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Old 03-14-2012, 04:55 PM   #41
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Based on what I read, he's very young? Does anyone have a link to a photo of him?
I think this is him. The photo is from the article at the link.

Greg Smith resignation letter: Goldman Sachs exec quits over firm's 'toxic' culture | Mail Online
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Old 03-14-2012, 05:12 PM   #42
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He says "Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. .... Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym."

I guess that Greg does not have a future in insurance either.
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Old 03-14-2012, 07:50 PM   #43
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So I finally read his letter. The only thing that strikes me as more pompous and self-righteous than that guy is the choir of responses in the 'comments' section

Geez, I could say many of the same things about the MegaCorp I retired from, they lost their way, didn't have the same values, etc. But I didn't write a letter to the editor, I just got on with my life.

Many companies try to up-sell the customer. This is news? What car salesman doesn't try to steer you to the higher model, or real estate agent to a larger house, or just about any business?

What I really hear form this guy is that their clients are stupid. I mean, I don't expect to go to a Chevy dealer and have him tell me that a certain model Ford would be best for me. It sounds like the clients are buying products from the same people who are advising them. If that doesn't scream 'conflict', I don't know what does. Caveat Emptor.

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Old 03-14-2012, 08:37 PM   #44
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"he has dedicated his life to doing the Lord’s work."

Oh my. That ought to change everyone's mind. No one could be a crook while doing the Lord's work.
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Old 03-14-2012, 08:52 PM   #45
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Mr Smith sounds like a disgruntled loser. The bottom line is that banks (like all other businesses) exist to make money for their shareholders and it is disengenuous (to say the least) to claim that there is a problem with that. Quite frankly, I would be very worried if banks were not seeking to make a profit out of their dealings with their customers and counterparties - the negative implications for the stability of the financial system and our own savings and investments would be significant.

As to the way in which Goldman (or any other business) goes about making those profits, there are really only three restraints - legal and regulatory issues, customer relations and reputation. Mr Smith focuses on the customers. Given that the products that Mr Smith's business unit was dealing in are sophisticated products which (I understand but have not been able to verify) are only offered to large sophisticated investors, the customers should be able to look out for themselves. Wilbur Ross's comments Wilbur Ross Sees No `Sea Change' at Goldman - Bloomberg that he has seen no "sea change" at Goldman is more credible than the views if a disgruntled mid level employee who is clearly happy to burn his bridges with the financial universe. Who would hire him after this? Lastly, it goes without saying that if customers were consistently losing money on the products being sold to them, presumably they would stop buying them. If customers thought they were being misled or missold products, they would either sue or complain to the SEC - something which unhappy customers routinely show a willingness to do.

While I am sure that, like all businesses, Goldman has its share of issues, Mr Smith's letter is more damning of Mr Smith than of Goldman. Unlike Frank Partnoy's FIASCO, I see nothing of merit (or even interest) in Mr Smith's letter.

Disclosure: I have an interest in Goldman
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Old 03-14-2012, 09:11 PM   #46
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What is surprising to me is that anyone would be enlightened by his letter.
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Old 03-14-2012, 11:18 PM   #47
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Who's calling names?
See below. Disgruntled and naive.

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Oh, make it stop. It's too funny.

But it does explain a lot . . . how young he is, why someone would be disgruntled at still only being a VP after 12 years, and the naivety with which the article is written.
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Old 03-14-2012, 11:19 PM   #48
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Thank you.

I see even some of you don't appreciate his going public.
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Old 03-14-2012, 11:21 PM   #49
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What is surprising to me is that anyone would be enlightened by his letter.
I don't think enlightened is the word I'd use...but I think it's refreshing that someone is willing to say what actually goes on rather than being paid "hush money" to go away and be quiet.

I do wonder, however, just how hard he tried to change things while there. That, IMO, is the true test of courage...to stand up for what you think is right in the face of doubters and opposition.
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Old 03-14-2012, 11:30 PM   #50
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Mr Smith sounds like a disgruntled loser. The bottom line is that banks (like all other businesses) exist to make money for their shareholders and it is disengenuous (to say the least) to claim that there is a problem with that.
You must have read a different letter than the one I did. He clearly stated that he did not have an issue with them trying to make money. His issue was that they were trying to make money at the expense of the very customers they were supposed to be serving.



