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.
via www.nytimes.com
I'm outraged by the outrage here, I've heard co-workers talking about this story, which has close to zero interest for me (except in its fascinating reception by the public!), I mean, a refugee from a den of thieves holds forth on their lack of honor and suddenly, after all else wer've seen, it's big news? I'm appalled and fascinated by the size of the story, but the story itself is almost nauseatingly banal, too awful to read and digest. This is Richard Slotkin's "man who knows Indians" come forth, like Jesus' resurrection, to tell the story of his time "behind enemy lines" or worse, a tale of how all used to be well until "greed got in the way". Ugh. Then again, as Slotkin wrote in "Gunfighter Nation", the public may have been too sensitive to actual events while the worst of the crisis was taking place, and a few years must pass before an acceptable narrative can be marketed, so now is the time for this actor to take the stage.
Posted by: Rballen422 | March 17, 2012 at 09:24 AM