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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 ma

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.

outside1234 15y ago
i suspect that the real Goldman response was to make sure this guy is on every financial black list there is.
- jarek 15y ago
  He got on the list the money he gave NYT the go-ahead to publish that article, and he knew he would perfectly well. Next week you'll hear about his new gig as an executive at a non-for-profit.
newstartupidea 15y ago
Good points. Something else I kept in mind when reading was that Goldman has a responsibility to its employees and clients to be able to weather the future, and regardless of current market volatility, there is a large amount of uncertainty; that uncertainty is prime motivation for focusing on making money by any practical means. That said, these are not excuses for bad behavior, and even though Greg Smith has a good bit of motivation to spin all of this in a way that benefits him, he puts himself at risk by saying this.
lix2333 15y ago
I thought this guy was an "executive director"? I think a lowly VP writing something like this wouldn't make nearly the splash he is making right now. A story like this is a nightmare to GS though. They've always prided themselves on valuing their reputation above all else and this is yet another shot to what they want to be seen as. However, it is important to realize that the public's perception of GS is different than their customers' perception. They were #2 in the league tables for M&A last year and their long time clients haven't shied away from using their services.
- RockyMcNuts 15y ago
  even if he was executive director, still not senior, more midlevel. hierarchy is - management committee > partner managing director > managing director > executive director > vice president > associate > analyst managing director is where you would be running a business, sort of like making general in the army, there are about 1700 of them. And the partners are the true senior managers and where real authority in the firm starts. Title inflation FTW. He might have trouble eating lunch in this town without changing his name LOL. Best bet might be to write and try to be the next Michael Lewis (Liar's Poker, Moneyball, The Blind Side, contributes to Bloomberg and Vanity Fair, didn't turn out too bad for him.) [edited Peter -> Michael]
  - aheilbut 15y ago
    I don't think Michael Lewis changed his name to Peter.
    - RockyMcNuts 15y ago
      d'oh! thanks - will fix. Lewis screwed up a few people's names in Liar's Poker and I always thought it reflected that he was more interested in a good story than facts, so it was kind of ironic I did same.
      - mmsmatt 15y ago
        Made me think of Muphry's law there http://en.wikipedia.org/wiki/Muphrys_law http://en.wikipedia.org/wiki/Muphrys_law
illumin8 15y ago
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.
- wcgortel 15y ago
  Fair point, but I'll note that Mr. Smith didn't manage $1T, rather he had clients who had an asset base at that level. That could mean "manage" but could also mean "I have spoken to people who manage."
- ig1 15y ago
  When I was working at a mid-tier bank I wrote software responsible for pricing over a trillion dollars of transactions while in a vp-level position
- byrneseyeview 15y ago
  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.
necubi 15y ago
According to the NYTimes byline, he is a "Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa." That doesn't sound like a lowly VP. It's rubbish that he has nothing to lose: coming out so publicly against your former employer never looks good on a resume. And Goldman can respond in the tradition of politicians facing similar stories: by using surrogates.
- gadders 15y ago
  Executive Director isn't that senior, though. Normally you need to be MD to be considered properly senior. Also, banks all vary in what they call equivalent titles. EG UBS: Associate Director, Director, Executive Director, MD Deutsche: Assistant Vice President, Vice President, Director, MD Bank of America and other places confuse things further with SVPs, FVPs, etc.
- mmsmatt 15y ago
  GS is 30k people, 12k of them VP-level, of which Smith was one. http://dealbreaker.com/2012/03/goldman-sachs-was-less-than-thrilled-with-times-op-ed/ http://dealbreaker.com/2012/03/goldman-sachs-was-less-than-t... VP in IB doesn't map to VP in any other industry I've seen. The (many, many) titles become more confusing when employees refer to Managing Directors (highest rank) as MDs, as if that wasn't overloaded. ("gonna see my MD today...")
byrneseyeview 15y ago
Mirabile Dictu! http://online.wsj.com/article/SB10001424052702304692804577281252012689294.html?mod=wsj_share_tweet http://online.wsj.com/article/SB1000142405270230469280457728... When Goldman doled out annual bonuses earlier this year, Mr. Smith's small payment became a point of friction, according to people familiar with the matter. Mr. Smith hadn't previously voiced his concerns about Goldman to his managers, according to people familiar with the matter. Occam's Razor says that the NYT was masterfully trolled.
- create_account 15y ago
  He effectively blacklists himself from any future job in finance (and therefore ends his career) just because he doesn't like his bonus? So no, it's not Occam's Razor: if he were merely unhappy with his bonus, he would call another i-bank and move on. BTW, I notice you're always quick to defend the big money status quo around here (you were against net neutrality a while back, IIRC). What's in it for you, as a mere SEO "consultant"? Are you paid to post these talking points, or do you really believe what you say?
  - byrneseyeview 15y ago
    I don't really know what he's thinking. But it is interesting that he was fine with the culture during most of his career, then not-fine with the culture after he found out how much money he'd be making in the future. There are many boutique banks whose management shares his sentiments, in the sense that they believe big banks are too self-serving and too indifferent to their clients. Some of those banks do very well, and it wouldn't be terrible for their PR to hire him. Do you know anyone who pays people for saying stuff like this on random message boards? I tend to say this kind of thing because I think it's true, and because I'm unimpressed with the quality of opposing arguments and would like someone to refute me. But if I can get paid while I'm at it, that's even better! I don't think the economics really work out, though.
    - create_account 15y ago
      Some of those banks do very well, and it wouldn't be terrible for their PR to hire him. Possible, but unlikely. Smith must have known he'd be attacked personally (as in that ad hominem piece you posted), and it's unlikely another bank would want to touch him, regardless of their true feelings towards Goldman. Do you know anyone who pays people for saying stuff like this on random message boards? Sure: http://www.reddit.com/r/IAmA/comments/pku22/iama_former_koch_industries_pr_sock_puppet_ama/ http://www.reddit.com/r/IAmA/comments/pku22/iama_former_koch... I tend to say this kind of thing because I think it's true, and because I'm unimpressed with the quality of opposing arguments and would like someone to refute me. I'll give you credit for the latter (if it's true), but not the former.
jmcqk6 15y ago
I agree that the Goldman response is funny, but that is not enough to dismiss the claims in the OP. Several times now there have been internal documents and emails released that verify not only that there are people in GS that really are not looking out for their clients, but this was a fundamental strategy when it came to at least some of the derivatives they were selling, knowing that they were shit deals. Sure, the argument can be made that it's just a 'few bad eggs,' but that argument just gets you so far. Now, it's not out of the realm of possibility that that some of these things are taken out of context. In IT, it's pretty common to vent concerning some... difficult customers. I think it's fair to say that you're right that some good people work there. Conceding that, I would like to see more by GS to address some of these other things.

