Goldman Sachs Exec Gives Peek Behind the Curtain of American Investment Banks

Just remember that these are the guys who put us in a recession. Greg Smith, a Goldman Sachs executive resigned on Wednesday and wrote a scathing review of life in the firm. The article “Why I am Leaving Goldman Sachs,” is pretty telling and is worth a read. Here are just a few interesting excerpts:

“How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.” 

“What are three quick ways to become a leader? a) 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. b) “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. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.” 

“These days, the most common question I get from junior analysts about derivatives is, ‘How much money did we make off the client?’”  

The Daily Mash ran a fake letter from Darth Vader explaining why he’s leaving the Empire. It has also inspired some great comedy. Stephen Colbert did a parody here, calling Smith “Banker-dict Arnold.”