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As to the way in which Goldman (or any other business) goes about making those profits, there are really only three restraints - legal and regulatory issues, customer relations and reputation.
Well, I sort of disagree with this, but maybe you consider this part of reputation...I think ethics should be a fourth. If you consider ethics part of reputation, then fine...we agree. IMO the ethics were violated, if you believe what he said was true.


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Lastly, it goes without saying that if customers were consistently losing money on the products being sold to them, presumably they would stop buying them. If customers thought they were being misled or missold products, they would either sue or complain to the SEC - something which unhappy customers routinely show a willingness to do.
If it goes without saying, you would not have said it...but I'm glad you did. Customers may not always know that they were getting the wrong end of the deal. Let's say I had a coin that I had no idea of the value. You, an expert came in and told me it was worth $50 even though you knew it was worth $100. I had expected that it was only worth $20...so I gladly took $50 from you. Then, you went out and sold it for $100. Seem ethical to you? You could argue that the seller should do their own research and beware of the buyer...I'll accept that. But it does not forgive the deceitful buyer for misleading the seller.


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Mr Smith's letter is more damning of Mr Smith than of Goldman.
You're entitled to your opinion...but I disagree...we'll find out over time what the customers of Goldman think. It's obvious you, as a customer, are not going anywhere.
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Old 03-14-2012, 11:48 PM   #51
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If customers thought they were being misled or missold products, they would either sue or complain to the SEC - something which unhappy customers routinely show a willingness to do.
Been there, done that, got the t-shirt.

Banks Bundled Bad Debt, Bet Against It and Won - NYTimes.com

He mentioned Abacus in the letter. Maybe you missed that sentence?

SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages; 2010-59; April 16, 2010

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According to the SEC's complaint, filed in U.S. District Court for the Southern District of New York, the marketing materials for the CDO known as ABACUS 2007-AC1
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Old 03-15-2012, 12:11 AM   #52
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You must have read a different letter than the one I did. He clearly stated that he did not have an issue with them trying to make money. His issue was that they were trying to make money at the expense of the very customers they were supposed to be serving.

Well, I sort of disagree with this, but maybe you consider this part of reputation...I think ethics should be a fourth. If you consider ethics part of reputation, then fine...we agree. IMO the ethics were violated, if you believe what he said was true.

If it goes without saying, you would not have said it...but I'm glad you did. Customers may not always know that they were getting the wrong end of the deal. Let's say I had a coin that I had no idea of the value. You, an expert came in and told me it was worth $50 even though you knew it was worth $100. I had expected that it was only worth $20...so I gladly took $50 from you. Then, you went out and sold it for $100. Seem ethical to you? You could argue that the seller should do their own research and beware of the buyer...I'll accept that. But it does not forgive the deceitful buyer for misleading the seller.

You're entitled to your opinion...but I disagree...we'll find out over time what the customers of Goldman think. It's obvious you, as a customer, are not going anywhere.
I'll weigh in here only this once, since this seems to be a USA rules issue. However, the scenario described, if the assayed value is "really" $100, one needs to ask, "in which market?". If wholesale, then he ethically might expect $100 - however if wholesale is $50, and retail is $100, the ethical thing to say/do is to clarify the distinction, and if the buyer is a wholesale buyer, openly liking to make an honest profit on the coin, he is doing what many, good people do, which is declaring in which market they buy, and in which one they sell. Clarity, it seems, is the rare ethical commodity in many financial dealings, all over the world. I stand among those who would love to be able to take a buyer/seller at their word. That's the "market" desire to have things be stable, predictable, contractual, rather than speculative unpredictable secretive junk.
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Old 03-15-2012, 12:48 AM   #53
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And in similar news out of NYC, All-Star outfielder Andruw Jones has decided to immediately retire his position and baseball career with the New York Yankees Baseball organization as he states "somewhere in the past, umm, couple years or somewhere around there the team management and other players changed from caring about the fans to not really caring that much about them. The management and other players always try to tell the fans that they care about them but I can tell you from the inside that most of those guys don't really care that much about the fans as individuals." Jones states further, "I always played this game for the fans and not for the money so to see the Yankees organization lie like that really hurts, man."

Jones said his current plans are to focus his energies on his growing auto dealership in Atlanta whose popular motto - "I will always go to bat for you, the customer!" - has made it the fastest growing business in the state of Georgia.
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Old 03-15-2012, 01:15 AM   #54
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I was surprised that this letter was the first new item on the national news...

