
Why I Am Leaving Goldman Sachs - roam
http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?_r=1&pagewanted=all
======
byrneseyeview
Goldman has a kind of hilarious understated response, in which they note that
this guy was a VP (there are thousands of VPs at Goldman) and that the group
he managed consisted of him and him alone. Plus, this was a bad year for
bonuses. Nothing like a slow career and a dwindling bank account to make you
aware of how morally imperative it is that you switch careers!

The people I know at Goldman are generally bright and hard-working. The ones
who perform agency work seem to serve the interests of their clients; the ones
who are closer to proprietary traders tend to advance the interests of
Goldman. There are some products for which it's very hard to have a pure
agency relationship, though; the best way to keep them liquid is to trade with
someone who is taking the other side of your trade.

I'd keep that kind of thing in mind when reading a story like this. It's
asymmetric warfare: he has nothing to lose by talking about how bad Goldman
is, but if Goldman talks back, they're a) dignifying a silly story, and b)
creating an opportunity for irresponsible folk like Taibbi to willfully
misinterpret them.

This article is the table tennis bronze medal of moral outrage.

~~~
illumin8
Managing $1T in client assets doesn't sound like a job for a lowly VP. Your
comment is mostly an ad-hominem attack against the author because he may or
may not have received a smaller bonus this year.

~~~
byrneseyeview
The article is all about the _hominem_. He says he left because of how he
felt. It's entirely appropriate to ask if there might be other feelings
involved.

As another reply points out, he didn't manage that much money. Goldman had
clients who managed that much money, and he apparently handled equity
derivatives for those clients.

I once worked at a company that worked on an internal web app for one of the
largest advertisers in the world, but that doesn't mean I "ran advertising for
clients with a multi-billion dollar marketing spend."

To be clear, I can sympathize with someone who used to be in the business of
working as an agent for his clients, and who is now in the business of
executing the same transactions but taking the opposite side and then hedging
his risk. I just don't think moral outrage is the right response to a change
in the macro situation. One could argue that while financial markets got more
sophisticated, Goldman Sachs coincidentally got evil, but I think it's more
likely that markets evolved, Goldman evolved with them, he didn't evolve with
Goldman, and he took it personally.

------
steve8918
It's interesting how the tone of this article is almost exactly the same as
the one about the Microsoft employee that recently quit Google.

Something happens to companies as they get larger, where the culture of a
company starts dying from a death-by-a-thousand-cuts, and then they start
promoting the wrong people into upper management that seem to really poison a
very good company culture. It sounds like Goldman Sachs is one of these
companies.

The irony is that I think the shift in mentality came from Wall Street itself
pushing the idea of "maximizing shareholder value", in the 80s. This lead to a
bunch of financially positive but culturally negative (some would say
sociopathic) decisions, such as closing plants that were profitable, _but
weren't profitable enough_. I think Michael Moore had a movie on this called
"The Big One".

Forbes has an article on this, calling it "The Dumbest Idea in the World":

[http://www.forbes.com/sites/stevedenning/2011/11/28/maximizi...](http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-
shareholder-value-the-dumbest-idea-in-the-world/)

I read the biography on Goldman Sachs, and I don't doubt for one second that
there was a historic culture that most of the employees were fiercely proud
of. But as the author mentioned, a few mistaken promotions into power and the
whole culture of a company can change through death by a thousand cuts. No
doubt the same thing is happening at all large companies that started off with
great roots. I saw this occur at Yahoo, where completely idiotic decisions
were made in order to preserve revenues so that managers' bonuses were left in
tact.

Is this something that can be avoided? I'm not sure... corporate culture
starts at the top and works its way down. It's something that must be
demonstrated by the leaders of the company at every level, and it filters down
to the lowest ranks. So if you have a company with strong leadership, then I
think it can be staved off for a while, but it requires a relentless focus.

~~~
chime
> Something happens to companies as they get larger...

I think promotion happens. When you're a fresh grad right out-of-college and
the Managing Director says "client is our #1 priority", you take it to heart.
That's your new mantra now. Nine years later, when the same Director, now
promoted to the Board says the same line, you groan inside because you know
exactly how often he calls his clients muppets. Slowly you begin to feel that
the company is no longer the same wonderful, inspirational place of work that
you signed up for.

Positions of power at any company, non-profit, government, or political
organizations are not filled with do-gooders who want to give everyone a hug.
They are filled with thick-skinned, ambitious, practical people who have
learnt to say the right things at the right time. So if you're a junior exec.,
you will hear inspirational BS. As you join their ranks, you will hear their
real thoughts. If the latter disgust you, it clearly means you aren't fit to
join their ranks, not because of any lack of skills on your part but rather
the difference in how you view the world.

To me all these execs leaving companies and saying "it's so different now"
just means they all grew up and realized they didn't like what they signed up
for. It's no different than couples splitting because "we grew apart." I
highly recommend people quitting if things aren't working out (
<http://chir.ag/200804242130> ) but I do not recommend airing out the dirty
laundry, especially when no laws were broken because you're just scaring off
the next company you intend to work for.

None of my above comments were in reference to anything at GS/Google/MS
specifically. Facebook will start charging for integration some day too and
some Dropbox exec will joke in company meetings about all the stupid people
who save personal photos on their servers. People are people and companies are
companies.

~~~
yajoe
I agree with your point that part of the cause is getting more senior and
actually watching the lies. But I don't accept that we should condone that
behavior.

Full disclosure: I left Micosoft last year after I long debated the trade offs
of starting my career over. I was a "top performer" and Microsoft makes a
point of telling the many people like me to stick around for all sorts of
reasons. Deferred compensation. Trajectory. Influence. Etc.

But then I actually got into the VP's circle and didn't like what I saw. This
smooth-talking, confident leader within Office was some kind of sociopath. He
and his comrades snickered after a middle manager announced he would put the
blame on someone for failing to deliver a major feature. I was confused when
it happened. Like one big inside joke, that would be my initiation.

This feature was promised three years ago to the previous President of the
division, and it turned out to be a top priority for the incoming president.
Well, the middle manager miscalculated and let it slip. We've all done this to
some degree-- answer an email late, forget to deliver on a request -- it's
part of being an engineer working with people. But the middle manager had done
it at a big scale and was wrong.

Rather than admit it because that would end his career (as I'll explain in a
minute), he threw someone else under the bus. He asked this senior PM to take
the project over. Rather than give her support, he decided to undermine her.
He had people give copious amounts of negative feedback on her specs, held
back people from working with her, and lied about progress to management. He
was setting her up to fail so he could swoop in and deliver it after she
failed without the wrath of being late. We've all seen managers excuse being
late because of low performers. The VP and his manager needed to construct a
low performer. And all he had to do was signal to the herd to stay away from
her with all the negative feedback.

