Chillin' out till it needs to be funded
Let’s face it. Apart from the yellow journalists who like their Vampire squid and the blind faith of followers of rant-o-rama hellraisers, not many others would blame the culture at Goldman Sachs, even when watching a live episode of South Park making a statemment using the neighbourhood S&L “culture” to show how bankers lost it for us all. charlie Gasparino revbveals he is a VP of 10 years who did not make MD right about now ( Thanks Twitter)
One does but feel that Greg smith’s op-ed / resignation in the New York Times …( To read with copyrighted illustrations, head over here and sign up for NY Times or use the NY Times account you already have)
When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.
Really? Not that anyone in the markets is really concerned, but The Old Gray Lady did carry the resignation prominently and just after a bad year from Goldman Sachs. .but then the Cat is already out of the bag as Fixed income markets are returning good volumes and income this quarter and Goldman Sachs has been upgraded by many broker/analysts , moving some units to cost efficient Utah, and has cleared the bank stress tests and been lauded at myriad places for cutting down compensation ratios ( after the fracas over i-banking pay remains and Greg Smith was one of the biggest beneficiaries) and for keeping bank capital ahead of stringent requirements and changing accounting to review unnecessary fair vlalue MTM and one of the few to eliminate DVA/CVA adjustment lines from its balance sheet.
The remaining insights in the letter, are fairly presented and also betray the fact that in his heart Greg believes and acts on all of them. In fact they could make good leadership material in the next MBA written book too, and the culture is neither sounding too academic nor feeling any more sticky or gooey than any big bad non Commie redneck Capitalist at his worst or even close to being vampire squiddy dark pool of “your choice of liquid /colloid here” and could in any other year well sound almost congratulatory in tone using cross sell, execution and market making..
How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.
What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.
The firm would do well to keep quiet over whatever Greg plans to brew in an ignominious exit from the top echelons like many before him. However, the overall tone of the letter at any other time would also have been understandable , pointing out to the lack of transmission of core values in the culture which is probably another kind of an exercise for the company