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Executive resigns, calling Goldman Sachs ‘toxic’

Wall Street was rattled last week when Greg Smith, an executive of Goldman Sachs told the world, via an op-ed piece in the New York Times, why he was leaving: “It makes me ill how callously people talk about ripping their clients off.” Read:

Why I am leaving Goldman Sachs, by Greg Smith, on NYTimes.com.

Goldman Sachs shares tumble after Greg Smith op-ed rocks finance world, on NYDailyNews.com.

Greg Smith’s resignation: Are Wall Street traders Psychopathic?, on Healthland.Time.com.



8 Comments on "Executive resigns, calling Goldman Sachs ‘toxic’"

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  1. Redwald says:

    The question is, what caused the change at Goldman Sachs? Greg Smith writes of the excellent culture of integrity the company used to have: “The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years.” But in the twelve years Smith had been there, he saw all of that going slowly rotten.

    One reader at least thought he had an answer:

    TH, MN: “The thing that really changed GS is the change from a partnership to a public company in 1999, just before Mr. Smith joined. Suddenly, the risks are off-loaded from leadership to shareholders, quarterly earnings become the focus, and management is free to wheel & deal any way they want to with little consequence to them. That has created a huge moral hazard and nothing is being done to control that.” – March 14, 2012 at 9:03 a.m.

    Interesting. But it doesn’t answer the broader question of why so much of the financial sector today is driven by unbridled greed—and whether and why this could have changed from decades past.

    Anyway it’s good to see from the second article that Mr. Smith’s public resignation is having an impact. Perhaps if more people with principles were prepared to stand up the way he has, more of these unscrupulous companies would be forced to shape up—or lose their clients.

  2. Ox Drover says:

    Redwald if you look at the big shots of days gone by, Joseph Kennedy for one, and all the others from DuPont on, as well as the political men, and the rail road barons, you will see that they were NOT any more “moral” then than people are now. They were just as immoral. Old Joe Kennedy made his money in prostitution, illegal booze and other such carp.

    There have always been psychopaths and immoral people at the top of the heap, getting power and money any way they could. They are just like the Mafia only without so many of the machine guns, and the violence they do is more circumspect, but people suffer because of them nonetheless.

    An individual company may have had a “moral” basis for business for some time, but the culture is always about who is in control NOW so cultures change in companies because of who is at the helm.

    I read a Dilbert quote the other day about “we can control our personnel cost by giving crappy performance reviews” and boy is that the TRUTH.

    I had received a 9 out of 10 or a 10 out of 10 performance review at every job I ever had, and had gotten such reviews at the job I had for 6 years, then all of a sudden we get this new CEO and this new Clinics manager and boy-o-boy I go down to AVERAGE which means I get a 2-3% raise if any at all.

    Back in the 80s when there was a big nursing shortage if you stayed with the hospital you were working for you would ge a 3% raise (even with a good review) but if you went across the street you could get a hire on bonus PLUS another 15% in salary to start, then the year rolls around and THAT hospital would give you a 3% raise if you got a good review, but if you went back to your original hospital across the street you could get another hire on bonus and another 15-20% higher starting salary, so we moved from hospital to hospital and back again every year or so.

    I can’t figure out why they didn’t “get it” why so many of their nurses left every year then came back the next year. After a few years of this I was making almost twice what some nurses that had stayed at the same hospital were making….but I finally figured out that hospitals were treating nurses like galley slaves and got out of the darned hospitals….at least into the clinics which were better for a while.

  3. MiLo says:

    Did you happen to read an article last week listing the 10 most ethical companies in the US. #2 General Electric

    YEA RIGHT I would sell my stock, but it isn’t worth anything anymore…..

  4. darwinsmom says:

    This quote from the first link was VERY interesting

    “How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.”

  5. skylar says:

    Ah yes, the ax-murderer clause. What a shame. such a waste of potential! :P

    Personally, I don’t buy all this crap. In the past year the resignations from financial firms resembles rats abandoning ship. Why is it, all of a sudden after all these years of unbridled greed, they aren’t able to turn a blind eye anymore? And do they really think we’ll believe this started 12 years ago? All we have to do is listen to these 1%er’s talk and you know they don’t have empathy and never did. I’m not talking about all the young wallstreet masters of the universe, I’m talking about the OLD OLD dudes who have been around for 40 years or more. The greed and psychopathy is not news. What is news? The internet is pulling the mask off these characters and they need a new one, that’s news.

    There is a term: CONTROLLED OPPOSITION. This smells of that. Since they’ve been unmasked the spaths need a scapegoat. They’ll look for one from within their ranks and blame all the greed on him. The truth is that the entire system is rotted from the inside out. There is nothing salvageable. Furthermore, we are outgrowing that sandbox. It’s time to get up, pull up our diapers and walk away.

  6. Redwald says:

    Oh, I don’t doubt there have always been rogues running things throughout history. Take some of the “robber barons of industry” of the late nineteenth century, say, even if they weren’t mobsters like old Joe Kennedy. Just the same, there is a perception (at least) that values have declined over the last half century or so. If true, it does call for an explanation.

  7. silvermoon says:

    I knew one.

    He was right there during 9/11 and the whole 9 yards.

    He wanted me to help him with a business deal to help a local man grow his business.

    The the wall st guy suddenly got really weird. He yelled at my kid and stormed away after I told him that was a no go and then he threatened to kill my dog.

    The judge who gave me the restraining order wasn’t amused either.

    Never saw him again. Never forgot.

    I would NEVER work with anybody who said they had ever worked for any of those firms. Ever!

    Where there is smoke, there is fire. And I’ve already seen one psychowack come out of there!

  8. Ox Drover says:

    Red, I think it is just THAT, a “perception” of honesty, not really the real thing.

    YOu know we talk about how “kids are getting worse” but you can go back to some Roman writings from the 2nd and 3rd century and find “the kids are getting worse” complaints. I think each generation deplores the behavior of the next…LOL

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