The hell they put her through so they could save their asses. And the fucking
snicker. She was a warm, smart, expert in this feature and had she been
allowed to work she would have outdone the middle manager. But the middle
manager was ambitious. And the VP seemed to like watching people destroy their
lives. And he liked loyalty. He knew if he could get dirt on his managers he
would keep them for a long time.

I try to be a good person. I try to be honest. I try to stand up for people.
But I couldn't help her. For a year I gave as much moral support as I could
without the inner circle knowing. But the politics were too thick and toxic to
touch. I watched her nervous breakdown. And then I knew I had to leave. Maybe
it really was this one bad team. But this was the rising star VP. If this is
how he succeeded then the others VPs would have to eventually. And the middle
manager was his replacement.

So, I got a different job. I took 3 months to travel in Europe to wash off the
filth. And I checked in with my friend, and am pleased to hear that she has
landed on her feet and is doing much better. At my current job the people
argue about -- gasp -- the customer. What a difference.

But I am still angry that evil people -- the VP, the middle managers -- are
allowed to continue. I don't agree we're supposed to be quiet. Food critics
used to be afraid of giving bad reviews because they wouldn't be allowed to
keep their jobs (in local markets unless you were someone politics would
prevail). Now we have Yelp. Really bad restaurants should have a hard time of
hiding. I wish there was something like that for managers and companies
without blowback. I wish there was a way to give feedback on LinkedIn. The
middle manager's profile is really funny to read. Apparently he runs all of
big data at Microsoft. From Office. As a middle manager.

Anyway, my point is there is opportunity to expose evil people and good people
in their careers. We should find a way to do it safely. People should have an
incentive to be good.

EDIT: grammar mistakes

~~~
white_devil
> I try to be a good person. I try to be honest. I try to stand up for people.
> But I couldn't help her. For a year I gave as much moral support as I could
> without the inner circle knowing. But the politics were too thick and toxic
> to touch.

You "could not" help her? That's not exactly true, is it? It's just that if
you had, there would have been negative consequences for _yourself_ , and so,
you didn't.

Thanks for the interesting story though.

~~~
pdonis
> You "could not" help her? That's not exactly true, is it? It's just that if
> you had, there would have been negative consequences for yourself, and so,
> you didn't.

I think the question isn't so much whether he could have tried to help her, as
whether it would have done any good. The end result might well have been no
improvement in her situation and a drastic worsening of his. In other words,
negative consequences for him _without any compensating positive consequences
for her_. In that situation, I'm not sure I would see much point in openly
intervening.

~~~
ClHans
Perhaps the positive consequence could be the simple matter of having done
something because it is right.

Perhaps he could look back on that period of time and reflect that, rather
than watch it happen, he took action. Even if it accomplished nothing, he
could at least say "I saw something wrong and I worked to right it."

What can he say now? "I saw something wrong, watched it happen, and vacationed
in Europe until I felt better."

One of these is morally praiseworthy. The other is not.

~~~
yajoe
There is a lot of gray with this story. One IC vs many middle managers and a
VP will never turn out well for the IC, especially at Microsoft. I don't know
what I could have done. To whom would I have sounded the alarm?

What I did: "I told my manager," "realized it's a systemic problem," "I was a
friend to someone who needed one," "I helped her leave and get her next job,"
and "I quit."

I made lemonade and enjoyed time in Europe. But I don't think there was a
choice to fight.

~~~
fpgeek
I'd say helping her leave and get her next job was the best thing you could
have done for her.

Even if someone had solved this particular crisis, it sounds like she wasn't
going to thrive in this political environment anyway. At that point, leaving
is the best choice and, all too often, people don't see that.

------
einhverfr
I keep thinking about this article and the recent Google one as well. And I
wonder, is this sort of moral decay necessarily part of the current corporate
world? Is it possible, over the long run, to have a tech firm, or any other
firm, that empowers employees to do what is best for everyone and to hell with
the rules? Or is this merely a matter of a few good leaders who get it, and
everyone else eventually overcoming them?

When I worked at Microsoft in Product Support Services, our general director
"got it" and encouraged us to break any rule if it helped the customer out, so
long as we did so reasonably responsibly, something I took him up on to the
point it seriously annoyed my direct manager. He left, and the group I worked
with ended up getting shipped off to India. And given more recent discussions
with Microsoft customer service, the question of "how do we deliver quality
customer service" has become far less important.

I guess my musings lead me to the thinking that being good requires a level of
confidence that is easy to lose as an organization, and that as it is lost,
the organization can turn toxic fast. But we can't succeed all the time. We
will face huge challenges. So how do we resist the urge to turn and focus only
on the immediate challenge, whether a competitor or the bottom line?

~~~
nostrademons
Currently work at Google, obviously speaking for myself and not my employer.

In my experience - yes, this moral decay is a necessary part of the current
corporate world. Or any corporate world. Or really, any world without the
possibility of failure baked into it.

I've seen a lot of idiotic decisions made at Google, many of which have been
complained about on Hacker News, many more of which are hidden causes of
things that are complained about on Hacker News. In every case, when I looked
at the chain of decisions that led to things being the way they are, _every
single decision was rational_ , given the information that all participants
had at the time. There's no vast conspiracy dedicated to turning Google evil,
no influx of incompetent new PMs & designers. Some of the most questionable
decisions have come straight from old timers like Marissa, or even from Larry
Page.

Instead, it's an information problem. Running any enterprise the size of
Google or Goldman Sachs requires trading off many competing factors. To make
the tradeoff, _someone has to keep all that information in their head at
once_. There's no other way to balance competing demands; if you keep only
part of the information in your head, your decision will be biased towards the
part that you've loaded into your brain. If you try to spread decision making
across multiple people, the decisions will be biased towards the part that the
person who screams the loudest can hold in his head (which is usually a
smaller subset than optimal; it takes mental effort to scream loudly).

I often see mystified posters on HN wondering why Google did something or
other, and a good amount of the time, I know (but can't say) exactly why we
did it. The userbase does not have all the information. Unfortunately, they
don't _care_ that they don't have all the information; they want Google to
work as expected, and the fact that there may be internal systems that don't
quite behave according to their mental model is irrelevant. And so the fact
that decision makers make decisions based on information that users can't have
becomes a liability in this case, biasing them away from what's "good" for the
user.

I remember Paul Buchheit writing here, several years ago, "A system's
participants don't have to be rational for the system itself to be rational",
referring to market economies. I'd posit that the inverse also holds: a system
with completely rational participants can still be irrational, if information
flow between participants is not organized in a rational way.

~~~
bhousel
I really think that you're completely missing the point in defending Google
and maybe Goldman Sachs by saying that their decisions are ok because they are
made rationally.

Rationality is emotionless and mechanical. It's about making a reasonable
decision based on whatever information is available to you. However, rational
decisions do not involve morals, culture, or feelings. _This is exactly what
companies like Google and Goldman Sachs are being criticized for._

When game theory is baked into your corporate culture, this is what you get.
The company starts an inevitable slide from "Do No Evil" into "Make the Best
Decision You Can With the Information You Have".

If I look down into my wallet and see no money there, and I'm hungry for
lunch, and I decide to steal some money from a little old lady, that may be a
perfectly rational decision to make. An outside observer may say I'm being
_evil_ , but they don't have a complete information picture about how hungry I
am, or how long the line at the ATM is, or that everyone else is eating lunch
so I have a duty to my shareholders to do the same.

