Greg Smith Isn't The Only One Who Testifies To The Rot At Goldman-Sachs

Wallace Turbeville, whose tenure as a VP at G-S predates Smith, gives testimony as well.

From The American Spectator:

Having spent 12 years at Goldman prior to 1997, I sympathize with Smith’s feelings of loss and betrayal. I left just at the beginning of the institution’s evolution into its current form and have observed the process with despair—not only for the organization but for the loss suffered by the nation.

He speaks with respect and fondness of his earlier days there, and with despair at what followed.

The world shifted. Trading exploded, largely fueled by information technology. It seemed that every number on earth could be divided by every other number, all in real time. Everything could be priced, and, once priced, could be traded. Markets were deregulated and carved into pieces, each representing a trading opportunity. The Wall Street firms, and Goldman in particular, with their enormous capital resources, could dominate more and more of the price points in the American economy, extracting value from the producers and consumers. Software programs could be written to access electronic trading platforms so that the enormous force of the trading houses could be brought to bear without the inefficiency of human intervention. It seemed that a business model relying on dispassionate exploitation of immediate opportunity had been perfected.

The golden rule kicked in—“He who has the gold makes the rules.” The predominance of trading profits reversed the balance of influence in favor of the traders. Clients were no longer just clients; instead, they were counterparties to be dealt with at arm’s length. In the end, the traders achieved Nirvana—using asset pools, they were able to synthesize their own clients as sources of securities to trade. The business of trading, focused on short-term profits, became dominant at Goldman Sachs, and every firm on Wall Street tried to emulate it.

There is more here, much more. It presents a problem for G-S, because it affirms what they loudly deny: They have been playing the ends against the middle, shamelessly.

Our culture has been gutted, not only because of these people, but they certainly have encouraged the process along.

Our Saviour's haunting question lingers in the air:  

What doth it profit a man if he gain the whole world and lose his own soul?

And, in that loss of the soul, what happens to the world you attempt to gain? Will it be worth the energy spent in the acquisition?

This story is just beginning to ramp up, ya'll. Don't listen to the noise the PR shills will be creating. Look at what has happened in your own homes and businesses and in the places you live, to your friends and family, your city and county, and your country.

The Spinnnnnnnnn Beginnnnnnnns For The Vampire Squid Team

And, boy oh boy, it's gunna take some real spinning to get past Greg Smith's tightly-written and horribly damning account of his reasons for his departure from G-S.

For those who haven't taken the time to read it--this is as good a time as any.

The first salvo appeared in the WSJ, a memo ostensibly written by Lloyd Blankfein (suuuuuuure-he-wrote-it-honest-injun!) which circulated to the employees.

Needless to say, we were disappointed to read the assertions made by this individual that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients.

In a company of our size, it is not shocking that some people could feel disgruntled.  But that does not and should not represent our firm of more than 30,000 people. Everyone is entitled to his or her opinion.  But, it is unfortunate that an individual opinion about Goldman Sachs is amplified in a newspaper and speaks louder than the regular, detailed and intensive feedback you have provided the firm and independent, public surveys of workplace environments.

In other words: He's just a disgruntled little fish in our big ocean here, never amounted to much, never will. Every time we come 'round and ask ya'll if ya'll are happy, ya'll all say 'Why, sho' nuf Massah Blankfein, we all jest luuuuuuuves working fer you heah at Goldman-Sachs.' That's good enough for us, so get back to work and rape more muppets--I mean clients--this week. Churn out those bond issues you know belong on the toilet paper rolls in the basement lavatories. Flip those stocks, churn those derivatives. Remember above all our motto--IBG/YBG--I be gone, you be gone, long before the muppets--I mean clients--understand how we raped them.'

There is a problem with that approach: Greg was not that small a fish, matter of fact he was very much on the rise and on the inside. His essay makes that clear. His essay makes a lot of things clear, but mainly all those voices that have been screaming that G-S is a corrupt enterprise have been telling the truth.

The attacks on Smith begin in earnest tomorrow. He may need a bodyguard, and he will find out just how completely bought-off both the US and UK governments are. His family, out to the second cousins, will be terrorized. He will be made An Example, An Object Lesson--don't mess with us boy. It would be a shame if your little five-year-old nephew were to end up in some sort of terrible accident, wouldn't it?

When the noise begins in earnest, OS hopes his readers will not be distracted by it.

'Get The Culture Right Again': Greg Smith's Final Words Upon Departing Goldman-Sachs

(HT Jesse, who has an uncanny ability to shuffle through millions of words to find the best ones to share.)

This sort of little announcement usually means little to the outside world:

Greg Smith is resigning today as a Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa.

OK, another banker/broker type has made his wad by making great deals from which he made profits, and he's off to do other things with his wealth that interest him more.

No biggie, happens every month somewhere.


This little announcement is different, because it is attached to Mr. Smith's Op-Ed piece in the YewNorkTimez, announcing the reasons for his departure. It is a wonderful thing to read, in no small part because Mr. Smith tells us in tones loud and clear that Culture Shapes Economy Before Economy Shapes Culture, which is what OS has been saying alllllll along.

Every paragraph is pithy, and the article is pre-loaded to blow up in the faces of the G-S PR hacks who will go to great lengths to destroy his reputation. (OS assumes Mr Smith has great lawyers to protect him when G-S calls in its favors to the SEC and Justice Department to have him prosecuted and sued for his public departure. The Corleones used the garotte and decapitated heads of favorite horses. Our modern-day Corleones use the bought-and-paid-for government.)

One of the best portions--it is difficult to choose--is this:

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. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.

It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.

Mr. Smith writes of humility, integrity, working for the best interest of the client, respect, work ethic--all the hallmarks that make a great business, a great family, a great house of worship, a great city, a great country. When those things go away, it is only. a. matter. of. time. before things cave in upon themselves.

So, thanks to Mr. Smith. He will undoubtedly go through the swamp full of alligators and sewage once this article gets around, and OS assumes he has a book deal in place, for which this essay was a teaser. If not, he'll have one by the end of April. OS hopes he carefully tucked plenty of very damning evidence away in his briefcase for these past several years. One always needs a bit of leverage in dealing with sociopaths--they respond only to the prospect of gaining more money or power, or to the fear of exposure and humiliation. An appeal to ethics or any greater good simply does not register anywhere within what little may remain of their souls.