Will Everyone Please Shut Up About Goldman Sachs?
Print
Comment
Email
RSS
Twitter
Will Everyone Please Shut Up About Goldman Sachs?
The bank has a culture that works. So what?
Posted Wednesday, July 29, 2009 - 12:16pm
At a financial conference at the New York Stock Exchange in 2006, I saw Lloyd Blankfein waiting his turn to go onstage while standing in a crowded room of reporters. Journalists, standing three-deep, surrounded bank executives at the conference. But not one reporter in the room seemed to recognize or approach the unassuming Blankfein, who was in shirtsleeves and wearing a baggyish suit—and also, at the time, was the chief executive of one of the largest investment banks. Byron Trott, the Goldman Warren Buffett, lacks flash; he looks more like a prosperous Midwestern architect than a millionaire Master of the Universe.
The key to the Goldman culture, its acolytes say, seems to be reciprocity. That's unusual in an industry in which power, or "hand," can sometimes be defined by the ability to take advantage of as many people—colleagues and clients—for as long as possible without getting caught. At many other Wall Street firms, bankers often perceive themselves to be at war with their firms; every bonus season brings negotiations about whether profitability comes from the banker's own work or "the platform," meaning the brand name of the bank. "Ripping someone's face off," or screwing them on a trade, is a common phenomenon on Wall Street. But Goldman, these people say, is refreshingly simple: "If you take care of us, we'll take care of you." And then they deliver. It may sound like the mafia, but you can see why many would rather buy into that idea than risk having their work taken advantage of. It's amazing, these Goldmanites say, what a little incentive can do.
So you can see why Goldman alums sometimes don't do very impressively once they leave Goldman. They find themselves in positions where no one questions their premises and it's hard to get good feedback and pushback. (This is why Paulson employed telephone banks of analysts to call Wall Street to solicit opinions.) Outside of the Goldman womb of debate and ideas, bankers and traders lack perspective. You might say that no Goldman is an island.
- « first
- ‹ previous
- 1
- 2
- 3
Comments
Just another example
...of Goldman Sachs adoration by this particular author.
Today I came across this site for the first time (after reading a few of Matt Taibbi's recent critiques of Government Sachs). I must say, I find the quality of journalism (if you can call it that) and apparent lack of critical thinking disappointing.
I would elaborate on my critique further, but frankly, I don't think it would make any difference. You guys will just continue to publish the same illogical, fact-challenged drivel until...oh, I don't know - maybe until you run out of paying advertisers?
Anyways, count me out of your future readership. I've wasted enough time already reading this b.s. Life's too short.
Good luck in getting that job offer from GS, Ms. Moore.
Sayonara...
Is she kidding me?
Can anyone say LITTON LOAN SERVICING???? This arm of Goldman Sachs is never mentioned in any articles about the company. Is that because Litton is one of the leading subprime mortgage servicing companies making a ridiculously large contribution to Goldman's bottom line and the housing markets downfall?
Goldman Sachs
Goldman was helping originating CDO's and CMO's with the right hand, and buyins cds from AIG with the left hand like it was the end of time. Which was it? It seems to me that this constitutes a material fraud, and why some lawyer doesn't just sue for the risk managers VAR report to show the synthetic probabilties is beyond me. Criminals.
There is hope for me
I always wanted to be a writer, didn’t think I had the talent. After reading this I may have hope…
Duplicate of an article from 2 weeks ago?
At first I thought this was an accidental re-posting of a similar article from two weeks ago: http://www.thebigmoney.com/articles/money-trail/2009/07/16/yes-we-do-nee... And, unfortunately, I have the same argument with this article. Any article that praises Goldman Sachs genius for their $3B profits but fails to acknowledge the $13B that the taxpayer gave to Goldman Sachs by way of AIG, fails to make that case that Goldman Sachs is all that bright.
I, too, can make a 3 billion dollar profit if the taxpayer gives me 13 billion dollars. Or, at least I'm willing to give it a try...
A good fairy tale
Goldman's culture isn't the reason for its success. It's an economic system that privatizes profit and socializes risk. They have exploited that to the tune of record "profits." Their management style has nothing to do with it. The taxpayer has everything to do with it.
It was a good article, so what?
