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Who’s the Customer?

Jesse's Cafe and James Rickard frame the picture clearly here. This will form the base of another ethical case I am constructing, or rather that meta data and data mining have constructed for all of us. 

Front running is the practice of knowing what trades are about to happen, executing a trade in front of the customer trade that will put the house, brokerage firm, casino, what have you, to the advantage of that party. For example if I know customers are about to short Toyota en masse I short first before the price drops and get the better and higher price in front of the customer. This practice is a no no according to NYSE standards but is precisely what is happening. So, the host or in this case Goldman becomes the beneficiary of the information to the disadvantage of the customer. 

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4 responses to “Who’s the Customer?”

  1. Tammy C. Salinas Avatar
    Tammy C. Salinas

    I think the real question is Who’s the loser? We are, for rewarding CEOs by giving them millions to get out of the companies they ruined.
    I like the analogy this blog reported
    ‘Wall Street likes to say, “what’s good for Wall Street is good for Main Street.” That’s the scorpion talking. What’s good for Wall Street is good for Wall Street. Never forget it.”‘
    Top officialls fell for the threat, if wall street fails we call fail so you getter bail us out or we are all doomed. This was a very poor judgement. I would have rather delt with the fall and start anew. NOW, we are head over heels in debt while top ex CEO’s and Golman’s family live luxurious lives. No one fixes my bank if I go under, I have myself to thank for that, so I have to fix it.
    I think all this insider information should be banned, its just another loop they were able to get into and now leak the information for their own greed and well-being. Cheating is what it is, perhaps another word…theft?

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  2. Dennis Elam Avatar
    Dennis Elam

    Thanks Tammy, looks like we have your curiosity about this up and running, this is the point of the blog, this is also why we willbe reading the series of articles in the syllabus about this financial crisis.

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  3. Erin De La Rosa Avatar
    Erin De La Rosa

    I agree, they should have just let the banks fail. How else where they suppose to learn their lesson? How else would people have gotten mad and asked for justice?
    Now, no one seems to really care and the banks are getting away with murder. Why isn’t anyone being prosecuted? I don’t understand why nothing is happening?!@!

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  4. Erin De La Rosa Avatar
    Erin De La Rosa

    That article is very informative.

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