outside1234 15y ago

i suspect that the real Goldman response was to make sure this guy is on every financial black list there is.

jarek 15y ago
He got on the list the money he gave NYT the go-ahead to publish that article, and he knew he would perfectly well. Next week you'll hear about his new gig as an executive at a non-for-profit.

newstartupidea 15y ago

Good points. Something else I kept in mind when reading was that Goldman has a responsibility to its employees and clients to be able to weather the future, and regardless of current market volatility, there is a large amount of uncertainty; that uncertainty is prime motivation for focusing on making money by any practical means. That said, these are not excuses for bad behavior, and even though Greg Smith has a good bit of motivation to spin all of this in a way that benefits him, he puts himself at risk by saying this.

lix2333 15y ago

I thought this guy was an "executive director"? I think a lowly VP writing something like this wouldn't make nearly the splash he is making right now. A story like this is a nightmare to GS though. They've always prided themselves on valuing their reputation above all else and this is yet another shot to what they want to be seen as. However, it is important to realize that the public's perception of GS is different than their customers' perception. They were #2 in the league tables for M&A last year and their long time clients haven't shied away from using their services.

RockyMcNuts 15y ago
even if he was executive director, still not senior, more midlevel. hierarchy is - management committee > partner managing director > managing director > executive director > vice president > associate > analyst managing director is where you would be running a business, sort of like making general in the army, there are about 1700 of them. And the partners are the true senior managers and where real authority in the firm starts. Title inflation FTW. He might have trouble eating lunch in this town without changing his name LOL. Best bet might be to write and try to be the next Michael Lewis (Liar's Poker, Moneyball, The Blind Side, contributes to Bloomberg and Vanity Fair, didn't turn out too bad for him.) [edited Peter -> Michael]
- aheilbut 15y ago
  I don't think Michael Lewis changed his name to Peter.
  - RockyMcNuts 15y ago
    d'oh! thanks - will fix. Lewis screwed up a few people's names in Liar's Poker and I always thought it reflected that he was more interested in a good story than facts, so it was kind of ironic I did same.
    - mmsmatt 15y ago
      Made me think of Muphry's law there http://en.wikipedia.org/wiki/Muphrys_law http://en.wikipedia.org/wiki/Muphrys_law

illumin8 15y ago

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.

