In two of my blogs from last year on the toxic mortgage catastrophe ( AIG sues Bank of America for $10 Billion Over Sale of Toxic Mortgages. The Irony of this All! AND The Quotable Oscar: .. "three years after our horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail...") , I quoted the following memorable comment from Senator Carl Levin to Goldman Sachs executives in April 2010 during a senate hearing:
"...600 million dollars of Timberwolf securities is what you sold. Before you sold them this is what your sales team were telling to each other. Look what your sales team were saying about Timberwolf : 'Boy that Timberwolf was one sh---y deal..'
Does that bother you at all?"Today, The New York Times published an Op-Ed piece by Greg Smith (a 12- year employee at GS, executive director and head of the firm's United States equity derivatives business in Europe, the Middle East and Africa), entitled Why I am Leaving Goldman Sachs.
Here is a man who entered the firm fresh out of College and joined a culture that "made me love working for the firm for many years." He goes on to say "that the environment now is as toxic and destructive as I have even seen it."
He has seen no less than five managing directors label their own clients as "muppets."
He says that leadership is at all time low for three reasons: (a) the emphasis is on selling clients the products they want to get rid of (b)The directive is to "Hunt Elephants": have clients "trade whatever will bring the biggest profit to Goldman" and (c) "Find yourself in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym." [think MBS's or CDO's]
He finishes with a caveat to the Board of Directors to make servicing the client the central focus and "weed out morally bankrupt people."
No doubt, Smith leaves the firm with disappointment and even a grave sense of disgust.
I only wonder why didn't he quit sooner?
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