8 ms·

The Secret Goldman Sachs Tapes

256 points by pdknsk 12y ago

Tloewald 12y ago
I will definitely listen to the broadcast. It surprises me that this kind of thing doesn't happen more often, given how easy it is to record conversations these days, and the liberality of the relevant laws in most states (one party consent).
ethbro 12y ago
Here's the original story at This American Life (no slight intended to Bloomberg, as the attribution and respect is crystal clear in the article): http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra http://www.thisamericanlife.org/radio-archives/episode/536/t...
jackgavigan 12y ago
There's also a print version of the story at ProPublica: http://www.propublica.org/article/carmen-segarras-secret-recordings-from-inside-new-york-fed http://www.propublica.org/article/carmen-segarras-secret-rec...
Aqueous 12y ago
If the tapes only contain content describing a general culture of discouragement of rigorous oversight, it's not totally surprising or any more jaw-droppingly incriminating than previous knowledge concerning the Fed's relationship with the banks. Basically this is what we already knew. The question isn't whether or not regulation is lax and whether or not this happened, it's how to fix it. And this poses a big problem because of the revolving door between regulatory agencies and private banks. No one wants to regulate a company that might offer them a million dollar job one day. It's kind of a tough problem to fix, since the only people who know enough about financial industry to regulate it are the people who work for the industry. And if we prevented people from working for the industry they regulate in any capacity for say, up to 10 years after they leave their government job (is this even Constitutional?), much fewer people would want to work for the government or the Fed. But even so I think that kind of reform is necessary - because it will attract to government service only people who are serious about regulation.
- enraged_camel 12y ago
  >>The question isn't whether or not regulation is lax and whether or not this happened, it's how to fix it. In my opinion the only way to reliably fix this is to create a group similar to the one that the federal government created to end Al Capone's illegal activities during the Prohibition. That group was nicknamed "The Untouchables" because they were fearless and incorruptible (by reputation, which is what's important). They were hand-picked by Eliot Ness, who reportedly went through the records of hundreds of Prohibition agents and personally identified a small group of them who were known for their honesty and integrity (as well as special skills, such as car tailing). What's remarkable about this group is that they were not only stubborn as hell but also extremely resilient to Capone's attempts at bribery and intimidation. Ness himself declined a bribe that was equal to his salary but would be paid to him monthly. They had a huge impact on bringing down the kingpin. It's pretty clear that the regulators in charge of overseeing the financial industry today don't have this type of drive. To them, it's just a job. They are normal men and women who are up against groups of massive political power. As such, they are not in a position to do their jobs effectively. That's why the system is rife with rampant corruption. Before you say I'm dramatizing, consider the possibility that Enron was just the tip of the iceberg, and under the surface there is ten Enrons that are propping up huge sectors of the economy with lies and deceit. Maybe ignorance is bliss and we should just let it operate like that. But truth has a habit of coming out sooner or later - and the sooner it comes out and everything comes crashing down, the sooner we can rebuild the system.
  - rayiner 12y ago
    We'd never stand for something like that today. Today, government is supposed to step out of the way and let the business world take the lead. That's why we've cut back on federal regulatory enforcement in everything from securities to environmental protection since the 1970's. And it has been a bipartisan effort. I mean, just look at how the tech industry reacts to regulatory enforcement when it comes to Uber and AirBnB. Guess what: people in the finance industry feel the exact same way. And the public largely agrees. Our liberals are post-Clinton liberals use the same small government, free-market talking points the conservatives made popular with Reagan. Even when they call for regulation they are supremely sensitive to the idea that its an illegitimate intrusion into private business.
canvia 12y ago
Audio: http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra http://www.thisamericanlife.org/radio-archives/episode/536/t... Transcript: http://www.thisamericanlife.org/sites/default/files/TAL_536_transcript.pdf http://www.thisamericanlife.org/sites/default/files/TAL_536_...
rayiner 12y ago
This stuff is fairly innocuous if that's all Lewis can come up with after reviewing 46 hours of tapes. "I'm not going to comment until I know what my boss thinks?" That's something nearly every underling has or will say at some point. The bigger issue is that being a regulator in the U.S. is a shitty job. Half the country thinks we shouldn't even have regulators, and the other half blames regulators for not understanding what they're doing out of one side of their mouth while condemning anyone with industry experience who does know out of the other side. So no surprise that the regulators are deferential to the banks. At any given time they're one presidential election away from losing what little leverage they have. Our regulatory system is the result of a clash of cultural values. One one hand we aren't comfortable with doing away with regulation. To the contrary, we demand it. On the other hand we think of regulatory bodies as leeching off "value-creating businesses" and condemn anyone who undertakes government service. Unsurprisingly, we get regulatory bodies that try not to rock the boat.