~~~
JumpCrisscross
Rationality doesn't necessarily exclude "morals, culture, or feelings". That
would imply that having a rational discussion about culture, e.g.
anthropology, is impossible.

Gus Levy, a former senior Goldman partner, coined the firm's then philosophy
of being "long-term greedy". Taking image, "headline risk" in finance
parlance, impact on recruiting, etc. into account is part of rational decision
making.

What makes a seemingly terrible decision rational is usually that the time-
frame invoked is too short. If a decision looks rational in the long-term but
conflicts with our value system it generally means that our value system needs
to be re-evaluated.

~~~
bhousel
_> Rationality doesn't necessarily exclude "morals, culture, or feelings".
That would imply that having a rational discussion about culture, e.g.
anthropology, is impossible._

No I am not implying that the process of making rational decisions has
anything to do with the process for holding rational discussions about stuff
(the stuff may be rational or not).

------
JumpCrisscross
I was an esoteric derivatives trader at an investment bank making money off
clueless clients. We actualy prided ourselves, as a prop desk, on not being
client facing. I went in expecting to parse global markets for inefficiency
while pioneering the frontiers of 21st century finance. As time went on I
found that the firm was content with mediocrity (as it could survive by simply
existing in its role) and had no time for risky business like thinking.

You delude yourself into thinking you're inherently superior, a "Master of the
Universe", even as you have never been able to explain to your mother what you
do. Sooner or later you realise your colleagues are smart but terrifically
insecure human beings, valuing their roles for _who_ association with the
firm's name makes them rather than _what_ they actually do. Thus hierarchy is
strictly enforced and innovation rages furiously in quaint, safe areas, e.g.
introducing "new" leveraged/inverse hedged swaps, while ignoring fundamental
assumptions, e.g. the trading floor should be siloed by product.

The bureaucracy and technical debt, combined with constant turnover in the
under-paid operations and IT staff, mean that gaining understanding of the
firm's as a whole as of no less than a quarter ago is a Herculean undertaking.
And it's worse when you talk about the sales traders - none of them understand
their product (they don't need to - the client's the one taking the risk),
it's a miracle if they know a few shortcuts in Excel, and every one of them
has an opinion on how xyz company (or country) should re-structure without
having read a single term sheet or prospectus.

Luckily, there are start-ups that are raging equally furiously but with un-
paralleled agility towards the financial sector. Alas, we'll have to find a
new slot-in role a la consulting, investment banking, and sales & trading for
insecure college graduates without hard skill sets to plump.

 _Note on recruiting_

I've seen some comments tacitly saying Messr Smith should have known what he
was getting into when he signed up for the job.

I was recruited by a very charismatic and values-driven MD when I was 19. Our
desk merged with the rest of the firm's shitty culture when he was fired for
being too ambitious. I didn't join for the six-figure salary - I turned down
other offers that paid more at the time. There are lots of other people I
know, brighter than I am, who were similarly drawn to the thought of a dynamic
work-day filled with brilliant, ambitious people all working to solve
difficult problems (that could be a tech company's recruiting ad...). Maybe I
should have been more clairvoyant, but in the end what drives people to
finance and what drives people to tech isn't all that dissimilar - the unique
cultures change like to unlike from there.

~~~
pavlov
Some pointless pedantry: There is no singular title "Messr", because "Messrs"
as the plural of "Mr" comes from the French "Messieurs". The French singular
is "Monsieur", which is abbreviated as simply "M".

~~~
demallien
It's more often Mr, even in French these days...

~~~
gregschlom
But it's still wrong (in French).

~~~
Miky
Could you more clearly define what you mean by “wrong,” please?

~~~
gregschlom
Writing "Mr." in French is incorrect. The correct form is "M."

"Mr." is English for Mister "M." is French for Monsieur.

I've seen this mistake made even in letters from banks and mobile phone
companies. I cringe every time I see it.

~~~
Miky
I was just trying to say that if using “Mr.” is becoming the norm in French,
then it is becoming correct. I don't know if this is actually the case.

------
guelo
So he thinks Goldman was honorable back when he was young and had no idea what
was going on. Bullshit. I happen to know of some shady Goldman credit swaps
from the 90s that my municipality has been trying to get out of. I'm sure
there is plenty of other garbage that went on back then too. You don't hire a
bunch of mostly young male type-A personalities and wave million dollar
bonuses in their faces and not expect questionable deals.

~~~
JumpCrisscross
> _mostly young male type-A personalities...wave million dollar bonuses in
> their face_

This also characterises hackers and Silicon Valley. There are some really good
people on Wall Street just as there are some real turds in Silicon Valley.

If you go back into Goldman Sachs's history it was a venerable firm with a
storied past of forsaking short-term profit for the client, i.e. being long-
term greedy instead of short-term greedy (quoting a GS executive from the
1970s). It started changing in the 1980s and completed its transformation
after its IPO.

Values aren't a function of sex or ambition.

~~~
dustineichler
"there are some real turds in Silicon Valley", understatement of the year.
Gimme some time, I'll eventually rant about this on my way out the door too.

------
rtperson
I worked at Goldman briefly in the 90s, and I remember being pleasantly
surprised at how little cynicism, and how much genuine enthusiasm for helping
others I found there. It was a bank, sure, in the business of making money,
but there was always this sense -- emanating from the top -- that money was
not its sole purpose. I can see where this writer was coming from, and I agree
with him that if this bank has lost its unique culture, then it has lost touch
with what made it successful in the first place.

------
tomkarlo
I used to work for Lehman Brothers; since then I've worked for Amazon and
Google in product capacities. (I was a PM before I went to MBA and then LB.)

The biggest problem was that there's little incentive in financial products to
pursue true creativity or innovation that generates value for your clients.
Both the market and the regulatory climate make it very hard, and very risky,
to develop and market new products. It's a lot easier to just find innovative
ways to strip value from your clients, or make new securities look a lot like
old securities.

My role at Lehman involved helping issuers structure securities for various
capital markets. I did not see us openly fleecing clients in the style of
Enron or this Goldman article, but it was pretty clear that some kinds of
deals were far more profitable for the firm than others, and it was going to
be in your interest to promote those kinds of transaction. It's the people at
the top who set the incentives and set the culture of a firm, and things will
only generally get worse as they trickle down the structure to individual
teams who are more interested in their personal comp than the overall
corporate brand.

One of the main reasons I wanted to go back to tech from finance was that I
felt like there's at least a lot of tech companies (Amazon and Google
included) where delivering true value to the end user is the primary value,
and how you get promoted and paid. I did not feel that was the case on Wall
Street; it was more important how many fees your team brought in than whether
the issuers (clients) were still in business a year later.

