Goldman Sachs has been caught at another racket in the stock market: front-running trades. What a clever gambit, done with the help of the markets themselves – the Nasdaq in particular – in which information on trades is held back a fraction of a second from public view, while the data is shoveled to the computers of privileged subscribers who can execute zillions of programmed micro-trades before the rest of the herd makes a move. This allows them to vacuum up hundreds of millions of dollars by doing absolutely nothing of value.
This is not conspiracy theory or speculation. Rather, Kunstler is describing precisely what is allowed to go on now, with the full knowledge and complicity of government and regulatory entities.
I’m not a lawyer, but I’ve got to think that the actions at the Nasdaq end – shoveling the data to the privileged subscribers a fraction of a second early – is patently illegal in the first place, since the whole purpose of an exchange is to create a fair trading space.
As we turn the corner toward autumn, President Obama looks increasingly like a dupe, a tool, or a co-conspirator of Goldman Sachs. If he doesn’t instruct the Justice Department to commence investigations of the company, and if he doesn’t dissociate himself from their alumni hanging around the White House, the Treasury Department, and elsewhere in the government, he’s going to become the object of an awful public wrath.
Populist anger is growing fast in the country, and for good reason. People are aware of what the banksters are doing to them, to the country, and to the economy. And may not take it much longer. Obama needs to have a Teddy Roosevelt moment and dismantle Goldman Sachs like Roosevelt did to Standard Oil or political unrest could destabilize the country in ways that won’t be pretty.
Congress has subpoenaed Goldman and others for hearings. As Kunstler points out, there’s already enough noise being made on this that Congress may be forced to do something. Goldman has few friends left and even WSJ, NYT, and Bloomberg have been running pointed articles about what Goldman is doing.
This would appear to be a perfect issue for the far left to be in the streets about, as happened with the Iraq war protests. But sadly, that’s not to be. Rather that participating in what might well turn out to be a fine and well-deserved roasting of a capitalist pig or two, the far left appears preoccupied with whether Ahmadinejad should be supported, as witness the current brouhaha over Monthly Review’s apologia for the Iranian government. They couldn’t be less effective if their ranks were filled with government agents (but of course that only happens in Orwell novels, right?). What a waste.
The attack on Goldman and High Frequency Trading has come out of financial blogs, like Zero Hedge, that are mostly libertarian. The populist fire they started has spread to the mainstream and includes the right-wing as well as moderates and progressives. In fact, the right-wing and libertarians may be the most angry as they see this as a betrayal of the free market principles that they thought capitalism was supposed to be grounded in.
We need a financial system that is genuinely transparent. But that’s not what we have now.
Readers of this blog know I’m allergic to conspiracy theories. But surveying the scene out there, it is hard to not conclude that Goldman Sachs has become the “front-runner” of a criminal syndicate defrauding US taxpayers.