- cynicalkane 12y ago
  This isn't quite accurate. Since 2007 there's been much more regulatory pressure--particularly on large commercial banks, but all financial institutions to a lesser extent. A major issue is the regulations themselves are extraordinarily complicated and the regulatory regime is unclear. What you characterize as "deference" is more like this: the regulators don't know what regulations out of (literally) hundreds of thousands of pages' worth of regulation they can get away with enforcing or not enforcing, but for political reasons they might be called to enforce whatever regulations at whatever time, such as with the retroactive enforcing of mortgage regulations everyone was ignoring before 2007 because the political incentives were such that everyone should have access to mortgages. So regulators are incentivized--whether corrupt or not--to build soft, close relationships. (As an aside, regulators and banks are continually building sophisticated machine-learning algorithms that have access to all your financial data, as well as powerful search systems to find whatever a regulator might demand.) Hobbes, writing in England in the 1600s, described the "silence of the law", wherein if the king's agents enforced all his laws his rule would quickly become tyrannical and lose legitimacy. Well, again, there are literally hundreds of thousands of pages of financial regulation, depending on who you ask, that can be characterized as "must follow". Enforcing them all would draw the wrath of most Republicans and moderates, because the world does need a financial system. The regulators work softly because, honestly, they don't know what they are doing or are supposed to do. Banks try to get in bed with regulators because they don't want to end up like HSBC; people calling for their heads essentially because they were lazy about regulatory demands for an issue that ended up being politically sensitive. A large part of compliance nowadays is trying to predict what Congress cares about or might care about in the future. Regulators are glad to get the extra access. After all, when the political winds blow the right way, they have the real power. Otherwise, don't rock the boat. There is also corruption--always, everywhere--but if I was to imagine how a "good" regulator could do his job in the way Michael Lewis demands, well, I can't imagine that ever happening.
AndrewKemendo 12y ago
The Ray Rice video for the financial sector has arrived. Not even close. That metaphor would only be apt if there was literally video of a Federal Reserve employee accepting cash from an employee of a major bank with an explicit statement from the bank saying something along the lines of "So you're going to keep the interest rates low so we can keep doing bond arbitrage instead of lowering rates for consumer lending right?" Even then most people wouldn't care because they have no idea how financial institutions work.
- lotsofmangos 12y ago
  With your hypothetical there, I think you have just described fairly accurately how I think most financial institutions work
cyphunk 12y ago
The environment of the FED sounds more like the paternal architecture of the military: Just the opposite: The Fed encourages its employees to keep their heads down, to obey their managers and to appease the banks. That is, bank regulators failed to do their jobs properly not because they lacked the tools but because they were discouraged from using them.
shimjim45 12y ago
Germane to the topic: Century of Enslavement: The History of The Federal Reserve http://m.youtube.com/watch?v=5IJeemTQ7Vk http://m.youtube.com/watch?v=5IJeemTQ7Vk
- ubernostrum 12y ago
  Sorry, can't watch due to all the chemtrail smoke in my eyes. And once it clears my mind will be controlled by them anyway, so I won't want to watch anymore.
  - shimjim45 12y ago
    It sounds like your brain has already died from a steady diet of Statist pablum. Perhaps when you grow up you'll be able to masticate actual history.
JimA 12y ago
So after listening to the entire show, I'd have to say she doesn't come across as being in the right at all. The big showdown on whether Goldman had a conflicts of interest policy came down to a difference of opinion that she was clearly in the wrong on. Her boss's request to amend her statement to say that they had one but it was totally inadequate should have been an easy one to agree to. Especially if the Fed's legal department was the one objecting to saying there was no policy. Instead she comes across as extremely stubborn and unable to compromise or see other viewpoints besides her own. I would have fired her too just because she was so difficult to work with. Silva does seem spineless in going out of the way to not verbally offend Goldman, but IMO that is more of a personality trait that him ignoring evidence. Now she's suing wanting to be vindicated that she was really right all along and everyone else was wrong, and releasing the tapes to support that. Not a Goldman fan, but for this report there is really no moral outrage to be had.
- nvarsj 12y ago
  You weren't listening well then. She agreed to change her statement but said she couldn't agree professionally.
  - JimA 12y ago
    I heard that, but it supports my opinion that she was simply unable to appear to be wrong. There was no interpretation required - either they have a policy or they don't. Since there is a document with that title they obviously have one, however poorly written it is. Her belief that since it didn't meet the Fed's standards it can't even be called one is just extreme.
- j2kun 12y ago
