63 total trading days in the quarter
17 trading sessions in which the Dow moved triple digits (27% of total days)
3 number of days the Dow was down over 200 points
-268.37 single largest losing day for the Dow
169.67 single largest gain day for the Dow
-552.45 Dow loss over 3 day period (1/20/10-1/22/10)
428.58 is how much higher the Dow closed on 3/31/10 from 12/31/09
Goldman Sachs (GS) traders didn't lose a dime at the end of each trading day during the first quarter. Please note Q1 included 63 trading days! Goldman Sachs traders raked in more than $100 million daily for 35 days and made no less than $25 million daily during the rest of the three-month period, according to their SEC regulatory filing. Keep in mind, GS made money every day regardless if it was an up or down day including the down 552 point 3-day drop.
Morgan Stanley's traders were not as successful manipulating and controlling the market as their GS peers as they lost as much as $30 million daily on four days during the quarter. Morgan Stanley made between $60 million and $90 million on each of 16 days during the quarter, and between $210 million and $240 million on one day.
Bank of America's traders split manipulation duties with Goldman Sachs as they too did not have one losing trading day in Q1. Their traders produced daily profits of at least $25 million during 95% of the days in the first quarter.
Grandpa just came across the following commentary regarding this same topic. PLEASE NOTE THE STATISTICAL ODDS!!
Rigged-Market Theory Scores a Perfect Quarter: Jonathan Weil
Commentary by Jonathan Weil
May 13 (Bloomberg) -- Score another triumph for the rigged- market theory.
In a feat that would seem to defy the odds, Goldman Sachs, JPMorgan Chase and Bank of America this week each said its trading desk made money every day of the first quarter. Goldman said its daily net trading revenue topped $100 million 35 times last quarter out of 63 trading days. JPMorgan and Bank of America disclosed similar eye-popping stats. Citigroup, too, recorded a profit on each trading day, Bloomberg News reported, citing unnamed people who knew the results.
The intrigue is high. If a too-big-to-fail bank’s traders were able to make money every day of a quarter, were they really trading in any normal sense of the word? Or would vacuuming be a more accurate term? What kinds of risks do such incredible profits entail, for the banks and the rest of us taxpayers? And are results such as these too good to be true?
There seems to be no satisfying way to answer those questions, or even the more basic inquiry: How exactly do these banks’ trading divisions make money? Reading the companies’ impenetrable financial reports is of little help. However they did it, the data suggest it was as easy last quarter as hitting the side of a barn with a baseball from three feet away.
This isn’t the way “trading” works in the real world. A simple exercise in measuring probabilities is instructive here.
Long Odds
Let’s say you manage a highly leveraged, diversified investment fund, and have become so skilled at playing the markets that you have a 70 percent probability of making money any given trading day. This would be a remarkable achievement in most markets. The odds that you would post a daily net gain 63 times in a row, though, would be about one in 5.7 billion. The formula for calculating this is: 1/(0.70 to the 63rd power).
Even if you had a 95 percent likelihood of a winning day, you would have only a 3.9 percent chance of doing it 63 trading sessions in a row.
Link to full article and worth the tripGrandpa: according to the Power Ball website, the odds of winning the Grand Prize are 1 in 195,249,0543. Your odds of winning the Power Ball grand prize are significantly better than 63 consecutive winning days trading the market. HELLO MARY SCHAPIRO!!!! KNOCK KNOCK SEC...ANYBODY HOME???
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