Goldman Program Packet Sniffing?

http://www.bloomberg.com/apps/news?pid=20601087&sid=alXddMij8xxQ

http://zerohedge.blogspot.com/2009/07/is-case-of-quant-trading-industrial.html

http://www.dailykos.com/storyonly/2009/7/7/750786/-Incredibly-Shrinking-Liquidity-as-Goldman-Flushed-Quant-Trading

http://blogs.reuters.com/commentaries/2009/07/05/a-goldman-trading-scandal/
Did someone try to steal Goldman Sachs' secret sauce?

While most in the US were celebrating the 4th of July, a Russian immigrant living in New Jersey was being held on federal charges of stealing top-secret computer trading codes from a major New York-based financial institution—that sources say is none other than Goldman Sachs.

The allegations, if true, are big news because the codes the accused man, Sergey Aleynikov, tried to steal is the secret code to unlocking Goldman's automated stocks and commodities trading businesses. Federal authorities allege the computer codes and related-trading files that Aleynikov uploaded to a German-based website help this major "financial institution" generate millions of dollars in profits each year.

Google Search: http://www.google.com/search?q=goldman+sachs+packet+sniffing&sourceid=ie7&rls=com.microsoft:en-us:IE-SearchBox&ie=&oe= Goldman Sachs Packet Sniffing

Morgan Stanley hires Citi’s Sopp for FX trading

Singapore: Morgan Stanley has hired Stuart Sopp from Citigroup as its Asia head of G-10 spot currency and forward trading, sources close to the matter said.

Sopp, who was previously Citigroup's Singapore-based head of G-10 spot FX trading, would move to Hong Kong to start his new job at Morgan Stanley, sources said.

The hiring is a sign of Morgan Stanley's focus on forex and flow business, one of the sources said, as investor appetite grows for plain vanilla products after a market meltdown last year saw demand wane for riskier derivatives and hedge funds.

Bank of America, Credit Suisse and Morgan Stanley said last month they would join a group of banks supporting a joint venture between foreign exchange settlement provider CLS Group and interdealer broker ICAP plc to reduce risks in processing.

Morgan Stanley is looking to hire sales and trading professionals in all major trading centres across the world, the source said.

Morgan Stanley, which became a bank holding company last year, repaid $10 billion from the government's troubled asset relief program in the last quarter when it posted a third straight quarterly loss.

For Citi, Sopp's departure comes less than a year after he joined the US bank from Deutsche Bank.

A Citigroup spokesman confirmed Sopp's departure. Morgan Stanley declined to comment on the move.

Citi, which vowed to remain focused on Asia, has struggled to retain high-profile executives in the past few months. The bank, one of the worst hit by the financial crisis, has taken $45 billion in bailouts from the US government.

Royal Bank of Scotland (RBS), which was bailed out by the British government, lost Ivan Ferraroni, its head of forex sales and trading in Tokyo, to Barclays, according to Barclays on Tuesday.

It comes a few months after RBS lost David Dredge, deputy global head of local markets at RBS and a key risk trader, to Artradis Fund Management, Singapore's largest hedge fund manager.

http://www.livemint.com/2009/07/28135425/Morgan-Stanley-hires-Citi821.html?h=B

EUR/USD Technical Analysis - Short Term Top? Selling Opportunity at Open?

EURUSDanalysis8.1.2009, originally uploaded by eliteeservices.

EUR/USD Technical Analysis August 1st 2009 – EUR/USD short term top - selling opportunity at market open?
EUR/USD could retrace to 1.4190 based on the following factors:
• RSI on hourly above 70
• Intrepidus FX Sell Signal
• EUR/USD is up based on technical break of the hourly channel (see chart 1 below)
• Profit taking on EUR/USD longs
• 1.43 is an established daily high since may (see chart 2)
• Same logic applies on USD/CHF Long
What could cause it to go higher?
• A continued selling off of the USD

