Hacker News Reader

Comment by crazyideaman | Hacker News Reader

Last year Goldman Sachs made 18 billion dollars and were profitable 236/251 days. 41 of those days they made more than 100 million dollars. Institutional traders like this routinely manipulate prices to temporarily raise/lower prices on low volume to take out stop losses and so on. News is routinely put out at the top and bottom of markets that happens to provide liquidity for these institutions. Yet, no investigations...

View on HN

Goldman sachs employ 30,000 people across dozens of separate business units and have a balance sheet of nearly a trillion dollars. And a vast chunk of their income is net interest income and advisory fees. It's in no way comparable.

53% of their revenue is from sales and trading. I'm only saying is that if Goldman Sachs had done this short there would not have been any outrage, calls for investigation and so on. Institutions routinely pull off massive profits from retail traders. As soon as one day it reverses then there is all this faux outrage. lol

That's not true at all. the big institutions are routinely investigated for this kind of stuff. Barclays and DB for example have had huge fines for various issues in the fx and interest rate markets.

And besides, the majority (if not all, given Volcker restrictions) of sales and trading is from market making, rather than risk taking / directional punts on the markets.

They are investigated for shorting a market? I find that unlikely.

I'm not trying to pick on Goldman. They were just an example of a large institution that makes huge amounts of money by doing exactly what these guys did. Betting against the market is absolutely routine behavior.

As for Goldman, do you really think they are clearing 100 million a day by being market neutral and just collecting premiums? When they buy/sell it absolutely moves the markets just on the sheer volume.

They're not being investigated for shorting the market, which as you say is routine. They're being investigated for possible market manipulation, given they were one of the biggest beneficiaries of an extreme price event in the oil market.

“My father is no different than any powerful man, any man with power, like a president or senator.”

“Do you know how naive you sound, Michael? Presidents and senators don't have men killed.”

“Oh. Who's being naive, Kay?”

source? yeah I know its fashionable to say that wall street keeps ripping people off, but banks are so crippled by regulations most hedge funds and small trading firms run circles around them. Big banks only make money from clipping tiny commissions on billions of transactions like a whale eating krill.

Looks like the report I was looking at was a bit dated and they don't provide the same chart in the 2019 annual report. Here is an older one though on page 92.

https://www.goldmansachs.com/s/2012annual/assets/downloads/G...

I was just contrasting that large institutions can short the market and easily move price due to the volume they trade at without being investigated but there is outrage when handful of random guys do and the price collapses.

Reply on news.ycombinator.com