Goldman Sachs: Vampire Squid

Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America

by Matt Taibbi  · 15 Feb 2010  · 291pp  · 91,783 words

upon the ravings of a guy who’s basically a half-baked PR stooge shoveling propaganda coal for bloodsucking transnational behemoths like JPMorgan Chase and Goldman Sachs. Rick Santelli’s February 20 rant came in response to an announcement by the administration of new president Barack Obama that it would be green

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the minds of everybody else. They want the average American to believe that what government is to him, it is also to JPMorgan Chase and Goldman Sachs. To sustain this confusion, predatory banks launch expensive lobbying campaigns against even the mildest laws reining in their behavior and rely on carefully cultivated allies

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is real. Maybe those oil futures you bought were never close to being worth $149 a barrel in reality, but the fees you paid to Goldman Sachs or Morgan Stanley to buy those futures get turned into real beach houses, real Maseratis, real Park Avenue town houses. Bettors chase imaginary riches, while

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bills or bonds or notes on the open market. Those primary dealers (as of this writing there are eighteen of them, all major institutions, including Goldman Sachs, Morgan Stanley, and Deutsche Bank) on occasion sell those T-bills to the Fed, which simply credits that dealer’s account when it buys the

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pursuing the mantra of personal profit with pure religious zeal. In fact, what made the bubbles possible was that the people who ran banks like Goldman Sachs and Morgan Stanley and Citigroup during the Greenspan era were possessed by this cultist fervor, making them genuinely blind to the destructive social consequences of

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and infuriatingly immune to self-doubt. The Randian mindset was so widespread in the finance world that even after the horrific 2008 crash, executives from Goldman Sachs could be seen insisting in public that Jesus himself would have approved of their devotion to personal profit (“The injunction of Jesus to love others

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crossed their desks. Most shameful of all was the liberal allotment of investment-grade ratings given to combinations of subprime mortgages. In a notorious example, Goldman Sachs put together a package of 8,274 mortgages in 2006 called GSAMP Trust 2006-S3. The average loan-to-value in the mortgages in this

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this was not publicly conceded), the banks often went out and bought credit protection from the likes of Cassano to hedge their risk. Banks like Goldman Sachs and Deutsche Bank were holding literally billions of dollars’ worth of these AAA-rated mortgage deals, and they all went to Cassano for insurance, offering

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They argued that the underlying assets in the deals had seriously declined in value and demanded that Cassano post still more collateral. Importantly, it was Goldman Sachs that freaked out first, demanding in August 2007 that AIG/Cassano fork over $1.5 billion in collateral. AIG disputed that claim, the two sides

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you from the valuation of the Super Seniors [CDSs] because I was concerned that you would pollute the process,” he says. Then, in October 2007, Goldman Sachs came back demanding more money, this time asking for $3 billion. The two sides again argued and again settled on a compromise, as Cassano and

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kept coming. By July 31, 2008, AIG had handed over $16.5 billion in collateral to Cassano’s clients. But some of them, in particular Goldman Sachs, were not satisfied. Goldman still had about $20 billion in exposure to AIG and it wanted its money. The management of AIG, however, disputed

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a funny thing began happening in late 2007 and early 2008. Suddenly Neuger’s customers started returning their securities to him en masse. Banks like Goldman Sachs started returning huge chunks of securities and demanding their collateral back. In what quickly struck some regulators as a somewhat too convenient coincidence, many of

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then something surprising happened. The counterparties did start closing out their accounts with Neuger. One in particular was extremely aggressive in returning securities to AIG: Goldman Sachs. Goldman had been leading the charge throughout the year in closing out its accounts with Neuger; now, in the summer of 2008, it stepped up

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a group from the Fed, led by then–New York Fed official Timothy Geithner, as well as officials from the Treasury (then run by former Goldman Sachs chief Henry Paulson) and regulators from Dinallo’s office at the New York Insurance Department. The private players of course included AIG executives and teams

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of bankers from, primarily, three private companies: JPMorgan, Morgan Stanley, and Goldman Sachs. For most of the weekend, the AIG meetings took place in the Fed building, with Fed officials in one corner, Dinallo’s people in a

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fell into crisis or was pushed by banks like Goldman: ANGELIDES: The chronology … appears to indicate that there’s some pretty hard fighting with Goldman Sachs in particular through March of 2008, and then after. I used the analogy when I started here: was there a cheetah hunting down a weak

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, and by failing to make information about the bad loans available to potential investors on the other end. By the time Coakley settled negotiations with Goldman Sachs, the latter had already been the beneficiary of at least $13 billion in public assistance through the AIG bailout, with $10 billion more coming

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companies started buying up stakes in trading firms that held seats on the various commodities exchanges. One of the first examples came in 1981, when Goldman Sachs bought up a commodities trading company called J. Aron. Not long after that, in the early nineties, these companies quietly began to ask the

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back: Can you give people a couple of days to agree with you? “People,” in this case, referred to the recipients of the letters, specifically Goldman Sachs. To which the congressional staffer wrote back: what is the sensitivity of a 17 year old letter which shaped agency policy? I am baffled. Adding

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The new investment vehicle was called index speculation. There were two main indices that investors could bet on. One was called the GSCI, or the Goldman Sachs Commodity Index. The other was the Dow Jones–AIG Commodity Index. The S&P GSCI traditionally held about two-thirds of the index speculation market

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those T-bills goes, every month, to your investment bank, along with a management fee. Your friendly investment bank, which might very well be Goldman Sachs, then takes that money and buys an equivalent amount of futures on the S&P GSCI, following the price changes. When you cash out, the

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in funds like CalPERS (the California state employees pension funds) and other state-run pension plans were fair game for the salesmen of banks like Goldman Sachs looking to pitch this exciting new class of investment as a way of complying with what Langbein, the Yalie professor, called the “powerful duty to

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entry of new financial or speculative investors into global commodities markets is fueling the dramatic run-up in prices.” And the top oil analyst at Goldman Sachs quietly conceded, in May 2008, that “without question the increased fund flow into commodities has boosted prices.” One thing we know for sure is

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But despite what Wall Street players were saying amongst themselves, the message to potential investors was very different. In fact, it still is. Banks like Goldman Sachs continually coaxed new investors into the commodities market by arguing that there would be major disruptions to the world oil supply that would cause oil

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“I said, ‘Whose side are you on?’ ” As the phone call progressed, Gheit began to consider other possibilities. “I was sure it was someone from Goldman Sachs or Morgan Stanley. That’s how weird it was.” It would be a full year before the CFTC under the Obama administration would admit that

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the same old cast of villains. In a weekly newsletter distributed to its own investors only, given to me by a source in the industry, Goldman Sachs in October 2009 repeated its classic “oil is going up because of the fundamentals” act. “We believe oil prices are poised to move higher,

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quite literally for sale, at rock-bottom prices, and the buyers increasingly are the very people who scored big in the oil bubble. Thanks to Goldman Sachs and Morgan Stanley and the other investment banks that artificially jacked up the price of gasoline over the course of the last decade, Americans delivered

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buying minority stakes in the same investment. But it’s always thirty percent, twenty-five percent, and so on.” We’ve seen how banks like Goldman Sachs and Morgan Stanley helped engineer an artificial run-up in commodity prices, among other things by pushing big institutional investors like pension funds into the

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a public relations firestorm that was both bizarre and educational. My initial reaction to being blasted in the media by commentators from CNBC (“Stop Blaming Goldman Sachs!” read Charlie Gasparino’s rant; another on-air talent called me a “lunatic”), the Atlantic, and other outlets was that this was just typical

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those illusions became completely unsustainable. Within six months after this article came out, it was de rigueur even for wire services to reference Goldman’s “vampire squid” reputation. But by then the executives at Goldman weren’t worrying all that much about their plummeting reputation—and that, in the end, turned out

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government and taxpayer and shamelessly engorged itself on us all. THE FIRST THING you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money

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, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who’s Who of Goldman Sachs graduates. Most of us know the major players: Henry Paulson, George Bush’s last Treasury secretary, who used to run Goldman and was the

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, like trying to make a list of everything. So what you need to know is the big picture: if America is circling the drain, Goldman Sachs found a way to be that drain—an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society

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s disastrous foray into the speculative mania of precrash Wall Street in the late 1920s and the launch of now-infamous “investment trusts” like the Goldman Sachs Trading Corporation, the Shenandoah Corporation, and the Blue Ridge Corporation. It’s probably not worth getting into the arcane details of these great Hindenburgs of

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Goldman got into the investment trust game slightly late, then jumped in with both feet and went absolutely hog wild. The first effort was the Goldman Sachs Trading Corporation; the bank issued a million shares at $100 apiece, bought all those shares with its own money, and then sold 90 percent of

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chair Mike Oxley and the rest of Congress. “This is an egregious distortion of the facts,” said Lucas van Praag, a spokesman for Goldman Sachs. “The suggestion that Goldman Sachs was involved in spinning or other inappropriate practices around IPO allocations is simply wrong.” And yet: at the end of that same year Goldman

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collapse without intervention. That same weekend, he green-lights a massive $80 billion bailout of AIG, a crippled insurance giant that just happens to owe Goldman Sachs about $20 billion. Paulson’s decision to intervene selectively in the market would radically reshape the competitive dynamic on Wall Street. Goldman’s main competitor

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Stephen Friedman, a former managing director of, well, you know. Friedman is technically in violation of Federal Reserve policy by remaining on the board of Goldman Sachs even as he supposedly is regulating the bank; in order to rectify the problem, he applies for, and of course gets, a conflict-of-interest

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meant. In a Bloomberg story on April 30 you could almost see the smirk emanating from the bank’s public relations department: April 30 (Bloomberg)—Goldman Sachs Group Inc., by selling bonds and stock yesterday, may be signaling that there won’t be any surprises next week when the results of government

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… Securities laws require the company to reveal material nonpublic information before selling any stock or bonds. Lucas van Praag, a spokesman for New York–based Goldman Sachs, declined to comment. Beyond that, the bank somehow seemed to know exactly what the Federal Reserve’s conditions would be before it would be allowed