Daily EUR/USD with established high near 1.4335

* EUR/USD back and forth price action was not impressive until the better than expected US GDP release was met by a negative equity reaction which sent EUR under 1.41. After digesting the data, which included benchmark revisions, equities took back losses and EUR bounced. The advance accelerated into the 16:00bst month end fix as EUR reached 1.4180. When USD bids nowhere to be found in thin post fixing activity EUR/USD extended to 1.4279 before it ran out of steam.
This is not a recommendation to sell EUR/USD. It means that when the market opens if EUR/USD fails to break through the high, selling could continue to fibo levels and hourly trendline. If EUR/USD breaks the 1.4279 high, expect it to go much higher initially.
There is a lot of fundamental pressure short USD at the moment, so if this is not a short term top, expect the EUR to explode.

Automated Trader updates 8.1.2009

The Q3 issue of Automated Trader is out now, and there's plenty of food for thought.....but first, here's a roundup of this week's news....

Bank of America Merrill Lynch announced the addition of four new electronic options algos to their trading platform, whilst Charles River released news that their Investment Management System is fully integrated with UBS Perimeter algo allowing clients to trade US markets outside of regular hours.

Equinix continued their string of expansion announcements from last week with news that they will open a second data centre in Singapore,
Essex Radez announced the expansion of its feed offering at Equinix NY-4,  AboveNet released plans to expand their dedicated London fibre network,  and Savvis announced that they will host Credit Suisse's Crossfinder trading platform.

CBSX released news that they will use SunGard Assent Liquidity Services for execution and clearing, Baikal continue their use of LSE group firm UnaVista for matching, reconcilliation and data integration, and Standard Chartered have been selected by the Singapore Mercantile Exchange as clearing and settlement bank.

In other news, Senator Charles Schumer fired a warning shot across the bows of the high frequency trading community and threatened legislation with a caution to the SEC to curb traders' flash orders.

On the menu in the Q3 issue of Automated Trader.....

You want alpha with that? And do you want your order well done or scrambled?  We serve up the latest in adaptive routing technology in this issue's cover story.  And don't miss John Howard's interview with the team behind the Danix Master Fund  who've created a healthy low volatility meal consisting of a discretionary main course with a systematic side order.

You wait all year for a round table, and then two come along at once. We've been at the heart of the industry debate on a whole variety of issues this month. First, there's our roundtable debate on latency, in which key industry figures debate not only strategies for managing (and solutions for reducing) the L-challenge, but also the prospect of a latency standard. You wouldn't think you could standardise speed, would you?

If your answer to that question is "No", maybe you should take a look to see what our panel of a dozen industry experts are thinking. Our latency debate is big - more than we could fit into a single issue of the magazine - so we've continued it online, and given you the chance to have your say.  Go to our online debate to find out the panelists views and to add your own - the debate is gathering momentum even as you read this, and if you're not part of it – well, you're not part of it. 

Then there's the big discussion about European equities trading, MiFID and the role of the MTFs. The table wasn't quite round, but the debate – concentration, cost, complexity, competition – was full and frank. That's what you get when you put two exchanges, four MTFs and one exchange/MTF into a small room and invite them to agree on how best to execute in Europe.  Wondering how it's all going to play out? So were we as we buffed up the crystal ball and took a look at where forecasting  might lead us on page 51.  Has the gap between forecasts and reality widened in recent years? And if so, should we adjust our use of forecasts?

David Clayden and our US photographer, Marisa Calin, are on the loose at SIFMA in New York, while Peter Green, CEO of The Kyte Group, discusses an evolution for his firm that might just turn into an evolution for the industry. Are you a big-bank client with a little-bank client profile? Maybe it's time to change.

Enjoy the issue, and see you online.

