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We have some advice for Smith, as well as the thousands of college students who apply to work at Goldman Sachs each year: If you want to dedicate your life to serving humanity, do not go to work for Goldman Sachs. That’s not its function, and it never will be. Go to work for Goldman Sachs if you wish to work hard and get paid more than you deserve even so. (Or if you want to make your living selling derivatives but don’t know what a derivative is, as Smith concedes in passing that he didn’t at first.)
Goldman and other investment banks do perform an important role in our economy, and Goldman bankers — most of them, at least — can hold their heads up high. But it is not charity work. Goldman’s clients are mostly very well-off. Smith’s lament that the bank no longer serves their needs above and beyond its own does not tug at our heartstrings.
This is the heart of the problem with Wall Street right now. The editors at Bloomberg apparently don’t understand the basic principles by which a good service exchange is supposed to work. This client-company relationship should not be a competition, ideally it should be mutually beneficial arrangement.
How the system is supposed to work is that Goldman Sachs would do the best financially by helping their clients do their best. There should not even be a question about putting the clients’ needs above Goldman’s or Goldman’s needs above the clients. Their goals for the most part should be mutually interdependent and self re-enforcing. It should be a a symbiotic relationship not a parasitical one. There is a very real difference between making money providing an expensive service and running a con.
Smith seemed more than willing to help make a lot of money in exchange for providing clients with a good service, Smith was complaining that Goldman was basically ripping people off. Smith’s criticism is that Goldman was not providing its clients what they paid for, the best possible financial advice, and was also using their trust to trick them out of their money.
This Bloomberg editorial suggests it is incredibly stupid to ever expect a Wall Street company to actually try to provide you with the service that you pay them for. If this is truly what the elite business world thinks this is not only an acceptable but expected way to treat paying clients, then Bloomberg makes Smith’s point for him.
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This is most excellent analysis, Jon.
And as the government of this United States, as well as Goldman Sachs, apparently sees nothing wrong with what Goldman Sachs is doing, not merely, to their “clients” but to “the people” through those actions which Mr. Smith, did not “see”, the ones that the President has termed, for lack of a “too-big”, applicable word, merely “immoral” … perhaps, it would, now, be timely to remind that government, that not only does that government derive its just powers ONLY from the consent of the people, the “governed”, but IT, the government is morally bound to act in accordance with moral principle and what is right, not wrong, for all of “the people” whom it purports to “serve”, not just a self-selected, “astute” monied elite?
Bloomberg does, indeed, make Smith’s “point”. And that point should stick in the minds, not merely of the Big Boyz and Gurlz screwing around with eye-gouging footsie for-plays on Wall Street, but also in the CONSCIENCE of those morally and legally charged with regulating the sordid affairs which give rise to issues that impact upon all of civil society.
If the regulators can’t, or won’t, keep “it” clean, ought they not at least strive to keep it fair … it being class war, after all, not just a heavy-breathing lust for money … whatever the cost to “muppets” or suckers … or marks … or johns …?
More of this deeper probing, Jon, if you please.
DW
Our job is not to moralize or even analyze. Our job is to totally destroy Goldman (and Bloomberg). It’s them or us.
Go to work for Goldman Sachs if you wish to work hard and get paid more than you deserve even so.
Isn’t that the problem?
How the system is supposed to work is that Goldman Sachs would do the best financially by helping their clients do their best.
That’s how the system worked when the career bankers were in charge. What caused it to change is when the traders took over.
Shorter Bloomberg:
Suck it Trebek!
My experience (now dated at least five years) is that G-S recruiters came to campus to seek out the top students. I had quite a few who went there. My advice was, they are going to pay you big bucks, chew you up and spit you out. Live in Brooklyn, save your money, and with any luck you will get out of this with your sanity and a quarter of a million dollar stake.
Being a a member of the crew team was a big plus.
I imagine that being greedy and having larceny in your heart was also a big plus.
Goldman’s clients are mostly very well-off. Smith’s lament that the bank no longer serves their needs above and beyond its own does not tug at our heartstrings
If GS is not serving the needs of its clients, then it is either benign and doing nothing of consequence or it is ratfucking its clients.
It has been proven already that GS ratfucks its clients.
That is normal business as far as Bloomberg is concerned.
Investment banks and investment bankers are rent seeking parasites, I firmly believe. Please notice also that the Bloomberg article declared that these entities “serve a very important purpose in the economy” but fail to identify that purpose or why it is so important.
The extremely rich are screwing the merely rich and the wannabe rich and a few “sophisticated” fund managers.
You common people have no money so this is not your fight – indeed as Bloomberg News said you should have “little sympathy” for the newly rich as they get screwed by the already very rich MOTU.
I have a granddaughter that is on high school crew – think it will help at interview time if she goes out for crew in college?
Shorter Bloomberg: “you knew I was snake when we started crossing the river.”
Utter amazing bit of Hurbis this. Smith was talking about Goldman ripping off their clients. Again their CLIENTS. People that gave them money in exchange for their services, the use of their expertise and and what not. It is the basic relationship in capitalism – and Bloomberg’s defense seems to be “well they are rich. who else would we steal from?” Good god why would any sane rich person or for that manner any person give Goldman Sachs a dime of their money.
