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They're disappointed with their banker, Goldman Sachs. But will they read Greg Smith's memoir, which hits bookstores today?
Back in March, Greg Smith really shook things up on Wall Street with his "See ya later!" walking-out-the-door New York Times op-ed about how Goldman Sachs has lost its way in the relentless quest for profits.
"Why I Left Goldman Sachs," the memoir for which Smith was paid a rumored $1.5 million to write, has now arrived in bookstores. Parts of it leaked out early, and there has a been a flurry of pre-publication punditry on what the book really means. Smith also went on "60 Minutes" Sunday to discuss all that has gone horribly wrong at Wall Street's most infamous investment bank.
Meanwhile, no shortage of Wall Street insiders and financial journalists of various stripes have begun to sift and parse Smith's motives, in some cases alledging that Smith was more con-man than crusader.
Frankly, it is more than a little shocking that Goldman — the "vampire squid" of Matt Taibbi's famous Rolling Stone article, the firm that survived the 2008 financial crisis while less well-connected banks like Bear Stearns and Lehman Brothers vanished beneath the waves — had not fallen in for this treatment before Smith came along. Is it really cool to call your clients "muppets," even if the Muppets are your clients?
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Greg Smith, formerly of Goldman Sachs, is not pictured.
In 12 years at Goldman Sachs, Greg Smith was probably already being lavishly rewarded (and by "probably" I mean "undoubtedly"). He quit the controversial investment bank in spectacular fashion, via an op-ed in the New York Times. Now he's scored a $1.5 million book deal. This is from The Wrap:
The former investment banker nabbed a $1.5 million advance from Hachette Book Group this week for a memoir based on his time at the firm, according to a report in the New York Post.
A spokesperson for the publisher did not immediately respond to requests for comment, and Smith's agent Peter [sic] Fedorko declined to comment.
The Post reports that Hachette beat out Penguin for rights to Smith's debut book.
There's a little publishing inside baseball there at the end. All it means is that Smith's book was so coveted that it inspired a bidding war.
Listen in to my weekly business and economy report with Andy Dean on America Now Radio. We have some good fun in this segment, talking about lotteries and how playing when the jackpot gets WAAAYYY up there makes spiritual if not financial sense; market-based parking pricing in San Francisco and the legacy of Michael Bloomberg in New York; a Euro Vegas in Spain; why the Muppets actually are Goldman Sachs clients (I scooped the entire financial media on this one); and finally why liquor stores contribute to crime.
One small note: I mentioned the difference between Spain's financial crisis versus Greece's when we were discussing casino magnate — and Newt Gingrich SuperPAC funder — Sheldon Adelson's plan to play George Marshall and save Spain's economy, by building an unemployment-ending Euro Vegas in either Madrid or Barcelona. It was of course Spain — not Greece, as I said — whose banks fueled a property boom before the financial crisis. That was and is the difference between Spain's mess and Greece's mess.
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That's not a Goldman Sachs executive behind the wheel.
Yesterday's big news in the financial world wasn't Apple stock climbing above $600 per share — it was the op-ed resignation letter to end all resignation letters penned by former Goldman Sachs executive Greg Smith, in which he savaged the Vampire Squid and accused it of betraying its clients.
According to Smith, Goldman clients aren't clients — they're routinely referred to as "Muppets."
Goldman lost $2 billion of market value in a hurry as the news circulated through the Muppet Theater.
No word on whether there is or ever has been a Vampire Squid Muppet in the works. They've already got Count von Count, after all. You could probably just add a few more arms and a blood funnel.
However, it turns out that calling clients Muppets, in Goldman-speak, isn't necessarily the insult that it sounds like at first. Because the Muppets are Goldman clients. I'm not kidding.
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Goldman Sachs calls them "clients."
A bomb went off on Wall Street this morning when Greg Smith, a now former London-based executive for Goldman Sachs, published an op-ed in the New York Times saying that the firm has completely betrayed its responsibilities to its clients. According to Smith, who worked at Goldman for over a decade, "if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence."
It's the resignation email to end all resignation emails.
And just what Goldman needs! Another PR crisis, hot on the heels of yesterday's good, share-price-improving news that it had passed the latest round of Federal Reserve stress tests. As Smith puts it:
Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.
It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.