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or not it was appropriate for a reputable mainstream media organization to publicly call Lloyd Blankfein a motherfucker. This was really what most of the “vampire squid” uproar boiled down to. The substance of most of the freak-outs by mainstream financial reporters and the bank itself over the Rolling Stone piece

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called the piece “vaguely entertaining” and “an hysterical compilation of conspiracy theories.” Van Praag even made an attempt at humor, saying, “Notable ones missing are Goldman Sachs as the third shooter [in John F. Kennedy’s assassination] and faking the first lunar landing.” But at no time did the bank ever deny

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but the mini narratives are ludicrously wrong, which makes the meta narrative suspect. And what I missed in the meta narrative, of course, is that Goldman Sachs, while perhaps corrupt, and too closely tied to government, and the recipient of far too much taxpayer support, was nonetheless not an appropriate target for

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Alabama senator Richard Shelby put it. The Democrats’ line was a little more complicated. They had no problem publicly pointing the finger at companies like Goldman Sachs as culprits in the mess, although behind closed doors, of course, it was Democratic officials like Geithner who were carrying water for Wall Street all

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9 billion; Washington Mutual would later sue, claiming that the FDIC and Morgan conspired to lower WMI’s sale price for Morgan. Paulson, a former Goldman Sachs employee, was in constant telephone contact with Goldman’s new CEO, Lloyd Blankfein, during a period in which Paulson was negotiating the AIG bailout, which

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of course led to at least $13 billion being transferred directly to Goldman Sachs, a major AIG counterparty. Around the same time as the September AIG deal, Bank of America entered into a state-aided agreement to buy foundering

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” Lewis said. There were other stories. The seemingly fortuitous late September 2008 coincidence of Warren Buffett deciding to pledge $5 billion to a then-foundering Goldman Sachs during the same week that the bank was miraculously rescued from possible bankruptcy by Geithner’s decision to allow it to convert overnight to bank

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with commodities traders, to the mortgage chapter where I spoke to people like Andy and Miklos who worked on billion-dollar mortgage deals, to the Goldman Sachs chapter where I spoke with hedge fund managers and traders who had done business with that bank, the information I was after was about general

What Happened to Goldman Sachs: An Insider's Story of Organizational Drift and Its Unintended Consequences

by Steven G. Mandis  · 9 Sep 2013  · 413pp  · 117,782 words

) alleging insensitive, unethical, immoral, and even criminal behavior. Matt Taibbi of Rolling Stone famously wrote, “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”2 Understandably it seemed that angry villagers carrying

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tease the VP in a funny, friendly way, the analyst rolled down the cab window and yelled out several times, “VP at Goldman Sachs!” Clearly, the subtext was, “VP at Goldman Sachs dining extravagantly at an elite restaurant!” The VP took it so seriously that the next morning he called the analyst into his

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agreed to pursue an IPO, co-senior partners Corzine and Paulson released a statement that reflects both capital and liability concerns: “As a public company, Goldman Sachs will have the financial strength and strategic flexibility to continue to serve our clients effectively as well as respond thoughtfully to the business and competitive

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business with smarter people than the one they had inherited. In discussions, most IPO opponents expressed the concern that going public could “destroy what makes Goldman Sachs Goldman Sachs.”5 A contemporary report described the process of debating and then postponing the IPO as “a wrenching experience that has bruised the firm.”6 It

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work against the takeover to protect them and shareholders are viewed very positively. A 1982 Wall Street Journal headline captured this positive image: “The Pacifist: Goldman Sachs Avoids Bitter Takeover Fights but Leads in Mergers.” The accompanying article praised Goldman’s policy of not representing corporate raiders in hostile deals, although it

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Goldman culture was changing. Renewed Involvement in Asset Management Goldman had steered clear of asset management since the Great Depression. In 1928 the firm created Goldman Sachs Trading Corporation (GTSC) as an investment trust, which worked much like modern mutual funds: the trust bought and managed a portfolio of securities, some of

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asset management business. This attitude changed in the late 1980s, when, lured by the consistent profits its competitors were earning in asset management, Goldman established Goldman Sachs Asset Management (GSAM) to serve institutional and individual investors worldwide.22 Goldman struggled to determine whether it should manage money for high-net-worth individuals

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research division to foster collaboration;12 the court acknowledged that Goldman’s research alignment process fostered collaboration among divisions “to insure a strategic alignment of [Goldman Sachs’] business.”13 So Goldman’s research alignment program was consistent with the firm’s teamwork approach, because it required different divisions to work together. But

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the only nonpartner on the firmwide marketing committee, which included some of the most respected partners. One of the initiatives of the committee was described: “Goldman Sachs introduced a new program in June 2000 to strengthen ‘firm-wide marketing … including how we leverage our brand, advertise, and in particular, cross-sell …’” Strengthening

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, should embrace the challenge of those conflicts. Like market risk, the risk of conflicts would keep most competitors away—but by engaging actively with clients, Goldman Sachs would understand these conflicts better and could manage them better. Blankfein (who spends a significant part of his time managing real or perceived conflicts) said

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number of clients but rather Goldman’s various roles or proprietary investing businesses causing the conflicts. Management Committee Composition The changes in the membership of Goldman Sachs’ management committee corroborate the idea of a shifting emphasis toward the legal standard of compliance and away from the original interpretation of the first principle

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participate in the firm’s philanthropic and charitable activities. According to a Goldman’s website section called “Citizenship,” in 2012, more than twenty-five thousand Goldman Sachs employees from forty-eight offices partnered with 950 nonprofit organizations. When I worked at Goldman, almost everyone I worked with gave time to Community Teamworks

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in mind that before 1999, Goldman was a private firm and therefore not required to make certain information public. TABLE B-1 Analytical framework of Goldman Sachs 1979 1990 1996 1999 2012 Head of firm (background)/#2* Weinberg (banker) Friedman (banker) Corzine (trader) Paulson (banker) Blankfein (trader) Whitehead (banker) Rubin (trader) Paulson

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Government: Governor of the Bank of Italy since January 2006; since 2011, President of the European Central Bank Goldman: Vice chairman and managing director of Goldman Sachs International; member of the firmwide management committee, 2002–2005 WILLIAM DUDLEY Government: President, Federal Reserve Bank of New York, 2009 to present Goldman: Partner and

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for economic, energy and agricultural affairs-designate since July 2009; assistant secretary of state for economic and business affairs, 1981–1982 Goldman: Vice chairman of Goldman Sachs International; worked at Goldman from 1982 to 2009 OTTMAR ISSING Government: Bundesbank board member and ex-chief economist of the European Central Bank Goldman: Senior

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chief, 2006–2008 Goldman: Former partner, 2004–2006 MALCOLM TURNBULL Government: Member of the Australian House of Representatives since 2004 Goldman: Chairman and managing director, Goldman Sachs Australia, 1997–2001 SIDNEY WEINBERG Government: Vice-Chair, War Production Board, during World War II Goldman: Worked at Goldman from 1907 to 1969 JOHN WHITEHEAD

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Paulson Goldman: Senior investment banker at Goldman, where he worked from 1998 to 2008 ROBERT ZOELLICK Government: President, World Bank, since 2007 Goldman: Vice chairman, Goldman Sachs International; managing director and chairman, Board of International Advisors, 2006–2007 A reminder: I am not judging the involvement of these individuals—good or bad

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demonstrating Goldman’s long-standing commitment to public service and corporate citizenship.1 FIGURE E-1 Goldman document listing its commitment to public service Source: Goldman Sachs, www.goldmansachs.com/investor-relations/corporate-governance/corporate-governance-documents/culture.pdf. FIGURE E-2 Goldman document showing a timeline of public service projects Source

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charge of Goldman and rebuilds its trading business. Because of the potential for direct conflicts with its large block-trading clients and because of the Goldman Sachs Trading Corporation debacle, Goldman steers clear of asset management until Gus Levy creates the investment management services (IMS) unit. 1970: The NYSE amends its rules

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a compounded annual growth rate of about 15 percent—while staffing was growing at 8 percent, EBT was growing at almost two times that. 19. Goldman Sachs Group, “Letter to Shareholders,” Annual Report, 1999, http://www.goldmansachs.com/investor-relations/financials/archived/annual-reports/attachments/1999-annual-report.pdf. 20. http://levin

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.nytimes.com/2009/06/16/goldman-regrets-market-euphoria-that-led-to-crisis/.) 22. http://money.cnn.com/2010/04/27/news/companies/goldman_sachs_hearing/index.htm. 23. Goldman Sachs Group, Report of the Business Standards Committee, n.d., www.GoldmanSachs.com/Business Standards. 24. See http://www.nytimes.com/2010/05/19

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said, the very term, even when used in the most general sense, has been called a ‘weasel word,’ devoid of academic legitimacy” (Chalmers Johnson, lecture, Goldman Sachs, Berkeley, CA, 1993). Eminent Japanologist Chalmers Johnson is not alone among scholars in dismissing it as a “weasel word,” devoid of academic legitimacy, http://citation

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relationship to the point that the client is willing to share confidential information, and a reputation for integrity matters a great deal (paraphrased from Endlich, Goldman Sachs, 18). 50. Today, Goldman’s focus is on “the long-term prosperity of our clients, shareholders, employees, and the communities we serve.” Shareholders, employees, and

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at the top concerning operational procedures and overhead, yet each department is allowed autonomy concerning entrepreneurship and innovation.” See R. D. Freedman and J. Vohr, “Goldman Sachs/Lehman Brothers,” Case Studies in Finance and Economics, C49 (New York: Leonard N. Stern School of Business, 1991, rev. 1999). 6. Laurence Zuckerman, “The Good

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its indomitable team spirit. Partners and staff ‘gang tackled’ problems with a near mania for interdepartmental and interpersonal communication and coordination.” See Freedman and Vohr, “Goldman Sachs/Lehman Brothers.” 27. Burt, Brokerage and Closure: An Introduction to Social Capital. 28. In Burt’s work at Raytheon, his mission was to integrate several

