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Greg Smith vs Goldman Sachs

MacroAndCheese's picture




 

macroandcheese.org

 

When I read Greg Smith's op ed in the New York Times my very strong impression was, "Nothing new here, so what, not worth reading." That's certainly true as far as I was concerned, but when a friend not in finance told me the contents of the editorial was a surprise, I thought I had better weigh in. I even feel somewhat duty-bound to do so, because I spent many years on the "sell side," that is, at firms like Goldman Sachs.

In fact I started my career at Salomon Brothers, the setting of Michael Lewis' "Liar's Poker." Lewis was three years ahead of me, and spoke to my training class, as mentioned in his book, around the time of the great crash of '87. Anyone who thought Smith's litany of complaints about Goldman Sachs were new or surprising has either not read Lewis' book, or has forgotten the contents--which is fair enough, since the book was published more than twenty years ago.

For those of us who were working at Salomon Brothers when Liar's Poker was published in 1989, the contents of the book came as no surprise. In fact, we all thought he nailed it. Salomon in the day was a rough and tumble place where foul language, sports analogies, and ruthless internal competition ruled every day. This was not a place for brainy professors to come to share their knowledge and help client CFOs benefit society. This was a place to out-sell the guy sitting next to you so you would get a bigger piece of the bonus pool at the end of the each year.

How you did that was your problem. The idea at Salomon then and at Goldman now is that you as a salesman have to make as many sales as you possibly can. That means you have to get your customer to like you so that he will want to trade with you. But for most of the products that Salomon sold (and Goldman Sachs sells), the products were OTC--over the counter. There is no commission per se, there is just the bid and offer price. So it's not only a volume game, it's also a price mark-up game. If you think your customer will pay 101 rather than 100 for bonds, you can offer them at 101 and see if he bites.

This is all in Michael Lewis' book. Here's an excerpt from page 35:


In any market, as in any poker game, there is a fool. The astute investor Warren Buffett is fond of saying that any player unaware of the fool in the market probably is the fool in the market. Salomon bond traders knew about the fools because that was their job. Knowing about markets is knowing about other people's weaknesses. And a fool, they would say, was a person who was willing to sell a bond for less or buy a bond for more than it was worth.

 

Or let's hear from Larry Fink, now the head of Blackrock, as quoted in Liar's Poker, talking about the savings and loan customers who traded with the big investment banks like Salomon:

"October 1981 was the most irresponsible period in the history of the capital markets. The thrifts that did the best did nothing. The ones that did the big trades got raped."

So now, 23 years later, for Greg Smith to raise eyebrows by "exposing" some of the less palatable aspects of Goldman's business practices seems a bit much. For one thing, Liar's Poker was a #1 bestseller. Everyone has read it. For another, anyone who pays the least bit of attention to the news knows that Goldman got into some very hot water three years ago for helping a hedge fund manager "short" subprime mortgage securities to a Goldman client. But if you're truly worried about Goldman now, you certainly should have been concerned in 2000, when Roger Lowenstein published his book on the collapse of mega-hedge fund Long-Term Capital Management (LTCM), "When Genius Failed."

In that book, Lowenstein describes the scene when employees of Goldman Sachs were at LTCM's office in Greenwich, Connecticut, as LTCM tried to avert collapse from a concentration of too many trading positions all going bad at once. Goldman was there to do "due diligence," that is, to conduct an inspection of LTCM's books so that they could represent LTCM's condition to investors to help LTCM secure financing. It's like a large-scale credit check. As Lowenstein portrays it:

A key member of the Goldman team was Jacob Goldfield, a lanky and brilliant but abrasive trader. According to witnesses, the headstrong Goldfield appeared to be downloading Long-Term's positions, which the fund had so zealously guarded, from Long-Term's own computers directly into an oversized laptop (a detail that Goldman later denied.) Meanwhile, Goldman's traders in New York sold some of the very same positions. At the end of one day, when the fund's positions were worth a good deal less, some Goldman traders at Long-Term's offices sauntered up to the trading desk and offered to buy them. Brazenly playing both sides of the street, Goldman represented mercenary banking at its ugliest. To JM (head of LTCM) and his partners, Goldman was raping Long-Term in front of their very eyes.

