If you think about all of the big debates of the last few months or years, you’ll think of the Wall Street bailouts, the 1% vs. 99% and a different set of other heated discussions. One common element in recent years has been Goldman Sachs (GS, Financial) being in the middle of the discussions.
It’s nothing new. A few years ago, one of the very interesting authors that I enjoy reading, Matt Taibibi, wrote about Goldman Sachs being the root of all evil. I’m barely exaggerating. In fact, he said that Goldman had been a major player in both creating financial bubbles (profiting on the way up) and then making even more money when the bubble ended up bursting.
That article and many others also pointed out how Goldman employees seem to be running the U.S. government in many different ways. If you look at the top guys that manage institutions such as the U.S. Treasury you will see that the majority of them did spend a considerable amount of time working for Goldman. Was it by chance then that the Treasury came out to rescue Goldman and others but also AIG which owed a tremendous amount of money to Goldman? Many find that difficult to believe…
[b]
The Testimony[/b]
As if public opinion wasn’t bad enough, CEO Lloyd Blankfein ended up testifying regarding the role of Goldman Sachs in the selling of toxic securities. I personally thought it got a bit ridiculous. He was mostly blamed for selling products that his firm had judged to be “crap” to its clients. We could probably discuss this for a while but the main point is that it certainly did not help Goldman’s image.
The Departing Employee
Then, Goldman Sachs saw one of its executives, Greg Smith, leave the firm in a very public manner as he wrote a piece in the NY Times explaining why he was leaving. The summary is that he felt the culture of GS was compromised, that it was no longer about helping clients but about screwing them. It made enough of a story for Goldman to have to react. The company said: “In our view, we will only be successful if our clients are successful.”
Even the fact that Goldman felt the need to reply to Mr Smith was sign of how bad things have become. Of course, many others such as Andrew Ross Sorkin have been very public about how GS is supposedly screwing its clients:
@GSElevator
For the past few months, what is almost certainly a fake twitter account has been posting as a Goldman employee with all kinds of remarks that do not help the GS image. It’s not that anyone thinks those are actual quotes. It’s rather that few believe that they are that far outside of what is really happening.
My Thoughts
Clearly, Goldman is to blame for a lot of what is going on. Its main problem though is that it continues to act in an arrogant way. That being said, I don’t think Goldman is evil. What I feel even stronger about is that it’s not more evil than its competitors. Goldman is the biggest and has been the best in its industry for a few decades now, so in this era where attacking the rich and successful is in fashion, it is such an easy target (as is attacking the top 1% or fortune 500 CEOs). What I would say though is that having firms like Goldman that are considered too big too fail is certainly an issue and if there isn’t enough control on how much risk the firm can take, then it should not be allowed to “bet the house” knowing that taxpayers will pay if needed.
What are your thoughts on Goldman Sachs (GS) ?
It’s nothing new. A few years ago, one of the very interesting authors that I enjoy reading, Matt Taibibi, wrote about Goldman Sachs being the root of all evil. I’m barely exaggerating. In fact, he said that Goldman had been a major player in both creating financial bubbles (profiting on the way up) and then making even more money when the bubble ended up bursting.
That article and many others also pointed out how Goldman employees seem to be running the U.S. government in many different ways. If you look at the top guys that manage institutions such as the U.S. Treasury you will see that the majority of them did spend a considerable amount of time working for Goldman. Was it by chance then that the Treasury came out to rescue Goldman and others but also AIG which owed a tremendous amount of money to Goldman? Many find that difficult to believe…
[b]
The Testimony[/b]As if public opinion wasn’t bad enough, CEO Lloyd Blankfein ended up testifying regarding the role of Goldman Sachs in the selling of toxic securities. I personally thought it got a bit ridiculous. He was mostly blamed for selling products that his firm had judged to be “crap” to its clients. We could probably discuss this for a while but the main point is that it certainly did not help Goldman’s image.
The Departing Employee
Then, Goldman Sachs saw one of its executives, Greg Smith, leave the firm in a very public manner as he wrote a piece in the NY Times explaining why he was leaving. The summary is that he felt the culture of GS was compromised, that it was no longer about helping clients but about screwing them. It made enough of a story for Goldman to have to react. The company said: “In our view, we will only be successful if our clients are successful.”
Even the fact that Goldman felt the need to reply to Mr Smith was sign of how bad things have become. Of course, many others such as Andrew Ross Sorkin have been very public about how GS is supposedly screwing its clients:
@GSElevator
For the past few months, what is almost certainly a fake twitter account has been posting as a Goldman employee with all kinds of remarks that do not help the GS image. It’s not that anyone thinks those are actual quotes. It’s rather that few believe that they are that far outside of what is really happening.
My Thoughts
Clearly, Goldman is to blame for a lot of what is going on. Its main problem though is that it continues to act in an arrogant way. That being said, I don’t think Goldman is evil. What I feel even stronger about is that it’s not more evil than its competitors. Goldman is the biggest and has been the best in its industry for a few decades now, so in this era where attacking the rich and successful is in fashion, it is such an easy target (as is attacking the top 1% or fortune 500 CEOs). What I would say though is that having firms like Goldman that are considered too big too fail is certainly an issue and if there isn’t enough control on how much risk the firm can take, then it should not be allowed to “bet the house” knowing that taxpayers will pay if needed.
What are your thoughts on Goldman Sachs (GS) ?