I love the tug at hear strings line- this means I can only assume the term “fiduciary duty” is a long distant memory.
well this just proves, as if we didn’t already know, wall street is corrupt down to its rancid heart and short of Hercules showing up with a river or two I have now idea how it will get cleaned up.
Goldman Sachs doesn’t need real customers because it’s in the suck money from taxpayers business. They put together a team, bought the White House, and they run it, while owning the money system at the same time.
I saw a cartoon during the Health Care Reform BS that I will never forget. Two lobbyists were talking. The second one says to the first one,”I don’t think we even need a patient.” Well, that’s GS. They don’t need anyone because they “do” Wall Street and the Government provides them with endless money to “do” them with. Why they have to take it from Seniors is beyond me. Aren’t they just printing it by the bushel. Why do they also have to grab from working people??
This is no recession, it’s a procedure, and the BushBomma Imperial Presidency is on board.
Goldman Sach’s is the Money Changers for the Wall Street Cluster Fuck that the OnePercent are doing on the people. They are simply consolidating every single inch of real property. Might as well be caterpillars moving across our lands. Your kids will pay rent by the night with the price changing daily like gas prices. They will pay for water by the bucket full because the OnePercent will own everything.
Absolutely. It was a revelation to me when I found out. Being on crew is like having the secret handshake. I don’t know why. My nephew was on the Stanford crew and did just fine, though in the end he decided to become an environmental biologist rather than an investment banker.
These statements logically contradict each other. If you want serve humanity don’t work at Golman contradicts Goldman and other investment banks do perform an important role in our economy. If Goldman does not serve humanity then how can they hold their heads high?
Second the article does not say what important role they play. Taking a guess I guess they mean they provide cash to corporations like Enron, they provided cash for GM and Ford to make gas guzzlers even though they lost market share for decades. They provided loans for the housing bubble. In the end they needed a bailout from the Government not the other way around. They are gamblers who swear this time they can win…they got a system.
No, for the most part these were good kids. One of them was an Iranian who wanted to do a Ph.D. in economics in the History of Economic Thought, but needed the money. They go in fresh like virgins and come out like whores.
The decline of America seems most pronounced in the declining quality of their lies. I agree with jon I mean come on this is the best lie they can come up with???
Good man!! We need more smart youngsters investigating all the effects we are doing to Mother Earth and try to make sure We are good Stewards of the environment…
Anyone read “The fall of the House of Forbes” Forbes business magazine is on such hard times the family had to sell the yacht, the private island, the Faberge Eggs etc. If anyone is connected to insider advice at the big banks it was the Forbes family who made their living writing puff pieces about how great banks like Goldman were.
I want the book at the FDL book salon.
He’s currently working on a project assessing the effect on the Delta of changing the flow of water from the Sacramento dams. It’s a post-doc. Hoping he will get a real job soon.
Something we here in the Bay Area need to be serious about.. Especially seeing that the southern and 30′s era people are clamoring to take even more water out of the whole watershed which would destroy all the fisheries in Northern California… not to mention that the delta could fall apart by the diversion of all that water down to southern counties…
Bravo Jon!
Not contradictory with the esoteric interpretation: these are financial warmongers, not servants. They make capitalism work.
Confused compradors think this is corruption; rather, it’s just composting.
Goldman Sachs takes trillions in bail out money and then says it’s not there to serve humanity. That’s like telling the guy that slipped you twenty when you’re taking out his daughter and saying, Im just here to boink your daughter and kick her to the curb.
These clients were not paying Goldman for “the best possible financial advice”. They came to Goldman to execute trades and they weren’t interested in advice (and if they got it they’d be cynical about it). There’s no fiduciary duty with this kind of client – they’re more of a counterparty than the traditional notion of a client. Goldman and other similar firms do have other types of clients to whom they have a fiduciary duty – for example those wealthy individuals who have their money managed by private wealth advisors.
And now they have begun to eat each other up. Lets all enjoy this show.
This is symptomatic of a pervasive corruption that has infected every level of business and government, but especially the higher levels which used to be held accountable. Exploitation is now considered virtuous. Evading taxation, regulations and law enforcement are viewed by executives as an essential aspect of their role. So-called leaders are judged by what they can “put over” on their clients and the public. I believe this must come to an end but is destined to end in a disintegration of the institutions that people depend on, or else civil war.
Smith very clearly says he was hired as a financial adviser to large asset funds
Bloomberg’s response is that of an addict in denial of the (obvious) problem.
you cant have anything but a conflict of interest once a bank/trading firm has a prop desk that trades for the house. At some point a recommendation made to a client is going to be seen by the prop desk as a loser and they are going to bet the opposite way. Then you have a client long ie mortgage bonds and the house short. Then inconvenient questions arise like did the client get put into the trade so that the in house prop desk could take the other side. I wonder if during the creation of the euro and the hiding of greece’s debt the banks knew they would be able to take the other side and have been salivating in anticipation. Does anyone think that derivative buyers corporate or government knew the risks and costs as well as the firms that sold those instruments to them???
Recall that internally they were referring to their product as “a shitty deal.”