Not sure of his name, but think it is David Faber.... he said he had talked to people and that the guy is not that far off...
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Old 03-15-2012, 09:43 AM   #55
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This is Goldman's public response
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"We disagree with the views expressed, which we don't think reflect the way we run our business. 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."
Does anybody here believe that is true?
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Old 03-15-2012, 10:01 AM   #56
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"We disagree with the views expressed, which we don't think reflect the way we run our business. 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."
This is Goldman's public response

Does anybody here believe that is true?
No business can be successful long term in spite of their clients/customers, so in that sense it is true. Does that mean they put their clients above all else? Doubtful, but then what company does, there are trade offs. If Goldman is really acting in their own interests without any regard for their clients, it will catch up with them.

Again, some are certainly better than others but I don't think anything about this story is unique to financial services or any other industry. Most employees at all levels treat customers well, but some employees treat customers badly every day. And every company has good employees who leave and criticize their employer, you hear those stories here.

Much ado about little, this BIG story will fade into the ether like most...
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Old 03-15-2012, 10:19 AM   #57
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I don't think enlightened is the word I'd use...but I think it's refreshing that someone is willing to say what actually goes on rather than being paid "hush money" to go away and be quiet.

I do wonder, however, just how hard he tried to change things while there. That, IMO, is the true test of courage...to stand up for what you think is right in the face of doubters and opposition.
+1 on the first paragraph.

I resigned from a company I felt was "ethically challenged." I didn't have any delusions of grandeur I could change anything by staying. The bad people were very powerful and they would have crushed me like a bug. I had previously learned my lesson that speaking truth to power is pretty much a waste of time.

In a previous job at a start-up, I went to Board members and told them straight out the CEO was using company personnel, time and money to run his other company and was otherwise mis-using company funds and not providing adequate leadership.

They didn't listen and I was laid off within 90-days. The investors (a group of small-time millionaires) ended up losing a total of $25 million. Would things have turned out differently if they had quickly acted on the information I gave them? Who's to say, but I knew the company was doomed if the CEO stayed in charge and the Board kept listening to his lies and BS.

The three other VP's were willing to look the other way and continue drinking the kool-aid hoping for the big payoff. My integrity was not for sale.
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Old 03-15-2012, 11:37 AM   #58
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See below. Disgruntled and naive.


If by "name" you mean slur, I object:

"Naively written" is certainly not a slur, it's an assessment of the letter - and an accurate one.

Disgruntled means angry or dissatisfied. Angry may be debatable, but dissatisfied is spot on and also not a slur.
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Old 03-15-2012, 12:04 PM   #59
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Mr Smith sounds like a disgruntled loser. The bottom line is that banks (like all other businesses) exist to make money for their shareholders and it is disengenuous (to say the least) to claim that there is a problem with that. Quite frankly, I would be very worried if banks were not seeking to make a profit out of their dealings with their customers and counterparties - the negative implications for the stability of the financial system and our own savings and investments would be significant.
Goldman Sachs needs to make money, but they should do this in a manner that does not exploit the client. Whenever we buy a service there is a level of due diligence that we can apply, but we also hope to buy good honest advice, not be treated as a sheep to be fleeced. Car mechanics might rip off the customer in ways that are not exactly illegal, but are immoral, because of their specialized knowledge. Mr. Smith is just voicing his opinion that Goldman Sachs does the same.
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Old 03-15-2012, 12:13 PM   #60
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In a previous job at a start-up, I went to Board members and told them straight out the CEO was using company personnel, time and money to run his other company and was otherwise mis-using company funds and not providing adequate leadership.

They didn't listen and I was laid off within 90-days. The investors (a group of small-time millionaires) ended up losing a total of $25 million. Would things have turned out differently if they had quickly acted on the information I gave them? Who's to say, but I knew the company was doomed if the CEO stayed in charge and the Board kept listening to his lies and BS.

The three other VP's were willing to look the other way and continue drinking the kool-aid hoping for the big payoff. My integrity was not for sale.
I worked in a small startup once and was worried at the stretching of technical specs by the CEO to make sales. The he'd look to me to back him up in meetings. I wouldn't do this. I now understand he had numbers to meet and actually have some sympathy for his position having 20 more years of experience, but I still wouldn't lie to a customer just to get a sale like he did.

Anyway I decided that the company culture was not for me and took up a job offer I had at NASA. When I resigned the CEO asked why I was leaving, I said "Given a choice between fish sticks or lobster, which would you choose?" I could almost smell the smoke of me burning my bridges.
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