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betrayed.” See J. A. Knee, The Accidental Investment Banker: Inside the Decade That Transformed Wall Street (New York: Random House, 2006), xvii, 48. 25. Endlich, Goldman Sachs, 256. These layoffs can have an effect on both the organization and the external environment. University of Minnesota anthropology professor Karen Ho, in her book

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1999, the executive committee was dismantled and a fifteen-member management committee was restored as the firm’s senior leadership group. 37. Endlich, Goldman Sachs, 252. 38. Freedman and Vohr, “Goldman Sachs/Lehman Brothers,” 13. 39. Cohan, Money and Power, 392. 40. Here is a clear example of the impact of a change in

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hired high-profile investment bankers, pressed various loopholes in the existing rules, exploited their balance sheets.” (See Knee, The Accidental Investment Banker, 24.) 45. Endlich, Goldman Sachs, 124. 46. “New organizations such as multibillion-dollar hedge funds and LBO [leveraged buyout] firms have begun to step in and play some of the

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accompany increased size” (see page 68). 51. C. Perrow, Normal Accidents: Living with High-Risk Technologies (New York: Basic Books, 1984), 308. Chapter 5 1. Goldman Sachs Group, “Letter to Shareholders,” Annual Report 1999, http://www.goldmansachs.com/investor-relations/financials/archived/annual-reports/attachments/1999-annual-report.pdf. 2. W. D

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: An IPO or Merger Could Reap Millions for Partners at the Wall Street Titan—But Would It Destroy What Makes Goldman Sachs Goldman Sachs?” Washington Post, June 7, 1998, H01. 6. McLean and Serwer, “Goldman Sachs: After the Fall.” 7. It was rumored that Corzine ultimately agreed to pay out the limited partners at two times

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[New York: Random House, 2006], 103.) Many limited partners believed that their historical contributions to Goldman were being seriously underappreciated and undervalued. (See J. Kahn, “Goldman, Sachs Tries to Soothe Limited Partners,” New York Times, July 30, 1998, D1.) 8. There were indications, some of them subtle, that a culture shift was

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, a Canadian hotel operator. 20. B. McLean, “The Bank Job,” Vanity Fair, March 23, 2012, http://www.vanityfair.com/business/features/2010/01/goldman-sachs-200101. 21. Endlich, Goldman Sachs, 45. 22. Keep in mind that this is when John L. Weinberg was still at the firm. 23. Ezra Zuckerman’s work (1999, 2000

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investment bank, without commercial banking. Morgan Stanley was excluded because it includes a large brokerage business. 15. http://dealbook.nytimes.com/2011/05/16/the-goldman-sachs-diaspora/. 16. See Donald MacKenzie, An Engine, Not a Camera: How Financial Models Shape Markets (Cambridge, MA: MIT Press, 2006), and his similar works. 17

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-to-market” discipline and cultural element of dissonance may have meant it was more accurate and generated more volatility in positions. 19. McLean and Serwer, “Goldman Sachs: After the Fall.” 20. The IPO prospectus can be found at http://www.goldmansachs.com/investor-relations/financials/archived/other-information/ipo-prospectus-gs-pdf

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currently Lloyd Blankfein (CEO), Gary Cohn (president and COO), David Viniar (CFO), Michael Evans (a vice chairman, global head of growth markets, and chairman of Goldman Sachs Asia), and John S. Weinberg (a vice chairman and co-head of investment banking). 2. “Without question, direct government support helped stabilize the financial system

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would have taken heterarchical organization to fuse together the two institutionally separate insights needed fully to grasp those dangers. The conjecture is plausible: in particular, Goldman Sachs, reported by several of my interviewees to be more heterarchical in its organization than most other major banks (it was a partnership, not a public

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to Review Its Business Practices,” New York Times, May 7, 2010, http://dealbook.nytimes.com/2010/05/07/goldman-toreview-its-business-practices/. 42. Endlich, Goldman Sachs, 164. 43. “Goldman Sachs Clients Lost in Translation,” London Evening Standard, January 14, 2011, http://www.this islondon.co.uk/standard-business/article-23914152-city-spy

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. Ibid. 52. Carney, “The Banality of Goldman’s Business Standards.” See also http://www.clmr.unsw.edu.au/article/ethics/embedding-ethics/basis-trust-warranted-goldman-sachs-business-standards-report-assessed: “The failure to articulate and integrate purpose, values and principles within a functioning ethical framework created toxic and socially harmful corporate

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, “Muppets of the World Unite,” The Guardian, March 14, 2012, www.guardian.co.uk/business/nils-pratley-on-finance/2012/mar/14/goldman-sachs-greg-smith-muppets. 65. T. Samuelson, “Goldman Sachs Employee’s Op-Ed Doesn’t Surprise Some,” WYNC, March 14, 2012, http://www.wnyc.org/blogs/wnyc-news-blog/2012/mar

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-28-2011/exclusive-william-cohan-extended-interview-pt-2. 9. Stephen Colbert, “Greg Smith’s Goldman Sachs Op-Ed,” The Colbert Report (Viacom), March 14, 2012. 10. W. D. Cohan, “Doing God’s Work: How Goldman Became the Vampire Squid,” Institutional Investor, April 25, 2011, http://www.institutionalinvestor.com/Popups/PrintArticle.aspx?ArticleID=2813008

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. 11. http://businesshighbeam.com/435607/article-1G1-16396594/inside-goldman-college-cardinals. 12. James Quinn and James Hall, “Goldman Sachs Vice-Chairman Says: ‘Learn to Tolerate Inequality,’” The Telegraph

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regulations (Jonathan D. Salant, “Goldman Doubled Lobbying Expenses Amid Financial Revamp, SEC, Probe,” Bloomberg.com, July 21, 2010, www.bloomberg.com/news/2010-07-21/goldman-sachs-doubled-lobbying-expenses-amid-financial-revamp-sec-probe.html). Further, Felix Salmon charged that former Secretary of the Treasury Hank Paulson gave insider tips to

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, October 16, 2007, http://www.washingtonpost.com/wp-dyn/content/article/2007/10/15/AR2007101501435.html. 3. Andrew Clark, “Success Shines Unwelcome Spotlight on to Goldman Sachs,” The Guardian, December 21, 2007, http://www.guardian.co.uk/business/2007/dec/21/goldmansachs.useconomy. 4. M. Taibbi, “The Great American Bubble Machine,” Rolling

Money and Power: How Goldman Sachs Came to Rule the World

by William D. Cohan  · 11 Apr 2011  · 1,073pp  · 302,361 words

on its feet” to, now famously, “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,” by Rolling Stone writer Matt Taibbi. The firm’s inexorable success leaves people wondering: Is Goldman Sachs better than everyone else, or have they found ways

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is reflected as accurately as possible. Naturally, since judgment is involved, especially with ever more complex securities, disagreements among traders about values are common. Goldman Sachs prides itself on being a “mark-to-market” firm, Wall Street argot for being ruthlessly precise about the value of the securities—known as “marks

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the hedge fund] that Timberwolf was designed for ‘positive performance.’ ” (Goldman called the lawsuit “a misguided attempt by Basis … to shift its investment losses to Goldman Sachs.”) Senator Levin then directed Sparks toward a series of internal Goldman e-mails about the importance of selling off the Timberwolf securities into the market

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twelve-story “fireproof” office building at 30–32 Pine Street, built on the site where Marcus Goldman had first started his firm. Business boomed at Goldman Sachs in the postwar years. Sachs credited Catchings with creating “such great companies” as National Dairy Products Corporation—a combination of Hydrox in Chicago, Sheffield

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the Postum Cereal Company, Maxwell House Coffee, Jell-O, and many others. These companies, and others that Catchings helped to create, remained clients of Goldman Sachs for generations, and Goldman partners took their turns, seriatim, on their boards of directors, further cementing the ongoing and close relationships. With Catchings’s enormous

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commercial success at Goldman Sachs came a corresponding increase in his desire for more power and authority at the firm, in the enduring Wall Street fashion. Catchings’s friend and

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be revealed.” The historian noted with some understatement, “The stock is said to have sold exceedingly well.” Galbraith likened the investment trust Catchings and Goldman Sachs—and many others—created in December 1928 to the opportunities the South Sea Company offered investors in the early 1700s. “As a promotion the investment

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many investment trusts are doing to-day.” Not surprisingly, this was exactly the approach taken by Waddill Catchings, the senior partner of Goldman Sachs, in structuring and marketing the Goldman Sachs Trading Corporation. Goldman may have been late to the party—the trust began operation on December 4, 1928, less than a year

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which now it owned less than 10 percent of the shares—through management and investment contracts. Indeed, all of the partners of Goldman Sachs were the directors of the Goldman Sachs Trading Corporation, and the partners of Goldman had to approve any and all directors of the Trading Corporation. By February 2, 1929

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proportion of such stock at a profit after the earnings of the companies had increased as a result of the efforts of The Goldman Sachs Trading Corporation and of Goldman, Sachs & Co.” Investigators, though, had their doubts that this was Catchings’s sole motivation for merging with Financial and Industrial. They suspected that

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of the Trading Corporation voted for the merger, in the days after the handshake with Jonas, but before any public announcement of the deal, Goldman Sachs—through a new partnership that it controlled—set about aggressively and systematically buying the shares of the Trading Corporation, effectively driving up the shares’ price

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an account was created to trade in the stocks of both Trading Corporation and Financial and Industrial. The owners of the account were the Goldman Sachs Trading Corporation (controlled by Goldman Sachs) and Delmar Capital Corporation (controlled by Ralph Jonas). According to the agreement between the two, “in connection with the proposed acquisition

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his shareholders he made the affirmative statement—albeit untruthful—that “I have never personally owned nor has anyone owned for me, a single share of Goldman Sachs Trading Corporation.” Under later “interrogation,” Jonas justified his decidedly misleading statement by claiming his obligation would only kick in had the merger not been

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it had inflated through its robust purchases during the previous weeks. “The market value for its own stock … was almost exclusively the creation of the Goldman Sachs Trading Corporation itself,” the subsequent report concluded. When asked about the manipulation later, Weinberg conceded that “buying actually improves the market, we know that,”

