Goldman Sachs: Thank You Mr. President

Flopping Aces ^ | 07-14-09 | James Raider

[Starman417]

Dear Mr. President,

This should prove a challenging week on the PR front for us at Goldman Sachs. There are a few situations surfacing for which appropriate clarification will provide you sufficient context in the event that the inevitable questions arise. We also have a couple of suggestions.

Regarding this nastiness of the past week, please do not be too concerned about all this talk surrounding our super high-speed fully automated transaction processors. Also please understand that they are our future. Admittedly, we are enamored with the technological prowess we have acquired. Don’t believe those jealous rumors coming from begrudging low-level corners of the financial community, whining about our “edge.” We run a clean and very efficient business that can withstand any scrutiny. Our company represents about one quarter of all program trading on the NYSE. We realize you are not familiar with our business or what we do, but just know that the billions in valuations that represent our daily trades require extremely fast, exceptionally complex algorithms running on the largest, and fastest processors money can buy, with as close proximity to the NYSE as is physically possible. This is part of our multifaceted long-term strategic plan.

This business is not for the feint of heart. We take risks, but attempt to minimize our exposure. That’s all. Don’t listen to noises suggesting that we make money on trades even when we buy and sell at the same price levels to ourselves. Everyone in the business is familiar with our fee structures. What’s a half penny a trade anyway? Nothing. There is no magic. As for front running orders with our faster than light system on stocks or options, well, that is just not the way we work, and it’s not even legal, is it? We’ll get back to you on that. In these difficult times people can become very excited, and reactive to unwarranted rumors. Pay no attention to hearsay coming from bottom feeders. … Front running indeed.

Thank the guys at Justice and the FBI for being so quick to respond, and picking up that frustrated dancer, Sergey Aleynikov. Stealing secret algorithms should be punishable by incarceration for life. Oh, could you check into what’s wrong with that judge who let him out on bail? Bail should be revoked. This is a matter of grave concern, and is of National import. As we said, someone could get a hold of this program and use it to manipulate the markets. OK, not “manipulate,” so much as harm the markets. We would never manipulate of course, but someone else certainly could. This is no superficial matter. This breach and the whole episode must be snuffed out before it develops any legs. This is no time to demonstrate any sign of weakness or lethargy in addressing such a heinous affront to the intellectual property at the deepest core of our business, and in some ways, the characterization of its essence.

[palmer]

Speaking of bonuses, you will be hearing some announcements about our historically large earnings for fiscal 2009, which means it is once again bonus time. The numbers might sound really big, really, really big, but keep in mind that we have top-notch employees we aim to retain in branches spread around

It's natural that extending the credit bubble should lead to more big bonuses. After all, credit is the lubricant for our economy and credit is just not the same without GS dispensing it.