In other words, Goldman was exploiting its priviledged position of trust and confidentiality to identify exactly what LTCM would need to dump in a massive fire sale, and beat them to the punch, profiting from the deluge of liquidation that surely would follow. Lowenstein's book is in its sixth print as of 2008, and was a Business Week "Best Book of the Year" in the year it was published. This is not "new news."

It's not that Goldman's comportment is unusually bad. Nor, obviously, is it particularly good. But scolding Goldman because some salespeople referred to clients as "muppets," to paraphrase Martin Sheen in "Apocalypse Now," is like handing out speeding tickets at the Indy 500. It's the nature of the beast.

As a fresh college graduate years before working for Salomon Brothers, I spent a year treading water in the town of my university before embarking on a short stint as a teacher. Job pickings were slim, so I decided to try my hand at being a waiter at the best restaurant in town. It was no lay-up. To be merely considered for a waiter slot, I first had to be a busboy. To be a busboy, I had to work for free, for some undetermined period of time, in a sort of busboy audition. After one day I threw in the towel.

I didn't make any money, but I got a good glimpse behind the scenes. In the confines of the tables, all was well, and elegant. In the kitchen, it was a swearfest. "Where is the f*cking side of potatoes," and "That SOB at Table 14 is gonna be wearing his soup" is all you could hear, all night long, on the other side of the metal doors leading to the kitchen.

Greg Smith was a waiter at the restaurant that is Goldman Sachs. He was a salesman, and worse than that, he peddled equity derivatives. To say the least, equity derivatives are not the flavor of the month. Volumes have dried up, and the money that banks are making is coming from fixed income, not equities. Smith was a Vice President among thousands of vice presidents at Goldman Sachs. The interesting question is not who is right in the "he said, she said" duel between Smith and Goldman Sachs, but rather, why did the New York Times give Smith prime time status?

If you're in the market for a home, you seek out the services of a real estate agent. You develop a relationship with that person. You talk about your kids, you talk about where you went for vacation. Do you expect that the realtor, knowing all too well the seller is paying the full fee, is going to work tirelessly to reduce the sale price for you? Do you think the realtor is going to tell you, hang tight, I think they will come down by 5 percent? Of course you don't.

Greg Smith seems to have mistaken his employer for the Red Cross, even though he managed to sell quite a few Goldman products over the years. His efforts will be seen for what they are: Sour grapes, and small, petty ones at that. It's a shame, because the world of finance is sorely in need of a higher ethical standard. But for now it's business as usual, and anyone who thinks otherwise is a muppet, not an muppeteer.

 

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Sun, 03/18/2012 - 23:00 | 2268464 malek
malek's picture

You kind of left a cliffhanger:

The interesting question is not who is right [...], but rather, why did the New York Times give Smith prime time status?

But no answer.
So what is your best guess?

Sun, 03/18/2012 - 23:54 | 2268565 MacroAndCheese
MacroAndCheese's picture

I think the NYT had two motives.  One is the oldest there is:  money.  They knew it would generate a buzz, and it did.

The second was the NYT's own agenda, and I really have no idea what that would be.  Regardless of what people think of the merits of the letter, it was poorly written, by a person who is not well-known.  Both of those factors would normally mothball the letter before it ever saw the light of day.  Instead it got prime real estate in the "newspaper of record."

Sun, 03/18/2012 - 19:41 | 2268043 Downtoolong
Downtoolong's picture

The fact that Greg Smith was a relatively low level employee at Goldman says a lot in itself to me about Goldman and the nature of the problem of trying to keep them under control. By measures of education, business acumen, compensation, tenure, and experience, Greg Smith was highly successful against national averages and standards.  For someone like him to be viewed as a piker by his peers stands as an open admission that organizations like Goldman have scary power and influence. The definition of Tyranny is the exercise of a power that no one should have.  Goldman seems to continuously dance back and forth over that line.  

However far off the big bazooka blast that the disclosures in Greg Smith’s resignation letter might have been, no one can argue that he didn’t make incredible personal sacrifices in doing so. He gave up his job and career (OK, maybe he can get a job as a bank teller somewhere since everyone knows that Goldman the bank holding company doesn’t actually hold any real banks). He no doubt gave up a sizeable severance bonus by violating the non-disclosure clause in his employment contract.