~~~
rutipo
I used to work for Lehamn too, M&A. Now working on my own startup. I also
found that the focus was on our incentives, and this is where the tech
industry is different in that it sets the incentives aligned with the users.

Wall Street could do the same by changing its incentives, and grow massively
together with their clients. Once they understand that clients all the way to
the end ("crowd") investor can also be happy users.

One thing that bothered me about this article though, is that it just seemed
like he had a personal reason to make his superiors look bad. After all, he
built his entire career in Goldman, so why burn your bridges? Unless they are
already burned and you are leaving with a blast anyway, and maybe you are
trying to get back at someone.

~~~
tomkarlo
I think he burned his bridges because he believes that GS is on a path that
will lead to its collapse if it continues unchanged. I don't think he
published the letter to be vindictive. It's supposed to be a wakeup call and
it's not like they were going to distribute that company-wide internally for
him.

Wall Street can't really grow that much more. It's already something like 11%
of US GDP and that's way too much for an industry that really doesn't produce
anything much. Fin services shouldn't be more than 3-4% of an economy, barring
export of services to other countries.

I'd argue this is part of why it's starting to eat its own young; it's an
industry full of extremely driven, competitive people but it has started to
run into the natural limits of its potential size. If the industry starts to
shrink a bit, things will get even uglier. It's not like there's a natural
other industry for all these people to work in that's growing and will take
the oversupply - if things get worse it will look like a piranha pool in the
dry seasons where a million fish have been concentrated into one puddle.

------
lkozma
It's probably all true, but the piece reads like an extended resume. If only I
could get NY Times to let me rant about how ethical I am and what trillion-
dollar clients I advised.

~~~
solutionyogi
I agree with you but if you are at his level, you don't really need a resume
anymore. Financial industry is all about who you know and from what I can see,
he is very well connected.

~~~
seertaak
FYI Executive Director at GS means the same thing as VP, which sounds much
more impressive than it actually is. There are literally thousands of them. To
put it another way, ED is a level up from Analyst. The _real_ cheese begins at
Managing Director -- which is the first level you don't reach through
seniority, but through "skill" (or politicking!).

~~~
lusr
"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."

I could be wrong, but I don't think the number of positions heading business
units across continents is that large.

~~~
gaius
There are an awful lot of Head Of X positions too. Often these have no-one
reporting to them directly - they are more analogous to project managers.

------
rdl
I know a lot of people who have left Goldman, etc. in the past few months,
specifically for tech jobs. It's because 2011 bonuses were utter crap. (and it
is toxic I'm sure, but the $ was the main thing)

~~~
bru
If I may ask

>specifically for tech jobs

Which kind of tech jobs? For banks, or something unrelated?

~~~
rdl
Startups (widely varied) or grad school. These were tech people who worked in
various tech/quant roles.

I think sample size is 4 at GS, maybe 10 elsewhere.

~~~
rdl
Also several have said they'd apply to YC (they have money, but not startup
industry connections, or at least not current ones). Remember, the deadline is
March 28th...

I'm pretty sure that after working for Goldman, you don't go work for another
large bank, you go work for the Goldman of another field. Otherwise it would
be like going from MLB to a farm team -- not an upward move.

------
uptown
Goldman's response: [http://blogs.wsj.com/deals/2012/03/14/goldman-rejects-
claims...](http://blogs.wsj.com/deals/2012/03/14/goldman-rejects-claims-made-
by-disgruntled-executive/?mod=e2tw)

“We disagree with the views expressed, which we don’t think reflect the way we
run our business,” a Goldman spokeswoman said. “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 described himself as an executive director and head of Goldman’s
U.S. equity derivatives business in Europe, the Middle East and Africa.

A person familiar with the matter said Mr. Smith’s role is actually vice
president, a relatively junior position held by thousands of Goldman employees
around the world. And Mr. Smith is the only employee in the derivatives
business that he heads, this person said.

~~~
egwor
If he really were head of US Equity Derivs (derivatives) Sales in EMEA, he'd
be an MD (managing director). We can all be head of something... after you put
enough creative thought in it.

------
phillco
Although its veracity cannot be confirmed, I would highly recommend the
"Goldman Sachs Elevator" twitter account for further reading...

<https://twitter.com/#!/GSElevator>

~~~
redthrowaway
It's pure fiction, but highly entertaining.

~~~
jarek
Supposedly it's at least partially true (as in featuring real people really
saying these things) but my source for this is this blogger that says so,
so...

------
cs702
"Why I am leaving the Empire," by Darth Vader:
[http://www.thedailymash.co.uk/index.php?option=com_content&#...</a>

~~~
velshin
That's hysterically funny. Only slightly off topic.

------
gavanwoolery
I have ranted for a long time about the corruption at Goldman Sachs, mostly to
deaf ears. :) This is the tip of the iceberg, as far as I am concerned. My
bigger concern is how involved GS is with our government.

[http://www.nytimes.com/2008/10/19/business/19gold.html?pagew...](http://www.nytimes.com/2008/10/19/business/19gold.html?pagewanted=all)

As it turns out, the human race is extremely intelligent and wherever there is
an opportunity to make money (corrupt or not), people are probably doing it. I
would call it a conspiracy theory, if it were not occurring in plain site.
Exactly which Americans approved of the multibillion dollar bailout, show of
hands?

~~~
jpdoctor
> _My bigger concern is how involved GS is with our government._

I agree: This deserves a great deal more attention.

Hell, just the Henry Paulson tax giveaway should have caused civil unrest.