  It's more that the Fed was actively working to bypass their own system. For example, in changing the minutes of meetings, in refusing to let her file a report that the boss would then have to overrule, and in general telling her that she was blanket wrong in a matter of interpretation. I don't see why consensus is such a necessary issue. We don't have consensus in any part of our government, but we are quite happy having dissenting supreme court justices write their own opinions. Why can't regulators also have dissenting opinions? The health of our economy is far more important than anyone's personal feelings in the matter.
rock57 12y ago
Here's one more secret Goldman Sachs tape)) http://www.youtube.com/watch?v=sX7TWstSV_E http://www.youtube.com/watch?v=sX7TWstSV_E
georgeecollins 12y ago
I wonder if there isn't a way to deal with this problem through something like the South African divestment movement of the 80's. If institutions like universities, pensions, and corporations were under pressure from their constituents to not do business from Goldman Sachs, Goldman Sachs would start feeling the pressure to not capture regulators. It is not clear that banking advice from GS is that great. Often times their customers are effectively the victim. If there was popular pressure to not deal with them they might clean up their act.
- josho 12y ago
  I'll rephrase your suggestion: Since the regulator responsible for monitoring private financial institutions has failed, we along with universities, pensions, etc should stop investing in those financial institutions. The above strikes me as very backwards. Isn't the appropriate response to fire the heads of the regulators, rebuild the agency to act on the recommendations that an outside body proposed to the regulators, and ensure that congress follows up to ensure changes have occurred. Oh wait. Therein lies the problem, congress has been captured by the finance sector's lobbying, so I'm being idealistic and your proposal is not as backwards as I first thought. I'm starting to understand Lawrence Lessig's focus on removing money from election campaigns, so that we can have real government policy because that's the real root cause of issues like this.
vfclists 12y ago
The Fed can do whatever it bloody wants so long as it uses its own money to bail out the banks it is supposed to regulate, rather than taxpayers money. So long as they and the banks they are supposed to supervise stick to that they can do whatever they bloody want. This is where the quality of debates on HN become so sucky and surreal. Given that more than a few of the Treasury Secretaries, SEC bosses and what nots are ex Goldman Sachs et al employees, why do any intelligent people expect the Fed and other government agencies to regulate the banks properly, if the failure of the institutions they are supposed to regulate would result in the loss of the pensions the continue to receive from such institutions?
vfclists 12y ago
There are times when I can't tell whether people are stupid or not, making comments like stopping employees of regulatory bodies seeking jobs at the companies they regulate would amount to restriction of trade or non-compete clause or whatever. How about saying that if FBI or DEA agents were banned from working or consulting for drug cartels and crime bosses after retiring that would be restriction of their employment prospects. Are we living in some kind of twilight zone or is that what happens when debates a left to guys on HN? Why can't American media simply call spades spades and simply come out and rather than say that Fed employees and bosses are simply weak and spineless, the simply say that they are corrupt and lacking in integrity? In fact the media are the biggest problem here, because instead of calling out things at the right time they weasel around the whole issue and belatedly come out with 'startling new revelations' after the horse has bolted. Why couldn't the Bloomberg journalists who revealed this information simply ask their employer about this? He could have told them about the Fed's dubiousness 30 years ago.
orin_hanner 12y ago
Story posted late this afternoon: http://www.bloomberg.com/news/2014-09-26/goldman-sachs-said-to-prohibit-bankers-from-buying-stocks.html http://www.bloomberg.com/news/2014-09-26/goldman-sachs-said-... > Goldman Sachs Group Inc. (GS), the top adviser on corporate takeovers, is changing its conflict-of-interest policy to bar investment bankers from trading individual stocks and bonds, a person with direct knowledge of the matter said.
darkhorse05 12y ago
I worked at the Federal Reserve for some time, so I know that the culture is as toxic as the article says it to be. Professionally, this experience has been the most aggravating of my career. Oh, let me tell you about the laziness! One of the developers I worked with would come to work at 11 am every single day and leave at 5 PM—sharp. He would then take a two hour lunch break. It wouldn’t be so bad if he actually did some work, but there was none. I remember vividly this one incident: we were trying hard to meet a deadline and he was responsible for an important component. Every week, he would paint a rosy picture of his progress, saying he was THIS close to finishing the project. The week of the deadline comes and it’s time for him to lay down his cards—and surprise, surprise—there was no working code! All he produced was a jumbling mishmash of code that had no hope of working. I spent the next week in the office writing this component. Close to 70 hours. Unreal. [Oh yeah, this guy was getting paid $130K, not to mention those sweet government bennies!] His direct manager would complain about him all the time, and many meetings were asking him to improve his output. And yet, he was never punished. The truth is, when it comes to working at the Federal Reserve, your work output is not as important as who your friends are. And this guy had friends in high(er) places. This guy is just one employee, but I believe it is just endemic of the kind of culture the Fed breeds. One of nepotism, of indolence, of apathy. I am truly scared for the future of this country knowing that these are the people behind the wheel.