The thing that amazes me most about Greg Smith’s unusual departure from Goldman is how all of a sudden references to it in the MSM seem to have stopped cold. Perhaps they have been vaporized like those client deposits at MF Global.  When an employee of Gregg Smith’s caliber can’t make a dent in known longstanding problems at his company, even by means of incredible personal sacrifice, then that is the problem.

 

Sun, 03/18/2012 - 15:45 | 2267603 Andy Lewis
Andy Lewis's picture

Your naive cynicism will not save you, azzwipe.

Sun, 03/18/2012 - 15:07 | 2267515 phybrr
phybrr's picture

Is this website for former traders and "those in the know?"  Why do you ridicule a whistleblower

and the media for exposing GS to us guppies? 

Since none of you "wise" people have been effective in bringing prosecution to the crooked banksters,

all we have left is to try to build a case through massive public opinion. Whose side are you on?

 Is this a GS support site?

Sun, 03/18/2012 - 17:21 | 2267783 MacroAndCheese
MacroAndCheese's picture

Yes, I support GS by pointing out how they ripped off LTCM when they were down.

Riiiiiight. 

Sun, 03/18/2012 - 20:47 | 2268173 Kayman
Kayman's picture

Look Kraft Dinner and Ketchup

I agree that the NYT article is  suspicious, but I don't agree with your smackdown of Smith.

If you want to preach a life of Caveat Emptor, then Goldman should have died in 08 when AIG couldn't cough up the $13 billion parlor trick.

I was going to give you the green thumbs up, but somehow you come across as terribly conflicted.

Sun, 03/18/2012 - 21:20 | 2268236 MacroAndCheese
MacroAndCheese's picture

Kayman you hit the nail on the head: conflicted.  I love finance.  There are lots of things about the industry that I don't like at all.

Don't worry about the green thumbs up, this is a green desert.  I'm a banker you know.

Mon, 03/19/2012 - 10:11 | 2269419 Kayman
Kayman's picture

" I'm a banker you know."

You have my sympathy.  If you truly are an intermediary, you have my respect.  If your job is to play "gotcha" with clients, not so much respect.

It has been a good debate; I think I'll go wash the blood off.

 

Sun, 03/18/2012 - 14:32 | 2267430 Eric L. Prentis
Eric L. Prentis's picture

If everyone on Wall Street is a dick head, why the hell are we using taxpayer money to save their sorry asses. Instead, Wall Street bankers should be bankrupt and in prison.

Sun, 03/18/2012 - 17:18 | 2267780 MacroAndCheese
MacroAndCheese's picture

Why not just execute the hundreds of thousands of financial service workers Eric, after all, they're all out to get you.

Sun, 03/18/2012 - 16:52 | 2267731 CoolBeans
CoolBeans's picture

Heartily agreed....but WE don't have in choice in the matter, sadly.

If we did - I could see a giant, good old-fashioned torchlighting...

There is no justice anymore when it comes to these bastards.

Sun, 03/18/2012 - 13:55 | 2267349 luna_man
luna_man's picture

 

 

When you have to defend, what you wrote, to this group, "MacroAndCheese", somethings wrong! 

 

Banker's = CRIMINALS...Where I come from!

Sun, 03/18/2012 - 17:35 | 2267809 MacroAndCheese
MacroAndCheese's picture

Yes luna man, I believe you.

Sun, 03/18/2012 - 13:39 | 2267320 jonjon831983
jonjon831983's picture

"Main street" only has a general idea that "Wall street" is a crook out to steal your retirement money, but they can't put a face or definitive reason behind it.  This Greg Smith helps to put a face and reason.

Sun, 03/18/2012 - 13:40 | 2267314 Neo
Neo's picture

I agree with you Macro, it is nothing new and those that are shocked by the OpEd are indeed the muppets or just WANT to pretend that their shocked. The only curiosity is why The Times published it.