~~~
TheFuture
"tax" giveaway? It's all borrowed money anyway, not actual tax revenue. Drop
in the bucket compared with the rest of the federal budget, and most of it was
paid back.

~~~
jpdoctor
> _It's all borrowed money anyway, not actual tax revenue._

Huh? How is forgiven taxes not tax revenue?

[http://www.marketwatch.com/story/paulson-files-to-
sell-500-m...](http://www.marketwatch.com/story/paulson-files-to-sell-500-mln-
in-goldman-stock?siteid=google&dist=TNMostMailed)

If Hank paid the taxes anyway, I can't imagine that scumbag would have done so
without major PR and fanfare.

------
testinomy
The author must be really angry at Goldman. Didn't he get his 500k bonus, but
only 200k? The other thing I learned is that corporations are out there to
make a profit. Who would have thought? However, as an outsider, it's good to
have some insight into the real business model of Goldman. It appears it
partly relies on information asymmetry, i.e. ripping off clients without them
knowing. This business model seems to have been damaged by this bad PR that
aims to dissolve illusions of the clients. I hope this kids gets his bonus,
but probably Goldman will just fire him after such a move. This is what
happens when there are too many greedy hands wanting the honeypot, but one
isn't satisfied. Not that unique to Goldman to be honest. When your business
model relies on information asymmetry, whistle blowers can be a real pain. To
combat that Goldman must discredit the source, and distract from the topic,
which is what we saw here in their response.

------
binarysolo
I've no love for GS, but an interesting counterpoint to consider (from
[http://www.forbes.com/sites/bruceupbin/2012/03/14/unshocked-...](http://www.forbes.com/sites/bruceupbin/2012/03/14/unshocked-
by-goldman-one-investor-says-buy-more/) ):

"'There are a couple of things out of place. 1) This guy has been at firm for
12 years and is only a VP…a pissant of sorts. He should have been an MD-light
by now, so clearly he has been running in place for some time. 2) He was in
U.S. equity derivatives in London…sort of like equities in Dallas…more
confirmation he is a lightweight. Somewhere along the line he has had sand
kicked in his face…and is not as good as he thinks he is. That happens to a
lot of high achievers there.'"

~~~
vacri
The article states that he is an Executive Director, one step higher than the
VP that your quote claims him to be.

~~~
ebaysucks
Yes, in fact Executive Director _is_ the "MD light" at Goldman.

------
ajb
So, Goldman used to be honest? They rated their own chapter in 'The Great
Crash, 1929': [http://storyoftheweek.loa.org/2010/10/in-goldman-sachs-we-
tr...](http://storyoftheweek.loa.org/2010/10/in-goldman-sachs-we-trust.html)

~~~
Estragon
Exactly what I came over here to say. If there's been a change, it has to be
something like the cynicism at GS having grown so overt that they can't pay
some of their institutional drones enough to ignore it.

------
suprememoocow
Many of the sentiments expressed by the author are shared by developers and
other technical staff working in the finance industry. In places like London
and New York, finance has, for a long time, managed to get the best technical
staff by paying the highest wages even if the work is less interesting. This
has been detrimental to other industries in the same regions. As morale
declines in finance firms, however, this is changing.

~~~
ig1
For a long time finance has been the place where the most interesting tech was
going on (not to say there isn't a lot of boring bog standard stuff as well).

It's an industry where many firms have had to develop their own network
transport layers, database engines, languages, etc. Where machine learning and
big data have been standard practice for over a decade. Where understanding
complexity and concurrency theory are important, and designing lock-free
algorithms can be a daily activity. There's very few areas of core CS that
aren't used in investment banks.

~~~
svanderwaal
I'm wondering if any of that work has been made available, eg. as an open
source project? There's a standard practice among tech/web companies to share
innovation on the infrastructural level, but I cannot name one example of a
bank innovating openly in that way. Perhaps they do publish academic papers
about their innovations?

~~~
suprememoocow
I've been contracting in the finance industry in London for seven years (at
four firms) and although financial companies are some of the biggest users of
open-source software, it's almost unheard of for firms to contribute back to
open-source projects. There are a few progressive companies but unfortunately
I've not worked at any of them.

Many firms have a strict policy of disallowing any source (open or not) from
leaving company premises. Email servers and proxy filters have detectors that
will raise an alert if source code is emailed or sent out over HTTP. It's
easily a sackable offence and this discourages developers from contributing
changes back to open-source: there are simply too many hurdles to jump through
in order to do it.

~~~
cheatercheater
Given your experience, what would you say are the top 5 techs that are being
used in this area in London? I was looking at the job market a while back but
it's not very transparent. How do you best go about finding a job of this
kind?

------
panacea
"Why I left reddit"

'It changed man. The culture wasn't the same as when I joined five years ago.'

These 'I said GOODBYE SIR!'s are interesting, but I'm not sure how much
reliable information can be gleaned from them. What ever happened to not
'burning your bridges'?

This is a resumé.

~~~
zerostar07
I agree with your sentiment, but not with the "burning your bridges" part.
Seems like the fear of burning your bridges keeps many people from speaking
frankly about what's happening in the corporate world. And that's important
nowadays because as they say, politicians don't run the world, Goldman Sachs
does.

Looking forward to wikileaks bank-leaks.

~~~
Estragon
Yes, given the cynicism which seems to have developed there, it seems like
only a matter of time before some GS employee decides to leak embarrassing
information as part of an insider trading scheme.

------
kqr2
Somewhat ironically, Goldman Sachs primary business principle / mission
statement is:

 _Our Clients' Interests Always Come First_

[http://www.goldmansachs.com/who-we-are/business-
standards/bu...](http://www.goldmansachs.com/who-we-are/business-
standards/business-principles/index.html)

~~~
sumukh1
But if you lift the curtain behind that statement, what they really care about
is their own success.

>"... if we serve our clients well, our own success will follow."

Then a few lines below, they essentially define what success looks like for
them and say that profitability critical to achieve those goals. It seems like
that profits are a more direct way to achieve "success" for them.

> "Profitability is critical to achieving superior returns, building our
> capital, and attracting and keeping our best people"

This should serve as a reminder that you can talk, talk, and talk some more,
but ultimately, you need to "walk the walk" for your words to carry a
significant impact.

------
yumraj
Call me a cynic but a large percentage of people in I-Banks make their money
and move on. Not that I doubt what he is saying, but it seems odd for people
to just develop morality after 12 years at GS where he must have made his
millions.

Basically, IMHO, he has made his money, is burnt out and wants to do something
else and thought it'd be a good idea to write this article since it perhaps
increases his profile for he wants to do next.

------
Hontano
Way to leave in style, good for him. I hope it gives the firm the wake up call
it needs.

I left a couple of years ago after a three year stint. It was partly out of
the boredom of babysitting a legacy platform that had little future, but
mostly because the department's role devolved into getting away with doing the
minimum for clients to justify our fees.

No matter how well GS pays, despite the relatively poor bonuses, it's not
going to be possible to attract and retain the kind of staff they need. I
wonder how many other nerds sit at their desks and catch a minute's respite by
daydreaming of building something great? If they're lucky enough to have the
freedom and enough of a financial cushion to take the leap I highly recommend
it. I've not been happier since.

------
raheemm
This is indicative of the shift of power within GS from investment banking to
the trading side of operations. That shift itself is based on who is
generating the most profits. Seems that trading and investment banking maybe
ideologically opposing forces, from a client interest standpoint. So to remove
conflicts of interest they should divest of one or the other and decide who
they want to be.

------
mathattack
The article still overflows with ego. From table tennis champion to Rhodes
Scholar!