Wow, reading through these comments is frightening in that I wonder if many people on this site learned reading comprehension at some point during high school or college. This article is about corporate culture in a specific venue where that kind of collaborative culture is, sadly, far too rare. For all those ranting about the evil of banks overall, or making money... that was not the point of this article. Let's step back a moment - what was largely the root cause for the current financial crisis? It was, for the most part (clearly not completely, but generally) due to a complicated system of syndications that packaged securities in a way that did not clearly outline the underlying investments and risk involved, setting up a system in which real risk was unclear due to a combination of reclassifying and then repackaging risk traunches. This structure then fell apart when part those underlying investment classes (housing loans) went batty due to a seismic shift in home values and the subsequent bursting of that bubble. It was at that point that many debts came due and, surprise! a whole huge structure had been built on what turned out to be a very shaky foundation. So... what is the obvious "dont' do that again" for this situation? 1) Setting up structures that are so interrelated that if one portion of the structure encounters problems the rest of the system loses half its value... don't do that! 2) Setting up divisions between these banks and departments within them such that it is impossible to understand the real risk involved in a capital structure - Don't Do THAT! Of course that is not in any way a catch all method of fixing the financial crisis, but it seems to me if you have two major contributing factors to a problem, that folks should be lauded for efforts to NOT follow that same kind of route in the future. We had a system where any naysayers to what the banks were recently doing were silenced, fired, pushed out of divisions, etc. This article does not say that GS shares no credit for the current economic straits of our country, but what it does say, and says quite well, is that the culture at Goldman is FAR better than that of most other financial players. I would hope that we could agree that forward progress is a good thing, and perhaps we should raise the level of debate to a point where we can look at and evaluate the details of a situation rather than reading an article the contains the name of a bank and having a Pavlovian moment that throws everyone into a rabid froth.
Paulson isn't floundering.
"...you also have to explain why Goldman Sachs alums have a history of not functioning terribly well outside of Goldman..." See, this is where you're wrong Heidi. They DO function very well outside of Goldman. That is precisely why they're getting yelled at by congressmen. Because instead of serving the taxpayers, they're serving GS. So really, the more they get yelled at, the better job they're doing. (for GS) Who said getting away with lying, cheating, and stealing was easy? Of course you will look ridiculous trying to defend your actions. Why is this so hard to understand?
Crudibility
The reporter's role of defending Government Sachs without actually going point by point on Taibbi's excellent sandblasting is nothing but pure credibility killer. Clearly, GS is in a bind, for the company that never speaks up about criticism is suddenly talking back, and asking obviously captured reporters to help out. But of course, we all know this depression isn't over, nor are the banks even remotely out of danger. Man, this is just going to be ugly. I only wish it was a reality show, but instead, we're all on Survivor together. I guess GS is Richard Hatch, winning with brilliant smarts and tactics, and not paying his taxes. Of course, he went to jail.
Talk about sick and deluded, or is it sick and deliberate?
Defending the indefensible. Is that your new career? How about writing a fervent defense of child molesters while you're at it? I understand that the Mafia has a culture that works too. How about we back off on them? After all, while the rest of us are unemployed, these guys are out extorting money and manipulating industries, just the sort of thing you seem to worship from the reading of your ....what's the word I'm looking for.... bullshit is as close as I can come. We need a whole new class of swear words that we can employ to express the degree of disdain that people who make 20 to 50 thousand dollars a year must have for these kings of crime after bailing them out and watching them stuff our money down their pants. It's too bad really that we use our law enforcement almost exclusively for tasering grandmothers and arresting college professors in their own home, and our military to exterminate wedding parties and funerals, when a swift assault of and arrest of the crooks at Goldman Sachs would do so much more to straighten out the mess they have created, but do not suffer from. I've read Slate since it's very earliest years. This is the first time I've felt compelled to write a comment, and I have to tell you that this article fills me with disgust and loathing. How anyone could write this kind of drivel is beyond me. What next, should we pass the hat, and send the few dollars any of us have left to create a trust fund for misunderstood bankers? These people are looting the nation. That's all there is to that. They neither deserve nor give any respect. Welcome to the ranks of the nuveau sleazy. I hope you get that GS job you're auditioning for. Sincerely, dslarsen