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, integrated conspiracy and combination, as there is no evidence that any of the other defendant firms were parties to the arrangements between Lehman Brothers and Goldman Sachs, or that they knew of the existence of these memoranda.” Notwithstanding Medina’s conclusion about this arrangement, Walter Sachs, at Goldman, and John Hancock,

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1948 preferred stock issue for Reynolds Tobacco Company. Generally, though, through ongoing trial and error—and through friendships honed and burnished over many years—Goldman Sachs proved itself to be masterful at exploiting its corporate relationships and turning them into substantial profits over many years for the firm’s partners. Take

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capital was around $6 million, a tidy percentage indeed. Goldman never considered settling with the government or discussing the possibility of signing a consent decree. Goldman, Sachs said, was “absolutely firm because we thought [settling] would be a mistake. We felt confident that having a highly intelligent judge, the question would

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then the largest in American corporate history, and Goldman’s commercial paper business was at the center of the company’s financial difficulties. Once again, Goldman Sachs was facing an existential threat. “Everyone hunkered down,” Doty said. “We had a couple of difficult years.” CHAPTER 7 CAVEAT EMPTOR Penn Central was

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Goodrich. Despite the controversy starting to percolate about the potential conflicts that emerge when investment bankers sit on corporate boards, the article made clear that Goldman Sachs and John Weinberg were outspoken believers that such conflicts could be managed. (At that time, Goldman partners sat on the boards of some seventy-five

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reasons.” On March 16, he replied to Rosenzweig in preparation for a meeting he was having with him and other university officials that day: “Goldman, Sachs’ discriminatory employment practices are symbolic of the injustices and discrimination Blacks have faced and continue to face. Although many Whites profess in their public life

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at Stanford. Whitehead, who was busy touting Goldman’s virtues to an eager audience, was left speechless by the question. In 1971, Goldman established the Goldman Sachs Fellowships at Harvard Business School, awarded annually to outstanding minority-group students. —— DESPITE THE MISDIRECTION provided in the Times article, the Goldman partners were

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company was in dire financial straits. The allegations were devastating, especially for a firm anxious to portray itself as in the vanguard of Wall Street. “Goldman Sachs continued to sell [Penn Central’s] commercial paper after [it] had received information about the financial condition of the [company,] which should have raised

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offer it.” The SEC found the idea preposterous that Goldman would take comfort from asset sales worth multiples of the commercial paper outstanding—“which fact Goldman, Sachs had never investigated,” the agency wrote—since “looking to liquidation as a means of determining credit-worthiness” meant that the “railroad clearly was no

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Then there were the blue sheets. “The blue sheets are secret memoranda in the files of Goldman Sachs, the credit files of Goldman Sachs recording contacts or conversations between Goldman Sachs and the issuer, in this case recording conversations between Goldman Sachs and Penn Central,” Pollack said. “These blue sheets are profoundly important to this case because,

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two hundred people, Michael Bradfield, the general counsel, seemed particularly focused on whether the investment would “lead to Sumitomo influencing the management decisions of Goldman Sachs” and be a violation both of Glass-Steagall and the Bank Holding Company Act of 1956, which limits to 25 percent the nonvoting stock ownership

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Freeman were free to trade the stock” and “both did” without “the benefit of confidential information.” Freeman’s “individual trading was completely in compliance with Goldman Sachs’s internal rules,” his lawyers wrote. Despite these flawed assertions made by Stewart and Hertzberg—and there were still others involving Storer Communications, one of

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information he and Levy, Tenenbaum, Lenzner, Rubin, Brosens, as well as younger arbs Tom Steyer, Daniel Och, Eddie Lampert, and others likely made at Goldman Sachs—“[a]nd although the answer that he received was couched in veiled language, it constituted illegal transmission of inside information.” Judge Leval figured Freeman had

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its mission of being the preeminent, independent investment bank in the world,” Corzine and Paulson said in a grandiose statement. “As a public company, Goldman Sachs will have the financial strength and strategic flexibility to continue to serve our clients effectively as well as respond thoughtfully to the business and competitive

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the margin. It created more ‘relationship tension’ for bankers to manage.” Conflicts? “No, ‘relationship tension’ was the preferred descriptive,” he said. As never before, Goldman Sachs was a beehive of global activity, across virtually every imaginable product line in finance, with the sole exception of taking deposits directly from consumers (although

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Street and to serve as Goldman’s chief learning officer. “Pine Street is dedicated to strengthening the culture of the firm, enhancing the success of Goldman Sachs and its clients, and developing world-class leadership and management talent,” according to Goldman’s website. “Distinguished businesspeople, noted academicians and the firm’s

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wouldn’t have gotten done but for this confidential [arrangement] where you needed people that really understood it and both sides very much wanted Goldman Sachs and Goldman Sachs was a partial owner of Archipelago and that didn’t bother the New York Stock Exchange or their board, or John Reed or John

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loans and generate transaction fees. This increased the originators’ focus on processing mortgage transactions rather than ensuring their credit quality. Wall Street banks, including Goldman Sachs, entered into the high-margin business of packaging mortgages and selling them to investors as MBS, including mortgage pass-through certificates. As is now evident

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relationship between Goldman and Paulson became somewhat more adversarial and competitive. Virtually overnight, Paulson & Co. went from being a good client of Goldman Sachs to becoming a competitor of Goldman Sachs. Much to the consternation of many of its clients, it was a dynamic that had occurred often at the firm, especially since

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conspiracy-theory journalism written by reporter Matt Taibbi. “The first thing you need to know about Goldman Sachs is that it’s everywhere,” Taibbi wrote. “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like

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groups and committees—with names such as “Firmwide New Activity Committee” and “Firmwide Suitability Committee”—that Blankfein and Cohn will use to run the firm. “Goldman Sachs relies heavily on committees to coordinate and apply consistent business standards, practices, policies and procedures across the firm,” the report explained. “The firm’s

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University Prologue: The Pyrrhic Victory 1. “a cunning cat”: Martin A. Armstrong, Looking Behind the Curtain: The “Real” Conspiracy, April 9, 2009. 2. “a great vampire squid”: Matt Taibbi, Rolling Stone, July 9–23, 2009. 3. the “angriest”: Jonathan Alter, The Promise: President Obama, Year One (New York: Simon & Schuster, 2010),

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p. 614. 39. “The spring and early summer”: Galbraith, p. 61. 40. “had gone outside its legitimate”: NYT, April 4, 1929. 41. “Goldman Sachs by now”: Galbraith, p. 62. 42. Goldman Sachs Trading Corporation was worth: NYT, August 20, 1929, p. 84. 43. “[T]he nearly simultaneous”: Galbraith, p. 64. 44. “Well, this is

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Penn Central Company, staff report to the Senate Special Subcommittee on Investigations, August 1972. Also helpful were trial transcripts from the Welch Foods Inc. v. Goldman, Sachs & Co. lawsuit. 24. “caused people to have a very positive feeling”: Author interview with Robert Rubin. 25. “They felt good”: Roy C. Smith,

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I thought”: Ellis, p. 264. 24. “most delicate undertaking”: Rubin, p. 90. 25. “There is incredible bitterness”: Institutional Investor, January 1984. 26. “The Pacifist: Goldman Sachs Avoids Bitter Takeover Fights but Leads in Mergers”: WSJ, December 3, 1982. 27. “Now at Oceanside High School”: Author interview with Steve Friedman. Biographical details

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5.1 money for Jewish immigrants collected by Sam Sachs made partner of, 1.1, 1.2 Goldman, Rebecca Goldman, Rosa see Sachs, Rosa Goldman Goldman, Sachs & Dreyfus Goldman Sachs: “Ad Hoc Profit Maximization Committee” at, 12.1, 12.2 Administrative Department of American Cyanamid Corporation lawsuit against annual budgeting at antitrust lawsuit against

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avoided by, prl.1, prl.2, prl.3, prl.4, prl.5, 18.1, 22.1, 23.1 see also Goldman, Sachs & Co.; M. Goldman and Sachs; Senate, U.S., Goldman Sachs hearing at Goldman Sachs, deals and underwriting of, 1.1, 1.2, 1.3, 1.4, 1.5, 3.1, 4.1, 4.

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Mississippi’s investigation of residential (RMBS), 19.1, 21.1, 21.2, 21.3, 22.1, 22.2, 22.3, 22.4 subprime Goldman Sachs Asia Goldman Sachs Asset Mangement Goldman Sachs Fellowship Goldman Sachs Trading Corporation, 2.1, 2.2, 2.3, 3.1, 3.2, 3.3, 4.1, 5.1, 8.1, 9.1

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Perella, Joe Perella Weinberg Peretz, Martin Pergamon Holdings Limited, 14.1, 14.2, 14.3 Pergamon Press Permanent Subcommittee on Investigations see Senate, U.S., Goldman Sachs hearing at Perry, Richard hiring of Peru peso, Mexican Peters, Henry Peters, Tom Petersen, Bruce Pet Milk Company Pfizer Philadelphi, Pa., 1.1, 1.

