If the source code is in the wild, Goldman Sachs is forced to stop all related real-time trades, because their strategy is completely exposed, and once somebody exploits it, they will lose money really quickly. (Just imagine how many transactions they can make per second, and imagine every one of those transactions lose some money in average.) That means they get forced to leave the market until they develop a new trading system, or at least, re-develop their strategy. That costs a lot of money because they have to stop doing investments and leave the money some place safe. — well, that might at least explain the funky HFT statistical anomolies
… and then let’s go home. My apologies for trying Doomers’ patience on this one. I’m still "re-retired," but thought the off-topic Goldman Sachs code story arc was too important to leave alone. Unless something really hairy comes up in the next while I’ll try to limit myself to occasional links on the sidebar now.
The above is from the comment thread under the only Aleynikov story on slash/dot to now. That long thread serves as a sort of tutorial running through how leaking the GS code might hurt their present business model. I’m sure there must be some discussion in the relevant Open Source development mailing lists on what busting Serge means to similarly employed S/W developers on a personal basis, but it’s been so long I don’t even remember what those mailing lists are.
UPDATE (7/17): Holy presumption-of-innocence, Batman! Somethin’s fishy about this NYT Op-ed.[1]
Now maybe Mikie wrote the whole thing, and maybe he’s sitting on that oyster barge of his fuming at the Old Lady for Joycing up his text; ’specially that header bit.
But if the next Docker hits the planks is some sweet plea deal where Serge gets a slap-in-the-wrist fine and couple nice vacation months away from the kiddies & diapers, suspendered Damocles-style long as he don’t rock the boat no more,[3] then The Castle here’s gonna suspicion maybe the S.S. Bada Bling got better stuff to do this fall than perform "Disc Loss … Sure!" [2] up against a dozen random piers with some old fed court judge scribing the reviews.
Stand by for a longish subprime post soon, and I’ll try once more to refocus on housing for a while, and refrain from further comment-posts (exception to that being venting at the head of the weekly H.4.1 update posts on Fridays).
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LATER: OMG!!! Secret’s out …
Based on the Rolling Stones article [rollingstone.com] I was able to reverse engineer the core Goldman Sachs trading algorithm:
#include
int main( int argc, const char* argv[] )
{
pump();
dump();
}
Apologies to indent purists everywhere.
—————————————
[1]: "Steal This Code", by Michael Osinski, New York Times, July 16, 2007.
[2]: "Brokers pilot yachts; investors wish for rowboats", by Lauren Rudd, Herald-Tribune (SW Florida), July 17, 2009.
Such an infraction might have been overlooked had it not been for the countless hours and millions of dollars Goldman spent developing the software, designed to detect large order positions ahead of their execution. In other words, the software enabled Goldman to essentially engage in high-tech front-running.
[3]: "Demons in the machine", Andrew Leanard, Salon / Business Spectator, July 18, 2009.
In this business, it’s all about having the best hardware, smartest software, and maximising every possible technical advantage – such as physically locating your computer servers as close as possible to electronic trading systems so as to save every possible millisecond.
From Admin:
Heresy – we all know there can be only One True Brace Style.
I also don’t understand why people hate spaces before parenthesis, or like them after.
#include "evil.h"int main (int argc, const char *argv[]) {
pump ();
dump ();
}
twist -
I took the liberty of adding a few ’s to make your intentions clearer. Also, what do you think Admin would make of my reply to Diane Harvey?
………………….
LATER: I’ve also quietly replaced the open-square-bracket you had at the end of line 2 with an open-brace. It compiles cleanly now and I’ve got it up and running. We’ll just have to wait and see what happens at 1331 Zulu
John-
Our admin was looking over my shoulder while reading your post, and he just typed the above rather than logging in as himself. The only code I ever wrote was a few lines of Basic years ago. As Igor says, my programming skills are “pathetic”.
I’ll ask him to translate your comment when I see him this morning- although he is far more fluent in “Tech Speak” than English! : )
twist -
Admin might also like to review Part IX (pp 168 – 177) of this bit of my sadly lost world (PDF) to gain some insight as to where that argc / argv control argument parsing he’s using in his main routine came from.
Since Multics was the first truly open system, we simply borrowed our own argument parsing from the source of things like the Multics “print” command line utility. Indeed “argc” and “argv” (with variations) were the internal ANSI PL/I variable names in some of said internal routines. When Thompson, Kerrigan, Richie, et. al. used the Multics source code as the basis for C’s I/O, they didn’t even bother changing the names.
‘Twas a whole different intellectual property regime in those days, and nobody minded. Come to think about it, if Honeywell or MIT had got litigious with Bell Labs over that one, the world as we know it could not possibly have happened.
John-
My father was a manager for Motorola for many years. His policy was that what an engineer had in his head belonged to him- anything else belonged to the company. Aleynikov should have gone by my dad’s policy.
That said, GS is not exactly a sympathetic victim, it kind of seems like stealing Lizzie Borden’s axe!
twist -
Too true, but the boss only owns the rabbits if he expresses at some point that he wants them. If Jerry O. Tuttle had done everything with is toes nicely pointed we’d still be stuck with $#%@*& WMCCS for pete’s sake.
……………………………………………….
Now here’s a post author we could cast as the “hard-bitten detective” on the case. Looks like he comes down mostly on your (comment #5) side; however, from his experience looks like GS could have pulled this FBI-in-the-loop exploit on just about anyone they’d have cared to target. Coders living in terror — now there’s a recipe for a productive staff
“The Aleynikov Affair: From Newark with Code”, by Craig Ball, EDD Update, July 17, 2009.
Hello!
This 2-year-old puff piece has just grabbed attention for other reasons, but Serge’s defence team should note a strong hint in the subtext that Lloyd and Ken may have been spending a considerable amount of quality time together in recent years.
“Goldman chief quietly builds a financial giant”, by Jenny Anderson, New York Times, June 6, 2007.