“Why I Am Leaving 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.
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.
Update: Ed Driscoll has plenty more gooey awkwardness.
This is why I manage my own money. Most “financial advisers” at banks and mutual fund dealers are merely high school grads or liberal arts degree types.
Financial advocates for investors who get all their info from the legacy media.
Good luck to them.
The Baby Boomer legacy for the Investment Industry.
When an investment partnership goes public the goals of the company are no longer supplying a service for company sustainability, it’s goals are profitability for shareholders. Cheers;
Sorta on topic.
What’s the deal with Mortgage Brokers? The first thing out their mouth is “I work for you, not the banks.” That was enough to scare me off when I was mortgage shopping years ago.
The best deal I got was from a bank manager, and I respect his advice. The Broker just wanted me to take a bigger and bigger loan.
Am I just cynical, or are these guys quacks?
And woe to any retail investor who relies upon “regulatory” agencies to keep brokers even halfway honest. FINRA (The Financial Industry Regulatory Authority) is an association of the firms they are supposed to be regulating, but FINRA is wholly-owned by those firms! It’s a sham to give the ILLUSION of protection. They act as a cover for blatantly illegal fraud committed by the brokerages.
The ONLY way to win in the market is by using inside information which is illegal for the public.
The abuses on Wall Street are now so rampant that the public DESERVES to lose their money.
Read this and find out why:
http://www.oftwominds.com/blogmar12/money-from-nothing-pt1-3-12.html
Eagle, Mortgage borkers are fine. They don’t work for you anymore than a bank does though. It’s all about a commission. It’s best to just phone a few around renewal time and ask what the best rate they can offer is. Take the best rate you find to your bank and walk if they can’t match it.
Goldman Sachs is a creation of the modern mixed economy where profits are privatized and losses socialized (too big to fail). The corporate culture of such monstrosities is one of obfuscation, deceit, collusion, cultured relationships, and at all times, rent seeking. Their law departments, when not involved in actually creating the laws under which they and their weakened competition operates, can find ways to get around anything thrown at them.
The only cure is laissez-faire capitalism. They are defenseless against honest competition and the justice of bankruptcy.
How is this any different from any investment firm? The worst are those mutual fund salesmen not attached to a bank.
All the more reason to open an online self-directed investing account. Invest in a few good quality mutual fund or ETF’s and you’re light years ahead.
Ouch, thats gonna leave a mark. For about 5 seconds, then back to business as usual.
You wanna make some money? Bet against the Canucks, the Sedins have that springtime in Sweden look in their eyes.
My guess is that because he is so outrage at what the bank was for the ten years he was there that he will be giving the millions in bonuses he earned employing the Goldman strategy back to the clients he milked it from.
As I noted here previously, Goldman Sachs (GS) has, amongst its many operating groups, a retail client group that supposedly services individuals ($1 million to get in the door, of course; pikers need not apply), and a proprietary trading group (“prop desk”) which risks GS’s money in hopes of making a profit. (Some hope – again, as noted previously, GS went an entire quarter last year when the prop desk lost money for exactly one day.)
The retail client services agreement says EXACTLY that the prop desk may, without notice, take positions opposite to the advice given to retail clients. In other words, while GS retail advisors are telling clients to buy XYZ stock, the GS prop desk can be selling it, or vice versa. Nice work if you can get it.
I can’t understand why anyone entrusts a dime to the giant vampire squid.
Goldman Sachs is an evil empire. Warren Buffet loves Goldman Sachs. Obama and Warren Buffet are in love with each other. Enough said, you get the picture.
Greg is common, Smith is very! common.
But look what a googled ‘Greg Smith’ already returns!
https://www.google.ca/#hl=en&tbm=nws&sclient=psy-ab&q=Greg+Smith&oq=Greg+Smith&aq=f&aqi=&aql=&gs_sm=12&gs_upl=0l0l0l124009l0l0l0l0l0l0l0l0ll0l0&gs_l=serp.12…0l0l0l124009l0l0l0l0l0l0l0l0ll0l0&pbx=1&bav=on.2,or.r_gc.r_pw.r_cp.r_qf.,cf.osb&fp=77178f0bd385c2f&biw=1440&bih=709
Crony Capitalism.
The only politician in North America man enough to mention it is …?
https://www.google.ca/#hl=en&gs_nf=1&cp=28&gs_id=56&xhr=t&q=crony+capitalism+sarah+palin&pf=p&sclient=psy-ab&oq=crony+capitalism+sarah+palin&aq=0&aqi=g1g-b1&aql=&gs_sm=&gs_upl=&gs_l=&pbx=1&bav=on.2,or.r_gc.r_pw.r_cp.r_qf.,cf.osb&fp=e8074a5949fbbcb5&biw=1440&bih=707
Crony Capitalism.