256 points by pdknsk 12y ago

I will definitely listen to the broadcast. It surprises me that this kind of thing doesn't happen more often, given how easy it is to record conversations these days, and the liberality of the relevant laws in most states (one party consent).

ethbro 12y ago

Here's the original story at This American Life (no slight intended to Bloomberg, as the attribution and respect is crystal clear in the article): http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra http://www.thisamericanlife.org/radio-archives/episode/536/t...

jackgavigan 12y ago

There's also a print version of the story at ProPublica: http://www.propublica.org/article/carmen-segarras-secret-recordings-from-inside-new-york-fed http://www.propublica.org/article/carmen-segarras-secret-rec...

Aqueous 12y ago

If the tapes only contain content describing a general culture of discouragement of rigorous oversight, it's not totally surprising or any more jaw-droppingly incriminating than previous knowledge concerning the Fed's relationship with the banks. Basically this is what we already knew. The question isn't whether or not regulation is lax and whether or not this happened, it's how to fix it. And this poses a big problem because of the revolving door between regulatory agencies and private banks. No one wants to regulate a company that might offer them a million dollar job one day. It's kind of a tough problem to fix, since the only people who know enough about financial industry to regulate it are the people who work for the industry. And if we prevented people from working for the industry they regulate in any capacity for say, up to 10 years after they leave their government job (is this even Constitutional?), much fewer people would want to work for the government or the Fed. But even so I think that kind of reform is necessary - because it will attract to government service only people who are serious about regulation.