~~~
ahmadss
it's hard to sell common sense values and mores without dropping hints and
lines about who you associate with and how awesome you are.

in all seriousness though, he probably saw this as a golden moment to build
his personal brand, gain some media exposure, and leverage that exposure and
brand building into another job offer, a writing gig, or a TV gig. consider it
a golden parachute moment.

~~~
mathattack
His Michael Lewis moment?

------
ajhit406
I find it somewhat ironic that a 12-year finance veteran is preaching about
integrity and resigning through an op-ed piece in the Times.

While it feels good to recognize the eroding integrity of the industry
(assuming it existed in the first place); I don't think this messenger is
praiseworthy. Reeks of self-righteousness to me... and somehow I'm certain
he'll be starting his own fund in the coming months.

------
dkrich
It would be awesome if he pulled a George Costanza and showed up to work next
Monday and pretended that the op-ed piece was a joke.

~~~
dmg8
"Didn't you quit?"

"What?! When?

------
veguss
[http://www.businessinsider.com/former-goldman-intern-this-
is...](http://www.businessinsider.com/former-goldman-intern-this-is-what-it-
was-like-working-under-greg-
smith-2012-3?nr_email_referer=1&utm_source=Triggermail&utm_medium=email&utm_term=Business%20Insider%20Select&utm_campaign=BI%20Select%20Recurring%202012-03-14)

I hold him in very high regard - he took care of us junior guys, gave us great
pieces of advice, and in general came across as one of the more personable,
friendly, and genuine guys on the floor.

Read more: [http://www.businessinsider.com/former-goldman-intern-this-
is...](http://www.businessinsider.com/former-goldman-intern-this-is-what-it-
was-like-working-under-greg-
smith-2012-3?nr_email_referer=1&utm_source=Triggermail&utm_medium=email&utm_term=Business%20Insider%20Select&utm_campaign=BI%20Select%20Recurring%202012-03-14#ixzz1p7rpY3Ae)

------
ValG
This article reminds me of the girlfriend that puts up with all sorts of
issues in a relationship but never addresses them. Then one day she snaps and
leaves without warning, when all along the relationship may have been saved
with some effort. I'm not saying he didn't try (his mentoring certainly
suggests he did), but it's a shame such a (previously?) reputable firm has
fallen so low. I'm not familiar with Goldman's hierarchy, but my impression
would be that Greg is in a very senior position within the company. Greg
sounds like he was in a direct position to influence the culture of the
company and maybe turn it back into what he remembered from his past. As an
executive director, I think that he almost has a duty to do just that. I'd be
interested in Warren Buffet's take on Goldman's Culture, or was he one of the
ones that got bilked (although it seems like his investment is doing well)?

------
FLengyel
As a New York Times Op-Ed author myself (with a friend; URL
<http://www.nytimes.com/2006/06/09/opinion/09orlow.html>), I can assert that
the typical trajectory after such a performance is to end up commenting on
Hacker News.

------
kds
I'd have appreciated such a step and public online announcement of its
motivations if done before Christmas. Not after the bonus payment.

------
j2labs
Very clever move to let his clients know they should keep tabs on him. It
advertises his integrity and informs people he's leaving.

~~~
vnorby
I thought the same thing, it's very obvious that he's starting either his own
firm, or will land somewhere else, and this article is a public attempt to
retain his clients and advertise to new ones.

~~~
ilkandi
Er, this is the age of technology. Why write a NYT article when you've already
got a copy of the virtual rolodex at home?

~~~
j2labs
Because you want people outside your rolodex too. :)

------
cnorgate
The problem with the world of finance is that it does not create anything in
and of itself. It is a derivative of true commerce, true business, the real
world.

Now that the big bonuses, expensive sell-weekends and general prestige
associated with being in finance have washed away, people on Wall St are
looking around realizing the emperor has no clothes. There's no money anymore,
and there was never anything ultimately redeeming about their work.

The only silver lining is that hopefully now our best and brightest will be
focused on solving real problems that matter.

------
amolsarva
A note about McKinsey and consulting:

Lots of discussions on "evil Goldman Sachs" or "the useless profession of
finance" that I have seen also include the business of management consulting
(McKinsey, Bain, BCG, etc) as the similar career tracks. It is true that lots
of elite students at US colleges are interested in Banking and Consulting when
they graduate. They are interested because both careers are prestigious and
lead to more things.

But the comparison is very limited.

There is a passage at the end of his op-ed when he talks about his first days
in the values driven organization learning the ropes of what the work is, how
to be productive at it, and how to take the client perspective always.

I worked for McKinsey from 2003-2006 and I had that same first-day experience
and it was more or less my experience throughout. I talk to folks now and they
still think/act this way -- values are super important, the client comes
first, being smart is all about helping the client better and therefore the
firm prospering in the long run. People bragged about "we turned down the
work" ALL THE TIME because it isn't a good use of "the client's
money/time/focus".

There have indeed been scandals where individuals (even the ex-head of the
firm!) have done unethical things at McKinsey.

These are more famous _because_ McKinsey is so super duper integrity focused
and they are embarrassing, but they happen on a backdrop of client service.

And indeed many many public spirited, "business isn't really what I'm about"
people come work at McKinsey and leave and go on to do other things.

The _big thing_ about consulting firms like McK which is really great and
different from banking -- apart from the values which may be good for their
business -- is that they are places for GENERALISTS. You get there and work on
a wide range of problems, with a wide range of
analytics/collaborative/communication skills. This is what is great about
consulting and why people go on from there to do great things.

In the "old" world of Goldman Sachs this might have been true too -- when they
were investment bankers advising clients on what to do. You and client win in
this scenario. But much of the firm's money these days is made from TRADING,
where there is a loser on the other side -- apparently the client.

------
hasker
I worked in the business trading interest rate products before deciding to
return to school. I still miss the game a lot and waste way too much time
trying to supplement my PhD stipend trading stocks, equity options, and
futures.

Mr. Smith's editorial describes a lot of the reasons I left when paired with
the dire outlook for the business now and back then. As others sort of noted,
much of the business changed simply from the sources of profits. OTC (Over the
Counter, i.e, non exchange traded) derivatives dealing and proprietary trading
started driving all revenue. From a cursory glance OTC derivatives create a
zero sum game with the client. The bank takes one side, the client takes the
other. Yes, on a large enough scale things should balance out, and perhaps no
moral hazards will develop, but at the most fundamental level the client or
the dealer wins.

This opens the door to a very unique class of businesses including casinos,
some annuity providers, buyers' agents in real estate where the provider has a
strong conflict of interest with their client. Previously banks did not have
these conflicts, or the divisons with these conflicts were not the dominant
earners. Well maybe M&A advisors on the buyers' side had an issue, but that
was generally less lucrative to advising the seller or on a hot IPO.

The question becomes, is this a Goldman problem, or a banking industry
problem? I am studying for the CFA, simply because the information is fresh in
my head, and I may need it some day. CFA ethics clearly states that one must
always put the client's interests ahead of the firm. I remain foreign to the
sort of magic that allows for this, while allowing one to operate as a
derivatives dealer and stay solvent.

Simultaneous, Mr. Smith forgets about the sort of horrible clients these banks
must deal with on a daily basis. Remember that the best guys at these firms
are the ones that get spots at hedge funds, asset managers, and sovereign
wealth funds. They know how to screw a counter-party better than anyone.
Anyone who has ever sat on a fixed income trading desk knows how viciously
PIMCO swings around their size to trade through the market. Every junior
trader has gotten crossed by a non-repetent small hedge fund. I doubt the
clients ever thought Goldman or any other bank was their friend. To assume
that a bank would help a client when there is blood in the water is lunacy.

You can probably tell I still have a lot of unresolved issues about exactly
what is right here. I have major issues with conflicts of interests. If I ever
return to finance, I will stay on the buy side. At least that way my interests
and the client's are fully aligned. I deliver higher returns and get paid
more.

------
va_coder
I hear a lot of talk about how things have changed. Have you guys read Liars
Poker? This stuff has been going on since the dawn of time.

