's Brain]

The only thing which separates Fed employees from Wallstreet is a couple of years and a career change (either way).

Re:Enough blame to go around for that

[Cyberax]

The problem is, the responsibility of the Fed is very narrowly defined. It's basically responsible for the inflation and unemployment, and that's all (and really, it should stay this way).

The Fed is not responsible for auditing banks for predatory lending practice or regulating the derivatives. Had the Fed raised the rates, the USA (and probably the rest of the world) would have gone into a recession which would have stopped the predatory lending. But the moment the rates were lowered again, the predatory lending would have picked up the steam again.

Also, raising the rates during the period of low inflation is quite harmful in itself.

Re:Enough blame to go around for that

[cdrguru]

The real problem from what I have read is the bond rating agencies. Someone, say Goldman, would package a bunch of questionable home mortgages together to sell bonds in support of. All anyone knew about these mortgages was the average credit score of the borrowers - that was all the information they had. Moody's (and the other two whose names escape me now) would then "rate" these bonds.

Well, the idiotic thing was that Moody's would rate 80 percent of the bonds as AAA, or investment grade. The other 20% would be kicked back. So, Goldman would then recycle that 20% with another batch of mortgages and Moody's would then rate them in the same way: 80% as AAA the rest as junk. It became a well-known fact that 80% of anything could be expected to be rated AAA.

Other banks, notably Deutche Bank, would then sell insurance (aka CDS) on these AAA bonds. Because they were rated AAA, the insurance was dirt cheap because there is pretty much zero chance of AAA bonds defaulting. Some folks made out very well on this already but not all of the bonds have actually defaulted.

Now we come to the real problem. Pension funds, insurance companies and the like are required by law to only invest in AAA (investment grade) bonds. Anything else is a serious lapse of their fiduciary duty. So now we have in the system a whole lot of almost-certain-to-default AAA bonds that will likely bankrupt pension funds, insurance companies and the like that invested in them and are left unprotected.

This was not caused by anyone at the folks packaging the bonds or selling CDS on these bonds. It was caused by a complete lack of competence on the part of the bond rating agencies that clearly labelled junk bonds as AAA. This would be like the USDA stamping "US PRIME" on a sack of cow manure - when it gets to the restaurant exactly who's fault is it? The farmer? The restaurant? How about the agency that labeled it as a prime steak? Because everyone has focused on the fact that Goldman (and everyone else in the financial business) jumped on the bandwagon when the rating agencies stopped doing anything except rubber-stamping 80% of everything with AAA, nothing has been done about the bond rating agencies. Nothing at all. They are likely continuing to do business the same way.

So where are we today? Well, credit is a whole lot harder to get for a number of reasons. Packaging of any sort of financial instrument up and selling bonds based on it has pretty much ended - and with it much of the available credit for home buyers and businesses. Because at least half of the value of homes is dependent on people being willing to pay, home prices have dropped and nearly everyone that bought a home owes more than the home is worth. This has nothing to do with the buyers overextending themselves - plenty of people are still paying on these underwater mortgages because they can. It just makes no sense to do so. The government has decided not to foot the bill for this, and perhaps rightly so. It isn't their bill and nothing they did caused it. The regulating agencies like SEC had no control over bond ratings to begin with and Moody's and their ilk have always functioned on a level of trust that their ratings were true and accurate because without their being accurate pension funds would have literally nowhere to put their money. The lenders are somewhat reluctant to pick up the tab - on the tune of over two trillion dollars, and why should they? They did nothing wrong except in some cases take advantage of the fact that Moody's wasn't doing their job.

Likely as not, all the mortgages in the country will default. Why keep paying when there is zero hope of ever getting out from under? See, you will never have any meaningful equity in your home as things stand today if you bought it after around 2000. Maybe 1995. It has nothing to do with a "housing bubble" and everything to do with a collapse of faith that you can sell a house for what it was worth six months ago. With little or no credit in the system, peopl

Re:Enough blame to go around for that

[Darinbob]

People point to Fannie/Freddie, but they just followed along with what other banks were doing, they weren't the leaders or the instigators. Sure, they have some culpability but every time I hear someone point to them it sounds like someone trying to deflect blame from the real villains.

Well, Obama did hire Goldman's top lobbyist

[unassimilatible]

As his Treasury Secretary's chief of staff. How's that for influence? And GE's CEO is on his economic team.

Question for you: If money doesn't buy influence, why do companies donate to candidates? And don't say because they are true believers - most donate to both sides.

