Posts Tagged ‘Business Media’

Chairman of Goldman Sachs International Was – Until Last Year – Also Chairman of BP

Thursday, June 10th, 2010

This article is a guest contribution from Washington’s Blog.

Janine Wedel has written extensively on how the “shadow elite” rule the world and about the “flexians” – the movers and shakers of the shadow elite who glide across borders, and structure overlapping (and not fully revealed) roles in government, business, media, and think tanks to serve their own agendas.

Wedel says that flexians wear many hats both within and outside of government, and use their networks of contacts to influence policy – are warping our democracy and the rule of law.

Peter Sutherland is the quintessential flexian.

According to his September 2009 bio:

Peter Sutherland is chairman of BP plc (1997 – current). He is also chairman of Goldman Sachs International (1995 – current). He was appointed chairman of the London School of Economics in 2008…. Before these appointments, he was the founding director-general of the World Trade Organisation. He had previously served as director general of GATT since July 1993 ….

Sutherland resigned as BP’s chairman in 2009, but apparently still serves in various key capacities.

Sutherland is managing director – as well as chairman – of Goldman Sachs International (Goldman Sachs International is the very powerful subsidiary of the Goldman Sachs Group, of which Lloyd Blankfein is CEO). Sutherland is also an Advisory Director of the Goldman Sachs Group itself.

And he is European Chairman for the Trilateral Commission.

He has, at various times, attended meetings of the Bilderberg group.

As if that is not enough, Sutherland also serves in the following capacities (click on “Read Full Background”):

Mr. Sutherland served as an Attorney General of Ireland and also served as European Commissioner from 1985 to 1989 where he was responsible for competition policy…. He serves as the Chairman of British Petroleum, BP Amoco PLC and United Kingdom. From 1989 to 1993, he served as the Chairman of Allied Irish Bank. …. He serves as a Non-Executive Director of Telefonaktiebolaget LM Ericsson. He serves as a Director of Goldman Sachs International. He has been Member of Supervisory Board at Allianz SE since January 2010 and serves as its Member of International Advisory Board …. Mr. Sutherland served as a Non Executive Director of BP Plc since July 1995. He serves as a Member of Foundation Board of World Economic Forum. He served as an Independent Non Executive Director of National Westminster Bank PLC since January 2001. He served as an Independent Non Executive Director of The Royal Bank Of Scotland Plc from January 2001 to February 6, 2009…. In addition, he serves on the board of Allianz, Koc Holding A.S. and is a member of the advisory board of Eli Lilly…. He served as a Director of LM Ericsson Telephone Co since 1996, Ericsson SPA since 1996 and Investor AB since 1995. He served as a Non Executive Director of Royal Bank of Scotland Group plc from January 2001 to February 6, 2009.

Sutherland is – literally – like Lloyd Blankfein and Tony Hayward rolled into one. But unlike Blankfein and Hayward, he has also held numerous powerful governmental and quasi-governmental positions.

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May 6, 2010 – The Day That Will Change Market Structure

Friday, May 7th, 2010

This article is a guest contribution from Tyler Durden, ZeroHedge.com.

May 6 market commentary from our friends at Themis Trading

May 6, 2010 – The day that will change market structure

Today’s action left us amazed, and we have been warning about this stuff since December 2008. Where do we even start? Yesterday afternoon and evening all the business programming focused on how the markets were in turmoil, and Greece this, and overdue correction that, and fat finger the other thing. They couldn’t even recognize the story, as even the business media doesn’t understand that the markets are a changed structure and beast. The story is not a key-punch error. The story is a failed market structure. The market failed today.