~~~
jpdoctor
> _Have you guys read Liars Poker_

Funny side note: Michael Lewis said that he wrote that as more of a warning.
He was astounded (and a little horrified) to find out it was being used as a
how-to.

------
toddnessa
I came away with a couple of things after reading this article. One was that
it was nice to know that there are principled people out there on Wall Street
who are willing to place their conscience ahead of their own interests and be
willing to resign if necessary in order to protest a corporate culture willing
to mistreat their customers for the sake of a dollar (as did Mr. Smith). The
second is that the real way to create long-term wealth for any business is by
exercising the time-tested principles such as the one mentioned in the
article- integrity, a spirit of humility, teamwork and always doing right by
your clients.

------
DanBC
([http://www.businessweek.com/news/2012-03-14/goldman-
stunned-...](http://www.businessweek.com/news/2012-03-14/goldman-stunned-by-
op-ed-loses-2-dot-2-billion-for-shareholders))

$2.2Billion is, to me, a lot of money.

------
AznHisoka
What I don't get is.. if Goldman Sachs is 'ripping' people off, why do their
clients continuously pay them money?

I see a pattern among consumers. Lots of businesses give consumers what they
want and tap into their emotional sensitivities, rather then what they need.
Who's to blame? the business? or the consumer? the business is just seeing an
opportunity for some profit. There's a misalignment in some industries between
really serving the client, and making profits.

Example: \- Junk food companies and fast food: they give us what we want:
great tasting good that makes us addicted, but is it what we need?

------
gadders
Is there a subtext?

The guy in the article has been at GS 10 years, heads up a desk, and is only
an MD. Bank promotions are normally announced early in the year, and bonuses
vest about now.

I'm guessing he is pissed off he didn't get MD, and has waited for his bonus
to hit his account before self-destructing.

Stage 2 in his plan will be to push his ex-colleagues under the bus by writing
an article about how evil bankers are, as per City Boy
(<http://en.wikipedia.org/wiki/Geraint_Anderson>)

------
qasar
One hypothesis could be that all organizations go through waves of growth and
success which then impact the subsequent talent they attract.

In other words, the most recent wave of talent that Greg Smith talks about is
more interested in being associated with the Goldman brand, rather than the
genuinely possessing the underlying desire to be world class bankers.

Also, perhaps this happened years ago and now its too late because those B
players are now running the show.

------
adaml_623
There are a few lessons in there for a few tech companies as well I think. If
your customers don't trust you then they will leave. OR not begin using you in
the first place.

However big you are supporting your customers and being contactable when there
are problems is an essential cost of business.

------
seshagiric
For some reason this sounded to me quite a much like James Whittaker's blog on
why he left Google.

[http://blogs.msdn.com/b/jw_on_tech/archive/2012/03/13/why-i-...](http://blogs.msdn.com/b/jw_on_tech/archive/2012/03/13/why-
i-left-google.aspx)

------
marajit
"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."

What if clients don't trust anyone? Its about risk/reward ratio. Trust/faith
went out the window when the scam of a monotheist God gave into the lesser
mistake of ubiquitous currency. The religion of the Semites was nursed on
trade. Money is the visible face of the Abrahamic God. Its with this
righteousness that Goldman Sachs engages in the world with such impunity.

Gone are the lineages of the priestly classes. Gone is the prudent care of the
warrior/king caste. The merchants rule in the decadent age. Soon we will be
holden to the mind of the sudra slaves.

------
untitledwiz
Tech bubble or not I am just glad that we may be seeing a decline and maybe
even a reversal of the brain drain by Wall Street.

~~~
untitledwiz
The op-ed also reminded me of this: [http://adgrok.com/why-founding-a-three-
person-startup-with-z...](http://adgrok.com/why-founding-a-three-person-
startup-with-zero-revenue-is-better-than-working-for-goldman-sachs/)

------
known
I used to work for GS. The pay was extraordinary. But the work
culture/environment will turn you into a paranoid.

------
DividesByZero
I'm unsure how an organisation which does not add any value and is based on
dead labor can possibly have anything other than a toxic culture.

When your primary goal is to repackage existing value and make money from
usury, it's a little bit steep to expect your employees to care about anything
else - your primary incentive is how much money you can extract from dead
labor, and not 'the success of clients' or anything else.

------
spdub
I see more and more of these exodus posts from various companies. The one
static thing I seem to be able to pinpoint between them, is that as companies
grow larger - more management is needed. As the management grows in a company
the modus operandi shifts from product to bottom line. While interesting, it
seems that this is just inevitable with most companies growth.

~~~
einhverfr
The interesting question is how much management one could get away with
trimming.....

------
JerryF
The most amusing thing I find about Goldman Sachs, is their refusal to put
their name on their building. They built a brand new 43 floor office building
right across the street from Ground Zero to serve as their new headquarters,
and their name is no where on the building.

It makes one think that they are hiding -- perhaps they're ashamed of
themselves?

~~~
DanBC
Partly they're hiding from people with guns and bombs.

~~~
jarek
People don't really wander around downtown Manhattan with bombs or assault
weapons. If they're looking to bomb GS, figuring out GS is at 200 West is
unlikely to be the greatest of their challenges. (There's few ways it could be
more public than being listed in their Wikipedia infobox.)

~~~
mjwalshe
They did in the 1920's the first ever car bomb (a horse drawn cart) was used
against the NY stock exchange. I belive you can still see the shrapnel scars
on the buildings facade.