Re:Well, Obama did hire Goldman's top lobbyist

[PixelScuba]

I'm guessing there is some truth to that last comment... not so much "true believers" but they give money to people they think will support their cause/initiative. Of course Unions are going to give money to Democratic candidates because they are more likely to support collective bargaining agreements and the concept of unions. Just like business, the oil industry gives money to Alaskan senators and pro oil drilling people. I'm sure there are plenty of Unions who contribute to republicans and plenty of businesses support democrats... but lobbyists tend to send the money to the people who are most likely to support them. It's probably more a case of both; Lobbyists pay representatives who agree with their values... and representatives continue to take that money and vote that way to ensure they keep getting the money.

Re:This is stupid

[hoggoth]

If you steal code that allows your company to make huge profits by executing trades a microsecond faster than your competition in a field with only a handful of real players, you certainly have taken something away from your company.

How that should ethically compare to other crimes and "business practices" that should be crimes is a different matter. But you cannot argue that Goldman hasn't lost anything.

wrong

[roman_mir]

wrong, the $147 bbl crude is the aftermath of what actually causes recession - money printing.

That's right. Recessions are caused by mis-allocated resources, but governments cause recessions by printing money and propping up various businesses, inflating asset bubbles, all of which leads to mis-allocated resources.

Of-course in this case that USA is in now, the government also has destroyed the capital savings by all the printing, but also it grew too much, and through its growth, it has created too many rules/regulations/monopolies.

A working economy can afford a government, even if the government is grossly overweight, but an economy that is losing capital investment through inflation (money printing) and capital/jobs flight (regulations, income taxes, subsidies to preferred businesses), such an economy cannot afford to have government that taxes income and mis-allocates funds further through government departments and programs.

The $147 bbl crude is just a RESULT of the inflation, which is monetary expansion - printing. It's not just crude, it's all commodities and energy.

Stop the money printing, cut the government by an amount that would return it to pre-1913 levels, and you'll allow the economy to fix itself.

Re:wrong

[braeldiil]

Because the economy was perfect in the 1800s. It's not like the US had 23 recognized recessions in the 1800s, including one bigger than the great depression. Even a passing look at economic history shows that the current economic regime, including the Fed, leads to a significantly more stable economy, with shorter and less frequent downturns.

Re:wrong

[Pinky's Brain]

It led to a significantly more stable economy ... until Reagan fucked it up and trade imbalances and debt (the latter partially being created by the powers that be to make the former sustainable for a longer time) started going only one way. The last 30 years have been a stable drive, towards impending doom (for most of us, although obviously not for the neo-feudal overlords busy concentrating ownership in land/power/water).

Re:wrong

[roman_mir]

In 1800s, the growth of US economy and lack of most of forms of gov't control, caused US dollar to appreciate by a factor of 2. I don't think people complained too much due to the deflationary effects of them being able to buy MORE things with the SAME money as time progressed, not fewer things with the 'same' money as it is happening past 1913 (the Fed and growth of gov't.)

USA had recessions - yes. You are saying it as if it is a bad thing! Recessions are wonderful, they are great. Recessions allow restructuring, allow mis-allocated resources (capital/labor/land) to be released and reallocated in more productive ways.

In 1800s the recessions didn't turn into depressions because there was no gov't spending recessions into depressions, which is what happened in USA after 1929 (but not in 1920, when recession was mitigated and fixed by Harding, who cut gov't spending instead by 70%)

In 1800s, the USA gov't wasn't in business of bailing out failures, that's why recessions were more frequent in numbers, but they only affected the people whose money was actually on the line, and not EVERYBODY, as recessions do today, due to gov't propping up/stimulating/bailing out the failing enterprises.

Recessions must happen, they will always happen, they are a fix to a mis-allocated resource that needs to be released and reallocated productively. Recessions are good, they release the steam from a bubble. Recessions, if not spent into by gov't, do not turn into depressions, which are much worse, because during depression there is no reallocation of resources, so instead of creative destruction, instead of losing bad businesses so that credit is freed and good businesses can restart and rehire the people who lost their jobs, instead the bad businesses are propped up, the credit is all eaten by the gov't spending machine and there is no release, a bigger bubble is inflated, while jobs are lost and not returned.

In depressions, which are all caused by gov't intervention, the only entity that can hire is a gov't, so depressions make situation worse in more ways than one - they destroy real market and they create more useless jobs, not jobs that produce anything people actually need or want, but instead the so called jobs are something that gov't decides must be done, and of-course it's all always wrong.