I mean really, were you all in diapers or something just 12-14 years ago when Wall Street and the pushers on CNBC were selling stock in DotCom companies that were nothing more than back-of-napkin-business-plans and 6 lines of perlscript? How about Enron? Do you think it was only Ken Lay and energy traders that made money off that bullshit? Look closely at the Housing Bubble too, it was not only Bankers that participated in those frauds. It was indeed plumbers, electricians, carpenters, and so on. There are crooks in every industry.

And before you go making an ass of yourselves accusing me of being a Banker or a 1%er, know this, I'm neither and have no money to speak of, I'm just a guy who see's the world and the people in it, as they have become.

illyia basically said we have to lie to the children just to keep them from tearing it all down, that is absolutely correct, cause indeed it really is that bad. Whether you want to admit it or not, statistically speaking, your neighbor is out to fuck you in one way or another.

T'was always thus and always will be.

Sun, 03/18/2012 - 17:34 | 2267805 MacroAndCheese
MacroAndCheese's picture

Agree, Neo.

It's faux naivete.  The commenters are here for a lynching.  To think that my post was pro-Goldman is hysterical.  Literally.

Sun, 03/18/2012 - 19:40 | 2268037 CompassionateFascist
CompassionateFascist's picture

No, they just have different values than you, Neo, and other realist-cynics. Ultimately, value conflicts cannot be resolved through rational means. There are...other means.

Sun, 03/18/2012 - 12:50 | 2267207 tradewithdave
tradewithdave's picture

As it becomes tougher to get a date when working at Goldman, either price discovery will kick in or Lloyd will simply hire associates that don't date.  Either way it's Milton Friedman or Charles Darwin in the end.  It worked for the Vatican Bank and even Dov Charney managed to get backing from Soros.  

http://tradewithdave.com/?p=9602

http://tradewithdave.com/?p=9620

Sun, 03/18/2012 - 12:32 | 2267184 goforgin
goforgin's picture

What's wrong with ripping-off rich people?

 

Sun, 03/18/2012 - 14:43 | 2267454 Money 4 Nothing
Money 4 Nothing's picture

Because middle class workers get their pension / retirement plans stolen as colladeral damage. MF Global ring a bell? Co-mingled accounts play no favorites.

Sun, 03/18/2012 - 14:14 | 2267394 piceridu
piceridu's picture

Yeah, ask where did the rich people get that money? Excuse me while I clear my throat--- rehyp-rehypoth---rehypothecation....

Sun, 03/18/2012 - 13:21 | 2267276 Kayman
Kayman's picture

What's wrong with ripping-off rich people?

Because that is breaking rule #1.  Don't shit where you eat !

Goldman must believe their own press clippings.

Sun, 03/18/2012 - 12:27 | 2267171 toadold
toadold's picture

Another theory about why you are starting to get Greg Smiths is that they realized the supply of big pay off muppets is dwindling and it was getting very hard and in some cases dangerous to compete for remaining fish in the barrel.   They are trying to position themselves to land in some other cushy spot by saying, "I was shocked, I tell you shocked, that I had to rape nuns for thier building funds." It was managements faults that I was a typical ruthless saleman and I cried everytime I made 7 figures in a year.  I really cried when it dropped to 6 figures, and I saw the beginning of the end. I would have to give up the extra apartment for my mistress and her coke habit. Oh the humanity!"

Sun, 03/18/2012 - 10:58 | 2267024 847328_3527
847328_3527's picture

"The Big Short" is Michael Lewis' best book in my opinion:

 

http://www.amazon.com/Big-Short-Inside-Doomsday-Machine/dp/0393072231

But they are all well written in non-techincal easy-to-read language and will definitely educate you to the workings of these brokerage firms and why it may be better to buy the commodity itself or the EFT (as Bogle also advises).

Sun, 03/18/2012 - 10:13 | 2266947 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Not the point that everybody knows or should know that OTC trading is a game where you can easily get your face wripped off.