Jenny Eastham
Managing Editor
Tel: +44-207-183-2208
www.automatedtrader.net

British Academy to Queen: 4000 risk managers but no synthesis, didn’t see the big picture

Risk management was

considered an important part of financial markets. One of our major banks, now mainly in

public ownership, reputedly had 4000 risk managers. But the difficulty was seeing the risk to

the system as a whole rather than to any specific financial instrument or loan. Risk calculations

were most often confined to slices of financial activity, using some of the best mathematical

minds in our country and abroad. But they frequently lost sight of the bigger picture.

http://media.ft.com/cms/3e3b6ca8-7a08-11de-b86f-00144feabdc0.pdf

Order Imposing Conditional Fine Upon Robert Gray

http://www.robbevans.com/pdf/forexlqorder10.pdf

EES joins oDesk

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The oDesk Manifesto for Online Work

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Gordon Brown: Internet & Technology has overrun Elite way of business

http://news.bbc.co.uk/2/hi/technology/8161650.stm
Technology means that foreign policy will never be the same again, the prime minister said at a meeting of leading thinkers in Oxford.

The power of technology - such as blogs - meant that the world could no longer be run by "elites", Mr Brown said.

Policies must instead be formed by listening to the opinions of people "who are blogging and communicating with people around the world", he said.

Mr Brown's comments came during a surprise appearance at TED Global.

"That in my view gives us the first opportunity as a community to fundamentally change the world," he told the TED Global (Technology, Entertainment and Design) conference.

"Foreign policy can never be the same again."

Forex Factory launches Broker Quotes multi-quote tool

Broker Quotes beta launched

After a substantial development period we're proud to unveil Broker Quotes, the first multi-source Forex quotes on the Internet! You can check out the live version in the left column of the News page http://blog.forexfactory.com/?p=879

Tradeview Forex FIFO Solution

As many of you are aware, this Friday July 31st, NFA Rule 2-43 becomes

effective for all US based FDM's and clients. Starting with Trade date

Monday August 3rd, all positions will be closed on a First In, First Out

(FIFO) basis. For those clients using IKON Platinum or IKON Viking

platforms there will be no change to your normal trading activity. For our

Meta Trader clients, however, there will be some changes you should be aware

and prepared for:

 

1. The FIFO roll process will begin everyday at 4:30 PM New York

(Eastern United States Time)

2. From 4:30 until 5:00 PM all Take Profit and Stop Loss orders will

be on a not held and contingent basis

3. Starting 4:30 PM any Take Profit or Stop Loss orders associated

with a FIFO matched position will be automatically cancelled.

4. Any Take Profit or Stop Loss orders on open (meaning not totally

closed positions) will be working.

5. It is your responsibility to verify all Filled/Working and

Open/Pending orders for accuracy

 

We are pleased to have created a solution that meets everyone's (clients and

regulators) requirements. We look forward to your feedback and thank you

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TO OPEN AN ACCOUNT, VISIT HTTP://WWW.OPENFOREXACCOUNT.COM and select tradeview forex

EES - The Forex Conundrum

It's difficult to know what one can say publicly about Forex. If performance is mentioned, it should first be approved by the NFA (as should any marketing material). Comments from insiders and partners are told in trust that it will not be repeated. Talking about market direction could be construed as a solicitation to invest or place a trade, opening potential liability issues. It seems there isn't anything one can mention without someone having a problem. Take a position, someone will be on the other side. And then readers complain about trader's making idiotically benign statements such as 'the market goes up and it also goes down.'

Even as this text goes to print, someone somewhere is thinking "what do they mean by this," and "are they talking about me?"

In an industry that revels in anonymity and secrecy, had its credibility ruined by fraud and misrepresentations, that is misunderstood and widely misinterpreted, is it any wonder that 95% (some sources say 99% others say 90%) lose money? As soon as it seems one trend is forming, forces come from out of nowhere and knock the market to another direction. Examples lately have been the SNB revaluing the franc, and announcements by the Fed purchasing US Treasuries.

Speaking of which, that is one investment that can be recommended without having various persons, agencies, and other organizations irritated by comments – TIPS. TIPS are the only haven investors have left to put their savings. Although not tax free, TIPS provide an excellent hedge against inflation and ultra high credit ratings. In fact, based on the perceptions about Managed Futures, Forex, and day trading, it may be simpler for CTAs to simply stop managing accounts and just invest their client funds in TIPS.