enraged_camel 12y ago
>>The question isn't whether or not regulation is lax and whether or not this happened, it's how to fix it. In my opinion the only way to reliably fix this is to create a group similar to the one that the federal government created to end Al Capone's illegal activities during the Prohibition. That group was nicknamed "The Untouchables" because they were fearless and incorruptible (by reputation, which is what's important). They were hand-picked by Eliot Ness, who reportedly went through the records of hundreds of Prohibition agents and personally identified a small group of them who were known for their honesty and integrity (as well as special skills, such as car tailing). What's remarkable about this group is that they were not only stubborn as hell but also extremely resilient to Capone's attempts at bribery and intimidation. Ness himself declined a bribe that was equal to his salary but would be paid to him monthly. They had a huge impact on bringing down the kingpin. It's pretty clear that the regulators in charge of overseeing the financial industry today don't have this type of drive. To them, it's just a job. They are normal men and women who are up against groups of massive political power. As such, they are not in a position to do their jobs effectively. That's why the system is rife with rampant corruption. Before you say I'm dramatizing, consider the possibility that Enron was just the tip of the iceberg, and under the surface there is ten Enrons that are propping up huge sectors of the economy with lies and deceit. Maybe ignorance is bliss and we should just let it operate like that. But truth has a habit of coming out sooner or later - and the sooner it comes out and everything comes crashing down, the sooner we can rebuild the system.
- rayiner 12y ago
  We'd never stand for something like that today. Today, government is supposed to step out of the way and let the business world take the lead. That's why we've cut back on federal regulatory enforcement in everything from securities to environmental protection since the 1970's. And it has been a bipartisan effort. I mean, just look at how the tech industry reacts to regulatory enforcement when it comes to Uber and AirBnB. Guess what: people in the finance industry feel the exact same way. And the public largely agrees. Our liberals are post-Clinton liberals use the same small government, free-market talking points the conservatives made popular with Reagan. Even when they call for regulation they are supremely sensitive to the idea that its an illegitimate intrusion into private business.

canvia 12y ago

Audio: http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra http://www.thisamericanlife.org/radio-archives/episode/536/t... Transcript: http://www.thisamericanlife.org/sites/default/files/TAL_536_transcript.pdf http://www.thisamericanlife.org/sites/default/files/TAL_536_...

rayiner 12y ago

This stuff is fairly innocuous if that's all Lewis can come up with after reviewing 46 hours of tapes. "I'm not going to comment until I know what my boss thinks?" That's something nearly every underling has or will say at some point. The bigger issue is that being a regulator in the U.S. is a shitty job. Half the country thinks we shouldn't even have regulators, and the other half blames regulators for not understanding what they're doing out of one side of their mouth while condemning anyone with industry experience who does know out of the other side. So no surprise that the regulators are deferential to the banks. At any given time they're one presidential election away from losing what little leverage they have. Our regulatory system is the result of a clash of cultural values. One one hand we aren't comfortable with doing away with regulation. To the contrary, we demand it. On the other hand we think of regulatory bodies as leeching off "value-creating businesses" and condemn anyone who undertakes government service. Unsurprisingly, we get regulatory bodies that try not to rock the boat.

cynicalkane 12y ago
This isn't quite accurate. Since 2007 there's been much more regulatory pressure--particularly on large commercial banks, but all financial institutions to a lesser extent. A major issue is the regulations themselves are extraordinarily complicated and the regulatory regime is unclear. What you characterize as "deference" is more like this: the regulators don't know what regulations out of (literally) hundreds of thousands of pages' worth of regulation they can get away with enforcing or not enforcing, but for political reasons they might be called to enforce whatever regulations at whatever time, such as with the retroactive enforcing of mortgage regulations everyone was ignoring before 2007 because the political incentives were such that everyone should have access to mortgages. So regulators are incentivized--whether corrupt or not--to build soft, close relationships. (As an aside, regulators and banks are continually building sophisticated machine-learning algorithms that have access to all your financial data, as well as powerful search systems to find whatever a regulator might demand.) Hobbes, writing in England in the 1600s, described the "silence of the law", wherein if the king's agents enforced all his laws his rule would quickly become tyrannical and lose legitimacy. Well, again, there are literally hundreds of thousands of pages of financial regulation, depending on who you ask, that can be characterized as "must follow". Enforcing them all would draw the wrath of most Republicans and moderates, because the world does need a financial system. The regulators work softly because, honestly, they don't know what they are doing or are supposed to do. Banks try to get in bed with regulators because they don't want to end up like HSBC; people calling for their heads essentially because they were lazy about regulatory demands for an issue that ended up being politically sensitive. A large part of compliance nowadays is trying to predict what Congress cares about or might care about in the future. Regulators are glad to get the extra access. After all, when the political winds blow the right way, they have the real power. Otherwise, don't rock the boat. There is also corruption--always, everywhere--but if I was to imagine how a "good" regulator could do his job in the way Michael Lewis demands, well, I can't imagine that ever happening.

