Goldman Sachs exec: "...environment at firm is 'toxic'"

[BumRushDaShow]

Top Goldman Sachs exec Greg Smith quits, saying environment at firm is 'toxic'
By Patrick Rizzo

In a very public and scathing resignation letter, Goldman Sachs executive director Greg Smith has called the atmosphere at the massive investment bank "as toxic and destructive as I have ever seen it."

"Today is my last day at Goldman Sachs," wrote Smith, who was the head of the firm's U.S. equity derivatives business in Europe, the Middle East and Africa, in an Op-Ed in the New York Times on Wednesday titled "Why I am Leaving Goldman Sachs."

Smith went on to describe what he says is a deteriorating culture at Goldman Sachs where clients are called "muppets" and their interests are given short shrift.

<snip>

"It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as 'muppets,' sometimes over internal e-mail," wrote Smith, who says he went to Stanford University on a full scholarship, was a finalist for a Rhodes Scholarship and won a bronze medal for table tennis at the Maccabiah Games in Israel.

More: http://bottomline.msnbc.msn.com/_news/2012/03/14/10682553-top-goldman-sachs-exec-greg-smith-quits-saying-environment-at-firm-is-toxic

NY Times OP Ed piece: http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?pagewanted=1&_r=2&hp

[Selatius]

1. Sounds like Enron all over again, except this time in the heart of Finance.

I bet all the other boys and not just Goldman Sachs down there at Citibank, JP Morgan, Wells Fargo, Bank of America, etc. think we're all a bunch of idiots for giving into their demands for a 700 billion dollar bailout for a mess they caused. All of them should've been allowed to burn when the house of cards they built collapsed. They wouldn't be laughing today.

[BumRushDaShow]

2. I did see where Citibank (et al) failed the latest stress test

yet they continue to go full bore with the same practices that sunk them in the first place.

[badtoworse]

3. Neither would anyone else - nt

[Initech]

16. Enron didn't get away with it - these douchebags won't either.

[alcibiades_mystery]

4. Oh,yeah, Goldman was a model of "humility" and "client-centered" care a mere twelve years ago!

Who the fuck is this guy fooling? Goldman has been the vampire squid for a hundred years, stocked to the gills with fraudsters and thieves. Smith is now likely rich, and can spend the rest of his life "lecturing" corporate leaders on "leadership and integrity." This is nothing more than a brand roll-out for a speaking and consultancy business. Dude's just another huckster that's realized you can make money inveighing against hucksterism.

[hatrack]

5. "I went to work at Moral Cesspool, Inc. . . . and now I smell BAD!!!"

"Clue party, table for one?"

[lumberjack_jeff]

12. +1

[jsmirman]

6. I know it sounds crazy to you

but when I was interviewing at I-Banking firms straight out of college, Goldman was the one place I really wanted to work. The culture was different there. Now this was quite some time ago, but I can tell you that the people you met were different - markedly - from the people at any of the other major players, and I had interviews, and usually multiple ones, with every big bank on the street.

Ultimately, after, in classic fashion, Goldman had put me through (no exaggeration) something like my 50th interview without extending an offer, I had to take an offer from another major bank. I lasted two years, during which I was recommended for early promotion a full year early, but left, as I could no longer take working in a soul-crushing environment doing something I didn't want to do. I always believed I would have stayed longer if I had ended up at Goldman.

I have been shocked by the things they have done in the last decade. I strongly believe that a number of people from the firm should be in jail. Things have changed there. I'd bet that an applicant going through the interview process up and down The Street wouldn't be able to discern any difference between the people at Goldman and the people anywhere else, except that they are probably even more arrogant and chuffed with themselves.

What this guy is talking about is not crazy, at least to me. And I'm not writing from a distance.

[Bake]

7. But they're "doing God's work."

According to their Chairman, at least.





OCCUPY!!

Bake

[ProSense]

8. Think Progress:

Goldman Sachs Insider Resigns, Reveals ‘Toxic’ Culture In Which Managers Called Clients ‘Muppets’

By Pat Garofalo

Last year, Goldman Sachs faced a significant amount of heat when internal emails — in which, bankers described a financial product they sold to clients as a “shitty deal” — became public. Goldman trader Fabrice “Fabulous Fab” Tourre became the face of a bank that cared more about its own internal trading profits than serving the needs of its clients, as shown by an email of his stating that he didn’t even understand the “monstrosities” he was peddling.

In today’s New York Times, Goldman Sachs executive director Greg Smith confirmed this characterization of the bank, writing that he resigned from Goldman due to its “toxic and destructive” environment which included managing directors referring to their own clients as “muppets”:

Today is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

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…It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail….These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?”

As Charles Elson, a professor of corporate governance at the University of Delaware, explained, “You make a much bigger buck on a transaction than on the long-term relationship…You have profiteers as opposed to advisers.” Goldman Sachs, of course, disputes Smith’s characterization of the bank, saying, “We disagree with the views expressed. … We will only be successful if our clients are successful.”

- more -

http://thinkprogress.org/economy/2012/03/14/444173/goldman-sachs-resign-toxic-culture-column/

[leftyohiolib]

9. lust of money (greed) is what will sink this country

[Oilwellian]

10. There are a lot of pissed-off clients this morning

Muppets???