Advice for traders

With all the complexities in Forex, it should be an easy case to make that any trader should only use quantitative automated strategies to trade Forex. In order not to upset your counterparties, any strategy should be market-neutral and not take any 'position' in the market. This is easily done with options and much less easily done in spot Forex. However, with the use of automated trading tools, it is very possible. A trader must extract alpha from spot Forex at the same time, no one should know about it, or else those who are peddling other strategies may become jealous and feel threatened. One should use a broker that charges high commissions, so the broker doesn't see the strategy as some sort of intellectual competition to the broker. A tough market to trade, just ask McDonalds.

Asian Market Update: Nikkei breaks out to October highs despite poor Q1 results from shippers; Bernanke talks down inflation worries, concerned about labor market

Asian Market Update: Nikkei breaks out to October highs despite poor Q1 results from shippers; Bernanke talks down inflation worries, concerned about labor market


- Asian equity markets remained on the bullish track fuelled by continued outperformance of the tech sector across the regional bourses even as the Nikkei shipping names plunged after posting poor Q1 earnings and US Fed chairman cautioned about the ongoing weakness for US labor. Nikkei225 briefly rose to its best level since October above 10,170, gaining nearly 2.5% before retreating back to 10,100. Hang Seng and Kospi were also up over 1.5%, while S&P/ASX and the Taiex were both higher by 1% with about 2 hours to go in Tokyo trading. Ahead of the US Monday open, front-month S&Ps reversed early weakness to rally 0.2% to $980 and benchmark yields advanced by a tick to 3.67%.

- Fed Chairman Bernanke offered a town-hall interview with PBS, defending the Federal Reserve independence against the rising scrutiny of Congressional lawmakers and further justifying bailout of large financial institutions to the angered "main street" audience. Most significantly, Bernanke retained the dovish outlook displayed in his Congressional testimony last week, suggesting that emergency credit programs will be unwound only when there is certainty of economic recovery while offering expectation of low inflationary pressure over the next couple of years despite the massive fiscal and monetary stimulus. Fed chairman also tempered optimism over economic rebound translating into job creation, forecasting unemployment above 10% and also suggesting that 1H of 2010 may not mark the peak of jobless rate as widely believed. With regards to congressional movement to audit the Fed, Bernanke was steadfast in the institution maintaining its independence, noting that politicians should not make monetary policy decisions, with the most likely result to interference being higher inflation.

- Asian trading economic calendar was light but is expected to pick up in days to come, with housing data from Australia and RBNZ decision marking the key events of the week. Japan June Corporate Service Price index registered its biggest decline on record at -3.2% y/y, slightly better than the -3.3% expected. South Korea's Consumer Confidence came in at 7-year high of 109.0, while UK's July Hometrack housing survey saw its best y/y level in 9 months at -7.7%. Over in China, Xinhua press quoted Stats Bureau economist Yao urging policymakers to maintain accommodative stance on monetary and fiscal front - comments in line with recent sentiment suggesting the momentum of economic recovery may not be sufficiently stable.

- In equities, Japan's financials closely tracked the market-leading tech sector after Nikkei press said Nomura, Nikko Cordial, and Daiwa Securities will post a profit in the first quarter because of rising revenues from banks' underwriting business. In other gainers, Fuji Heavy was lifted by over 5% after a JP Morgan upgrade, and Hitachi gained over 5.5% after announcing it would make its separately listed group firms publicly listed. Among notable decliners, Nikkei's shipping names Mitsui OSK, Nippon Yusen, and Kawasaki Kisen reported poor results across the board, dropping sharply after mid-day recess to overall session declines of 3-5%. Elsewhere, Sumitomo Chemical fell 5% even though the company said it was not the source of press speculation on Friday that operating profit may fall 90% y/y to ¥1B. Mitsubishi Motors also refuted press rumor it would post a ¥20B operating loss on 50% drop in sales to ¥300B. Outside the Nikkei, shares of Virgin Blue were halted on announcement it would raise A$231M in new equity. The airline also forecast poor outlook for the current and next year, with FY09 Net loss seen at A$160-A$165M v loss A$19.2M expected and 2010 net at breakeven v a profit of A$28.2M expected. In Korea, tech giants Samsung and Hynix were sharply higher after strong earnings posted late last week, and local press reported that Doosan Heavy's Babcock unit has developed technology allowing coal power plants to generate electricity without CO2 emissions.

