Goldman Sachs director quits 'morally bankrupt' Wall Street bank

[dipsydoodle]

Source: Guardian

A Goldman Sachs director in London has resigned after publishing a devastating open letter accusing senior staff of being "morally bankrupt" and bent on extracting maximum fees from clients by offloading unsuitable investment products.

Greg Smith, who has left his post as executive director of the firm's equity derivatives business in Europe, claimed that chief executive Lloyd Blankfein and president Gary Cohn have "lost hold of the firm's culture on their watch". He added that "this decline in the firm's moral fibre represents the single most serious threat to its long-run survival"..

Smith's charges, which were swiftly denied by the bank, were published in Wednesday's New York Times.

Smith, who joined Goldman as a summer intern and worked at the firm for 12 years, first in New York and then in London, claimed managing directors repeatedly referred to their clients as "muppets", sometimes over internal email.

Read more: http://www.guardian.co.uk/business/2012/mar/14/goldman-sachs-director-quits-morally-bankrupt

[alcibiades_mystery]

1. 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.

[naaman fletcher]

4. meh...

When a relative of mine was there 20 years ago, he said that it was constantly ingrained that the firm was wealthy long term by looking after it's clients, and that they never did anything illegal or fraudulent, and never would have lied about the crap they were selling. But, that is just one opinion.

[Mopar151]

5. That's old school smart business - it's also called minimizing downside risk.

To put it another way - my friend works for a family of wealthy car dealers (service/parts manager). I've bought 2 cars from them, and would do so again. They would rather make a reasonable profit from each customer, on a recurring basis, than f*%# them once for a little more. It ain't no charity - but they sell a lot of cars!

[Delphinus]

6. That's the kind

of car dealer I want for my next purchase.

[Mopar151]

26. url,fwiw

http://www.merchantsauto.com/index.htm

How they work: Merchants is also a huge leasing company - ~10000 cars yr, IIRC. 3500 cars leased to the Red Cross nationwide. They retail about 40% of the cars coming off lease, with the rest going to the wholesale auction. They also buy some cars wholesale, to fill in their retail inventory, as well as retailing the best of their local trade-ins.

[JBoy]

11. My real estate agent is like that

Funny how I call him "my agent", as I bought our house using him 15 years ago. If/when I sell, and he's not retired, I'll use him again.

He explained to me, when he discouraged me from buying a couple of properties we looked at "Here's my selfish reason: I want you to love the place you buy, so when it comes time to sell you come back to me." I've also referred two or three friends to him.

Old school business.

[spooky3]

8. He could have made FAR more $ staying there

As long as GS didn't screw up so badly as to collapse. There's a comparatively limited high PAYING client market for his services now.

I'm inclined to take him at his word.

[Lucky Luciano]

13. He could make much more at a hedge fund....

Except that public bad mouthing like that us never good if you want to remain in the game.

[spooky3]

17. exactly

[Stuart G]

2. While this is not new, it is new coming from an insider

I hope it sets Goldman Sachs ablaze..

They got it coming....K and R

[ehrnst]

3. Why I Am Leaving the Empire, by Darth Vader

A great parody:

http://www.thedailymash.co.uk/news/society/why-i-am-leaving-the-empire,-by-darth-vader-201203145007/

[bluedigger]

7. That's great!

[EFerrari]

9. LOL!

[muriel_volestrangler]

27. A Response from Goldman Sachs From Chairman Lloyd Blankfein

The following letter to Goldman Sachs’ worldwide clients was issued today by Goldman Sachs CEO Lloyd Blankfein:

Dear Goldman Client:

By now, many of you have probably read the regrettable resignation letter published in today’s New York Times by former Goldman executive Greg Smith, explaining why he is leaving the firm after twelve years.

In the letter, in which he excoriates Goldman and his practices, Mr. Smith comes across as a man of conscience, ideals, and high moral standards. And as you read his words, you no doubt asked yourself this troubling question: how could Goldman have hired such a person?
...
http://www.borowitzreport.com/2012/03/14/a-response-from-goldman-sachs/

[Nihil]

32. ROFL!

Did you see what he said at the bottom of that letter ...

>> As to those of you who were serviced by Mr. Smith, it’s understandable that you would be concerned
>> about who will be taking his place going forward. On that front, I have some exciting news: today,
>> Goldman is pleased to announce that our new executive director and head of the United States equity
>> derivatives business in Europe, the Middle East and Africa will be Mr. Joseph Kony. For those unfamiliar
>> with Mr. Kony’s resume, let me assure you that he has the character and moral standards you have
>> come to expect from Goldman, and like the rest of us here at the bank, he has dedicated his life to
>> doing the Lord’s work.