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5.1, 6.1, 7.1 Tyco Tyson, Laura D’Andrea, 13.1, 13.2, 13.3 UBS Underwood Corporation underwriting banking vs. by Goldman Sachs, see Goldman Sachs, deals and underwriting of Medina’s judicial ruling on on mortgages risks of Union Investment Management United Aircraft United Cigar Manufacturers’ Corporation United Corporation United

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friendship with, prl.1, 3.1, 3.2, 6.1 Ford IPO handled by, 4.1, 5.1 as irreplaceable as janitor at Goldman Sachs made partner at Goldman Sachs Management Committee created by in move uptown, 6.1, 7.1, 8.1 Musica’s swindle and New York Stock Exchange seat of,

Why I Left Goldman Sachs: A Wall Street Story

by Greg Smith  · 21 Oct 2012  · 304pp  · 99,836 words

up on the pavement behind the club. ——— Minor misadventures notwithstanding, the summer had ended well. I knew that I wanted to work for Goldman Sachs, but did Goldman Sachs want me? When you leave for the summer, there’s a protocol: the firm does not guarantee you anything. You have to wait a

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everybody pulled together and supported one another—and our clients. The overriding message was “Now is the time we differentiate ourselves. This is where Goldman Sachs becomes Goldman Sachs. Let’s be ultra-attentive to our clients; let’s help them get back on their feet, even if it doesn’t benefit us

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buying into the hype? And besides, Merrill Lynch, Salomon Smith Barney, and Credit Suisse were far more egregious about making conflicted recommendations. This is Goldman Sachs, I thought. We may have made some missteps, but we hold ourselves to a higher standard than the other guys. Prakash’s shop was one

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include products such as options, swaps, and futures. And you can get derivatives on all asset classes: equities, foreign exchange, commodities, fixed income. At Goldman Sachs, derivatives teams were divided by asset class. Corey’s Futures Execution desk was a subsector of the broader Derivatives Sales team. I took a deep

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trading floor, universally liked and respected. A Daffey story: Once Gary Cohn—then the global cohead of the Securities division, later the president of Goldman Sachs—walked onto the trading floor while Daffey was at his terminal, in conference with a genius strategist named Venky, a twenty-five-year-old who

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say, “I lift your offer,” which means he buys it from me for $55. And then there were the hand signals. Even though the Goldman Sachs trading floor had become completely computerized by the time I arrived, salespeople and traders there (and on Wall Street generally) instinctively still used hand signals

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. ——— Just before 4:10 P.M. on Thursday, August 14, 2003, a ferociously hot day in New York City, the overhead lights on the Goldman Sachs trading floor flickered. A moment later, they flickered again—the only evidence that a massive power blackout had taken down much of the northeastern United

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Wall Street. The recession was ending; the housing market was beginning to percolate. Moods around the financial markets were beginning to pick up. On the Goldman Sachs trading floor, Daffey’s boss, Matt Ricci, a former Yale basketball player and a very gung-ho partner, was leading the charge. Every Friday

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with a certain horror. To indulge in them would have been looked upon as severely reckless—and reckless people didn’t survive very long at Goldman Sachs. Disciplined people survived. Being caught using would have been grounds for immediate dismissal. Smoking: in the New York office, there was a smoking crew

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quick, sphinxlike smile. “That was a fun time this weekend,” he said. The king of understatement. ——— The year 2006 was a big one for Goldman Sachs. The markets kept booming, and Derivatives Sales continued to rack up revenues. Clients were confident: they were trading; they were taking risk. I was executing

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. Instead, it was chitchat of the “How ’bout those Yankees?” variety. In later years, when I heard Gary speak about leadership at Pine Street, Goldman Sachs’s leadership-development program, he would always emphasize the importance of walking the floors, letting your people know who you were. He also talked about

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saying that maybe Goldman had lost its luster and that the bigger banks, with bigger balance sheets, were going to eat us alive. How was Goldman Sachs achieving these astounding profits? Not through investment banking, not through the traditional methods of raising capital for companies, some of the articles pointed out,

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everyone.” There were more than a thousand people on the list. To sharpen the picture further: in a given year, depending on market conditions, Goldman Sachs could fire roughly that same number of employees—one to two thousand people. So being promoted to vice president is as much a tribute to

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lend it. Long-term, secure borrowing costs suddenly became very expensive for the remaining pure investment banks: Lehman Brothers, Merrill Lynch, Morgan Stanley, and Goldman Sachs. Investment banks did not have depositors or offer checking accounts to Mom and Pop; nor did they have access to very cheap financing through the

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we’re-all-big-boys world of investment banking, but dicey nonetheless. The risk was simply this: if Goldman Sachs went bankrupt, the client’s money might vaporize. And what were the chances of Goldman Sachs—Goldman Sachs—going bankrupt? Wasn’t going to happen. Bear Stearns had been foolish to tie up so much of

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Was it Wachovia? Washington Mutual? Citibank? Screw the mergers was what everyone on the trading floor was thinking. We will survive this thing. We are Goldman Sachs. Outsiders would probably have called us arrogant, but everyone felt that what made Goldman special would be lost if we merged. It had been a

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all weekend. This was huge. In a single weekend, the institution of the investment bank, as it had once been construed, had vanished forever. The Goldman Sachs of Sidney Weinberg, Gus Levy, and John Whitehead had vaporized—cleverly converted, through the eleventh-hour labors of desperate men (Lloyd Blankfein, Gary Cohn,

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institution that could borrow money from the government at zero interest and then invest it at government bond rates, in essence making free money. Goldman Sachs and Morgan Stanley were now effectively getting paid by the government just to stay in business. CHAPTER 7 Looking into the Abyss Out of the

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they made the big bucks, why they had been appointed leaders. Instead, Mr. Cleanse sat frozen at his terminal day after day, anxiously tracking Goldman Sachs’s stock price, which for the partners on the floor correlated significantly to their net worth. His passivity was particularly demoralizing to the junior analysts

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new world we live in, content is the way we will differentiate ourselves. Keep it up.” CHAPTER 8 The Four Clients Passover, April 2009. Goldman Sachs had come through the wilderness of the financial crisis a changed firm. From a simple structural perspective, we were now a bank holding company instead

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looking more and more like a hedge fund, the Wise Clients were important allies. They’d get looped in early about the various trades Goldman Sachs liked, so they could invest alongside the firm and use their muscle to propel the firm’s investing ideas into self-fulfilling prophecies. Goldman

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that Goldman’s sense of fiduciary responsibility was eroding. And every year, one or another of these clients probably shows up on the list of Goldman Sachs’s top twenty-five clients—these are clients ranked by fees generated, not assets under management or return on investment. There is something highly

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down very quickly. In mid-2009 before it was obvious that the markets were going to start recovering, a number of the smartest traders at Goldman Sachs started noticing an anomaly in the derivatives markets: derivatives prices were implying that for the next ten years straight, we were going to continue

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the context of pondering this type of question—of whether the firm saw its customers as “clients” or “counterparties”—that I attended the exclusive Goldman Sachs leadership program called Pine Street. Based on Jack Welch’s pioneering Crotonville Management Development Center at General Electric, Pine Street started during the Hank Paulson

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Street, thought leaders such as Bill George, the former CEO of Medtronic turned Harvard Business School professor, the author of Authentic Leadership, and a Goldman Sachs Board member, talked about how leaders are meant to behave. A scientist talked to us about the Stanford marshmallow experiment—the one where children were

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dispensed some great advice to our team: Eat Light, Feel Right. Slowly, I started to feel right. ——— David Viniar, the chief financial officer of Goldman Sachs, is an extraordinarily impressive guy—the guy who, every quarter, when Goldman releases its earnings, is the public face of the firm. Tall and thin

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performance under extraordinarily difficult circumstances. As the experts peppered Viniar with questions, he succeeded in making a two-pronged, essentially self-contradictory argument: that Goldman Sachs, which was owed billions of dollars related to credit-default swaps with AIG, had hedged itself to such a degree that we would have been

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were meant to suggest, in an abstract way, the history of finance capitalism. The sheer size of the mural certainly suggested the mighty wealth of Goldman Sachs. The building’s first seven stories were occupied by gigantic trading floors, each larger than a football field, and significantly bigger than the fiftieth

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others—castigated Wall Street in general, and Goldman Sachs in particular, for surviving and thriving on the backs of U.S. taxpayers, for using bailout money to make big bets, then using the winnings to award executives obscenely big bonuses. When I heard the term vampire squid, popularized by Matt Taibbi in Rolling

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who since early 2006 had been raking in huge sums by shorting the mortgage market. According to the SEC suit (which was lodged against both Goldman Sachs and Tourre), Paulson had personally selected the mortgage securities that went into the product, using a single criterion: which were most likely to fail.

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along. And they would get them soon. As I was flying to Asia, Lloyd Blankfein, David Viniar, and Fabrice Tourre, among other representatives of Goldman Sachs, were headed to Washington to appear before the Senate Permanent Subcommittee on Investigations to “vigorously contest [the SEC’s accusations] and defend the firm and

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I quietly kept watching. Finally, Lloyd came on. Viniar had looked somewhat shell-shocked under Levin’s verbal barrages; Lloyd struggled in a similar fashion. Goldman Sachs was not good at this: appearing in public, in the limelight, under interrogation, was not our strong suit. These were muscles we had never

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know exactly how things would go down. After handshakes and niceties all around, the head of the fund immediately brought up the SEC charges against Goldman Sachs. No bullshit on his part. The normally extremely dignified and guarded head of the multibillion dollar fund did not mince words. He looked at

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what Lloyd was saying and thinking in that regard. The senior client said, quite politely and mildly, that given the length of his relationship with Goldman Sachs, he was slightly surprised not to have heard directly from Lloyd. I cringed. Then, after parting handshakes, we left. I felt extremely deflated. I

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a lot better: the firm’s reputation had been damaged with some clients. A lot of clients were no longer comfortable taking counterparty risk with Goldman Sachs. They would be willing to trade only listed, transparent products that went through a clearinghouse. That way the clients’ money, and market exposure, would

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time with Michael Daffey. The audition would be strange. The weather outside was cold and rainy, but the action on the trading floor at the Goldman Sachs offices on Fleet Street was hot and heavy: intense, dramatic, in your face. The offices were housed in two adjacent buildings, Peterborough Court and

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West Street was massive; people were spread out as far as the eye could see. When they interacted, they usually observed the social niceties. Goldman Sachs’s London office had different sorts of niceties. The dress code, for example. Daffey and other partners in the London office loved tossing around the

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saw that the priorities there were so misaligned that there were major efficiencies to be created and much new business to find. At the time, Goldman Sachs in Europe was focused almost exclusively on structured products. Goldman would never have admitted this to clients, but internally they felt that salespeople should

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be done; frustrated because the clients themselves were frustrated. I was hearing the same message again and again from clients in Switzerland, France, Germany: “Goldman Sachs is not customer-friendly. In the good times, you’ll compete for the profitable business, but in the crisis, when we needed you, you weren

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shamelessness. Certainly, Hank Paulson and Lloyd Blankfein did their share of maneuvering in getting to where they were. They are tough, ambitious men, and Goldman Sachs is not a charitable foundation. But there was a time at Goldman, and on Wall Street in general, when if people crossed an ethical line

