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Wednesday, March 14, 2012

And just what do you think was the source of the money that makes you be able to afford to do this?
Posted by Jill | 6:06 AM
Greg Smith, an executive director at Goldman Sachs, has told his bosses to take this job and shove it -- on the op-ed page of the New York Times:

To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.

[snip]

When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.

Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave.

How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

Now, I don't know how much Greg Smith has earned from the toxic environment at Goldman, but as an executive director, you have to believe it was a pretty penny -- probably enough to support himself and his family in comfort, if not quite the style to which they are acccustomed, for a good, long time; perhaps forever.

Lloyd Blankfein has been CEO at Goldman since May 31, 2006. Greg Smith was at Goldman through the financial collapse of 2008 -- and he stayed another three years. Even the most charitable view implies that he socked away enough money long after he had decided to do this that if he is blacklisted from Wall Street forever, he won't need the money.

So cry me a river, Mr. Smith. You had a chance to make a statement in 2008 when it became clear to everyone OUTSIDE of Wall Street what Blankfein was. And you stayed. I don't fault you for wanting to assure your family's future before throwing in the towel. But don't sit there now and tell me how moral you are for exposing Goldman when it's the very money and influence you gleaned from that system that gives you the clout to try to cleanse your soul in the Times. You may never work on Wall Street again, but you and your family will be living on the money made from that system. And no amount of op-eds will hide that fact.

UPDATE: Yeah. What Dan Gross said:

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3 Comments:
Blogger Patricia said...
Yeah he's in no way going to suffer financially from this.That anyone would hand over their money to a financial institution is just plain crazy. Thank God I don't have any. LOL
3/14/12, 12:25 PM  
Blogger jurassicpork said...
Oh, God, you give great ed, Jill. I need a cigarette.
3/15/12, 1:15 PM  
Blogger O’Hollern said...
Apparently he's got a couple of offers for a book deal too. These bastards just always land on their feet.
3/15/12, 4:42 PM  
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