wcgortel 15y ago
Fair point, but I'll note that Mr. Smith didn't manage $1T, rather he had clients who had an asset base at that level. That could mean "manage" but could also mean "I have spoken to people who manage."
ig1 15y ago
When I was working at a mid-tier bank I wrote software responsible for pricing over a trillion dollars of transactions while in a vp-level position
byrneseyeview 15y ago
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.

necubi 15y ago

According to the NYTimes byline, he is a "Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa." That doesn't sound like a lowly VP. It's rubbish that he has nothing to lose: coming out so publicly against your former employer never looks good on a resume. And Goldman can respond in the tradition of politicians facing similar stories: by using surrogates.

gadders 15y ago
Executive Director isn't that senior, though. Normally you need to be MD to be considered properly senior. Also, banks all vary in what they call equivalent titles. EG UBS: Associate Director, Director, Executive Director, MD Deutsche: Assistant Vice President, Vice President, Director, MD Bank of America and other places confuse things further with SVPs, FVPs, etc.
mmsmatt 15y ago
GS is 30k people, 12k of them VP-level, of which Smith was one. http://dealbreaker.com/2012/03/goldman-sachs-was-less-than-thrilled-with-times-op-ed/ http://dealbreaker.com/2012/03/goldman-sachs-was-less-than-t... VP in IB doesn't map to VP in any other industry I've seen. The (many, many) titles become more confusing when employees refer to Managing Directors (highest rank) as MDs, as if that wasn't overloaded. ("gonna see my MD today...")

byrneseyeview 15y ago

Mirabile Dictu! http://online.wsj.com/article/SB10001424052702304692804577281252012689294.html?mod=wsj_share_tweet http://online.wsj.com/article/SB1000142405270230469280457728... When Goldman doled out annual bonuses earlier this year, Mr. Smith's small payment became a point of friction, according to people familiar with the matter. Mr. Smith hadn't previously voiced his concerns about Goldman to his managers, according to people familiar with the matter. Occam's Razor says that the NYT was masterfully trolled.

create_account 15y ago
He effectively blacklists himself from any future job in finance (and therefore ends his career) just because he doesn't like his bonus? So no, it's not Occam's Razor: if he were merely unhappy with his bonus, he would call another i-bank and move on. BTW, I notice you're always quick to defend the big money status quo around here (you were against net neutrality a while back, IIRC). What's in it for you, as a mere SEO "consultant"? Are you paid to post these talking points, or do you really believe what you say?
- byrneseyeview 15y ago
  I don't really know what he's thinking. But it is interesting that he was fine with the culture during most of his career, then not-fine with the culture after he found out how much money he'd be making in the future. There are many boutique banks whose management shares his sentiments, in the sense that they believe big banks are too self-serving and too indifferent to their clients. Some of those banks do very well, and it wouldn't be terrible for their PR to hire him. Do you know anyone who pays people for saying stuff like this on random message boards? I tend to say this kind of thing because I think it's true, and because I'm unimpressed with the quality of opposing arguments and would like someone to refute me. But if I can get paid while I'm at it, that's even better! I don't think the economics really work out, though.
  - create_account 15y ago
    Some of those banks do very well, and it wouldn't be terrible for their PR to hire him. Possible, but unlikely. Smith must have known he'd be attacked personally (as in that ad hominem piece you posted), and it's unlikely another bank would want to touch him, regardless of their true feelings towards Goldman. Do you know anyone who pays people for saying stuff like this on random message boards? Sure: http://www.reddit.com/r/IAmA/comments/pku22/iama_former_koch_industries_pr_sock_puppet_ama/ http://www.reddit.com/r/IAmA/comments/pku22/iama_former_koch... I tend to say this kind of thing because I think it's true, and because I'm unimpressed with the quality of opposing arguments and would like someone to refute me. I'll give you credit for the latter (if it's true), but not the former.

jmcqk6 15y ago

I agree that the Goldman response is funny, but that is not enough to dismiss the claims in the OP. Several times now there have been internal documents and emails released that verify not only that there are people in GS that really are not looking out for their clients, but this was a fundamental strategy when it came to at least some of the derivatives they were selling, knowing that they were shit deals. Sure, the argument can be made that it's just a 'few bad eggs,' but that argument just gets you so far. Now, it's not out of the realm of possibility that that some of these things are taken out of context. In IT, it's pretty common to vent concerning some... difficult customers. I think it's fair to say that you're right that some good people work there. Conceding that, I would like to see more by GS to address some of these other things.