Were 1800s perfect?
No.
Was economy more SOUND during 1800s than during 1900s and 2000s? Of-course. USA became the biggest producer, the biggest creditor, it paid out all debt, so it didn't have any, it produced quality things people wanted - actual wealth, it caused money to increase in value - a win for the working people, who could buy more with same.

The only people who are afraid of deflation and want inflation instead, are people with most debt, who do not stand a chance of being able to actually pay the debt out in real money - real production. That's government. It's the gov't that basically benefits from destruction of monetary system that it hijacks.

Your argument is stupid and invalid

[Cyberax]

Your argument is invalid, and that's why - other prices are not rising, except for some commodities.

Look, oil has risen from $37 at the bottom of the financial crisis. Now it's back to $100. That's increase of 2.5 times! Inflation generally requires ALL prices to come up, and this hasn't happened so far - prices for non-energy-intensive goods and services are stable (within a few percents). There's no real inflation in the USA.

And please notice the part: "In the USA". Because there's also no inflation in the Eurozone! And the exchange rate of euro vs. dollar has not changed much since the start of the crisis (not by 2.5 times as it would be implied by oil prices).

What happens in reality is peak oil. There's a strong demand for energy from China, India and Brazil which have economies growing fast (China is back at 10%-a-year growth!) and there's just not enough oil.

"Stop the money printing, cut the government by an amount that would return it to pre-1913 levels, and you'll allow the economy to fix itself."

Yeah, fix itself in the sense "emasculate". Right into the Greatest Depression. Fiat money is one of the greatest inventions of the 20-th century.

PS: stop whining about 'inflation destroying savings'. You ain't seeing no inflation. Read about 1000% a year inflation after the USSR collapse - that'll teach you what the REAL inflation is.

Re:Your argument is stupid and invalid

[roman_mir]

Your argument is invalid, and that's why - other prices are not rising, except for some commodities.

- Rising consumer prices will be coming to USA once it cannot DISPOSE of its US dollars and bonds to producer nations.

European countries that are in trouble are at least implementing austerity measures, however ECB is also printing and it is also pushing the Euro down.

Bank of Japan is also printing, especially now, though this is ridiculous, they should be cashing in their foreign holdings (US T-bills, dollars), because if they are scared to cash in the US debt now, when they really need to buy a lot of stuff, so they really need to appreciate their curerency, then it shows just how pathetic the entire concept of 'reserve currency' is, that you can't use it even in a real, serious, extreme emergency, that Japan is experiencing, because you are trying still to prop up the US consumer.

My argument is absolutely correct. You are not understanding that USA is printing dollars to buy consumer goods that are created in other countries, mostly in Asia. So the Asian economy must buy the commodities - raw materials, that are used to produce the goods, then the Asians send these goods to USA, which pays in printed cash, then Asia based companies take the printed cash and convert it into their local currency by bringing the cash to the banks, and the central bank (which they also have unfortunately), then prints their currency to buy the US dollars.

So you are not seeing the prices go up in USA, because those dollars end up collecting in foreign central banks, but you do see the commodity prices going up, because they are being bought with printed money. All of this causes the Asians to subsidize the USA consumer, by allowing the US prices to stay very low.

What Japan really ought to be doing (and probably will end up doing) is dumping the US debt. Today the US bond buyers are all central banks, including US Fed. The private parties are all selling. This is because all national banks operate under assumption that they can always print more currency, so they are not worried, but this process pushes prices of all currencies down, while forcing commodities up.

Now, in USA the end-consumer prices are not rising yet, but across the world they are rising. This entire situation with the Arab nations rebelling is based on the fact, that 80% of their income goes towards food and energy, so for them the prices are rising sharply, thus there are rebellions.

Also saying that there is no inflation in Eurozone is misleading. Prices are going up in Eurozone in real terms, even if they stay in check in nominal terms, because Euro is losing grounds, the austerity measures end up cutting plenty of social obligation support, so people basically end up with less money for the same basket of goods. In Europe there are price controls, for example in Germany the Italian pasta costs 1/3-1/5 as much as it costs in Italy due to price controls (all of this is terrible for the overall economy and never works in the long term), so you see Italians actually crossing the border, coming to Germany to buy their own food.

As to 'peak oil' - certainly, there is this, there are trouble all over the Middle East, but the oil is just one of all commodities, and all of them are rising.

Cotton, sugar, rice, wheat, pork, metals, coffee, etc.etc.etc., everything is near or at or much above their historic averages and in some cases historic highs.