I wondered what Joseph Kony would do to carry on "doing the Lord's work" once the authorities
got too close to him but I didn't realise that he'd seek sanctuary in the one place (outside of government)
that the murderous greedy & insane are always safe!

[Aviation Pro]

10. All one needs to know about Goldman Sachs can be found here....

https://mobile.twitter.com/#!/gselevator

It will make you throw up.

[LittleGirl]

15. that link doesn't work for me

I tried and I have a twitter account, but got an error about not being able to sign in or something like that. I use firefox

[Aviation Pro]

19. Try going through Google...

Use key words 'Goldman Sachs elevator'

First one on top is the same as the link embedded here.

Or try this: https://mobile.twitter.com/GSElevator

[grahamhgreen]

12. More in NYT: At meetings at Goldman, on the other hand, “not one single minute is spent asking quest

"At meetings at Goldman, on the other hand, “not one single minute is spent asking questions about how we can help clients,” Mr. Smith wrote. “It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.”

“People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer,” he warned.

A Goldman Sachs spokesman responded to the piece early Wednesday: “We disagree with the views expressed, which we don’t think reflect the way we run our business. In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.”

Mr. Smith’s criticism, much more than stories about bonuses or brickbats from the likes of Occupy Wall Street, could be especially painful for Wall Street now. Memories are still fresh of the Securities and Exchange Commission lawsuit filed in April 2010 accusing Goldman of fraud, after it sold clients complicated mortgage backed securities that later soured, and never mentioned that it had bet against them."

http://www.nytimes.com/2012/03/15/business/a-public-exit-from-goldman-sachs-hits-a-wounded-wall-street.html?pagewanted=2

[longship]

14. Two essential reads

To Big to Fail by Andrew Ross Sorkin
which traces the Wall Street meltdown from the Lehman Bros. collapse to Bush's multi-billion dollar bailout. Goldman figured prominently in everything that happened. After all, Sec'y of Treasury Henry Paulson was a former Goldman exec.

The Big Short by Michael Lewis is a very entertaining read which outlines exactly how Wall Street banks brought the entire world's economy to its knees by marketing poisonous products so toxic that a collapse became inevitable. The book features an incredible cast of characters who were the ones who saw the inevitabilities. A brilliantly told story.

[sarcasmo]

16. Maybe he can turn into a whistle blower.

[woo me with science]

18. Banks and corporations don't have morality.

They operate for profit and the bottom line, period.

That is why it is so deadly dangerous to cede your government, your lives, and the lives of your children to them.

[BadgerKid]

20. ^ This. n/t

[johnnyrocket]

21. I'm still curious, who are GS clients? And why would anyone want to deal with these sleazeballs?

[DeSwiss]

22. Does this mean.....

...that Blankfein isn't doing God's work???

- K&R

[just1voice]

23. That's one of the best letters I've ever read

From the article:

"If you were an alien from Mars and sat in on one of these meetings, you would believe that a client's success or progress was not part of the thought process at all," he wrote.

Smith wrote that Goldman had devolved from a company he was proud to work for when he joined. He said the bank needs to "weed out the morally bankrupt people" and suggested that the erosion of Goldman's culture threatened its future.

Smith wrote that there are easy paths to becoming a leader at Goldman, including persuading clients to invest in products the company wants to get rid of or will bring the most profit to Goldman.

Another way, he said, is to "find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym."

http://www.usatoday.com/money/industries/brokerage/story/2012-03-14/goldman-sachs-exec-resignation/53524744/1

[lame54]

24. "I don’t know of any illegal behavior..."

Fuck you Greg, you fucking liar.

enjoy your ill-gotten pension

[tclambert]

25. I'm making a list of moral banks. Here's what I have so far:

[dipsydoodle]

28. rivers banks are ok

.

[avaistheone1]

29. The only problem I have with Greg Smith's take is that he seem to think Goldman Sachs has not

committed any crimes - when that isn't so.

US regulators yesterday demonstrated their determination to crack down on Wall Street's excesses during the subprime mortgage crisis by handing Goldman Sachs a fine of $550m, and warning that "half truths and deception" would not be tolerated.

http://www.guardian.co.uk/business/2010/jul/16/goldman-sachs-record-abacus-fine

That said I do admire him speaking up publicly and walking away from his very lucrative position at GS.

[Dont call me Shirley]

30. Hey GoldSacks is just following Alan Greedspan's mantra "Hate The Customer".

He was a disaster for this country and everyone who followed his Ayn Rand selfish fake free market BS.

[Amonester]

31. That excerpt from his letter in NYT:

Today, if you make enough money for the firm (and are not currently an ex murderer) you will be promoted into a position of influence.

Telling, isn't it.

"not currently"

Looks like becoming one after getting promoted in a position of influence is just okee-dookee Gambini...