"How my conscience courageously cries out!
Though I trusted this firm, it
Exploited poor Kermit,
Rapaciously ripping his eyes out."
The New York Times set Wall Street ablaze today with its publication of Why I Am Leaving Goldman, a banker's bitter swan song to a financial culture gone astray. Greg Smith, the suddenly former head of equity derivatives in the firm's London office, made an earnest confession (perhaps too earnest) of what everyone else has said for years: Goldman, Sachs makes money by ripping off its clients. Inside the firm, clients are disparaged as "muppets" who deserved to get their "eyes ripped out" (sorry, Kermit). But, aside from the insertion of non-disparagement clauses in the Vampire Squid's employment contracts, what will change as a result of this cri de coeur? Maybe nothing, but it does provide a moment of clarity for reflection: conservative blogger Noah Millman, a former equity derivatives man himself, explains the money behind Goldman's changing ethos -
It takes discipline to say, “let’s take care of the customer, and think of the long term” when you’re talking about normal amounts of money. When the amounts of money become as staggering as they were in the mid-2000s, the game – at best – becomes “how can we convince ourselves that we’re taking care of the customer.” Because what if the only way to take care of the customer is to get out of the game?However, the final word should go to Marketplace's Heidi Moore, who looks into the soul of Wall Street and asks:
Did Goldman change the way it did business? Maybe. But the more likely view is that those flaws - in the industry, in the firm, in other firms - have been there for a long time and the scales just fell from his eyes when it finally turned against him.