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View Full Version : Greg Smith leaves Goldman Sachs in a blaze of glory



Van Huskey
03-15-2012, 1:02 AM
Wow...

http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?pagewanted=1&_r=1

John Coloccia
03-15-2012, 6:53 AM
And let the games begin. I wonder how long it will take Goldman Sachs and others who shall remain nameless to start trying to destroy Smith? I'll give it until Friday morning for the coordinated attacks to begin.

Bill Edwards(2)
03-15-2012, 8:08 AM
And let the games begin. I wonder how long it will take Goldman Sachs and others who shall remain nameless to start trying to destroy Smith? I'll give it until Friday morning for the coordinated attacks to begin.

Yep! The HR department will say he's had a couple sub-par revues and the public
beatings will start.

Dave Anderson NH
03-15-2012, 9:16 AM
After an article like that he will be accused of being everything but an axe murderer by the fine folks at Goldman Sachs. The next steps will be denial and punishment of the innocent.

Harry Hagan
03-15-2012, 9:20 AM
Its already started. ABC aired a statement from Goldman Sachs last night.

David Weaver
03-15-2012, 9:28 AM
Yep! The HR department will say he's had a couple sub-par revues and the public
beatings will start.

I used to work at a place like that. The person who tracked the HR paperwork called it "building a case" when you wanted to have some dirt on someone. They used it as a year-long process to fill someone's file with stuff so that when they decided they wanted to axe someone, magically all of this paperwork showed up over a year describing how you were dudley-do-wrong no matter how good your work was.

You could spot the people who were "having a case built" against them, because they would do good work and always complain about how no matter what they did, they got bad reviews (the people who did bad work for real were already well known). Once the process started, each person had about a year. The smart ones started looking elsewhere. The ones with intuition that wasn't quite so sharp tried to figure out their way out of it and eventually got laid off.

They had a bizarre process of picking candidates for a case that I wasn't in on, but I sure don't have any idea what their basis was, because a lot of times it wasn't related to performance measured by goals, nor was it folks that people "didn't like". In some cases, people got "riffed", apparently for no reason other than someone with discretion in "case building" wanted their book of business because they wanted it or needed it for personal revenue goals.

I can't identify exactly with the GS scenario, but I can identify enough to understand what the guy is upset about. When you're in a company where revenue must grow in the short term no matter what, people without scruples are incented to game things. If you value yours, it's better to find somewhere else to work than it is to try to swim upstream in a waterfall.

I left on my own terms, but I did request to be added to the "case log" when I knew I no longer wanted to work there. People who were targets of "case building" got bumped always got severance. Since I quit on my own terms, I got nothing . Nobody found the request to be fast tracked into the RIF target list that funny, and I didn't really get "nothing", I got the reward of leaving and the insight on what to really look for in an employer in the case that you are blessed enough to have a choice.

Greg Peterson
03-15-2012, 9:54 AM
The usual array of tactics will be employed against Mr. Smith. It will come out that he not only juggled kittens, but that he also juggled puppies.

GS is so large they are able to create their own reality. So, what GS wants, GS gets.

George Beck
03-15-2012, 10:00 AM
Goldman Sachs isn't afraid of the government, Goldman Sachs IS the government

David Weaver
03-15-2012, 10:23 AM
There will be plenty of guys (protecting their revenue screen) who will voluntarily come out and try to discredit this guy, if for nothing else, just to get their names in the paper as someone who "has the utmost respect for their clients".

But as the news pretends this who thing is something new to business, or transactional relationships between any men/women since the beginning of time, it's just a guy who blew his top (and I can understand why he did).

People have been swindling others since the beginning of time, otherwise there wouldn't be sayings like "never show your cards to someone else", etc. It existed long before quarterly earnings reports.

Joe Angrisani
03-15-2012, 11:11 AM
The one thing that stands out as funny to me in his article was the comment that GS has changed so much in the 12 years he was with the firm. Maybe Mr. Smith's light came on after 12 years, but from everything I've ever come across on the topic, Goldman Sachs has been that way for DECADES. They are not post-2008 developements.

David Weaver
03-15-2012, 11:14 AM
Things changed a lot where I worked in 8. It only takes a change in leadership and finance, and how they measure individuals and direct revenue generators (a term i'm using for people who sell business) to behave. If you tell someone that they need to increase revenue from a client base by 10% per year, then people get creative. Huge changes can occur just in a year or two.

If you look at the situation GS was in, I don't now how they were compensated in terms of clients (i'm guessing it wasn't all fee for service). 2008 would've created huge revenue generation problems if variable compensation on accounts was generated by asset performance. HUGE problems. If goals don't change, people get creative. How do you generate as much revenue with 65% of the asset base you had before? At that point when people are already on edge, are you going to do it above board and go to clients and tell them that direct visible fees are going to increase 1/0.65 of the variable fees to make up for asset losses?

When you work for a large public company, things change really fast, the long-termers who consider some changes really material wash out, and new game players come in. To someone who is just starting, they never know a different environment.

That's not to say that in 2000, clients were getting econo-priced fees and caviar services, but everyone has a point where they say "I can't treat clients like this" no matter what the boss says.

Ben Hatcher
03-15-2012, 11:57 AM
It won't be long before they sue him for libel. Goldman's stock took a 3+% hit yesterday. I wonder if he shorted it in advance of his op ed.

Van Huskey
03-15-2012, 12:05 PM
I am pretty sure by the end of next week GS will be trying to convince me Greg beat me up and stole my lunch money in second grade...

Don Jarvie
03-15-2012, 1:07 PM
Goldman Sacks got nothing on the Boston Red Sox. The Sox use the "smear campaign" whenever a well liked superstar leaves town all the time. Right after they let Franconia go and he didn't hold the talking points (I wasn't fired, I wanted to leave) they "leaked" the real story to a writer from the Boston Globe which basically said Franconia was a pill popping druggie who was fooling around on his wife and couldn't manage anymore. The truth was Franconia was using pain pill occasionally for his knees and back and was getting a divorce. Franconia said he interviewed for the Cardnials job and all they asked him was about the pills. The Sox list goes on, Garciaparra, Pedro Martinez, etc

Jim Matthews
03-15-2012, 5:09 PM
Goldman Sacks got nothing on the Boston Red Sox.

Except the Red Sox didn't cook the books for an entire nation to qualify for membership in the EU.
Too big to fail, not too big to jail...

Larry Edgerton
03-15-2012, 6:41 PM
I would not want to be him right now.

Someone life is about to get miserable. Why do it? Nothing will change except his quality of life. Six months from now he will be a forgotten footnote, but you can bet that GS will not have stopped making his life miserable.

I don't know if he thought this out completely.

Fun watching though........

Larry

Mike Archambeau
03-15-2012, 7:59 PM
It would not be unusual for a person like this to have a book about to be released. If that is the case the press he gets is helpful in promoting his book. And he will probably have a career in journalism now instead of finance. btw that hit that GS stock took on the day his atricle was released erased $2,200,000,000 from Goldman Sach's market capitalization and hit every Goldman partner right in their wallet.

David Weaver
03-15-2012, 8:11 PM
Well, it's a temporary hit in equity. It will recover once the news blows over. Most of the clients don't have any preconceived notions about brokers, dealers, and advisors anyway. They already know that such folks will take as much as they can get.

jeremy levine
03-16-2012, 12:10 PM
Firms once operated under the idea "be careful it's other peoples money" now they operate on the idea "don't worry it's other peoples money"