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> Win-win. That's not complete. It's win-win-lose. Win for you, win for GS, and lose for the society.

by wott 10y ago

hueving 10y ago
That assumes the allocation of capital provides no value to society. Mortgages, business loans, loans to governments (bonds), etc.
- hash-set 10y ago
  Regulatory capture, M&A corporate raiding, wiping out middle America one rotten deal at a time. The allocation of capital at the top has been demonstrably destructive to our society. It has enabled the near total destruction of our Constitutional Republic. You're all fucking heroes.
atemerev 10y ago
I am a part of the society. So are Goldman Sachs directors, and their clients, and their clients, and clients of those clients etc. GS is an investment bank. Their main activity is investment -- meaning giving money to the entrepreneurs (not directly -- but instead investing in funds who assemble venture funds who give money to the entrepreneurs), as well as providing financial lifelines to existing companies. For me, investment banking is what enables society's economic well-being. Without investment banks, there would be much less companies created, jobs retained, and economic activity in general. Investment banks make high profits? Good, every business should strive to do that -- Apple have much better profit margins than GS. Nobody blames Apple to be ruthless capitalistic profit-takers, as long as their new iPhone is better than the old one.
- osullivj 10y ago
  That's a very generous view of the investment banking sector, and one that doesn't quite align with my 17 years experience in that line. For example, your view doesn't accommodate how GS packaged credit derivs designed to fail and sold them to AIG, then sold default insurance on the same instruments to hedge funds that would profit from their failure. Investment banks exist to extract a profit from each transaction they do. Nothing more or less. A very large proportion of that profit goes to the management and staff of the bank as bonuses. Some of it goes to shareholders as dividends, but a much lower proportion that in other sectors. Which is why I don't buy IB equity.
  - hash-set 10y ago
    You also forgot to mention how they took order from clients at one desk, then swiveled the chair around and told the prop desk what the order was so the house could front run the order or do one of any number of other unethical things to the clients.
- hash-set 10y ago
  I think the country could get along just fine without out. Better, in fact.
- logfromblammo 10y ago
  That requires belief in a certain type of economic religion. Compare: - "God is good, and we do as He commands, because we are His people." - "Our work is what enables civilization to exist, and its economy to grow." From my perspective, investment banks are less virtuous and necessary. They are like a hydroelectric dynamo. They appear to sell cheap renewable power to the surrounding communities. But no one seems to notice that is only because they dammed the entire river, such that no one downriver can provide their own (possibly cheaper?) power with their own waterwheel. They made themselves the only game in town, and then they made the game crooked. Anybody that doesn't have a lakefront mansion abutting the reservoir has to make do with the silty low-head trickle that comes down the spillway. They, in conjunction with the rest of the global financial system, partially caused the problem that they appear to solve. The monetary system is engineered to concentrate capital at the top. It makes it easier to make money just by already having money than by efficiently executing a great new idea. I am biased against banking by my personal experiences. So take the above with that in mind.
cloudjacker 10y ago
That isn't an absolute and you know it. Why even perpetuate the narrative, without pinpointing specific actions? Someone pointed out M&A consolidation and regulatory capture. Specific actions with specific discussions, and a very small portion of the functions of these institutions.

> Win-win. That's not complete. It's win-win-lose. Win for you, win for GS, and lose for the society.

by wott 10y ago

> Win-win. That's not complete. It's win-win-lose. Win for you, win for GS, and lose for the society.

That assumes the allocation of capital provides no value to society. Mortgages, business loans, loans to governments (bonds), etc.

hash-set 10y ago
Regulatory capture, M&A corporate raiding, wiping out middle America one rotten deal at a time. The allocation of capital at the top has been demonstrably destructive to our society. It has enabled the near total destruction of our Constitutional Republic. You're all fucking heroes.

atemerev 10y ago

I am a part of the society. So are Goldman Sachs directors, and their clients, and their clients, and clients of those clients etc. GS is an investment bank. Their main activity is investment -- meaning giving money to the entrepreneurs (not directly -- but instead investing in funds who assemble venture funds who give money to the entrepreneurs), as well as providing financial lifelines to existing companies. For me, investment banking is what enables society's economic well-being. Without investment banks, there would be much less companies created, jobs retained, and economic activity in general. Investment banks make high profits? Good, every business should strive to do that -- Apple have much better profit margins than GS. Nobody blames Apple to be ruthless capitalistic profit-takers, as long as their new iPhone is better than the old one.

osullivj 10y ago
That's a very generous view of the investment banking sector, and one that doesn't quite align with my 17 years experience in that line. For example, your view doesn't accommodate how GS packaged credit derivs designed to fail and sold them to AIG, then sold default insurance on the same instruments to hedge funds that would profit from their failure. Investment banks exist to extract a profit from each transaction they do. Nothing more or less. A very large proportion of that profit goes to the management and staff of the bank as bonuses. Some of it goes to shareholders as dividends, but a much lower proportion that in other sectors. Which is why I don't buy IB equity.
- hash-set 10y ago
  You also forgot to mention how they took order from clients at one desk, then swiveled the chair around and told the prop desk what the order was so the house could front run the order or do one of any number of other unethical things to the clients.
hash-set 10y ago
I think the country could get along just fine without out. Better, in fact.
logfromblammo 10y ago
That requires belief in a certain type of economic religion. Compare: - "God is good, and we do as He commands, because we are His people." - "Our work is what enables civilization to exist, and its economy to grow." From my perspective, investment banks are less virtuous and necessary. They are like a hydroelectric dynamo. They appear to sell cheap renewable power to the surrounding communities. But no one seems to notice that is only because they dammed the entire river, such that no one downriver can provide their own (possibly cheaper?) power with their own waterwheel. They made themselves the only game in town, and then they made the game crooked. Anybody that doesn't have a lakefront mansion abutting the reservoir has to make do with the silty low-head trickle that comes down the spillway. They, in conjunction with the rest of the global financial system, partially caused the problem that they appear to solve. The monetary system is engineered to concentrate capital at the top. It makes it easier to make money just by already having money than by efficiently executing a great new idea. I am biased against banking by my personal experiences. So take the above with that in mind.

cloudjacker 10y ago

That isn't an absolute and you know it. Why even perpetuate the narrative, without pinpointing specific actions? Someone pointed out M&A consolidation and regulatory capture. Specific actions with specific discussions, and a very small portion of the functions of these institutions.