The market melted down and “liquidity providers” quickly pulled all bids. According to today’s Wall Street Journal, high frequency firm, Tradebot, closed down its computer systems completely, as did New Jersey’s own Tradeworx, who was so critical of our silly market structure comments in their SEC comment letter. By the way, if you don’t know who or what Tradebot is, it is the proprietary trading engine that used to be part of the BATS exchange. In fact the reason BATS was rolled out as an exchange to begin with was to lower costs and facilitate trades for Tradebot (Tradebot’s 1251 NW Briarcliff Pkwy Kansas City address is next door to BATS’s North Mulberry Drive address fyi). In the WSJ article Mr. Cummings said his Tradebot system was designed to stop trading when the market becomes too volatile, because he “doesn’t want to compound the problem.” Too bad he doesn’t understand that that was and is the problem. To make matters worse, while some high frequency firms shut down yesterday and pulled their bids, as we warned they would do for over a year and a half, other high frequency firms turned from being liquidity providers to liquidity demanders, as they turned around and indiscriminately hit bids like Randolph and Mortimer Duke.

We are just plain outraged, and think every investor and market participant in the USA should share this outrage. They were sold a lie. How many times over the last year have we all heard that HFT liquidity was a blessing that lowered costs and helped investors, and that it would be there in stressful markets just like the market makers and specialists they replaced were there? How many times have you read in the big media that HFT helped the markets perform brilliantly during the global meltdown in 2008 and 2009? We said it before and we say it now. Lies.

Not so long ago, if our markets experienced severe stress, and certainly a “fat finger”, human wisdom would intervene. Reasons for the stress would be ascertained, trading in affected stocks would be slowed or halted, stabilizing bids would be initiated as needed, and severe volatility would be dealt with in a calm and reasoned manner. Today, the human specialist model has been replaced by an automated market maker model. Our market structure has evolved. It has evolved, not by design,?or a well-thought and reasoned plan, but it has evolved to cater to masters of expensive technology, deployed unfettered by participants whose only concern is to squeeze out every last picosecond and fractional cent before they move on to other countries’ markets and asset classes. The for-profit exchange model at every chance sacrifices the protection of long term investor interests for the profitability of serving hyper-leveraged intraday speculators. By the way FLASH orders are still utilized at Direct Edge, but that is here nor there.
Today’s price swings in a great number of stocks highlight the inherent and systemic risk of our automated stock market, which has few checks and balances in place.  Once the market sensed stress, the bids were cancelled and market sell orders chased prices down to the lowest possible point. Investors who thought they were protecting themselves with the prudent use of stop orders were left with fills that were far away from the closing price. In some stocks like our SAM example above, this was $0.01. We warned of the potential for HFT to behave this way when we met with and showed our regulators the NY Fed study that highlighted HFT’s vanishing act around stressful news announcements in the currency markets.

We read this in a recent comment letter to the SEC about HFT and couldn’t agree more: “When markets are in equilibrium these new participants increase available liquidity and tighten spreads. When markets face liquidity demands these new participants increase spreads and price volatility and savage investor confidence.”

The EXCHANGES’s response late yesterday was to cancel trades that moved by more than 60%. Yes 60%. SO if you bought a stock at $21, put in a stop-loss market order at $20 (expecting to get filled in a market decline of somewhere less than but close to $20), and got filled at $10 (yes this happened and worse), your trade stands! And if you bought this same company’s stock (that fell from $20 to $3 before closing back at $18) at $3 and sold it at $14 thinking you made a big profit, your buy is cancelled, you are short stock at $14, you have a loss, and the futures are green this morning. Inspires investor confidence, right? With this wise remedy and redress by our exchanges, along with their other maneuvers (stay tuned for our coming Data Feed White Paper), one can’t help but be confident in playing ball on this level playing field. NOT.

Today’s severe market drop should never have happened.  The US equity market had at been hailed as the best, most liquid market in the world. ?The market action of May 6th has demonstrated that our equity market has major systemic risks built into it.  There was a time today when folks didn’t know the true price and value of a stock. The price discovery process ceased to exist. High frequency firms have always insisted that their mini-scalping activities stabilized markets and provided liquidity, and on May 6th they just shut down. They pulled the plug, as we always said they would, and they even admit it in the papers this morning. We need a new mousetrap. This is not an isolated incident, and it will happen again

Source: ZeroHedge.com, May 6, 2010 – The Day That Will Change Market Structure, May 7, 2010

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