I've been featuring a video on my YouTube page for quite some time now that reflects how Wall Street views their clients. Jim Cramer described it best:

"

[nadinbrzezinski]

11. Realize kids are taught this way

At places like the Whartons school of business. That be one of our elite schools. So this existing at an investment bank is all but surprising. The question is how many?

[BumRushDaShow]

13. +1

My biggest beef. The Whartons and Harvard Business schools' current modes of operation and teaching of the current set of business practices.

Couple this with similar practices by the Columbia School of Journalism's (or equivalent) models and you see the origins of the vicious, ruthless, divisive, and fact-free discourse and conduct that litters our landscape today, lacking in compassion and common sense, and rife with nothing but the quest for the almighty dollar bill.

[nadinbrzezinski]

14. My niece is attending Penn

Her boyfriend is going there.

When a kid gets paid 30K for a summer internship and is expected to make a five figure first year out there is a problem

She proudly described the environment at whartons, one she could personally not tolerate, she is in an engineering program, as backstabbing, lack of cooperation and always think about number one.

It came as zero shock to me, but I pointed out that this value system was one reason for the crash.

The reaction was telling... They, the kid and parents, hate bankers in general, but cannot connect the values taught with the crash

And from what they said, Harvard s hardly ruthless enough.

[BumRushDaShow]

19. My grandfather graduated from Penn Dental school in 1924

where he had been told that he was qualified for the medical school but they already reached their 2 n***er quota, but he was welcome to attend the Dental school.

So I have my own personal beef with them (born and raised and living in the city where they are located).

[nadinbrzezinski]

20. If it held they also had a Jew quota

These days it's not as obvious.

[BumRushDaShow]

21. Yup. n/t

[white_wolf]

23. On the topic of Journalism.

I'm not sure what Columbia's model is, but at my school I've heard professors say that the goal of media production is to lie to the audience or tell selective truths. I understand what he was trying to say, but that language always seemed wrong to me, shouldn't the goal of Journalism be to tell the truth even if we don't agree with it?

[DallasNE]

15. There Is A Feeling Of Entitlement With The Uber Rich

It leads to the .001% calling their customers and clients "muppets", or worse. Bundle what these Goldman-Sachs people are saying with what one of Romney's Super PAC friends is saying. They feel an obligation to run things for their own benefit. And this is probably where your Secretary of Treasury will come from should the Republicans win in November.

http://thinkprogress.org/politics/2012/03/10/442067/billionaire-romney-backer-ultrawealthy-have-an-insufficient-influence-over-politics/

[nadinbrzezinski]

17. Yup, when a kid gets paid 30k for a six week internship

In a New York firm, and expects at least five figure out of college, yup I'd call that entitlement.

[lapislzi]

18. Goldman Sachs is not healthy for universities and other living things

They are the reason that for-profit universities have the bad rap they do.

When my husband went to work for the Art Institute of Pittsburgh 15 years ago, it was a for-profit institution owned by EDMC Corporation (Educational Management bla bla bla), but it was not a vampire school.

The tuition was on the high side, but so were the admissions standards and the quality of education they provided. The post-graduation placement rate was high, and the corridors are still lined with artwork of graduates--be they designers, game designers, costume designers, or the like. The Art Institutes were respectable and a great place to work. My husband loved his job.

That all changed when EDMC fell victim to an LBO by Goldman Sachs several years ago. The first thing to change was the admissions process. No longer were tours offered by students, faculty, and adjucts. A staff of young, green, commission-only salespeople were brought in as "VP Admissions" to "sell" the "product." The pressure was enormous, and the turnover rate high among these kids.

Then students disappeared, to be replaced by "clients." Instead of running the IT Lab and Help Desk, my husband was re-branded a "customer care specialist."

The ads started running on TV around the same time that it became widely noticed that the Art Institutes would accept anybody with a warm checkbook. Dropout rates skyrocketed along with tuition, while the admissions standards, graduation and placement rates fell like lead sinkers. EDMC was hemorrhaging red ink, a loss leader for its parent company, Goldman.

Then the place descended into an atmosphere of mad paranoia among the staff. Who would be dismissed in the next round of layoffs? My husband made it until the Massacre of September, 2011, when 2,000 Goldman Sachs employees were terminated in a single day. My husband was among them. His position was eliminated, and his colleagues have had to take up the slack left when a senior technician disappears overnight (in IT you are not allowed even to clean out your personal effects or say goodbye to your co-workers--you are escorted from the building under guard)

When my husband chats to his former co-workers, we hear the words, "dismal," "depressing," and "scary." Entire departments have been eliminated in favor of outsourced services.

Goldman Sachs will suck every cent of capital out of EDMC and leave the husk to rot on the streets of Pittsburgh, Tampa, and cities all over America. The brand is poison now, beyond redemption.

I spit on Goldman Sachs and every vulture associated with their toxic culture.

[Rex]

22. As I've been saying and many have been saying for years now

until our government decides it wants to help the people of this country, we will see this kind of criminal activity continue. The govt only seems to function against criminal behavor of the blue collar variety. When it comes to white collar crime...the plutocracy really shows it's ugly head for all to see.

Oversight and regulation. Two things no business suit would ever want, but needs.