Kids. Unbunch your panties and sit down.
The reactions to Greg Smith’s op-ed have been flying fast and furious.
In my summary judgment, they have as a group been indiscriminately furious, perhaps as a result of being unjustifiably fast. I place heavy blame on the editors of the papers these reactions have been published in. *cough*financialtimes*cough*
Let’s take Investment Banking: In need of a brush-up.
In big bold subtitles this says “Parting shot of a Goldman Sachs trader is the latest criticism of a group known for self-interest“. Greg Smith was a salesman, not a trader, but okay, maybe this was the copywriter’s mistake, not the authors themselves (all seasoned FT veterans). In fact they do make the distinction toward the end when they conclude that “The nagging truth, however, is that the problems of Goldman Sachs are not just a product of a trading mentality. It was, after all, advisory bankers rather than traders who hurt the group’s reputation in the UniCredit affair.”
This article was a story waiting for an event: Let’s take a selection of the best known Ugly Goldman Stories across its disparate activities and slap them together with the unifying theme of “self-interest”.
You can do anything in finance but God forbid you be self interested while you do so. I do not understand why the rest of the working population, especially people who sell soft drinks and fast cars and celebrity gossip and reality TV and ridiculous travel destinations, gets a free pass in this self interest thing. Of course self-interest, within legal boundaries, is acceptable. Outside it it is unacceptable. We do not make this allowance for the financial industry. Even among the financial industry we get this:
“I despise Goldman,” says the chief investment officer of one UK asset manager. “It is completely self-serving.”
Self-interest within legal boundaries but outside client expectations is less acceptable but pardonable and of course it has a deleterious effect – on the self in question. Therefore it is not in the long term self interest to pursue these actions for short term benefit. It is highly suspicious that the authors would trot out a Sid Weinberg anecdote and completely omit his successor Gus Levy’s commandment to that The Firm be ”long term greedy“. The facts are being cherry picked to convince the less knowledgeable reader of the authors’ overall agenda which is – what, exactly? – that Investment Banking is in need of a brush up because of Goldman’s excessive self interest? Because of Goldman sales or Goldman advisory? Because of anecdotal evidence or comprehensive surveys?
An even more egregious example of this, though neatly contrasting in sympathy to The Firm, is Nader Mousavizadeh’s ironically titled “Separate myth from reality at Goldman”. I have to say, seeing how it was written by an ex-journalist, that it is extremely poorly written by my judgment. Have a look for yourself and try to figure out where the author stands by the end of paragraph 3. You can’t. Why? I suspect it is because the author doesn’t really know where he stands either. Does this pass for good writing at The New Republic? And look at the non-anecdotal evidence he uses. I hesitate to use the word “evidence” because there is ambiguity between the singular and plural form. In Nader’s essay, it is singular. A very singular non sequitur. Nader uses the ranking of global M&A advisory business to dismiss the possibility of betrayal of client trust by an equity derivatives salesperson. Ultimately, Nader succeeds in doing nothing but establishing the fact that he worked for Goldman for 5 years and thinks they are better than that.
It is hard to take any argument seriously when they are based on weak grounds. I don’t claim to be unbiased in these issues and I care very much about fair play, but having to read horrendously argued opinions that play to a populist tune does not convince me that it is worthwhile trying to debate their progenitors.
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