Everyone should know this. Everyone should have read Liar's Poker, When Genius failed as well as Manias, Panics and Crashes. Add to the reading list too that everyone should have at least a college undergraduate math major's equivalent in calculus, an understanding of credit risk and analysis, a subscription to the FT, the WSJ, the NY Times, read Zero Hedge and the host of other excellent financial blogs, a Bloomberg in front of them, a deep understanding of Excel, another statistical package to work with larger data sets, a deep understanding of historical context and mainstream economics, a deep understanding of non mainstream economics (Austrian), a degree in philosophy and psychology to analyze behavior and to try and think about markets ex ante rather than only ex post, and understanding of meditative techniques and rhetorical persuasion ... etc.

If everyone knew and markets were indeed efficient, you would not need any regulation or regulators. Markets would regulate themselves. We are far from that. In point of fact, very few actually know. The force of marketing and the reassurance of regulators who are in absentia overwhelms the many. Pigs to the slaughter. But heh, that Porsche is sweet!

It's not that GS was unethical. They were, they are, time and again. The other banks are in the same boat. It's that the regulators who oversee them don't have any of the qualifications to be in the markets themselves and therefore are at a complete loss as to what they should be regulating. Like pink slime, the regulators make choices based on scale and influence and are rationalizing the world from the viewpoint of industrial production and efficiencies. Pink slime sucks up a lot of food waste and reuses it. The Greens should be so happy! Yet it is processed with ammonia and can also suck in fecal matter and therefore outbreaks induced by e coli, salmonella, etc. The same in finance. You think you are getting a nice custom made burger. You are really over paying for the shit swept up off of the floor. And you are about to find out as you have to rush to the mens room in a panic.

Sun, 03/18/2012 - 09:52 | 2266932 El Gordo
El Gordo's picture

THE NYT published this piece to prepare us for what is coming next out of Obamaville, and to make it seem like it's both normal and the right way to do things.  The thugocreacy rolls on, growing ever larger with each turn.

Sun, 03/18/2012 - 09:30 | 2266906 toadold
toadold's picture

What's "new" these days is not that bankers, brokers, and traders, are ruthless. Records of that go back to the Classical Roman period.  Some of the roughest people in the world are Cockney floor traders in London and they are gentle little ladies compared to what the Romans did.  What is "new" is that we are now in a fiat currency "depression"  that has evaporated the margin of survival for muppets who get raped. The pool of muppets is shrinking till it is the people who ride the metaphorical short bus who are getting raped or shotgunned in the barrel. It is noticeable now.  When you screwed someone in the 1970's or early 1980's they screwed had a chance of survival.  Now not so much, in part because they have been poorly educated.  Now there is a raging almost inchoate anger based on fear as much as anything.  People are watching savings evaporate, are living on credit cards that are approaching limits, and the lies have become so obvious.  Guns and ammo sales are going through the rough and manufactures are getting back logged. 

An example, Notcie of lie: Housing is in recovery in Southern California

http://www.doctorhousingbubble.com/short-sales-foreclosures-pasadena-foreclosure-and-short-sale-shadow-inventory-2012/

Lie, after lie, after lie. When people are foaming at the mouth inchoate mad, don't expect reasoned arguments to have any effect.  Half the people who comment here on Zero Hedge are deranged one way or another and I include myself.  

Sun, 03/18/2012 - 09:36 | 2266914 hooligan2009
hooligan2009's picture

im in the other half...err..wait which half was the sane half?

Sun, 03/18/2012 - 10:39 | 2266994 WmMcK
WmMcK's picture

I'm in the half that makes the other one possible.

... where all the children are above average - G. Keillor

Sun, 03/18/2012 - 08:52 | 2266875 hooligan2009
hooligan2009's picture

Problem: Too many fools/muppets who have to be in the game being exploited by too many leeches/gangsters who get a thrill out of mind rape.

Solution: Devils Island and a new currency (not backed by gold) called the Boson.

Sun, 03/18/2012 - 07:51 | 2266836 Ponzi Unit
Ponzi Unit's picture

Sure, it's old hat for insiders. The importance is Smith's timing and the potential for criticality, that last snowflake that triggers the avalanche. Change, if even possible, must come from an outraged public. Question is what will it take?

Sun, 03/18/2012 - 03:27 | 2266719 Yen Cross
Yen Cross's picture

  Long COAL. Stolper is short Nat Gas!

