Evil Syndicated

By now, everyone in that fraction of the world that pays attention to something other than American Idol and their platter of TGI Friday’s loaded potato skins knows that 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.

The old-fashioned method used by brokers was called “churning,” in which stocks were bought and sold incessantly (by phone) from the portfolios of inattentive clients merely to generate commissions.  In any sensible society — i.e. a society with an instinct for self-preservation — it would be against the law and the people doing it would be sent to prison.

James Howard Kunstler | Clusterfuck Nation