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Bank Statements

The Crybaby Culture

Well, here we go again—yet another pounding of Wall Street’s favorite punching bag, Goldman Sachs, this time by a disgruntled employee on his way out the door. Greg Smith’s letter—or screed, as I prefer to call it—gave Wall Street something to gossip about on Wednesday and seems to have given the New York Times a myriad of opportunities to hyperventilate about the “toxic culture” of greed at Goldman, and by inference, everywhere on the Street. That’s pretty rich stuff coming from a publication run by the Sulzberger family, who are arguably among the worst guardians of shareholder value anywhere on the planet. My take—I’d have taken this letter a lot more seriously had it been published in the Wall Street Journal, where the background and intentions of its author might have been scrutinized a bit more closely beforehand.

Let me make myself very clear—I am in no sense defending Goldman Sachs in my commentary here. In 30 years on Wall Street, I competed against this company on several occasions, and I can tell you firsthand that they do not work and play well with others. They are ruthless competitors, including shutting analysts from competing firms out of client meetings during road shows, etc. And frankly I remain stunned by the whole Abacus affair, and the fact that Lloyd Blankfein couldn’t quite fathom that his firm had a fiduciary duty to let clients know that Goldman was shorting (i.e., betting against) the very securities that they were selling—and were letting a large short-selling hedge fund manager pick the mortgage tranches to go in those securities, to boot. Your role as broker, agent—whatever—does not relieve you of a duty to fully inform your clients, Mr. Blankfein, and with your lack of understanding of that duty lies the problem.

However, I also know many fine and honorable people who work at Goldman and have worked there for years, and I can tell you that client service is their mantra. Greg Smith’s letter does harm to these folks—did he feel no responsibility to his fellow workers, if not to the management that had paid him handsomely for all these years? Why did you not do your employers at least the courtesy of submitting the letter to them first, so they could have prepared your co-workers for what was to come? And while you were a relatively low-paid VP in the Goldman hierarchy, I can assure you that you made more money than 99% of this planet’s occupants—are you now going to give back those millions, or donate them to charity? As a cog that enabled this toxic wheel to function for more than a decade, don’t you now have a moral duty to remedy those wrongs through charitable deeds and giving?

Here’s the reality of Greg Smith’s rant—it came right after Goldman’s bonus payment season (another little fact that he fails to mention), and I’d make a pretty good bet that Mr. Smith did not find his bonus commensurate with his wonderful-ness. (I think it’s also a good bet that he was passed over for partner.) I also find almost comical his depiction of the junior analysts at Goldman who walk around questioning how much money they’re making from clients. As anyone who has ever worked at a Wall Street firm can tell you, junior analysts are clueless about client identity, client profitability, and just about everything else, because they don’t have time to do anything but grunt-work. In short, most of Mr. Smith’s letter simply does not ring true to anyone with Wall Street experience.

To me, this letter and its author smack of a particularly nasty brand of Wall Street narcissism and a culture of self-importance that has been building for a while now. It’s all about me, me, me—not about one’s firm, its history and its employees—and if this letter does set off the requisite soul-searching among those who work there, so much the better. But the financial crisis and the inevitable down-sizing of the Street that has followed seem to have exacerbated this need for some to call attention to themselves lest they be left behind in the process. In addition, the return to normalcy from the crisis environment of the past four years has left only a few remaining opportunities for the doom-sayers to have their 15 minutes of fame—and Professors Roubini, Stiglitz, Taleb, Admati, etc., are intent on making hay while the sun still shines.

Unfortunately, Wall Street analysts—who should be bastions of private comportment and behind-the-scenes activity—have not been immune to the “look at me” trend. One of those—who will remain unnamed here but will be instantly recognizable—has seen fit to write a book about his “exile” on Wall Street, which he blames on evil investment bankers and the lack of a true separation between research and investment banking on the Street. (Gee—who knew?)

Well, buckaroo, I’ve got news for you—I was getting kicked out of bank CEO offices while you were still a junior schmuck, and it’s something you keep quiet, not divulge for public consumption. The reason for your “exile” is quite simple—it’s because you’re a self-important and oblivious jerk, and you whine on earnings calls about how you’re excluded from management visits. (Nothing like telling your clients openly that you can’t get information about the companies that you purport to follow.) And as with Mr. Smith, I find it rich that you excoriate the culture that has paid you so well and enabled a Hamptons lifestyle. BTW—did you tell the Occupy Wall Street folks about that while you were commiserating with them?

You can see where I’m going with this. It’s time for a whole bunch of people in a whole bunch of occupations—with Wall Street chief among them—to shut the hell up or get out. It may seem charmingly outré at this point, but us old-timers are tired of listening to you. Those of us who worked at a whole bunch of firms on Wall Street—some good and some horrible—learned early on in our careers the following adage: “Wall Street is a small street”, and take it from me— truer words were never spoken. Don’t let yourself be manipulated by the media—the Times is having a field day with Greg Smith’s letter, to promote its own agenda—and be true to your co-workers and to the people who were good enough to employ you in the first place. So if you can’t stay somewhere, just move on quietly—and for God’s sake, just stop the whining.