Sun, 03/18/2012 - 01:53 | 2266664 JOYFUL
JOYFUL's picture

Say what you will about the author or his piece, he has managed to ask the only question that matters: Why did the NYT run with this?

For over half a century,(at the very least since the time of Herbert Matthews and the Castro as "rebel savior" scam) that rag has operated as the unofficial mouthpiece of Amerikan(Secret Government) foreign policy. There's scarcely an item to be found in it's pages that isn't invested with upholding the views of that secret cabal of power players whose control of Euromerikan society has now reached epic proportions.

What's essential to realize is that concurrent with this upside of the almost total seizure of power has come the downside: the money arm of the cartel has bet the house on a losing hand...the ponzi scheme has reached through to the last sucker, and exhausted itself at last. The derivatives iceberg is floating silently ahead of a ship with a broken rudder, and no amount of running to and fro about the deck is going to change the collision with destiny. All of the 'puppets' (the political caste version of 'muppets') have been warned and given their roles...there wil be war, because there are no further profits to be made from "peace" - the timeless cycle will repeat itself.

So why then, the Greg Smith op-ed and why at this time?

In one of his best pieces from last year, Martin Armstrong did an outstanding analysis of the timeless cycle of banking collapse - THE ATHENIAN REAL ESTATE PANIC BANKING CRISIS. He demonstrates with clarity the inevitable collision of greed & avarice with panic and collapse, as surely as the sun comes up, and how our situation of today is no different than that of a dozen times before.  Where Armstrong is weakest is in his understanding of the purely political dynamics of the cycle. Or perhaps he knows more than he is allowed to say.

All through time, each crop of megalomaniacal financial wizards has considered themselves the pinnacle of wisdom and success - the current one is no different. They will seek to avoid the inevitability of their fall with mega schemes of world domination..and to, finally, beat the odds.  This is why we will see war in the ME within months. The banksters are ready now to quit being banksters, and move on to the next phase...

Throughout history, those bankers who always go down in flames and have destroyed the economy...have always been those who are traders....each one thought they had found the magic formula - political control. Yet not a single firm has survived. Armstrong TAREPBC pg 5

There is not one iota of difference between the bloodlusting maniacs in tel aviv and their enforcement arm in New York/Washington. They are all scions of the messianic Sabbatean heresy which has reached, at the very pinnacle of it's dominance, it's own appointment with destiny. Being maniacal & messianic, they will allow nothing to stand after their own fall; they will take it all down with them. The now know they are gone.  The NYT has been tasked with preparing the public for the collapse and the next phase...all out war upon all those still outside their control, so that none shall remain alive to witness the hubris and humiliating end of the latest "masters of the universe."  While the usual dupes will be unloading on the banks for the quick and brutal collapse we are about to witness, their cronies in the political sphere will be ramping up the phony patriotism machine in delicious freedom from blame.  I suspect that next week will be one of the more interesting 7 days in human history.

http://youtu.be/R8finX1bOPI (Rodney Franklin -Life Moves On)

Sun, 03/18/2012 - 14:15 | 2267398 Kayman
Kayman's picture

 JOYFUL

Putting aside the content of the piece, I submit the "why" run it, is so that Obama can throw the banksters overboard, now that he has the comedians to kowtow to.

Obama will easily metamorphize into a born- again banker basher, while Romney tries to defend the "good" that closing factories and expanding derivatives, has done for the real economy of this country.

And after the election it will be spritzers all around for the great performances.

Sun, 03/18/2012 - 13:58 | 2267360 mess nonster
mess nonster's picture

Right on. In other words, once the money has been taken from the suckers, shut the book down and scram.

The current financial paradigm has been gutted. Goldman has served its purpose, and now the edifice, much like the WTC, the (Soon) USS Enterprise, etc, must be demolished. if that destruction can be used as a false falg, or to some other useful purpose, so much the better.

if Goldman  et al folds, if we see a glut of "whistleblowers", don't for a minute think it is spontaneous.

If you cheer the "destruction" of the bankers, then youre hopelessly deluded. Those fucks ain't goin' anywhere except deeper under cover.

I think this is what mac n' cheese is really trying, very subtly, to alert us to. PAY ATTENTION! Magic is the art of misdirection. Don't be misdirected.