Yeah, fix itself in the sense "emasculate". Right into the Greatest Depression. Fiat money is one of the greatest inventions of the 20-th century.

- Great Depression was caused by the gov't spending into a recession it also caused. The 1920 recession was worse than 1929 (and worse than 2008) in terms of total job losses, however Harding turned it around by cutting 70% of gov't spending. 1920 recession was caused by Fed printing since 1913.

The 1929 recession was caused by Fed propping up Bri

Re:Your argument is stupid and invalid

[roman_mir]

Fiat money is one of the greatest inventions of the 20-th century.

- just wanted to say something about this.

Fiat - I do not consider it to be money, not US dollars, not Euro. Sure, in the stores we exchange these for goods, but we shouldn't be holding these pieces of paper that become more and more worthless with every new one that is printed by the so called 'independent' central bank.

If fiat is any good, it's the kind that Hong Kong has - competing currencies, issued by different banks with different reserves behind them (and there is an official competing currency of the city itself.) At least there is competition between those currencies.

The way the fiat is structured - there is no way anybody in his/her sound mind and judgment should want to hold it. Real money is what real money has always been - gold. The word for money came from the word for gold in most cultures. Gold cannot be printed at a whim of a politician, it holds value, it's an easy medium of exchange, it's indestructible, it's easy to reshape, it's everything that real money needs to be.

The only sound type of paper money is the kind that is simply a gold equivalent. If the currency has no reserve behind it, but it has a printing press - that's not money, it's not worth holding, it's not worth saving, it's a losing proposition, this has been shown over and over, by all the inflations, hyper-inflations, if you don't see it, you are blind.

Even against other currencies, like Canadian dollar or Swiss Frank, etc., US dollar lost 50% of value easy over the last 15 years. Against gold it lost much more than that, that's because all currencies are being debased.

Anybody relying on fiat for savings is a fool.

Re:Your argument is stupid and invalid

[Cyberax]

"- Rising consumer prices will be coming to USA once it cannot DISPOSE of its US dollars and bonds to producer nations"

Wrong! Bond prices are low and that means the USA can't print dollars fast enough for other people to buy. So the rest of your argument folds as house made of cards.

"- Great Depression was caused by the gov't spending into a recession it also caused. The 1920 recession was worse than 1929 (and worse than 2008) in terms of total job losses, however Harding turned it around by cutting 70% of gov't spending. 1920 recession was caused by Fed printing since 1913."

Wrong! Read history, the Great Depression was preceded by tight fiscal policy.

You are WRONG WRONG WRONG WRONG. Thousands times wrong. And yet the world heeds idiots like you because your words just SOUND right even though they have no meaning. One moment you predict inflation and the other moment you predict high bond prices. And when neither prediction comes true you start twisting the meaning of the words.

Your kind of goldbuggers has so far been consistently wrong in predicting EVERYTHING in this crisis. Absolutely fucking everything: inflation, rising bond prices, national defaults, etc. Your every fucking prediction was untrue.

And Keynesian predictions were always right on money.

Want to prove me wrong? Show me a prediction of goldbuggy austerians which came true AND was different from prediction of Keynesian models. I dare you.

Re:Your argument is stupid and invalid

[Cyberax]

"The only sound type of paper money is the kind that is simply a gold equivalent. If the currency has no reserve behind it, but it has a printing press - that's not money, it's not worth holding, it's not worth saving, it's a losing proposition, this has been shown over and over, by all the inflations, hyper-inflations, if you don't see it, you are blind."

No. You fucking goldbuggers don't know how economy works. Currency is not a way to replace gold, it's just an unforgeable token for certain amount wealth to be used in exchanges.

And the fact that we can change the amount of money in circulation with relative ease and use it to influence the economy is one of the greatest insights. And you want to throw it out for nothing.

Don't believe me? That's simple - prove me wrong. Show me a recent (50-60 years) crisis where a 'gold standard' of some kind (like pegging currency to dollar) and austerity has helped to make a sustainable recovery. I know of exactly ONE case, and in very unusual situation.

Re:Your argument is stupid and invalid

[roman_mir]

Wrong! Bond prices are low and that means the USA can't print dollars fast enough for other people to buy. So the rest of your argument folds as house made of cards.

- Bond prices are falling and thus the buyers are dumping, and the only buyers are national banks.

Bond prices are falling and thus the interest rates are rising, it's a seesaw, as bond prices fall, interest rise. If the bond issuer does not raise the interest, the bond price hits bottom.

