Greg Smith Resignation Letter In The New York Times

March 28, 2012 by staff 

Greg Smith Resignation Letter In The New York Times, Greg Smith’s resignation letter to Goldman Sachs, published in the New York Times on its op-ed page, gave me a good laugh. Smith’s sub rosa message was that at long last he had seen the light about Goldman’s ways and wanted out to live a more satisfying – if less well-paid – life. Suddenly getting religion must be easy after earning tens of millions in salary and bonuses for 12 years, as Smith did.

For those who view Smith as a folk hero for labeling his employers as greedy and insensitive to the adverse impact their avarice has on their clients, take a close look at Smith’s title. Smith was the executive director of Goldman’s European-based equity derivatives department.

Derivatives are the reason your home lost 50 percent of its equity since 2006 and why the federal government had to bail out Goldman and the rest of Wall Street with your money. Smith profited immensely from derivatives; you suffered.

Years ago, when I worked on Wall Street for Merrill Lynch, we considered Goldman to be our chief rival for investment banking business. Accordingly, we watched their movements closely to see if we could gain some slight advantage. Merrill, a retail-oriented firm that specialized in selling common stock to individuals, was just emerging as a banking power. Goldman, on the other hand, had an established reputation as the banker of choice for the nation’s gold-plated corporations.

One of those blue chip companies was Penn Central Transportation, which in the late 1960s operated more than 20,000 miles of track in 16 states and two Canadian provinces. Not only was Penn Central crucial to the northeastern U.S. hub, it also held vast parcels of prime New York real estate along Park Avenue.

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