The Firm with a Shadow that Extends Far Past Wall Street
November 22nd, 2007Via: The Ledger:
As John A. Thain prepares to take the reins of Merrill Lynch, he is only the latest example of a tradition borne out across Wall Street, in Washington and around the world. He is a Goldman Sachs alumnus who has reached the top elsewhere.
For decades, one investment bank in Lower Manhattan has churned out a golden list of corporate executives and statesmen, wealthy financiers and nonprofit managers.
In many ways, Goldman Sachs is seen as the financial world’s equivalent of General Electric, the corporate powerhouse, or McKinsey & Company, the management consulting firm. It is a training ground — and finishing school —from which other companies, along with quite a few governments, have frequently plucked their own top leaders.
And it has seeded some of the most successful private investment funds, many of them extending Goldman’s shadow from Greenwich, Conn., to London and beyond.
Goldman claims among its alumni Henry M. Paulson Jr., the current Treasury secretary; Robert E. Rubin, a Treasury secretary under President Bill Clinton and now Citigroup’s chairman; and Mario Draghi, the Bank of Italy’s governor. Jon S. Corzine, New Jersey’s governor, led Goldman for several years. Joshua B. Bolten, the current White House chief of staff, is a Goldman alum.
Mr. Thain, who left Goldman as president and chief operating officer to take over the troubled New York Stock Exchange and now Merrill, falls squarely in that tradition.
To insiders, all this is a result of Goldman’s elite culture, a sense of close-knit partnership that has endured despite the firm’s decision in 1999 to turn itself into a publicly owned corporation. To detractors, the firm is alternately a cult or a secretive fraternity like Skull and Bones at Yale, one focused on profits and power.
The bottom line on Goldman is that it is stocked with bright people who practically mint money. Even as the implosion of the subprime mortgage market forced many of its rivals to take multibillion-dollar write-downs this summer, to cite just the most recent example, Goldman reported a 79 percent increase in profit.
From a school/cult the likes of School and Cross Bones – ya.
How did Goldman Sachs escape the deluge of subprime?
They didn’t.
Most likely the most creative accounting. “Bright people who can practically mint money.” More like like they know how to cook the books better, faster. When you are focused on profits and power and the Illuminati is your gawd – I suppose anything goes.
Maybe these people are covered with some kind of teflon now, but I don’t think they’ll last a week past March 2008, when hell’s bells will start a ringing on the US Dollar.
The sound from Goldman is now OINK, Snort, look at my halo.
Who cares. These high flyers will be lucky if they escape with their lives when this whole thing unwinds.
I haven’t looked into the case with GS, specifically, but I suspect that their hedging strategy must be working.
Lehman, so far, repeat: SO FAR, has been able to walk away from the mess they had a hand in creating by hedging. They got whacked a bit at the end, but pfft! What’s a few billion to those bastards?????
How many chainsaws can they manage to juggle? I dunno.
All in all, though, GS isn’t holding that much subprime apocalypse paper. See this post about the five firms with the most, and especially JP Morgan:
https://cryptogon.com/?p=1609
Also notable is Zoellick