Now, however, the Fed is the buyer of bonds.
So Fed is printing the dollars that it is buying the bonds with. So you have no argument at all - it's not that people want dollars, it's that they are not willing to hold the US bonds.

You completely misunderstand the bond market, totally.

Wrong! Read history, the Great Depression was preceded by tight fiscal policy.

- as if it's me, who needs to 'read history'.

The Fed pumped the economy full of greenback even just between 1927 and 28 to keep inflating the construction and stock market booms.

In 1928 they stopped printing, that's true. But the damage was done, the inflated valuations and the stimulus did its dirty work and the sudden stop of the printing presses in 1928 sent a shock through the inflated system - all of a sudden the gov't stopped pumping the money into the bubble.

OK, bubble burst. Instead of letting it work itself out by reducing gov't spending, the gov't didn't stop spending, started mis-allocating ever more resources causing the Great Depression, (which in retrospect is not going to look so 'Great', when it will be compared to the depression that is still ahead of USA due to the next bubble bursting - the US bond bubble.)

You are WRONG WRONG WRONG WRONG. Thousands times wrong.

- you should put a loop around it, like so:

for(;;){ print your garbage here} or you can use while(1) or while(true), but it won't change a single thing.

You will still not understand anything that is being said and you will still be on the losing side, because you do not understand economics.

And yet the world heeds idiots like you because your words just SOUND right even though they have no meaning. One moment you predict inflation and the other moment you predict high bond prices. And when neither prediction comes true you start twisting the meaning of the words.

- predicting inflation?

Inflation is here, open up your dumb eyes. Inflation is all around. Inflation is expansion of money supply. Inflation is the cause of rising prices, but inflation in itself is NOT rising prices.

Prices can rise for various reasons, but inflation causes a class of assets to gain value RELATIVE to the value of the worthless currency.

I am NOT predicting high bond prices, you dumb shit, dumb ass, idiot. I am predicting the bubble, that is US bond prices are in NOW bursting.

I am predicting CRASH, you fucking nimrod, crash of bond prices , dumb shit. Crash of bond prices, get it through you stupid ass thick skull.

Crash of bond prices sends the INTEREST RATES UP.

Long term interest rates up.

Bonds crash - interest rates go up.

Interest rates will go up because the prices for bonds will crash.

Fucking idiot.

Your kind of goldbuggers has so far been consistently wrong in predicting EVERYTHING in this crisis. Absolutely fucking everything: inflation, rising bond prices, national defaults, etc. Your every fucking prediction was untrue.

- hey, fucking retard, look at my sig.

The video is from 2006. The guy is explaining the incoming 2008 crash in vivid details. He made money on shorting the mortgage market. So you are a fucking retard who is also ignorant, and with my SIGNATURE I refute your stupid ass claim that you sucked out of your asshole in that idiotic, retarded paragraph, moron.

And Keynesian predictions were always

Re:Your argument is stupid and invalid

[Cyberax]

Oh no, you don't.

"The video is from 2006. The guy is explaining the incoming 2008 crash in vivid details. He made money on shorting the mortgage market. So you are a fucking retard who is also ignorant, and with my SIGNATURE I refute your stupid ass claim that you sucked out of your asshole in that idiotic, retarded paragraph, moron."

You still don't get it? The scenario of the crash was predicted by Paul Krugman back in 2000-s and a dozen of other economists. It has NOTHING to do with gold standard or pegged currency. Absolutely NOTHING at all - bubbles can happen just fine in the gold-based economy, in fact they are AIDED by it because the limited supply of currency forces firms to use various credit mechanisms.

So you still have NO predictions at all. Zero. Zilch. None.

You're back at redefining what the "inflation" means. For morons - it means an increase of prices which is nowhere to be seen. Indeed, it has actually fallen http://www.calculatedriskblog.com/2010/02/core-inflation-declines-for-first-time.html which had been PREDICTED by the Keynesian economists.

I think, next time you'll redefine 'sunrise' as 'inflation'.

And here's what happens when people listen to idiots like you: http://en.wikipedia.org/wiki/File:Ee_real_gdp_growth.svg - 20% of the GDP had been wiped by the austerity measures forced by the de-facto 'gold standard' (pegging the local currency to the euro).

Oh, or maybe an example of Britain should help you? http://www.usatoday.com/money/world/2011-01-25-britain-economy_N.htm - austerity measures kick in and economy 'surpisingly' stalls. Why would that happen when government slashes spending and pledges austerity?

