Goldman Sachs Exec Quits And Tells All

Goldman SucksAbout to be former Goldman Sachs executive Greg Smith is the talk of Wall Street today as a result of his op-ed piece in the New York Times, in which he describes his decision to quit the temple of Mammon (my term, not his):

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. 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…

[continues in the New York Times]

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  • Eric_D_Read

    Translation: I made my “fuck you money” and I’m tired of the pressure so now it’s time to play the good guy so I can try different kinds of scams.

    • Eric_D_Read

      It’s barely 10:30 am EST, and the comments at the NYT website are already closed. Hmmmmm…wonder why?

      • emperorreagan

        I see it as someone getting out before Goldman starts looking for fall guys. I suspect there will eventually be some token sacrifices to the SEC for illegal activity.

        • Eric_D_Read

          Possibly. But would resigning mean they couldn’t take the fall for things that were done while they were still there? I doubt it. If anything, that would probably make it more likely.

          • emperorreagan

            I would bet that 90% of the non-support employees at Goldman Sachs have committed SEC violations.  Maybe by being a public critic, he thinks that anything would be tainted by charges that Goldman is seeking retribution.

            I think it’s relatively common for people to make fuck you money then quit in investment banking, it’s just hard to guess at the reasons someone would bite the hand that feeds them.  Certainly not conscience, unless he magically developed one in the last few months because no one with a conscience goes into high finance.

  • Nunzio X

    As banks gobble up smaller banks and became gigantic, the customer’s sound financial health has come to be considered completely irrelevant. Even big Goldman Sachs clients’ interests were seen as less and less relevant as “profit-uber-alles” came to be the motto.

    As yourself: if a mega-bank doesn’t even care about it’s billionaire clients any more, why the fuck would they give a shit about YOUR dinky bank account?

    Increasingly, I’m making it a personal choice to do as little business as possible with non-local companies. It ain’t easy, but I’ve found that my local credit union is a lot more my style than Chase or whoever, and the same applies in almost every industry.

    Sure, I can’t buy gasoline from Mom And Pop Refiners / Fillin’ Station, but to the extent possible, my bucks are going local.

    Fuck Goldman Sachs, Chase, Walmart, etc.

    I’m Nunzio X, and I approve this message.

    • Eric_D_Read

      Buy Local. Hate Global: a survival slogan for the Brave New World.

    • http://twitter.com/prosperhappily Robert S

      Going to a credit union, or a local bank is a great move.  Nice job.  

  • Bull dirt

    I’m not buying this guy’s sudden proclaimation that he has taken the moral high ground. He’s just another rat leaving a sinking ship.

    Everyone should research the amount of executives stepping away from the financial sector right now. It’s absolutely staggering. This is pure P.R. and cover for what’s really happening. Good find on this article.

    • Southpaw10677

      i agree bull the timing on this is suspect especially with over 100 resignations from executives in the past year and a half in the financial sector from all over the world, these folks know something big is coming down the pipeline and they are all heading for the hills u r right bull its all smoke and mirrors

    • Md471

       I worked at Goldman in the mid 90′s and it was ALWAYS a dishonest and boiler room culture.  Smith’s reporting that Goldman was a nice team work culture is utter bullshit.  The only thing “nice” about Goldman Sachs is the paycheck which is about 3% higher than at other Wall St investment banks.  It’s evident that Smith is departing because he wasn’t promoted to “Managing Director” within the typical time frame.  At Goldman, the “Executive Director” title is at the Vice President level and typically it’s the “Executive Director/Vice President” job title. If you don’t move into the “Managing Director” level within the time frame, you will never move into the MD level at Goldman. About 85% of MDs at Goldman are jewish men and very few women or minorities are at the MD level. Goldman has always been a “sink or swim” culture and you better dress and act the part because your executives will ask you what you are spending you money on if you dress like the average Joe.

      • Liam_McGonagle

        100% agree with everything, with possible reservation about the relevance of the Jewish thing. I don’t believe there is anything particularly magical about any gender, religious or ethnic community that makes them more or less susceptible to corruption thany any other.

        My take on it is that the most salient weakness of culture in companies like Goldman is their large scale, which necessarily induces reflexive, group-think in a private industry setting, where there is no premium on minority stakeholders’ rights.  It may be particularly accute at Goldman, but really it’s emblematic of themes pervasive in almost all American institutions.

