Friday, November 9, 2012

Former #GoldmanSachs Trader Accused of Fraud. $GS

In what should be filed under same old, same old. A former Goldman Trader stands accused of fraud by U.S. regulators. Well now, what a shocker. It appears one Matthew Marshall Taylor stands accused of defrauding the bank of 118m. The FT piece states;

"in late 2007 “intentionally concealed from his employer the size of the S&P 500 e-mini futures contracts position, risk and profits and losses,” the Commodity Futures Trading Commission said in a civil complaint filed in a New York district court on Thursday."


"For instance, the CFTC said, Mr Taylor put on a real trade of 34,604 e-mini trades on December 13 2007. He then manually entered a fabricated sale of 33,000 contracts, the regulator claims. The false sale had the effect of appearing to reduce Mr Taylor’s e-mini positions from 37,104 contracts to 4,104 contracts."


"On that same day, the CFTC said, Mr Taylor went on to amass a position in the futures contracts worth over $8.3bn. Mr Taylor then prepared an end of day profit and loss report showing a false loss of $2m, the CFTC said. Mr Taylor’s actual loss for that day was $52m."


“He . . . was promptly removed from his job and terminated soon thereafter. Since these events, which had no impact on customer funds, we have further enhanced our controls.”

Okay got it.

"After leaving Goldman, Mr Taylor went on to work for Morgan Stanley."

Say what?

Okay, I think I have the picture but I have a couple of questions and then some comments regarding this whole thing.

First. This happened in late December 2007 and the CFTC is now filing this complaint now? Is the CFTC that busy chasing down thugs on Wall St. or have they caught the porn surfing bug from the SEC?

Second. How does a trader at a global leader in finance, a firm on the cutting technological edge of all things financial - the type of high tech stuff that can sniff linen with the number 100 & Ben Franklin's face on it from a couple hundred nautical miles-, the place where God's work is done, get away with manually entering a fabricated sale of contracts to conceal a position's size?

Third. How does an thug like Taylor pull off this stunt and then get hired across the street at Morgan Stanley?  Sounds to me like Wall St. does a much due diligence on their new hires as they do on their IPO offerings to customers. ZERO!

Morgan Stanley either did or didn't investigate his background. Seriously. How long would it take Morgan to have found out the skinny on this dirt bag Taylor? About 15 minutes via the phone, that's how long. Wall St. gossips more than a room full of Italian ladies on their husband's bocce day. So let's assume Morgan did investigate him and knew his background. This tells me they simply don't care so long as he can make em' a buck.

I'll tell you why this happens. Because there is a culture on Wall St. today that would make a Charlie Merrill and others of his era cringe at the thought of. A culture of thugs and thieves that would sell their wife and/or daughter into sex slavery for a 6 figure bonus. A culture of tolerance for the intolerable so long as they make the managing partners buck. A culture of willful blindness by even the decent and honest (who are the majority) among them to patently offensive behaviour as to insult one's intelligence. A culture rotten to the core.

By tolerating this lawlessness and thuggery they are killing the proverbial golden goose which is the market. Not to mention what the criminal high frequency trading has done but you can re-read my piece Culture of Risk from August this year following the Knight Capital debacle for that .

Monday, October 22, 2012

Virnetx Holding - $VHC

I came across Virnetx Holding, ticker $VHC,  while I was chart surfing. Quite the flag formation after a volume laden impulse move down.

As my notes indicate, a break of the lower boundary of this flag implies things that are- how do I say this diplomatically,..... -not nice.

Thursday, October 18, 2012

#Goldcorp - $GG

After quite the impulsive move up off the 32 level Goldcorp - ticker $GG - has stopped to catch its breath and is sporting quite the nice looking flag formation. We could violate the lower bound of the channel to se up a small double bottom inside the channel. Need to see that low of Oct 15 hold.

As an aside the larger double bottom off $32 with a midpoint of $41 carries a target of $50 on it. This flag if broken to the upside carries a target of, depending on breakout of $61, which if you peek at a longer term chart would make new highs. Very bullish longer term!

#CarboCeramics - $CRR

Weekly view of Carbo Ceramics ticker $CRR. Notes on the chart.

Below is a daily close up view  where it appears to be sitting on some long term support. I want to watch this very closely here. 

#FirstMajesticSilver - $AG

The daily chart on First Majestic - ticker $AG - shows a really nice pennant (highlighted area)  forming here.  Coincidently, right on top of the prior reaction high at $22. Worth watching people.

Thursday, October 11, 2012

Cummins - $CMI False Sense of Security?

The weekly view of Cummins Engine ticker $CMI is shown below. Back in early 2011 we had what looked and then turned out to be a 'too good to be true' looking head and shoulders formation (shown in aquablue). The break of the neckline in August lead to quite the skirmish between bulls and bears with bulls winning out. Notice the low volume rally back in January this year. What was that about volume and validity???

Either way made a new high by about $10 bucks, attracted all the momo hedge fund valet attendants most of which know as much about risk management on YOUR money as they do about the ecosystem in the Republic of Congo. The stock looks to have rolled over with one last gasp forming a possible right shoulder of a NEW head and shoulders formation. So now having disappointed folks once will this new formation lull stockholders into a false sense of security??

The late 2009 consolidation around $45 looks like the target if the neckline and more importantly, the reaction lows of 2011 are broken.

#Caterpillar - $CAT Time to Say Good Night Irene?

Quite the chart Caterpillar ticker $CAT, is sporting. The weekly view below shows couple of things. An interesting looking double top, a very tired looking 13/34 week moving average scene and last but not least the breakdown from a recent bear flag.

The break of the bear flag brings in a target of $50.
A break of the double top low of roughly $65 brings in a target of ..... ummm, uhhh, $15.

Remember now this is a weekly chart! Time will tell. The CAT bulls will consider this talk heresy but come to think of it the Nortel bulls thought the same way years ago. Of course this time, live every other, is always different.