 

Sun, 03/18/2012 - 01:42 | 2266653 holdbuysell
holdbuysell's picture

"It's the nature of the beast."

In other words, status quo, engage.

No, thank you.

More confirmation to simply invest money and time locally and tell Wall Street to pound sand.

Sun, 03/18/2012 - 01:11 | 2266626 Aquarius
Aquarius's picture

Our Adopted Monetary System, of which there is no doubt whatsoever: and,

 

... which consists of Usury and compound Interest as its base, fractional reserve banking, Central Banking and Government and Bureaucratic Protectionism as well as Commercial License or 'carte blanche' -

 

... is designed, a priori, and by default, either intentionally or not, but certainly, maintained deliberately to serve the few at the direct cost to humanity as a whole.

 

“With a gold standard fractional reserve banking wouldn’t be possible. So the bankers wouldn’t own all of the gold.” The moneylenders were banned from England in the Middle Ages long before fiat money was invented, because they were lending gold at interest and were winding up with all the gold. The people were rioting in the streets so the king sent the moneylenders back to Europe. If you lend money at interest and the money supply can’t expand, the lenders quickly end up with all the money. That’s the nature of compound interest."

 

As Usury, the use of interest as the base of "any" monetary system and I stress "any", it is clear that there exists a group and or attribute and attraction within the whole spectrum of the human diaspora, those that excel at capturing all such tokens as well as, or along with, the productions of human Labour, innovation, creativity and body, etc. 

 

It appears natural as well as a dominant human trait which arises automatically when humans fail to strive for and grasp the human potential of accomplishment. You could actually model this as human behaviours are both well known and well documented, as, turning points in socio-economic trends come from, I propose, ideas born in the glimpse and presence of this human accomplishment.

 

 “Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all.”

 

- Dale Carnegie

Sun, 03/18/2012 - 00:51 | 2266591 Yen Cross
Yen Cross's picture

 Really? We all know the ou=tcome,

Sun, 03/18/2012 - 00:28 | 2266538 Tuffmug
Tuffmug's picture

Macaroni and Cheese,

What did Lloyd promise you for this spin piece to denigrate Smith as a sour grapes loser, attack the Times for running an Op-Ed by a lowly serf who you consider is too insignificant to have a valid opinion, and defend Goldman because they are no scummier than the rest of the scum in Wall Street and, therefore, we should consider their behavior as normal and acceptable?

Sun, 03/18/2012 - 08:19 | 2266847 MacroAndCheese
MacroAndCheese's picture

Tuffmug and all you high-fiving thumbs-uppers,

It's truly amazing how much you guys hate bankers for the sheer love of hating them.  Show me one positive phrase, word, hint of any support whatsoever for Goldman or investment banks in general in what I wrote.

As soon as you see it's written by a banker, that's all you need to know.  Hate him.  Rip his lungs out.

Why in the world do you think this is Goldman Sachs spin?  Maybe you better, like, read what I wrote before you get out your tar and feathers.  Do you think the only anecdote that involves Goldman, ie the LTCM outtake, is warm and fuzzy for Goldman?

My point is, saps like you who feign shock that people at Goldman refer to some customers as "Muppets" are the real muppets of the story. 

Sun, 03/18/2012 - 14:32 | 2267407 AbruptlyKawaii
AbruptlyKawaii's picture

you're right about one thing, i see any banker, even a teller and i want to kill him/her and its family with extreme prejudice and extreme sadistic pain.  yup you are correct about that one. just biding my time. you are a fucking cancer, a diseased parasite you and your family and your ilk deserve full extermination you mother fuckers disprove evolution via natural selection, keep walking around the streets, starbucks, lowes, little league? soccer for the kids? 4th of july in the hamptons? greenwich? malibu? downtown? can't hide all the time, if i were you i'd stfu in public, about what it is that you do, FUCK YOU!