        And the public sector’s prone to a version of this, too, but there is a signifcant difference in that they at least have to maintain the facade of respecting minority stakeholder rights–as transparently shambolic as that may be. 

        I fully acknowledge that the functional difference between this and corruption of private sector culture is largely academic in the short term, anyhow.  But I can imagine some structural changes that could more easily redeem the public sector, at least partially.

        Yes, the raison d’etre of these companies is simply to return a profit–to some unaccountable private entity; maybe their officers, maybe their customers.  There is a place in the social ecology for that sort of behavior–just a much, much, MUCH smaller place than we’ve been given to believe to date.

        Smith’s sour grapes more than likely do originate from him being blocked from the inner sanctum than some kind of Saul-on-the-road-to-Damascus moment.  But that’s not to say that he won’t cogitate on that seminal event, and that this whole thing won’t become the springboard to a radically broader and more accurate understanding of his place in the world.

        That said, I love to take the piss out of the self-serving bullsh*t platitudes Smith laid out about Goldman’s “Golden Age”.  I pray to god that he and other drones run accross this sh*t and recognize themselves in it.

  • Liam_McGonagle

     Quote from Smith:  ” . . . 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. ”

    A little wide of the mark don’t you think?

    Still, these are just baby steps.  Took me quite a while to accept a realistic Weltanschauung, too.

    And now that Smith has totally and irrevocably violated his employment contract’s non-disparagement clause, he’ll have plenty of time to get up to speed.

    • Liam_McGonagle

      P.S.  Just occurred to me;  Isn’t that quote really a version of the ol’ dirt band’s post-breakup mantra,
      “It used to be about THE MUSIC, MAN!”

    • Liam_McGonagle

      P.P.S.  For further disclosure, I’d have to say that I worked at Goldman for a while, too in the ’90s, and it really is true what Smith says about the culture changing.

      I used to be on the Mitt Romney portfolio team.  When he was in town we’d meet with him as a team and do breakfast.  Then we’d help some old lady across the street on our way to the office and round the whole thing off by picking up some faded slag for a gang bang and snort coke off her *ss through rolled up $100 bills.

      But these day’s it’s all about the almighty dollar.  Distressing.

      • Jin The Ninja

        lol’d.

        • Liam_McGonagle

          Thanks.

          Have to admit, though, I’m a little peeved by this Smith fellow’s timing.  Totally undermines the dramatic launch of my own tell-all book about my days at Goldman.

          For years I was part of the “Sunshine Squad”–the division that got axed when Mr. Whatshisface came on board.  You know, the guy Smith apparently doesn’t like.

          Goldman basically had me drive around town spreading magic pixie dust and looking for cats to rescue from trees.  Just the typical sort of thing that executives from multinational financial leviathans do all day.

          Have to say that you look familiar, though.  Were you that fellah two doors down the hall?  The one in charge of the care and feeding of the company unicorn?

          • Jin The Ninja

            i totally feel the same way. it’s very transparent- mr. smith only finds it ‘immoral’ NOW? so i guess stealing pensions, driving up food commodity prices, mortgage securities trading, that was all okay, until the ‘culture’ degraded. Oh yes, mr. smith, you were such a high minded artist-poet of econ BEFORE…lol

          • Eric_D_Read

            Don’t worry. He’ll make up for all of it in his tell-all book revealing the inside trading secrets that THEY DON’T WANT YOU TO KNOW! 

            Soon he’ll take his place along side late night TV humanitarians like G Gordon Liddy and the Sham Wow guy.

          • Jin The Ninja

            oh good, i wouldn’t want him to starve…

      • Eric_D_Read

        There’s a great collection of short stories in there somewhere..

  • Okarin

    once he gets his book published that’s his another million though i wouldn’t mind if he’s remains insightful and honest

    • http://twitter.com/prosperhappily Robert S

      I don’t doubt he’ll try to publish a book.  But, would you be surprised if he met with a sudden accident in the near future?  

  • http://simondrake.com/ Simon Drake

    Before the credit bubble blew up in our faces I had the honour of being a back room contractor at Goldmans. I have no malice towards them, I left my role voluntarily, BUT they were the top of the pile when it came to ‘financial institutions that think they are invincible’ (too big to fail), the torch bearers of financial wisdom (they trade both ends of the market – you my friend are the slim piece of ham in the sandwich), and believe that their sh1t don’t stink – thanks to an omnipresent public relations network. The tragedy is that we trust our money with people and they trust GS. We’re at the bottom layer of a bunch of fools.

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