AndrewKemendo 12y ago

The Ray Rice video for the financial sector has arrived. Not even close. That metaphor would only be apt if there was literally video of a Federal Reserve employee accepting cash from an employee of a major bank with an explicit statement from the bank saying something along the lines of "So you're going to keep the interest rates low so we can keep doing bond arbitrage instead of lowering rates for consumer lending right?" Even then most people wouldn't care because they have no idea how financial institutions work.

lotsofmangos 12y ago
With your hypothetical there, I think you have just described fairly accurately how I think most financial institutions work

cyphunk 12y ago

The environment of the FED sounds more like the paternal architecture of the military: Just the opposite: The Fed encourages its employees to keep their heads down, to obey their managers and to appease the banks. That is, bank regulators failed to do their jobs properly not because they lacked the tools but because they were discouraged from using them.

shimjim45 12y ago

Germane to the topic: Century of Enslavement: The History of The Federal Reserve http://m.youtube.com/watch?v=5IJeemTQ7Vk http://m.youtube.com/watch?v=5IJeemTQ7Vk

ubernostrum 12y ago
Sorry, can't watch due to all the chemtrail smoke in my eyes. And once it clears my mind will be controlled by them anyway, so I won't want to watch anymore.
- shimjim45 12y ago
  It sounds like your brain has already died from a steady diet of Statist pablum. Perhaps when you grow up you'll be able to masticate actual history.

JimA 12y ago

So after listening to the entire show, I'd have to say she doesn't come across as being in the right at all. The big showdown on whether Goldman had a conflicts of interest policy came down to a difference of opinion that she was clearly in the wrong on. Her boss's request to amend her statement to say that they had one but it was totally inadequate should have been an easy one to agree to. Especially if the Fed's legal department was the one objecting to saying there was no policy. Instead she comes across as extremely stubborn and unable to compromise or see other viewpoints besides her own. I would have fired her too just because she was so difficult to work with. Silva does seem spineless in going out of the way to not verbally offend Goldman, but IMO that is more of a personality trait that him ignoring evidence. Now she's suing wanting to be vindicated that she was really right all along and everyone else was wrong, and releasing the tapes to support that. Not a Goldman fan, but for this report there is really no moral outrage to be had.

nvarsj 12y ago
You weren't listening well then. She agreed to change her statement but said she couldn't agree professionally.
- JimA 12y ago
  I heard that, but it supports my opinion that she was simply unable to appear to be wrong. There was no interpretation required - either they have a policy or they don't. Since there is a document with that title they obviously have one, however poorly written it is. Her belief that since it didn't meet the Fed's standards it can't even be called one is just extreme.
j2kun 12y ago
It's more that the Fed was actively working to bypass their own system. For example, in changing the minutes of meetings, in refusing to let her file a report that the boss would then have to overrule, and in general telling her that she was blanket wrong in a matter of interpretation. I don't see why consensus is such a necessary issue. We don't have consensus in any part of our government, but we are quite happy having dissenting supreme court justices write their own opinions. Why can't regulators also have dissenting opinions? The health of our economy is far more important than anyone's personal feelings in the matter.

rock57 12y ago

Here's one more secret Goldman Sachs tape)) http://www.youtube.com/watch?v=sX7TWstSV_E http://www.youtube.com/watch?v=sX7TWstSV_E

georgeecollins 12y ago

I wonder if there isn't a way to deal with this problem through something like the South African divestment movement of the 80's. If institutions like universities, pensions, and corporations were under pressure from their constituents to not do business from Goldman Sachs, Goldman Sachs would start feeling the pressure to not capture regulators. It is not clear that banking advice from GS is that great. Often times their customers are effectively the victim. If there was popular pressure to not deal with them they might clean up their act.