The only politician in North America man enough to mention it is …?
Ron Paul. Why do you ask?
I am actually connected by marriage to two Wall Street types, one of who was at the epicenter of this whole thing. One of them’s mother told me a story about him which showed he was willing to win at any cost in a sporting event, the other was described in a magazine article in better days years ago as having been identified as a potential “master of the universe” by a Wall Streeter watching his win-at-any-cost behavior in a baseball game.
Goldman Sachs in conjunction with Al Gore wanted to dominate carbon trading, didn’t they?
Gore, Goldman Sachs, & carbon trading fit so well with this story.
Stock brokers do not make one cent unless you buy or sell something. Standard operating procedure at stock brokers is to invent tips or continuously make up stuff to encourage selling your shares and buying different ones.
Stock brokers do not make one cent unless you buy or sell something.
True, twenty or thirty years ago. These days, the preferred style is the “wrap” account, where the managers get a fixed percentage (say 1-1.5%) of the assets under management each year. This gives the managers an incentive to grow the account, as their take increases as the account grows. However, since a $1 million account only generates $10,000 in annual fees, smaller accounts tend to be ignored in favour of the big accounts. After all, a 10% increase in a $1M account only generates an extra $1,000 in fees, while a 5% increase in a $5M account generates an extra $2,500. And it’s waaaay easier to get a 5% gain than a 10% one.
In a previous life I had a short an inglorious career as a stock broker, in what we used to call a bucket shop. That side of the industry is pretty much dead now that people can trade on their own accounts.
We specialized in acting as principal in Reverse Take Overs. Most people don’t know how this works so I will give a brief description of how it works. In Canada there are a lot of defunct corporations. They still legally exist and their capital structure is still in place but they have closed up shop and everyone has gone home. This is very common in the mining industry where prospectors form companies, raise money and go and dig holes looking for gold. If they find gold everyone gets rich. If they don’t which is usually the case they become defunct and close up shop. Then someone wanting to form a “new” corporation will acquire all the shares of defunct XYZ mining and rename it ABC mining They will probably have paid a fraction of a cent a share. They will then sell all the shares to a brokerage for 10 to 20 cents a share and that money will become their working capital. The brokerage will then turn around and try to sell those shares for 2$ a share. When this is done the corporation does not have to issue a prospectus because legally nothing has changed from when the company was in business in its previous incarnation. We used to call people who our telemarketers had got as leads and tell them all about this great new opportunity and how we were going to make them rich. But there was no market in these shares as we were the only people selling them. and on any given day the market price would be what ever we decided to sell it at. One day we would sell it for 2 the next week we would sell it at three. Someone who bought it at 2 would see in the paper (this is before the interweb) that it was now 3 and call us to say they wanted to sell. we would tell them that we were selling to 3, but if they wanted to sell we would give then 10 cents, as there were no other buyers.
When we opened new accounts for people they assumed they they were our clients, but they weren’t. Our clients were the people we were selling shares for, not to. This whole procedure was perfectly legal at the time, I don’t know whether it has changed since. Importantly the big banks brokerages do exactly the same thing. If you are going to invest open your own account and do your own research and make your own trades. Its not that difficult. If you want some training before you do it, take the Canadian Securities Course, which is the course I had to do to become a broker. Its not that expensive, or difficult but you will probably learn a lot.
Not surprising the current admin has many ex G/S employees on payroll in the finance dept. Not surprising thie current afmin has the highest debt ration in US history.
There are brokers and brokers. My mother’s broker did very well for her. But – as one who does taxes in season – I have to say my collleagues and I have had clients where it was obvious that the the broker was not acting in the clients’ best interest.
On the other hand, my observation is that the quickest way to go broks is to go day trading.
This is both the Best Ever Resignation Letter and also the Best Ever Job Application Letter.
This is also why I handle my own money, what little there is. At least I will not be cheating myself .. dellusional, perhaps, but not dishonest.
I do not see how Gobmouth Smacked can recover from this devistating resignation letter. They will probably assassinate his character – disaffected employee, passed over for promotion, etc.
I heard about this piece I don’t know where? But, it is going viral … glad to see Kate pick up on this.
BTW Kate, I was in Brasil for two weeks and had great difficulty commenting because of spam filters rejecting “.br”
Gobsmack Mouth are financial advisors. As with all such critters, I have to ask why are you giving me advice as to how to make money, rather than making it for yourself?