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session. Silverman said, “When we survey the clients, there is a clear pattern that emerges. They trust their individual sales reps at Goldman Sachs. But they don’t trust Goldman Sachs as an organization. We need to change this perception.” After the session, when almost everyone had left the room, I walked up

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but nobody did anything about it. The bonus culture was just too entrenched. The numbers themselves militated against change. There was a time in Goldman Sachs’s history when bonuses were very subjective. At the end of each year, your manager made an assessment based not just on how much business

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actively avoiding recruiting. This gave me a louder internal signal than anything else of just how much things had deteriorated. This was no longer the Goldman Sachs that, when I joined, young people were excited about. The images of Weinberg, Levy, and Whitehead had faded to invisibility. Goldman was still the

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that goes sour, and brings the county closer to bankruptcy? Who gets impacted when a government such as Greece or Italy trades derivatives with Goldman Sachs or JPMorgan to cover up its debt and kick its problems down the road? Who ultimately loses when Morgan Stanley misprices the Facebook IPO and

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Street ever lose? Even real casinos don’t make money every single day of the quarter. As proof of this information advantage: Why do Goldman Sachs and JPMorgan Chase mutual funds—housed in their respective asset-management divisions on the other side of the Chinese wall—underperform their peers, as measured

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by Morningstar? Why do some hotshot traders from banks such as Goldman Sachs, Morgan Stanley, and JPMorgan go out on their own, start their own hedge funds, and flounder? Because they no longer have the advantage of

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ultimate trigger pulling ability,” on which securities to invest in. A PM employs researchers to help inform his or her decisions. Pre-IPO partner: A Goldman Sachs partner from before the firm went public in 1999. Could be worth in the tens or hundreds of millions of dollars. One certainty: almost always

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policy against the default of a company or sovereign nation. About the Author GREG SMITH resigned in the spring of 2012 as the head of Goldman Sachs’s U.S. Equity Derivatives business in Europe, the Middle East, and Africa. Born and raised in Johannesburg, South Africa, Smith graduated from Stanford

Extreme Money: Masters of the Universe and the Cult of Risk

by Satyajit Das  · 14 Oct 2011  · 741pp  · 179,454 words

built or bought investment banks to compete. i-Banks, the new buzzword for investment banks, shamelessly derivative of Apple’s ‘i’ products—particularly Morgan Stanley, Goldman Sachs, and Merrill Lynch (collectively dubbed MGM)—changed their business models to match the universal banks. At an internal conference in the early 1990s, John Thornton

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, a Goldman Sachs managing director, outlined a business model. Eschewing the traditional PowerPoint presentation, Thornton used a felt pen to draw dots on a white board. “These are

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afternoons. One New York trader referred to them as Monty Python’s Flying Investment Bankers.3 The feeling was mutual. One English merchant banker described Goldman Sachs as: “nothing more than high-priced interlopers who produce a massive stream of impractical ideas that have no relevance.” The banker gave the Americans credit

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) and the company (for marketing value) is important. It helps to come up with the big idea. In 2001, Jim O’Neill, an analyst with Goldman Sachs, came up with the BRIC (Brazil, Russia, India, and China) economies. CRIB was rejected as infantile. It was marketing genius. The now ubiquitous acronym

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advertised in The Wall Street Journal: “you can find the Black-Scholes value using our...calculator.”12 Black went on to a long career at Goldman Sachs. Scholes moved to Salomon Brothers and Long Term Capital Management (LTCM), where Merton joined him. As the Nobel prize in Economics is not awarded

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but are not predictable—just as the existence of black swans was only discovered in Australia in the eighteenth century. In August 2007, David Viniar, Goldman Sachs’ CFO, commented that: “We were seeing things that were 25-standard-deviation moves, several days in a row.” In October 2008, the Dow Jones Industrial

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buying them. Milken’s Mobsters But there just wasn’t enough Chinese paper to match investor demand—there were far too few fallen angels. When Goldman Sachs and Lehman Brothers issued the first junk bonds in 1977, Milken and Drexel seized the opportunity, starting with a $30 million issue for Texas International

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into a monstrous drag race belching smoke and fire.”29 Harvard-trained Fred Joseph, Drexel president and CEO, wanted to build the firm to rival Goldman Sachs, then, as now, the benchmark for excellence. Lacking clients within the Fortune 500, Drexel’s investment banking franchise was built on the comers where expertise

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heavily against them to increase returns. Ralphie’s Funds controlled more than $15 billion of assets, funded by $14 billion of borrowings from Merrill Lynch, Goldman Sachs, Bank of America, and JP Morgan. The fees (2 percent of assets under management and 20 percent of profits) accounted for three-quarters of Bear

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Countrywide, New Century, and Ameriquest, home builders and banks. But the main game was shorting the MBS referenced to the loans. Investment banks, such as Goldman Sachs and Deutsche Bank, and hedge funds structured CDOs to benefit from the expected decline in house prices. They bought insurance against losses on loans that

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paying off the mortgages—$29 million). Counting on the Abacus In April 2010, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Goldman Sachs, dismissed by Kenneth Griffin, the founder of hedge fund Citadel, as “childish.”7 The lawsuit concerned an April 2007 CDO—Abacus 2007 AC1 (see Figure

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With ACA in financial difficulties, RBS, who purchased ABN-Amro, lost $841 million on the super senior CDS. There were parallels to 1929 and the Goldman Sachs Trading Corporation, a listed investment trust. After the crash, at a 1932 U.S. Senate hearing, there were questions about the transaction:8 In 2010

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role and economic interests, which were adverse to CDO investors, were incomplete. The settlement avoided the real issue—the conflicts of interest within investment banks. Goldman Sachs feared that the separation of client business and trading with its own capital limited its ability to compete. Under CEO Lloyd Blankfein, the son of

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taking, armed with analysis from a consulting firm that Citi’s risk taking lagged competitors. Chairman of the executive committee, Robert Rubin, former head of Goldman Sachs and secretary of the Treasury under President Clinton, was at the center of this push, arguing that “the only undervalued asset is risk.”15 Citi

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a simple currency swap. Figure 13.3. Off-market currency swap In 2008, Greece was found to have entered into a series of transactions with Goldman Sachs to disguise its debt. Earlier, academic Gustavo Piga identified an unnamed European country, generally assumed to be Italy, using derivatives to provide similar window dressing

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money by helping clients hedge or take on more risk using derivatives. Clients also paid dealers handsomely for structures that took advantage of regulatory loopholes. Goldman Sachs allegedly made around $300 million from the Greek job. Madman’s Games Much of the financial innovation was designed to conceal risk or leverage, obfuscate

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still showed that there was a 99.85 percent chance that there would be no actual losses. As MtM losses climbed, collateral calls flowed in. Goldman Sachs, who insured more than $20 billion of risk with AIG, demanded $1.5 billion in August 2007, and a further $3 billion in October.

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demanded by dealers, PwC, AIG auditors, identified serious problems in risk management. Former New York Federal Reserve president Gerald Corrigan, now a managing director at Goldman Sachs, had warned in 2007: “Anyone who thinks they understand this stuff is living in lala land.”28 Lehman Brothers, whose operating principle was demonstrating smart

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children’s cartoon. Tom Wolfe used the term to satirize his bond trader protagonist in Bonfire of the Vanities. In 2009, Lloyd Blankfein, CEO of Goldman Sachs, unconsciously borrowed from Wolfe to justify bumper profits: “performance is the ultimate narrative.”3 By the new millennium, Wolfe admitted that hedge fund managers had

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and remained on its partnership board until 2007. Gupta faced civil insider trading charges for allegedly sharing secret information acquired as a board member of Goldman Sachs and Procter & Gamble. Robert Khuzami, director of enforcement at the Securities and Exchange Commission, described Rajaratnam as “a master of the Rolodex” rather than “a

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September 18, 1998 Bear Stearns was rumored to have frozen the fund’s cash account, following a large margin call. On September 23, 1998 AIG, Goldman Sachs, and Warren Buffet made an unsuccessful offer to buy out LTCM’s partners and inject $4 billion into the fund. Facing the specter of a

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following analysis: “We did not expect that the market would move so aggressively against our positions.”40 Sophisticated fund-of-funds and investors such as Goldman Sachs, Morgan Stanley, Credit Suisse, Bank of New York, Deutsche Bank and Man Group, failed to pick up any problems at Amaranth. In a speculative environment

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The funds that profited from the collapse were generally smaller funds, outside the mainstream. Before the crisis, when asked about John Paulson, a banker at Goldman Sachs told a potential investor that he was “a third rate hedge fund guy who didn’t know what he was talking about.”18 One person

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through the tightly linked system. The linkages were exacerbated because major players had near-identical business models and risk management practices. Everybody wanted to be Goldman Sachs, JP Morgan or Deutsche Bank, concentrating on the latest fashionable products, equity derivatives, structured credit or prime brokerage. In 1994 Charles Bowsher, comptroller general of

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, a country of 330,000, became a global banking player—“Wall Street on the tundra.”34 Icelandic bank Kaupthing (meaning “marketplace”) aspired to be the Goldman Sachs of the Arctic. Icelandic firms owned Eastern Europe’s telecommunication firms, well-known UK high street retailers such as House of Fraser, Arcadia and Hamleys

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were losses. The International Institute of Finance (IIF) proposed a return to using historical prices to facilitate stable valuations in order to increase market confidence. Goldman Sachs dismissed it as “Alice in Wonderland accounting.” Resisting calls for changes in accounting standards, one accountant argued that: “It’s the market that needs to

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56 Senior management frequently did not seem to have a good grasp of what was going on in their own firm. John Thain, a former Goldman Sachs executive and head of the New York Stock Exchange, replaced Stan O’Neal at Merrill Lynch. Asked about Merrill’s need for capital, on January

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error is in question. Differential equations, positive definite matrices or the desirable statistical properties of an estimator rarely determine the price of traded financial instruments. Goldman Sachs’ Emanuel Derman, a trained physicist, identified the difference: “In physics, a model is correct if it predicts the future trajectories of planets or the existence

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(who owned them) allowed investment banks to trade on their own account and take greater risks. Much More Than This Learning about former CEO of Goldman Sachs and U.S. Treasury secretary Hank Paulson’s bucolic lifestyle, playwright David Hare mused: “Why does anyone need $500 million, or whatever he got from

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every last entitlement. They worked just past the hour entitling them to free meals and a car-service ride home. Travel expenses were routinely misstated. Goldman Sachs offered a generous health benefits package, including coverage of sex reassignment surgery.43 If you liked to go hunting or shooting then you just invited

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masters of mankind.”47 21. Financial Nihilism When bankers say that it’s not about the money, it may even be true. Ron Beller, a Goldman Sachs partner, was one of a group of bankers who had more than £4 million stolen from them by Joyti De-Laurey, their secretary. The bankers

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the reasoning power up and down the line.16 He did not acknowledge any failure or complicity of the agencies in creating the bubble. When Goldman Sachs was indicted for alleged violations in structuring and selling CDOs, Buffett, a major investor in Goldman, defended the firm, its actions and its CEO.

