Wednesday, March 14, 2012

How much have Wall Street and banks changed?

Not much, according to Greg Smith, a London based Goldman Sachs' executive director who is leaving with a loud message to the public. He contributed an Op-Ed to the New York Times, Why I Am Leaving Goldman Sachs:
"TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

"...How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

"... I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. 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.

"It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” ...

"These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: [emphasis added] You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen..."
I've tried to apply this last point to so many issues. Trend lines are vital. If you don't change the direction of travel, you WILL end up where you are headed.

So, if ethical behaviour of investment institutions — and business, in general — has been dwindling in recent times, it will get worse, unless changes are made. If public education declines for lack of resources, disaster awaits. If we export our natural resources, particularly non-renewables, and cede manufacturing to Asians, poverty is inevitable for large segments of Canada's population.

Obviously, the middle classes have been squeezed relentlessly in the past decade. The trend line is established. We know where we are headed. Is it really where we want to go?
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  1. Dare I say that the financial system actually rewards psychopaths? Increasingly, so does politics.

  2. When both systems, financial and political, reward such behavior what is the expected result?

  3. Yes, it would seem that the "real screw ups" in society, are gravitating towards positions, of increasing influence and power.

    Sadly, we actually "reward" these people, into "manipulating" our lives, while we are too busy to notice, until its too late. As with anything in life, you get what you pay for, in this case the "mantra" goes "if you'll give me your money, I'll make lots of it for both of us"... then you get the financial crash of 2008.

    To much power in too few hands.. and gee look, the same "clowns" that were running the system, at the time of the "meltdown" are still there! Obama reappointed most of them or promoted them...go figure.

    Our overall system really is, in sad shape.

  4. Proof that fraud is the new norm was the intentional sub-prime bundling of junk into global investment packages. No-one went to jail to this day. Not from Lehman Bros., not from Goldman Sachs. And indirectly, the Canadian government is implicit because investing in markets is the only way we can register (benefit from) our retirement savings plans.

    If the Canadian government allowed registering of pensions (with the same 30+% benefit) in real estate, for example, there'd be a mass exodus of funds from corporations. Reality for corporations--and investment houses--would result.

    And we investors would be safe in that long-term investment strategy, simply because the good Lord isn't making any more land. A sure thing, in my view, but Canadian legislation doesn't allow that.

    So our hard-earned dollars remain at the mercy of these fraudsters, who have learned nothing other than they can get away with it.

  5. Think about it folks,these 'people'do not produce anything.They just take from others.



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