1. How Goldman makes money Part 1 and Part 2?

Goldman by its size and political connections enjoys many advantages you and I can only imagine. Like the insurance companies who collect interest on premiums paid while waiting months to pay health providers for services delivered today they profit on “the float”. Their size allows them to create runs in markets, shoring commodities floods the market and creates downward pressure through supply and demand, and then when the price drops they cover the short. Selling something they do not own and then filling the hole when the price is less. The question is not how do they make money, but rather how could they not profit in a system designed, and run by them. You could profit too if the government gave you money for free then paid you interest to loan it back to them.

2. JP Morgan Chase Company Profile?

JPMorgan Chase & Co. (JPMorgan Chase), incorporated on October 28, 1968, is a financial holding company. The Company is a global financial services firm and a banking institution in the United States, with global operations. The Company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, assets management and private equity. Bear Stearns was acquire by JP Morgan at $10 dollars a share. The government grantee $100 billion of loss.

3. Wall Street trader’s NYSE Trading Floor Tour

How a broker works on the NYSE Trading Floor. And how technology has change the trading floor, there are less people on the floor in 2008 then in 1988.

4. How NASDAQ Works Behind the Scenes
Computer systems that handles the exchange of stocks between buyers and sellers, and to set opening and closing prices.

Efficient Market Hypothesis

Efficient Market Hypothesis is an investment theory that sates its is impossible to “beat the market” because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information. EMH, stocks always trade at their fair value on stock exchanges, making it impossible for investors to either purchase undervalued stocks or sell stocks for inflated prices. As such, it should be impossible to outperform the overall market through expert stock selection or market timing, and that the only way an investor can possibly obtain higher returns is by purchasing riskier investments.
The economists Robert Shiller describe EMH as “the most remarkable error in the history of economics thought.” Some professional investment mangers went even further.
Two fundamental tenets make up the Efficient Market Hypothesis. EMH first asserts that public information gets reflected in assets prices without delay. Information that should beneficially (adversely) affect the future price of any financial instrument will be reflected in the asset’s price today. Second, and more fundamental, tenet of the hypotheses: In an efficient market, no arbitrage opportunities exist.

EMH does not imply that price will always be “correct” or that all market participants are always rational. There is abundant evidence that many (perhaps even most) market participants are far from rational and suffer from systematic biases in their processing of information and their trading proclivities. But even if rational profit-maximizing investors always determined price setting, prices can never be “correct.”
To think of the stock market in terms of “reasonable market efficiency” or “relative market efficiency” rather that an absolute efficiency. Andrew Lo (2007) has suggested that few engineers would even contemplate performing a statistical test to determine if a given engine was perfectly efficient.

References

Lo, A. (2007). Efficient Markets Hypothesis. In L. Blume, & S. Durlauf, The New Palgrave: A Dictionary of Economics, 2nd ed. New York: Palgrave McMillan.

Shiller, R. (1981). Do Stock Prices Move Too Much to be Justified by Subsequent Changes in Dividends? American Economic Review 71, 421-436.

Shiller, R. (2000). Irrational Exuberance. Princeton: Princeton University Press.