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...my son and I have for some time been purchasing sound common stocks.” Actor Eddie Cantor, who lost a substantial sum in the collapse of Goldman Sachs Trading Corporation, replied: “Sure, who else had any money left?” Cantor created a skit where a stooge walks out on stage violently squeezing a

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lemon. Cantor asks: “Who are you?” The stooge replies: “I’m the margin clerk for Goldman Sachs.”4 Heading for the exit at the same time, traders learned that everybody owned the same securities, all financed with borrowed money. Liquidity evaporated. Nobody

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one of its hedge funds. On 7, August 2007, on the brink of collapse due to investments in mortgage-backed securities including the ill-fated Goldman Sachs CDO Abacus, German lender IKB Deutsche Industriebank was rescued. On August 9, 2007 BNP Paribas, a French bank, suspended redemptions on some of its investment

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needed: “If you’ve got a bazooka, and people know you’ve got it, you may not have to take it out.”10 The former Goldman Sachs CEO was unable to move beyond banking’s deal culture. Bungled initiatives followed half-baked ideas. Finally, the U.S. government was forced to take

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. Belief in myth allows the comfort of opinion without the discomfort of thought.”45 In 2009, Lloyd Blankfein, chairman of Goldman Sachs, described by Matt Taibbi of Rolling Stone as a “great vampire squid wrapped around the face of humanity,”46 told the UK’s Sunday Times that he was “doing God’s work

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’s work just before the crisis, remained unapologetic about the firm’s behavior. In a piece of historical revisionism that Joseph Stalin would have admired, Goldman Sachs claimed that it never needed government assistance and would have survived the crisis without it.47 As old communists knew, it is difficult to know

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merely sharing in the profits that they generate. They complain that they are poor cousins to the hedge fund managers. The 36,000 employees at Goldman Sachs, the most lucrative of investment banks, took home just more than $8 billion in 2010, less than twice John Paulson’s earnings

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Fool and His Money, Orion Books, London: 157, 158. 2. Tom Wolfe (1988) The Bonfire of the Vanities, Picador, London: 64. 3. Tony Tassell “The Goldman Sachs narrative” (8 February 2010) Financial Times. 4. Quoted in Robert Slater (2009) Soros: The World’s Most Influential Investor, McGraw Hill, New Jersey: 178. 5

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Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism, Palgrave Macmillan, New York: 169. 38. Quoted in Duff McDonald “Please, Sir, I want some more: how Goldman Sachs is carving up its $11 billion money pie” (5 December 2005) New York Magazine. 39. Owen Gleiberman “Cannes: in the dark documentaries “Inside Job” and

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“Buffett says “wildly capricious” economy inspires his charity” (16 June 2010) Bloomberg News. 41. Ho, Liquidated: 260. 42. Ibid: 270. 43. Althea Chang “Unusual perks: Goldman Sachs covers sex changes” (8 February 2008) (http://money.cnn.com/2008/02/08/news/companies/gender.fortune/index.htm). 44. Michael Lewis (2010) The Big

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“Totally wired” (2005) The Guardian Unlimited (http://blogs.guardian.co.uk/theguide/archives/tv_and_radio/2005/01/totally_wired.html). 42. Johann Hari “How Goldman Sachs gambled on starving the poor—and won” (2 July 2010) The Independent. 43. Jayati Ghosh “The unnatural coupling: food and global finance” (2009), The Ideas

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. 46. Matt Taibbi “The Great American bubble machine” (5 April 2010) Rolling Stone. 47. John Gapper “Master of risk who did God’s work for Goldman Sachs but won it little love” (23 December 2009) Financial Times. 48. John Maynard Keynes (1933) The Means to Prosperity, Macmillan, London: 37 (www.gutenberg.

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Failed: How Blind Faith in Markets Has Cost U.S. Our Future, The Bodley Head, London. Charles D. Ellis (2009) The Partnership: The Making of Goldman Sachs, Penguin Books, London. Adam Ferguson (2010) When Money Dies: The Nightmare of the Weimar Hyper-Inflation, Old Street Publishing, London. Niall Ferguson (1998) The House

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reserves, 30 Sons of Gwalia (SoG), 216 standard, 29-31 golden ring, 314 golden years, 46. See also retirement Goldfinger, 26 Goldilocks Economy, 296, 348 Goldman Sachs, 76, 81, 122, 191, 195, 289 David Viniar, 126 indictment of, 325 Jim O’Neill, 90 Milken’s mobsters, 146 Ron Beller, 321 SEC suit

The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History

by David Enrich  · 21 Mar 2017  · 513pp  · 141,153 words

, more precisely, its investors’ and customers’) own money. Another factor was that, over the past couple of decades, many old Wall Street partnerships—firms like Goldman Sachs, Bear Stearns, Lehman Brothers, and Morgan Stanley, which had been owned by a small group of their uppermost, longest-serving employees—had converted into publicly

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when he returned to Nottingham in the fall, he started applying for trading jobs at other banks: the Royal Bank of Scotland, J.P. Morgan, Goldman Sachs, and Deutsche Bank. He landed interviews everywhere other than at Goldman. When the Scottish bank offered him an entry-level position as part of the

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no appeal for me. Nor infamy.” Chapter 8 A Yacht in Monaco Once again, rivals were taking notice of Tom Hayes. One of them was Goldman Sachs, the investment bank that epitomized Wall Street success. Its roots traced back to 1869, when it was founded in a one-room office in lower

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countries, of providing conflicted, self-serving advice, of distorting public markets for its own profits. “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,” Rolling Stone journalist Matt Taibbi would write of

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Goldman in 2010. The Vampire Squid moniker stuck. Still, if you were in finance, Goldman exerted a gravitational pull like few other bodies. One day in spring 2008, Hayes got a

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myself,” he confided to Read. “I don’t enjoy myself.” “Which is why I thought you would take the megabucks for a couple years at Goldman Sachs and then do whatever pleased you,” Read said. “The pressure at Goldman would have been even worse,” Hayes sighed. “That’s one reason I turned

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the next few weeks, some of America’s biggest banks would be subsumed by stronger rivals. Giants like Citigroup, Bank of America, even the great Goldman Sachs teetered on the brink. Overseas, the carnage was similar. Hayes’s former employer the Royal Bank of Scotland needed a huge bailout from the British

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marking the places where long-dead newspapers like the People’s Journal once resided. The magnificent art deco headquarters of the Express now served as Goldman Sachs’s European headquarters, its gilded lobby off-limits to all but a few of the investment bank’s lucky visitors. A stone’s throw away

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, thanks to the violent financial turbulence, had suddenly become a full-time occupation. But Fisher was preoccupied with an unrelated problem. He had read a Goldman Sachs research note earlier that day about Libor. Fisher was no expert on the benchmark, but he knew its definition: It was the rate at which

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, it got him thinking: How widespread was the confusion? Libor was an integral part of the world’s financial plumbing, so how could the great Goldman Sachs misunderstand what the rate was supposed to be measuring? Fisher tried to find the definition of Libor on the BBA’s website. When he finally

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pounds—which he did, quickly, a sign of the almost reckless intensity and commitment that would mark his career to come. After graduating, he joined Goldman Sachs at age twenty-one and shot up through the ranks. At thirty, he became the firm’s youngest-ever partner. A Goldman partnership was one

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’re doing” was a common Gensler refrain if he took issue with an employee’s work. His no-holds-barred approach might work on a Goldman Sachs trading floor, but it was jarring inside a staid government agency staffed by not-very-well-paid civil servants. He sowed discord with some of

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Management, at the time the world’s largest hedge fund, unraveled in the space of six late-summer weeks partly because Wall Street banks like Goldman Sachs had gleaned valuable information about what assets it was holding. (Hayes was familiar with this tale, having read When Genius Failed, the definitive account of

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family’s assets. A court eventually ordered Hayes to pay £878,806 (roughly $1.3 million). The Old Rectory went back on the market; a Goldman Sachs banker snapped it up on the cheap. For months, Hayes, Tighe, and their families clung to the hope of a successful appeal of his conviction

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–66 Libor trial, 452–53, 455–56, 458–59 SFO criminal charges, 390–91, 401 Gilmour, Lisa, 118 Glass-Steagall Act, 19 gold standard, 32 Goldman Sachs, 21, 157–58 culture of, 158–59 Gensler at, 247 Hayes job offers, 157–59, 212 Libor report, 207–8 Golestan Palace, 25 Goodman, Colin

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, 13–14, 59, 409 “gardening leave” of, 241, 265, 289 hiring of lawyer, 347–49 job offers, 55, 57, 58, 60–61, 212–13, 305 Goldman Sachs, 157–59, 212 job search after UBS, 320–22 Journal stories, 198 Justice extradition, 348, 367, 371–72, 374, 395, 397, 404 Justice investigation, 324

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of London, 447 University of Minnesota, 249–50 University of Nottingham, 14, 16, 21, 22, 335 University of Pennsylvania, 246–47 University of Southampton, 448 Vampire Squid, 157–58 Venice Beach, 209 Vogels, Frits, xi, 168, 335 Wall Street Journal, 6, 188–91 “Libor Fog: Bankers Cast Doubt on Key Rate Amid

