Where do you call your customers muppets, talk about ‘ripping their eyeballs out’ to maximise the profit you make from them and sell them inappropriate products?
Answer: Goldman Sachs, according to one of their executive directors, Greg Smith, writing in yesterday’s New York Times.
Just a year or two after GS boss Lloyd Blankfein said the company was engaged in ‘God’s Work’, Smith writes: “Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch.”
“My clients have a total asset base of more than a trillion dollars,” writes Smith, ”I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs.”
The three ways to achieve promotion at the company are, says Smith:
“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;
“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;”
“Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.”
Smith says: “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.”