josho 12y ago
I'll rephrase your suggestion: Since the regulator responsible for monitoring private financial institutions has failed, we along with universities, pensions, etc should stop investing in those financial institutions. The above strikes me as very backwards. Isn't the appropriate response to fire the heads of the regulators, rebuild the agency to act on the recommendations that an outside body proposed to the regulators, and ensure that congress follows up to ensure changes have occurred. Oh wait. Therein lies the problem, congress has been captured by the finance sector's lobbying, so I'm being idealistic and your proposal is not as backwards as I first thought. I'm starting to understand Lawrence Lessig's focus on removing money from election campaigns, so that we can have real government policy because that's the real root cause of issues like this.

vfclists 12y ago

The Fed can do whatever it bloody wants so long as it uses its own money to bail out the banks it is supposed to regulate, rather than taxpayers money. So long as they and the banks they are supposed to supervise stick to that they can do whatever they bloody want. This is where the quality of debates on HN become so sucky and surreal. Given that more than a few of the Treasury Secretaries, SEC bosses and what nots are ex Goldman Sachs et al employees, why do any intelligent people expect the Fed and other government agencies to regulate the banks properly, if the failure of the institutions they are supposed to regulate would result in the loss of the pensions the continue to receive from such institutions?

vfclists 12y ago

There are times when I can't tell whether people are stupid or not, making comments like stopping employees of regulatory bodies seeking jobs at the companies they regulate would amount to restriction of trade or non-compete clause or whatever. How about saying that if FBI or DEA agents were banned from working or consulting for drug cartels and crime bosses after retiring that would be restriction of their employment prospects. Are we living in some kind of twilight zone or is that what happens when debates a left to guys on HN? Why can't American media simply call spades spades and simply come out and rather than say that Fed employees and bosses are simply weak and spineless, the simply say that they are corrupt and lacking in integrity? In fact the media are the biggest problem here, because instead of calling out things at the right time they weasel around the whole issue and belatedly come out with 'startling new revelations' after the horse has bolted. Why couldn't the Bloomberg journalists who revealed this information simply ask their employer about this? He could have told them about the Fed's dubiousness 30 years ago.

orin_hanner 12y ago

Story posted late this afternoon: http://www.bloomberg.com/news/2014-09-26/goldman-sachs-said-to-prohibit-bankers-from-buying-stocks.html http://www.bloomberg.com/news/2014-09-26/goldman-sachs-said-... > Goldman Sachs Group Inc. (GS), the top adviser on corporate takeovers, is changing its conflict-of-interest policy to bar investment bankers from trading individual stocks and bonds, a person with direct knowledge of the matter said.

darkhorse05 12y ago

I worked at the Federal Reserve for some time, so I know that the culture is as toxic as the article says it to be. Professionally, this experience has been the most aggravating of my career. Oh, let me tell you about the laziness! One of the developers I worked with would come to work at 11 am every single day and leave at 5 PM—sharp. He would then take a two hour lunch break. It wouldn’t be so bad if he actually did some work, but there was none. I remember vividly this one incident: we were trying hard to meet a deadline and he was responsible for an important component. Every week, he would paint a rosy picture of his progress, saying he was THIS close to finishing the project. The week of the deadline comes and it’s time for him to lay down his cards—and surprise, surprise—there was no working code! All he produced was a jumbling mishmash of code that had no hope of working. I spent the next week in the office writing this component. Close to 70 hours. Unreal. [Oh yeah, this guy was getting paid $130K, not to mention those sweet government bennies!] His direct manager would complain about him all the time, and many meetings were asking him to improve his output. And yet, he was never punished. The truth is, when it comes to working at the Federal Reserve, your work output is not as important as who your friends are. And this guy had friends in high(er) places. This guy is just one employee, but I believe it is just endemic of the kind of culture the Fed breeds. One of nepotism, of indolence, of apathy. I am truly scared for the future of this country knowing that these are the people behind the wheel.