Do you understand that you have exactly ZERO

Re:Your argument is stupid and invalid

[Cyberax]

"You are a troll, now I get it. You are a troll. Keynesians are what? They couldn't even predict what Austrian economics predicted correctly would have happened once the WWII ended - a boom. They thought that all that cheap labor force coming back from war and gov't stopping the war spending would send economy back into a depression."

And you're lying. Keynes correctly predicted a recession after the war end and it HAS happened (look it up - a recession of 1946 and 1947). It was not deep because the government's brains had not yet been eaten by the goldbuggers. Spare workforce was put into building the roads and inertia of WWII helped to boost consumption.

So I'm still waiting for a valid prediction different from Keynesian predictions from you. Can you find it? Of course, not.

Re:Your argument is stupid and invalid

[roman_mir]

Weimar Republic of Germany.

July 1922 670 reichsmarks = 1 US dollar
August 1922 2,000 reichsmarks = 1 US dollar
October 1922 45,000 reichsmarks = 1 US dollar
November 1922 10,000 reichsmarks = 1 US dollar
30 December 1922 500,000 reichsmarks = 1 US dollar
May 4, 1923 RM 40,000 = 1 US dollar
June 1, 1923 RM 70,000 =1 US dollar
June 30, 1923 RM 150,000 = 1 US dollar
August 1-August 7, 1923 RM 3,500,000 = 1 US Dollar
August 15, 1923 RM 4,000,000 = 1 US Dollar
September 1, 1923 RM 10,000,000 = 1 US Dollar
September 30, 1923 RM 60,000,000 = 1 US Dollar

November 15, 1923 Rentenmark issued; pegged to the Gold Standard; Rentenmark 4.2 = 1 US dollar; at this time:
Old Reichsmark 4,200,000,000 = 1 US dollar

-----------

Hyper inflation situations that resulted in discarding currency and pegging to reserve of some sort for a century and a half:

Argentina 1975-91
Zimbabwe 1980 - 2009
Angola 1991-95
Austria 1914-23
Belarus 1994-2002
Bolivia 1984-86
Bosnia and Herzegovina 1992-93
Brazil 1986-94
Bulgaria 1996-97
China 1948-49
Free City of Danzig 1923
Georgia 1993-95
Greece 1942-44
Hungary 1922-24
and again Hungary 1945-46
Israel 1970-79
Krajina 1992-93
Mexico - debt default in 83, and hyper inflation to 1993
Nicaragua 1987-90
Peru 1988-90
Philippines 1942-44
Poland 1921-24
Romania 1990-98
Russia 1921-22
again Russia 1992-98
Taiwan 1947-49
Ukraine 1993-96
United fucking States of America: 1861-65
Yugoslavia 1989-94
Zaire (Congo) 1989-96

---

No. You fucking goldbuggers don't know how economy works. Currency is not a way to replace gold, it's just an unforgeable token for certain amount wealth to be used in exchanges.

- yet, you idiot, fail to recognize the simple fact. Gold is money, and paper is not.

Thus paper is printed out of existence, proven with above examples (and I am not even counting North Korea and Cuba and such, they are retarded in this sense).

Gold on the other hand keeps value.

So, when you say this:

And the fact that we can change the amount of money in circulation with relative ease and use it to influence the economy is one of the greatest insights. And you want to throw it out for nothing.

- I ALREADY THREW IT OUT.

Yeah, for myself I threw it out. Ask me what I hold for money, for the last decade, dumb ass, ask me. Paper - medium of short term exchange, because stores do not deal in gold. Gold - money.

Saying I should 'believe you'. I believe my eyes when I look around and see dumb asses losing their purchasing power, day after day, after day. Dumb ass.

Re:Your argument is stupid and invalid

[roman_mir]

I have one word for you, dumb ass - gold.

While you are sitting there, with a thumb up your ass, losing your purchasing power by holding fiat currencies every day of the week, real money - gold keeps the value.

I have nothing to prove to you, real money proves it. To you, everything went up in price. In gold, everything stayed near the same in price or even fell.

Re:Your argument is stupid and invalid

[Cyberax]

Yeah, sure.

But do you know what would happen if everyone started to use gold instead of fiat money? The answer: you wouldn't have any gold because you won't be able to save it from your starvation wages. What is good for an individual is not necessarily good for the economy as a whole.

Re:This is stupid

[bunratty]

If I were able to make an exact duplicate of an object, I would be able to get an apple from your apple while allowing you to keep your apple. I suppose I could use the same trick on rare coins and make as many copies as I want without taking your rare coin. However, flooding the market with many copies of a rare coin would dilute the value of each individual coin, causing your coin to lose value even though I have not taken it from you. In the same way, information is valuable if not many people know the information. That's why trade secrets exist.