- In currencies, European and commodity started off weaker against the greenback but reversed higher as Asian equity markets opened to the upside. EUR/USD traded as high as 1.4240, GBP/USD reached 1.6460 after dip below 1.64, and USD/CHF traded below 1.07. In commodity FX, USD/CAD ranged between 1.0830-80, AUD/USD rose above 0.82, while NZD approached multi-month highs just above 0.66. Japanese Yen was relatively unchanged, trading in a thin 97.70-90 band vs USD but selling off against the other majors.

- Crude oil prices opened the session lower, but have since moved into positive territory and above $68.50. Crude oil is tracking the gains in Asian equities and the commodity currencies against the US dollar. In terms of oil demand related news, the US Lundberg survey showed that the average price of regular gasoline declined by 2.7% to $2.49/gallon in the two weeks ended July 24, after the prior survey showed that prices declined by 3.9%. Despite, the most recent decline in gasoline prices, Lundberg believes that gasoline prices may rise at least 10 cents even if crude oil prices do not rise as retailers and refiners seek to improve their margins. Spot gold is higher by more than 0.10% and is tracking the gains in oil prices. In other metals trading, Shanghai copper and aluminum have moved to multi-month highs, tracking the gains in Chinese equities.

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McDonalds loses 7% on US Dollar move

http://bloomberg.com/apps/news?pid=20601087&sid=awrz2xNoLSrA
July 23 (Bloomberg) -- McDonald's Corp., the world's largest restaurant company, dropped the most in nine months in New York trading after second-quarter revenue declined more than analysts projected.

McDonald's fell $3.12, or 5.3 percent, to $55.70 at 2:41 p.m. in New York Stock Exchange composite trading. The shares had the biggest intraday decline since Oct. 24 after losing 5.4 percent this year before today.

Slowing consumer spending and a stronger U.S. dollar contributed to a 7 percent drop in revenue, to $5.65 billion, the company said today in a statement. Global sales at established stores rose 4.8 percent, less than analysts' projected, as visits declined in countries including China.

Foreign Exchange

Currency translation trimmed profit 9 cents a share in the quarter, the company said. McDonald's now expects foreign exchange to cut full-year earnings by 21 cents a share, and forecast it will reduce third-quarter profit by 6 cents, Chief Financial Officer Peter Bensen said.

The Dollar Index, which the ICE futures exchanges uses to track the dollar against the currencies of six major U.S. trading partners, including the euro, British pound and yen, rose more than 10 percent in the 12 months through June.

Foreign Embassies told to Stockpile local currencies for a year

http://www.globalresearch.ca/index.php?context=va&aid=14446 A top investment advisor, Harry Schultz - who was MarketWatch's Peter Brimelow pick for financial newsletter of the Year in 2008 - is now claiming:

Some U.S. embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of U.S. cash to purchase currencies from those governments, quietly. But not pound sterling. Inside the State Dept., there is a sense of sadness and foreboding that 'something' is about to happen ... within 180 days, but could be 120-150 days.

Investment advisor and former Army Counterintelligence officer Bob Chapman is saying the same thing, reporting on the possibility of a so-called "bank holiday" planned for late August or early September. According to Chapman's sources, U.S. embassies around the world are selling dollars and stockpiling money from respective countries where they operate.

Leading trend forecaster Gerald Calente has also repeatedly predicted a "bank holiday".

But the rumors of embassies being advised to stockpile local currency is stunning and - if true - point to a possible huge devaluation in the dollar.