 

Sun, 03/18/2012 - 13:33 | 2267309 riley martini
riley martini's picture

 M&C you leave out the end payer in banking fraud ABACUS for example the muppets were workers paying into pensions, people paying sales and property tax , school districts and other institutions ie widows and orphans . The crooks dealing directly with Fraudman Sucks were a part of the fraud but I'm sure they cheat individuals as well . Thats why you come off as another bootlicker of the fascist crooks . Your piece is an everybody else is doing it deflection of rampant corruption with a corrupt and complicit government.

Sun, 03/18/2012 - 12:56 | 2267216 Tuffmug
Tuffmug's picture

I hate any banker who views his client as a date to be raped!

Sun, 03/18/2012 - 12:45 | 2267199 Kayman
Kayman's picture

Kraft Dinner

I have long term customers.  We profit from each other's unique skills.  If one of us gets greedy, it destroys the long term relationship.

You, sir, are propogating the morally bankrupt and economically disastrous point-of-view, that one ought to expect to be raped in a business transaction.  You are wrong.

Wall Street exists because of the welfare provided by the Fed and the Treasury.  Unfortunately for the coniving rats, the ship is sinking.  Malivestment is now the rule, not the exeption.

Skimming, churning and lying does not make a great country.  Enjoy the ride to the bottom.

Sun, 03/18/2012 - 21:05 | 2268209 MacroAndCheese
MacroAndCheese's picture

Kayman

I said nothing of the sort.  I said Goldman is the same as all counterparties to a transaction, be it an investment banker, a real estate agent, or a waiter at a restaurant.  I didn't say that was a good thing, I said that's the way it is, and anyone who thinks otherwise is a sap, or a liar.

In your case, you seem to be the rare soul who combines the two.  Congratulations.

Mon, 03/19/2012 - 09:55 | 2269342 Kayman
Kayman's picture

You earlier admonished a writer for an "ad hominem" against your character. Now you try to defend yourself by attacking me personally. Welcome to Fight Club. Hypocracy, the human virus.

Mon, 03/19/2012 - 18:38 | 2271140 Zero Govt
Zero Govt's picture

Bankers (and politicians) are a human virus (parasites living off other peoples money)

bankers are commission cutters (of other peoples money). Their work is a cost, it is not in the least productive (wealth creating)

presumably that's why these worthless toerags wanted their filthy fingers on monopolising money, so they could 'create' money (counterfiet wealth) out of thin air

their industry has bloated into one of the biggest most unproductive boils of puss on humanity in all human hsitory, all of them like Mr Cheesecake here, narcisstic, thieving scum

their egos are as big as their toilet paper, $700 Trillion at last count ...and all of it worthless like them

it's about time these peanut counters were put back in their box counting up the till rolls in small shops on $1.99 an hour ..it's hard to hypothicate till rolls

Sun, 03/18/2012 - 12:59 | 2267223 Piranhanoia
Piranhanoia's picture

You sell worthless crap and you know it.  You know there will be no maturity on any of the toilet paper you sell.  Malinvestment has been the rule for ever.  You don't get to forget the last several hundred years of theft to absolve a system that is corrupt to the core, and always was.  Are you so young you don't know how to read a history book or a financial ledger?

Your long term customers are being screwed, because you have to be greedy to sell shit as chocolate.

Sun, 03/18/2012 - 11:25 | 2267052 illyia
illyia's picture

Cheese, I suppose it's your POV. You are obviously so "in the know" that you expect the rest of the investor population is just naive in not knowing. And, from your perspective that may seem true.

But most people are not anticipating others circling like sharks, seeking to grab a bite. Most are providing a fee for a service and attempt to provide the best service (meaning honest and well crafted) as they can. They see this as the nature of honest competition. The basis of capitalism.

What you are describing is a slipage into a world of corruption and graft. No one goes over the toll pbridge without paying - and everyone should know that. Slippage backwards in time.

But that is a world we ridiculed as barbaric some short ten years ago, and taught our children was to be distained. Apparently it is now so prevalent that is is indistinguishable from normal - as you present it.

Caveat Emptor is still only loosely understood by the muppets. And, it will probably never really be "understood". People will simple become very guarded, suspicious and insular. Not a great attitude if you want a peaceful open market around the world.

Sharks are not people, they are ancient preditors. They are not helpful in creating an advanced human culture - except to clean up after the war. So they have that going for them...

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