Honor among thieves?

[xkr]

So, as I understand it, a programmer was sentenced to 97 years in prison for stealing the algorithm that Goldman Sachs used to steal money from other people.

The single most critical element of any market, including a stock market, is that it is, “fair.” That means, the same price and the same terms for everybody. In fact, these are the same words used by the NY stock exchange and NASDAQ.

But how is using super computers for millisecond arbitrage “equal terms for everybody?”

How do you think that hundreds of top employees at Goldman can take home over $1 million a year in compensation? With overtime?

Re:Honor among thieves?

[BeanThere]

Millisecond-arbitrage is the least of Goldman's 'evils'. Robbing taxpayers via "stimulus", dodgy bail-outs, and crony corruption at high political levels seem far worse ... and that's where they get the cash for the bonuses.

Just using super-computers for millisecond arbitrage doesn't seem too egregious ---- ANYONE can benefit from that, if it's profitable, by just investing their money with Goldman. And if you invest money with an investment firm, wouldn't you want them to manage the money in a way that gives you better returns? Or would you say "I would like lower returns thanks".

But they didn't get so rich from these trading systems, in fact if you recall they LOST a lot of money from their trading arms. That's why they needed the bailouts!

The same old song.

[westlake]

The punishment does not fit the crime. Period.
This should be a *civil* matter. Garnish his wages, make him pay for restitution and loss of revenues, but this should not be a criminal offense.

It always comes as a surprise to some folks when a white collar criminal - particularly one of their own class or profession - is caged.

Which is really the whole point of the business:

It teaches the lesson that no one is above the law. That no one is judgement proof.

Re:The same old song.

[omfgnosis]

That's great. So when are the Goldman execs going to the gallows where they belong? No one is above the law, my foot.

True, which is why Goldman gave more to Obama

[unassimilatible]

But hedged their bets by giving some to McCain, who ironically was leading in the polls until Lehman failed. Maybe these Goldman analysts are pretty damn smart after all. "Hey, we banks are a house of cards about to implode, so let's go with the guy who won't get blamed as 'Bush's third term.'" But just in case, we'll throw McCain some scraps as well.

Goldman Sachs: Recipients
2008 Cycle

Senate Obama, Barack (D-IL) $995,745
Senate Clinton, Hillary (D-NY) $401,950
Delegate Romney, Mitt (R) $235,275
Senate McCain, John (R-AZ) $234,695
House Himes, Jim (D-CT) $150,498
Senate Dodd, Chris (D-CT) $112,500 (co-architect of "Dodd-Frank" watered-down financial regulation bill)

Re:True, which is why Goldman gave more to Obama

[wisty]

And that's just the presidential candidates. Giving money to a presidential campaign has sweet-FA ROI. They don't need the money (their PR flacks will work for the love and fame, and the ads they buy will be nothing compared to the more independent media circus - look at how much free advertising Obama got just by being, well, Obama); and they are under enormous scrutiny. If the President pardons the head of GS, it kinda smells a bit funny.

A grunt congressman has virtually no free help, no free coverage, and bugger-all scrutiny. But put a bunch of them together, and they have more influence than the president. If a motion to investigate the financial sector is watered down in back-room negotiations, the average voter won't be any wiser. The president doesn't have to veto motions that never reach his desk.

Madoff was also harshly punished

[AlejoHausner]

I think what we're seeing here is that, if you steal from very rich and powerful people (like the directors of GS), you will be severely punished. That's why Bernie Madoff is in prison for the rest of his life: he too stole primarily from rich people.

Of course, if you steal from the less-well-connected, nothing much will happen to you. Thus the directors of Goldman, AIG, Citi, etc who bet their shareholders' equity, and also risked the pensions of many workers, did not go to jail. Instead, they got themselves installed in the Treasury department, and got their cronies even more money from taxpayers!

As Matt Taibbi said "Why isn't Wall Street in jail?" : http://www.democracynow.org/blog/2011/2/22/matt_taibbi_why_isnt_wall_street_in_jail

Then again, as Billie Holiday sang, "Them that's got shall get, them that's not shall lose. So the bible says, and it still is news!"

Re:This is stupid

[shentino]

You're not stealing the code, what you're stealing is the exclusivity of its use.

