Greg Smith resignation letter from Goldman Sachs

boilermaker55

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Aug 12, 2011
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Gasparino said the bombshells that Smith dropped in his resignation letter about Goldman's indifference to their clients' financial well being is nothing new. He cited a previous interaction with BlackRock CEO Larry Fink, who told him that he did not trust Goldman Sachs because they ripped off their clients."
Now the Goldman boys are trying to do damange control. Surprise they are calling him a disgruntled employee.
Now with then think back to Kenneth Lay and all of the other situation concernin high profile banking.



GASPARINO: Goldman Sachs Is Investigating The Claims Greg Smith Made In His Resignation Letter
 
Investors & clients are "Muppets"
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.

Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.

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.

These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.
 
The vampire squid needs to be sentenced to the corporate death penalty.
 
About that "muppets" thing. Greg works for Goldman Sachs in the UK.

"Muppets" is British slang for a stupid person. They are not talking about the American TV puppets.

I don't know what more it is going to take to wake people up to realizing their pockets are being robbed.

The clients who are being ripped off that Greg is talking about are you. Your pension fund manager, your city treasurer, your bank.

It is your money they are stealing.

You think because you are getting a "return on investment" that you are not being ripped off?

You are the goose that lays the golden eggs. They feed you just enough scratch to keep you alive and dependent on them. And the scratch they feed you is carcinogenic. It is toxic waste they are sloughing on you because they fucked up somewhere and need to unload it. Your idiot money manager is just the rube to go for it.

Bah! I could go on for days about this shit. But it is bad for my health.
 
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About that "muppets" thing. Greg works for Goldman Sachs in the UK.

"Muppets" is British slang for a stupid person. They are not talking about the American TV puppets.

I don't know what more it is going to take to wake people up to realizing their pockets are being robbed.

The clients who are being ripped off that Greg is talking about are you. Your pension fund manager, your city treasurer, your bank.

It is your money they are stealing.

You think because you are getting a "return on investment" that you are not being ripped off?

You are the goose that lays the golden eggs. They feed you just enough scratch to keep you alive and dependent on them. And the scratch they feed you is carcinogenic. It is toxic waste they are sloughing on you because they fucked up somewhere and need to unload it. Your idiot money manager is just the rube to go for it.

Bah! I could go on for days about this shit. But it is bad for my health.

I keep trying to tell people this is why their utilities, local, city, state & property taxes are going through the roof. It is a major reason for the string of cities who are teetering on the edge of bankruptcy. It is likely that your city manager invested all the money they had set aside to pay for that $billion sewer treatment system into MBS & CDO. Poof they lost it all & now your sewer bill just doubled. The bankers are taxing you to death & blaming it on the government. Of course somehow I think that paid off government officials are complicit in letting these schemes happen to us.

Birmingham, Alabama’s Bankruptcy: the Fraud That Will Not Go Away
The story of corruption, bad faith, and “paying to play” schemes involving major banks and brokers has been covered in detail here, here, and here, but the sordid story began when the Environmental Protection Agency forced the county to build a new sewage plant in the mid-1990s. It was supposed to cost $300 million, relatively affordable to the residents of Birmingham, with its population of 650,000. But by the time the bankers and the brokers and the country commissioners got through with them, the taxpayers now face a bill approaching $4 billion. The current commissioners, after struggling for years to find a way out, finally threw in the towel last month and declared a Chapter 9 bankruptcy.
 
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Goldman's share value drops $2.2 billion over Op-Ed.

“The argument that Goldman has become increasingly profit- driven, sometimes at the expense of clients’ best interests, and that some employees use vulgar and disrespectful language, is hardly news,” Whitney Tilson, founder of hedge fund T2 Partners LLC, wrote in an e-mailed commentary. “What’s the next ‘shocking’ headline: ‘Prostitution in Vegas!?’”
 
In 1933, in the wake of the 1929 stock market crash and during a nationwide commercial bank failure and the Great Depression, two members of Congress put their names on what is known today as the Glass-Steagall Act (GSA). This act separated investment and commercial banking activities. At the time, "improper banking activity", or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash. According to that reasoning, commercial banks took on too much risk with depositors' money. Additional and sometimes non-related explanations for the Great Depression evolved over the years, and many questioned whether the GSA hindered the establishment of financial services firms that can equally compete against each other. We will take a look at why the GSA was established and what led to its final repeal in 1999.

Now with the advent of repealing this act.... the Glass-Steagall Act were repealed through the Gramm-Leach-Bliley Act in 1999.
Look where the greed of the bankers and wall street have taken us.
But 10 years later, the end of Glass-Steagall has been blamed by some for many of the problems that led to last fall’s financial crisis. While the majority of problems that occurred centered mostly on the pure-play investment banks like Lehman Brothers, the huge banks born out of the revocation of Glass-Steagall, especially Citigroup, and the insurance companies that were allowed to deal in securities, like the American International Group, would not have run into trouble had the law still been in place.
 
Question: What’s the cost to a company of one disgruntled former employee?

Answer: About $2 billion if it’s Goldman Sachs.

That’s how much of the bank’s market value was wiped out after one of its directors, Greg Smith, resigned from the company and penned an op-ed piece in The New York Times attacking the firm’s culture and treatment of clients.

The bank’s shares fell 3.3 percent in trading Wednesday as London-based Smith’s article set Wall Street and the media ablaze with discussion about the behavior of big banks bailed out by taxpayers after the financial crisis. The share price decline meant Goldman lost some $2 billion in market value. Its market capitalization is currently just short of $65 billion.
 
I keep trying to tell people this is why their utilities, local, city, state & property taxes are going through the roof. It is a major reason for the string of cities who are teetering on the edge of bankruptcy. It is likely that your city manager invested all the money they had set aside to pay for that $billion sewer treatment system into MBS & CDO. Poof they lost it all & now your sewer bill just doubled. The bankers are taxing you to death & blaming it on the government. Of course somehow I think that paid off government officials are complicit in letting these schemes happen to us.

Birmingham, Alabama’s Bankruptcy: the Fraud That Will Not Go Away
The story of corruption, bad faith, and “paying to play” schemes involving major banks and brokers has been covered in detail here, here, and here, but the sordid story began when the Environmental Protection Agency forced the county to build a new sewage plant in the mid-1990s. It was supposed to cost $300 million, relatively affordable to the residents of Birmingham, with its population of 650,000. But by the time the bankers and the brokers and the country commissioners got through with them, the taxpayers now face a bill approaching $4 billion. The current commissioners, after struggling for years to find a way out, finally threw in the towel last month and declared a Chapter 9 bankruptcy.

Right you are!

Former City Treasurer federaly indicted for accepting kickbacks in return for approving more than $200 million in pension fund investments.
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