And see the corporate reaction.
Wall Street hates Greg Smith for telling the world of rampant abuse in one of its most prestigious firms.
October 24, 2012
by Yves Smith
But the absolute trashing and personal attacks on Greg Smith in the past week that were orchestrated by Goldman and supported, heavily, by the US financial networks got my attention. Generally ad hominem attacks are used by those who consider the facts of the case to be dangerous ground, and wish to do anything that they can to avoid discussing them. So instead they seek to discuss the person bringing them to light…
The rationales in favor of Goldman quickly take on the character of the schoolyard. Everyone does it on Wall Street, and singling out Goldman isn’t fair. And what was Greg Smith expecting? Everyone knows Wall Street is predatory and will do whatever it takes, even abuse their customers and make millions out of it. And if the customers are dumb enough to fall for it, they deserve it. Don’t be a fool like him, be a sophisticate and move along.
What people do not realize is that the fraud cuts so deep and wide that it hard to escape it, even if one has no dealings personally with any of these firms. These Wall Street financiers have their hands in everyone’s pocket through the manipulation of the financial system, the price discovery mechanisms, and the money supply. And if you do not understand this by now, you understand nothing.
Smith’s sin seems to be that he’s an insider from an uber prestigious, connected firm who dared say something bad about his former employer. The “don’t rock the boat” attitude is so deeply ingrained in America that it’s considered reckless to be candid about why you are quitting a job in an exit interview. And it’s not a stretch to call the reaction totalitarian when it’s Wall Street that is on the receiving end of criticism. Look how, despite running again and again to Wall Street’s aid, Obama is an official enemy for a mere “fat cats” remark. Similarly, the industry depicts Elizabeth Warren as a power-mad Commie bank serial killer, when her fault-finding is based on clear eyed analysis of how deceptive and predatory practices hurt consumers.
I’ve not read Smith’s book, but based on the extensive commentary on it, it appears that Smith intended it to serve as an insider caveat emptor for people who need financial product warnings. From Clusterstock:
‘Why I Left Goldmanc Sachs’ isn’t for people who know the Street. It’s not even for anyone who’s read Liar’s Poker (that’s way more advanced). It’s for the millions of people who have no idea what Wall Street is. It’s for the people who only heard about Goldman Sachs or Lehman Brothers in 2008, when it seemed like the world was collapsing under the weight of Wall Street’s complex business.
This isn’t hard to pick up. Smith talks about complicated things like markets and hedge funds in simple terms meant to be understood by someone who’s never heard of a derivative.
And while the negative commentary will likely succeed in killing book sales, that may not matter much, since Smith reached more people than were ever likely to read his work via his 60 Minutes appearance , in which he comes off well.
By contrast, as Pam Martens describes Goldman’s brass knuckles reaction in making extensive disclosures from Smith’s personnel files is unheard of outside litigation. Moreover, she highlights a stunning comment by Edith Cooper, the head of pretentiously-named Human Capital Management in a Bloomberg interview , that “Our interests are 100 percent aligned with our clients.” Bloomberg has since edited that world class whopper out; you can go see that it’s missing from the segment, but Bloomberg failed to scrub the lone comment on the video from four days ago calling out the remark (I’ve taken screenshots for posterity since I assume Bloomberg will complete its Goldman-flattering airbrushing now that I’ve pointed out their lapse).