Re:This is stupid

[Lord Kano]

I suppose I could use the same trick on rare coins and make as many copies as I want without taking your rare coin. However, flooding the market with many copies of a rare coin would dilute the value of each individual coin, causing your coin to lose value even though I have not taken it from you.

Monetary value isn't an inherent thing. The value of SCO's operating system fell through the floor when linux got popular, that doesn't mean that anyone did anything wrong. If you could produce exact copies of that rare coin and were honest with the people you were selling it to, you wouldn't have done anything wrong.

I'm not suggesting that this programmer didn't do anything wrong, but I'm suggesting that calling it stealing may not be accurate.

LK

Re:Oh The Irony

[BeanThere]

How is HFT a form of theft? And if HFT gives better returns the 'common trader' can benefit by just investing their money at firms that do HFT.

Goldman are indeed a bunch of crooks, but not through HFT ... look at tax-funded stimulus, bailouts, Fed arrangements etc. - THAT is theft.

I think my post was very clear

[unassimilatible]

That there were plenty of villains. But a government-created enterprise, which wouldn't have existed in an actual free-market, buying up loans, allowing banks to make more loans (which they otherwise couldn't have under capital requirements), clearly added to the problem. Of course the Countrywides and American Home Mortgages were villains as well. But why were, uh, are government-created, taxpayer-backed monsters adding to the problem? Countrywide and AHM are long gone, but Freddie and Fannie are still buying the damned loans!

Why on earth would I want to deflect blame? I wouldn't want to hold stock in those zombie, parasitic investment banks if you gave it to me for free. But the truth is the truth: Too much government intervention was the problem, not a lack of it.

Re:Oh The Irony

[bigbird]

HFT increases liquidity and narrows the bid/ask spread, which helps the common trader. But it can also be used to determine the maximum price that common traders are willing to pay, which is cheating.

Re:Oh The Irony

[bigbird]

By issuing rapid tiny orders increasing in value, traders using HFT can quickly determine the maximum price that common traders are willing to pay. Knowing the buyer's limit price gives a seller an unfair advantage.

Re:This is stupid

[omfgnosis]

Yeah, prison is swell. Sure. Which is why you're jumping at the opportunity to get yourself placed in the program.

Right?

All I got from that

[DarthVain]

is that I now want McDonald's for lunch, thanks!

Re:Oh The Irony

[BeanThere]

Not all advantages are automatically unfair, I'd say this one is fair.

- HFT trading helps to attain market equilibrium faster (i.e. new "information" is fed into market prices faster), which means price signals will be more accurate at any given time for ALL traders. This is a benefit to EVERY investor, except those who were wishing it was the old days and they could still take advantage of market disequilibrium at minute/hour/day scale - which by your definition, was then also an "unfair advantage" in and of itself, just on a different scale.

- HFT is available to every single investor by just using one of the many firms that utilize the technique. This means EVERYONE's money, on average, is safer and everyone gets slightly better returns.

The only people who can really complain, are those who used to take advantage of market disequilibrium on older slower technologies --- which was exactly the same "bad" practice, just slower (if it's "bad" at sub-second levels, the exact same thing at minute or hour levels was surely also "bad"? I don't think it's "bad" though.).

I run a business, but when my competition figures out how to do something better/faster, I don't whine that they have an "unfair advantage", I up my game or adapt my business model, I don't whine about "unfair advantages" and claim that doing what I do better and more efficiently is a form of "theft" from me based on my sales drying up. Boo hoo to the slow-traders, but if your trading product is the equivalent of buggy whips, it's time to adapt or move on.

It's hardly just Obama

[Benfea]

Wall Street has their grubby mitts all over our government, and has for decades leading up to the Obama administration. The higher-ups at the various regulatory agencies won't press charges because they want to get big juicy jobs when they leave government, so the only ones who actually want to pursue real criminal cases are the folks at the bottom of the food chain, who get overruled by the people who want those juicy jobs.

Our government no longer exists to serve the needs of the people, it exists to serve the needs of Wall Street, multinational corporations, and the extremely rich. The most maddening thing is that conservatives and libertarians work tirelessly to make sure the aristocracy has ever more influence over our government (e.g. the recent Citizen's United ruling made possible by decades of conservative/libertarian activism).

Normal people look at the undue influence the rich and corporations have over our government and think "This is unfair and unjust. How can we transfer that power back to the people where it belongs?" Conservatives and libertarians look at this same set of circumstances and conclude "Buncha dirty no-good peasants. How can we transfer even more power to our lords and ladies?" For this, our "liberal media" labels them as populists and liberals the elitists.