Goldman Responds To Greg Smith
March 22, 2012 by staff
Goldman Responds To Greg Smith, Goldman Sachs’s sweep for internal emails containing client insults like “muppet,” a scoop by my Reuters colleague Lauren LaCapra, got lots of well-deserved snark as the bank’s latest too-little-too-late response to Greg Smith’s “Why I Am Leaving Goldman Sachs” op-ed.
In case you’re just returning from a vacation in Antarctica, which is pretty much the only way you could have avoided the financial world’s equivalent of Kim Kardashian’s divorce, Smith, a London-based Goldman executive director, said he was sick and tired of the bank’s callous treatment of its clients.
“It’s purely about how we can make the most possible money off of them,” Smith wrote in the New York Times. “If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.”
Why Smith’s piece was considered a revelation is mystifying, given Goldman’s starring role in last April’s 635-page Senate report on Wall Street and the financial crisis.
We all know about the Securities and Exchange Commission scrutiny of the Abacus deal, in which Goldman permitted hedge fund manager John Paulson to pick underlying mortgages that doomed the collateralized debt obligation it was hawking to clients, and the famous “one shtty deal” otherwise known as the Timberwolf mortgage-backed CDO.
As the Senate report explains, both were part of Goldman’s institutional effort to secretly reverse its own long position in residential mortgage-backed securities even as it marketed MBS investments to clients.
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