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Bashing Goldman Sachs is simply a game for fools

Bashing Goldman Sachs is simply a game for fools
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First Published: Wed, Jul 29 2009. 12 21 AM IST

Updated: Wed, Jul 29 2009. 12 21 AM IST
From the moment I left Yale and started working for Goldman Sachs, I’ve felt uneasy interacting with those who don’t.
It’s not that I think less of Goldman outsiders than I did while I remained among you. It’s just that I feel your envy, and know that nothing I can do or say will ever persuade you that I am no more than human.
Thus, like many of my colleagues, I have adopted a strategy of never leaving Goldman Sachs, apart from a few brief, spasmodic attempts to make what you outsiders call love or the beast with two backs. Goldman recognizes how important it is for its people to replicate themselves. We bill no performance fees for the service.
Today, the sheer volume of irresponsible media commentary has forced us to reconsider our public relations strategy. With every uptick in our share price, it’s grown clearer that we who are inside Goldman Sachs must open a dialogue with you who are not. Not for our benefit, but for yours.
America stands at a crossroads, and Goldman Sachs now owns both of them. In choosing which road to take, ordinary Americans must not be distracted by unproductive resentment towards the toll-takers. To that end we at Goldman Sachs would like to dispel several false and insidious rumours.
Rumour No. 1: Goldman Sachs controls the US government.
Every time we hear the phrase the United States of Goldman Sachs we shake our heads in wonder. Every ninth-grader knows that the US government consists of three branches. Goldman owns just one of these outright; the second we simply rent, and the third we have no interest in at all. (Note there isn’t a single former Goldman employee on the Supreme Court.)
What small interest we maintain in the US government is, we feel, in the public interest. Our current financial crisis has its roots in a single easily identifiable source: the envy others felt towards Goldman Sachs.
Superior powers: The Goldman Sachs headquarters in New York. Jeremy Bales / Bloomberg
The bozos at Merrill Lynch, the dimwits at Citigroup Inc., the nimrods at Lehman Brothers, the louts at Bear Stearns, even that momentarily useful lunatic Joe Cassano at American International Group Inc. (AIG)—all of these people took risks that no non-Goldman person should ever take, in a pathetic attempt to replicate Goldman’s financial returns.
For too long we have allowed others to emulate us. Now we are working productively with US treasury secretary Tim Geithner and the Congress to ensure that we alone are allowed to take the sort of risks that might destroy the financial system.
Rumour No. 2: When the US government bailed out AIG, and paid off its gambling debts, it saved not AIG but Goldman Sachs.
The charge isn’t merely insulting but ignorant. Less responsible journalists continue to bring up the $12.9 billion (Rs62,178 crore) we received from AIG, as if that was some kind of big deal to us. But as our chief financial officer David Viniar explained back in March, we were hedged. Our profits from AIG rounded to zero.
People who don’t work at Goldman Sachs, of course, find this implausible: How could $12.9 billion round to zero? Easy, but you just need to understand the mathematics.
Let’s assume AIG transferred $12,880,560,250.34 of taxpayer money to Goldman Sachs. A Goldman outsider, asked to round this number, might call it $12,880,560,250.00. That’s not how we look at it; at Goldman we always round to the nearest $50 billion, so anything less than $50 billion rounds to zero.
Think of it that way and you can see that $12,880,560,250.34 isn’t even close to not rounding to zero.
Rumour No. 3: As the US government will eat the losses if Goldman Sachs goes bust, Goldman Sachs shouldn’t be allowed to keep making these massive financial bets. At the very least the $11.4 billion Goldman Sachs already has set aside for employees in 2009—$386,429 a head, just for the first six months—is unfair, as the US taxpayer has borne so much of the risk of the wagers that generated the profits.
Really, we don’t know where to begin with this one. It is wrong-headed in so many different ways!
Let’s begin with the idea that the taxpayer is running a bigger risk than we are. The billions he stands to lose are trivial; after all, they round to zero.
The real risk, when you think about it even for a minute, is the risk we take ourselves: that Goldman will cease to exist and we will cease to be Goldman employees. To flirt with such tragedy we obviously need to be paid.
Rumour No. 4: Goldman employees all look alike.
Several recent newspaper photos have shown that a surprising number of Goldman Sachs workers are white, male and bald. That non-Goldman people glance at such photos and think Holy crap, they even look alike! just shows how deeply anti-Goldman bigotry runs in American life.
We at Goldman represent unique clusters of DNA; if we bear some faint surface resemblance to one another, and to creatures from the 24th century, it is only because our superior powers of reasoning lead us to hold in our minds exactly the same thoughts, at exactly the same time.
A shared disinterest in growing hair, for instance, isn’t a coincidence of nature but an expression of healthy like-mindedness.
The world is a pool table, our naked-headed chief executive officer likes to tell us. And all the people in it are either stripes or solids. You alone are the cue balls.
Rumour No. 5: Goldman Sachs is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. Those words are of course taken from a recent issue of Rolling Stone Magazine and they are transparently false.
For starters, the vampire squid doesn’t feed on human flesh. Ergo, no vampire squid would ever wrap itself around the face of humanity, except by accident. And nothing that happens at Goldman Sachs—nothing that Goldman Sachs thinks, nothing that Goldman Sachs feels, nothing that Goldman Sachs does—ever happens by accident.
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First Published: Wed, Jul 29 2009. 12 21 AM IST