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Old 03-14-2012, 10:10 AM   #1
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Thumbs Up Why I Am Leaving Goldman Sachs

Excellent and courageous op-ed today in the NYT by Goldman's executive director and head of United States equity derivatives business in Europe, the Middle East and Africa.


Some excerpts:

TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.


When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.


My clients have a total asset base of more than a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs.


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.


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.

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.


Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.
What I really liked about it is the part relating to the juniors - for various career-changing reasons I have recently had an opportunity to network with a lot of the older, senior partners (in law, finance and in business), and the one take home message that has been a constant is that "things used to be different". Some will tell you that the rat race wasn't as severe, some will tell you that "back then" they would view the clients as friends and confidantes and vice versa, some will tell you that there was a culture of long-term investment in "kids" fresh out of school rather than turning them into cogs in the machine and working them to the point where you have a 90% attrition rate within the first 5 years and so on.

Hard for me to comment on as somebody in their early 30s - I've only known corporate culture as it stands today, but I do get the sense that it wasn't always like this.

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Old 03-14-2012, 12:33 PM   #2
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An acquaintance of mine worked for a good number of years at a financial firm and a few months ago wrote a long, impassioned essay about what she had seen and experienced as the firm's "culture" (for lack of a better word) changed, and how disheartening it was.

This article echoes much of what she said.

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Old 03-14-2012, 05:57 PM   #3
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I don't see how they can be motivated to change when they weren't punished in any way for what went down there-or anywhere else on Wall St. Seems to me it only made them more arrogant.
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Old 03-14-2012, 07:04 PM   #4
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I thought that was going to be another bash the 1% type article based on envy and resentment (i.e., the typical OWS critique). Imagine my surprise that it illustrates the loss of morals and ethics that can actually be found at both extremes of society today.

The greed, detachment and soullessness at the top and the lack of work ethic and personal responsibility at the bottom. Both ends basking in narcissism and materialism. Both ends making it harder and harder to "play by the rules" and succeed.

Good for this guy.
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Old 03-16-2012, 01:00 AM   #5
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Originally Posted by MrsSpringsteen View Post
I don't see how they can be motivated to change when they weren't punished in any way for what went down there-or anywhere else on Wall St. Seems to me it only made them more arrogant.

same here in Europe too, sadly
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