~~~
jarek
Can you quickly recount what has changed in lower Manhattan since the 1920s?

~~~
mjwalshe
The history of NYC is not my strong point I surgest a trip to a library.

You could look at

<http://en.wikipedia.org/wiki/Wall_Street_bombing>

------
amolsarva
The official response:

We wanted to share with you the below communication which was today sent to
the people of Goldman Sachs:

Goldman Sachs Logo Office of the Chairman March 14, 2012

Our Response to Today’s New York Times Op-Ed

By now, many of you have read the submission in today’s New York Times by a
former employee of the firm. 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.

While I expect you find the words you read today foreign from your own day-to-
day experiences, we wanted to remind you what we, as a firm – individually and
collectively – think about Goldman Sachs and our client-driven culture.

First, 85 percent of the firm responded to our recent People Survey, which
provides the most detailed and comprehensive review to determine how our
people feel about Goldman Sachs and the work they do.

And, what do our people think about how we interact with our clients? Across
the firm at all levels, 89 percent of you said that the firm provides
exceptional service to them. For the group of nearly 12,000 vice presidents,
of which the author of today’s commentary was, that number was similarly high.

Anyone who feels otherwise has available to him or her a mechanism for
anonymously expressing their concerns. We are not aware that the writer of the
opinion piece expressed misgivings through this avenue, however, if an
individual expresses issues, we examine them carefully and we will be doing so
in this case.

Our firm has had its share of challenges during and after the financial
crisis, but your pride in Goldman Sachs is clear. You’ve not only told us, you
have told external surveys.

Just two weeks ago, Goldman Sachs was named one of the best places to work in
the United Kingdom, where this employee resides. The firm was the highest
placed financial services company for the third consecutive year and was the
only one in its peer group to make the top 25.

We are far from perfect, but where the firm has seen a problem, we’ve
responded to it seriously and substantively. And we have demonstrated that
fact.

It is unfortunate that all of you who worked so hard through a difficult
environment over the last few years now have to respond to this. But, our
response is best demonstrated in how we really work with and help our clients
through our commitment to their long-term interests. That priority has
distinguished us in the past, through the financial crisis and today.

Thank you.

Lloyd C. Blankfein Gary D. Cohn

~~~
chubbard
"...Blah blah blah dear god please don't leave us. We've even conducted an
internal audit and 89% of us wanted to keep our job. See we're honest people."

I'd be more inclined to trust their communications, but as he cites in several
parts of the letter about leaked internal communications to support his
feelings. Then we also have other people stepping forward saying "Yes I worked
at xxxxx, and I saw, suspected, or participated in fleecing clients." To what
degree is all arguable. Are these all well timed publicity stunts of a person
trying to take clients away from a firm to start his own? That's one hell of a
conspiracy theory, and probably pretty unlikely. Maybe he is. Who cares.

Here's what I think. The last down turn shook Goldman to the core, and with it
all the good will they had for their clients. Suddenly, the money train looked
like it could derail permanently. When you got a lot of cash it's really easy
to look like a genuine and generous person/firm. "Here there's enough cash to
go around for all of us," they'll say.

But, when that cash dries up. Generosity dries up too. And it's all too easy
for people to turn into selfish, desperate people. Remember back during the
crash when Carl Icahn was quoted saying he had friends that didn't know how
they were going to live on $10 Million/year? That was the desperation setting
in.

Here's the thing though. S&P 500 closed the decade out flat. Contrast that
with the 80's & 90's where it had multi-year straight growth. It was easy, and
the money was easy. Now all that easy money ain't around. This drought is
playing out all over the financial industry. Goldman ain't the only one
behaving badly.

------
DividesByZero
I'm unsure how any company founded on dead labor can possibly have anything
other than a toxic culture.

------
thongly
GS secret sauce: "teamwork, integrity, a spirit of humility, and always doing
right by our clients"

~~~
gaius
GS should never have IPO'd. It never belonged to the partners, they were only
custodians of it. Then it became just another bank.

------
lollancf37
When did common sense became so inspiring ?

------
michaelochurch
The gentleman era of investment banking is largely mythical. There was a long
period where they were notably less scummy and cutthroat than other investment
banks (compare: Salomon Brothers in the 1980s) but they were always an
investment bank.

The most visible (to a young person) sign of a bank's character is how it
treats its employees. The 90+ hour weeks and terrible conditions in the
"analyst" program (the term has nothing to do with analysis; it means "whale-
shit") are not a new invention; that goes back to the 1980s. Before that,
banking was dominated by the _Mad Men_ culture: the hours weren't long but the
politics was just as malicious.

~~~
pradocchia
> The gentleman era of investment banking is largely mythical.

There was a qualitative change after the banks went public. The old
_partnerships_ were inherently more prudent. And that's where the old culture
came from. The new corporate structure rewards any risk-taking where losses
lag gains by a year or more. So the culture changes.

~~~
baggachipz
I really think being publicly-traded companies is the root of the problem
here. When a company goes public, it adopts one (and only one) goal: Maximize
shareholder value. When that's the priority, it naturally follows that the
sharks take over the waters. This is not a tough leap of logic, and it's
repeated in corporate culture constantly. We need a famous person to quote it
succinctly so that it is enshrined as a colloquial law.

~~~
dkarl
I once worked for a guy who was considering incorporating his two-person
company. His investors were mostly family and professional contacts. One day
he was talking about how it would limit his decision-making because of his
obligation to always do what was most profitable for the shareholders. He was
potentially facing a choice between selling out to a much larger company or
staying independent so he could develop the company into the kind of business
he always wanted to run. He and his partner had a controlling stake, but
theoretically, if their investors wanted him to sell but he refused, they
could sue him for damages, breach of fiduciary trust or what-not. Or so he
said. I asked him, "If there was a perfectly legal, but morally reprehensible
way to make a lot of money for your shareholders, and you were aware of it but
didn't take advantage of it, could they sue you for damages?" He didn't think
so, but he couldn't explain to me the legal difference between his moral
judgment and his lifestyle preference for one kind of business over another.
I'm still intrigued by the question.

To make the situation more dramatic, suppose a company disposed of a thousand
barrels of toxic waste every month, and the board of directors found out that
the perfectly legal method by which they were disposing of the waste was
horrifically environmentally damaging but exposed the company to no possible
liability. Could they choose to dispose of the waste in a much more expensive
way? What if it meant cancelling a dividend? What if it meant bankrupting the
company -- could they be sued then?

~~~
guelo
I think the whole "fiduciary duty" argument is mostly used by assholes as an
excuse for being assholes. Managers of corporations have wide latitude to do
as they see fit. Successful shareholder lawsuits of this type are extremely
rare.

~~~
dkarl
It was enough to scare him away from incorporation while there was talk of an
offer to buy the company. The customer that was going to make the offer would
have replaced him in his business role, limited him to research, and shut down
all the work that wasn't relevant to the one product of ours that they used,
but they were going to give all the investors a very significant profit. He
didn't care because he thought the company could be much bigger than the buyer
wanted it to be, and also possibly because he was already wealthy and enjoyed
being the boss much more than he needed the money. When I ponder that last
part I guess it's possible that his worries about getting sued reflected a
guilty conscience more than a real legal risk.