SUPERHUBS: How the Financial Elite and Their Networks Rule Our World

by Sandra Navidi  · 24 Jan 2017  · 831pp  · 98,409 words

sweeping enthusiasm in everything he does. He grew up in a working-class family on Long Island and, after graduating from Harvard Law School, joined Goldman Sachs—the source of many financial superhubs—before starting his own investment management firm. Several years ago, he finally landed a coveted invitation to the WEF

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, was his thesis adviser. While at Harvard, his path crossed with many who would later become key figures in the crisis: Lloyd Blankfein, CEO of Goldman Sachs; Kenneth Rogoff of Harvard University; and Paul Krugman, Nobel laureate and Princeton professor. Both Bernanke and Larry Summers earned degrees at MIT. Bernanke went on

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Street capitalized on an unfair advantage. Particular attention was paid to the Fed’s 2008 hiring of four private asset management companies—PIMCO, Black-Rock, Goldman Sachs, and Wellington—to help implement its quantitative easing program. Lacking the necessary expertise and infrastructure to implement the enormous program itself, the Fed had to

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is particularly important in the top ranks of finance, but sometimes the equation does not quite add up. At the height of the financial crisis, Goldman Sachs’s clients worried that bank contagion could spread to the firm and render it insolvent. As a precaution they began to withdraw money in droves

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of Wall Street. Attendees include George Soros, Ray Dalio, Larry Fink, Ken Griffin of Citadel, Howard Lutnick of Cantor Fitzgerald, Jamie Dimon, Lloyd Blankfein of Goldman Sachs, Steve Schwarzman, and Henry Kravis of the private equity firm Kohlberg Kravis Roberts & Co. (KKR). They all lend their support; for example, in 2009 George

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’ network is Goldman Sachs. It is the most exclusive of all exclusive clubs and artfully illustrates how the power-laws of network science correlate with actual network power. Due to the fact that Goldman always seems to make money regardless of the circumstances, it has been vilified as the “great vampire squid wrapped around

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employees, and partners leave the firm to take public office. In the time leading up to the financial crisis, Robert Rubin, previously co-CEO of Goldman Sachs, served as secretary of the U.S. treasury under President Bill Clinton. During the crisis, Hank Paulson, then CEO of

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Goldman Sachs, became the next U.S. treasury secretary. The president of the European Central Bank, Mario Draghi, was once vice chairman and managing director of Goldman Sachs International. Mario Monti, prime minister of Italy from 2011 to 2013, worked as

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an adviser for Goldman Sachs. Robert Zoellick went from being Goldman Sachs’s head of international affairs to president of the World Bank. From there he returned

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German reunification. Speaking of Germany, its government was heavily criticized for providing too much top-level government access to Goldman Sachs, which the political opposition labeled the “bonus program for investment bankers.” Prior Goldman Sachs employees have also obtained high-level government positions throughout the world. Numerous other influential and famous Goldmanites include John

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Thain (former chairman and CEO of CIT Group, former president and co-CEO of Goldman Sachs), Jon Corzine (CEO of MF Global, former U

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.S. senator of New Jersey, former CEO of Goldman Sachs), Duncan Niederauer (former CEO of NYSE Group, former partner at Goldman Sachs Group), Joshua Bolten (White House chief of staff to U.S. President

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George W. Bush, former executive director for legal and government affairs at Goldman Sachs), and countless more. That’s Rich: Superhubs and Super-Riches One thing that nearly all top financial executives have in common is great wealth, which

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of JPMorgan Chase, in 2013 and 2014 respectively made $20 million and in 2015 $37 million. Lloyd Blankfein (net worth $1.1 billion), CEO of Goldman Sachs, in 2013 received a total compensation of $23 million, in 2014 $24 million, and in 2015 $23 million. And Michael Corbat, Citigroup CEO, in 2013

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sweeping views of Manhattan. One-bedroom apartments are available to accommodate the residents’ staff. The building has counted former Citigroup CEO Sandy Weill, CEO of Goldman Sachs Lloyd Blankfein, and hedge fund billionaire Daniel Loeb amongst its residents. Townhouses on the Upper East Side of Manhattan are also popular with the billionaire

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; finance ministers George Osborne, Jeroen Dijsselbloem, Hank Paulson, Tim Geithner, Larry Summers, and Robert Rubin; bank executives such as Lloyd Blankfein and Robert Zoellick of Goldman Sachs, Paul Achleitner of Deutsche Bank, and Ana Botín of Banco Santander; and big investors such as Philipp Hildebrand of BlackRock, Peter Thiel of Thiel Capital

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with Bild will also take the elevator down with it.”6 The same applies to U.S. tabloids. No sooner had Lloyd Blankfein, CEO of Goldman Sachs, admonished his troops to avoid undue displays of wealth than the New York Post—a tabloid that everyone disses yet devours—ran a story about

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jobs, and after being let go from Bank of America she purchased the women’s network 85 Broads, which had been founded by a female Goldman Sachs partner as a platform for female senior executives. In 2014, Krawcheck gave it the clever moniker Ellevate and launched the Pax Ellevate Global Women’s

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the “victim” image, which undermines power, promotes a perception of weakness, and makes it virtually impossible to obtain high-level leadership positions.34 Most recently, Goldman Sachs has been in the news with a suit that alleges a pattern of discrimination against female associates. It accuses the bank of a macho culture

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before heading President Obama’s National Economic Council and thereafter returned to Wall Street in various advisory roles; and Hank Paulson was co-CEO of Goldman Sachs before becoming U.S. treasury secretary under the George W. Bush administration. Peter Orszag, Bill Clinton’s economic adviser and director of the Congressional Budget

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Megahub: Robert Rubin Any account of revolving doors would be incomplete without the mention of Robert Rubin. But where to start? With his positions at Goldman Sachs? With him becoming treasury secretary in the Clinton administration? Or how about his subsequent role as board director and senior adviser at Citigroup during the

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he had his first brush with arbitrage traders, who contacted him to elicit information on deals. After a couple of years, he moved on to Goldman Sachs, where he started out as a risk arbitrage trader. Arbitrageurs exploit price differences in the markets by legally obtaining information, typically through close relationships with

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implementing economic policies, his influence was substantial because Clinton was not an economics expert and relied heavily on his advice. Two years later, the former Goldman Sachs luminary became the seventieth secretary of the treasury. He is widely credited with “Rubinomics,” a policy that achieved a balanced budget by way of tax

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Uncertain World: Tough Choices from Wall Street to Washington. Second, Rubin has been excellent at building relationships. He placed himself at central network intersections like Goldman Sachs, the White House, and the Harvard Corporation, among many others. In an interview, he said that one reason for returning to Citibank was to be

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as a hub. At the Council of Foreign Relations, he sits atop many different converging networks in terms of industries, geographies, and mission. While at Goldman Sachs, he gave a number of younger employees seed money when they left the firm to start their own funds. Today, some of these managers preside

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aloof and somewhat dry, he is actually the embodiment of a master networker. Prior to serving as secretary of the treasury, he was CEO of Goldman Sachs and forged relationships with leaders all over the world, particularly with the Chinese elite. His connections in China were said to have been better than

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eggshells, careful not to trigger any of his infamous outbursts. Fond of military lingo, Fuld liked exaggeratedly brutal formulations. He once told John Thain of Goldman Sachs, whom he suspected of spreading rumors about Lehman, that when he discovered the culprit, he would reach down his throat and tear out his heart

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to $85 billion to AIG in return for a 79.9 percent equity interest. In total, the AIG subsidies amounted to $182 billion, of which Goldman Sachs as an AIG counterparty received $12.9 billion. Following Lehman’s collapse, Fuld stayed out of the public eye. He spent most of his time

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, for which he received $5.5 million in 2008 made headlines. He was also a board director at Taconic Capital, a hedge fund founded by Goldman Sachs alumni. In addition, he received $2.7 million for speaking engagements in 2008, including $135,000 for a single speech at

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Goldman Sachs. Despite this criticism, Summers lobbied hard behind the scenes for the prestigious and powerful position of Fed chair. Renowned New York Times columnist Maureen Dowd

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extremely high value of personal, trusted connections. Any of those parties could just as easily have gone to any of the premier investment banks like Goldman Sachs. But they chose an individual they knew and trusted, one who was respected and had standing in the international banking community. Klein is a perfect

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impending AIG failure, an executive of a private bank told me in confidence that the C-suite had given orders to halt all trading with Goldman Sachs and that their decision had led executives at other institutions to do the same. Similarly, in the case of Lehman, financial executives made the decision

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, April 30, 2012, http://dealbook.nytimes.com/2012/04/30/how-elite-colleges-still-feed-wall-streets-recruiting-machine/. 17. Matt Taibbi, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America (New York: Random House, 2010), 208. 18. Sherwin Rosen, “The Economics of Superstars,” The American Economic Review

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/germany/when-tabloids-turn-powerful-media-ally-abandons-german-president-a-806982.xhtml. 7. “Goldman Sachs Wives Hate to Wait,” Page Six, August 5, 2009, http://pagesix.com/2009/08/05/goldman-sachs-wives-hate-to-wait. 8. Matt Phillips, “Goldman Sachs’ Blankfein on Banking: ‘Doing God’s Work,’” Wall Street Journal, November 9, 2009, http

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://blogs.wsj.com/marketbeat/2009/11/09/goldman-sachs-blankfein-on-banking-doing-gods-work. 9. Matthew Holehouse, “Bob Diamond’s Daughter Attacks George Osborne,” The Telegraph, July 3, 2012,http://www.telegraph.co.

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. 19. Nomi Prins, All the Presidents’ Bankers: The Hidden Alliances That Drive American Power (New York: Nation Books, 2014), 413, Kindle edition. 20. Martin Reyher, “Goldman Sachs, JP Morgan, Josef Ackermann: Mit diesen Lob-byisten traf sich die Bundesregierung,” Abgeordnetenwatch, February 21, 2013, https://www.abgeordnetenwatch.de/2013/02/21

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/goldman-sachs-jp-morgan-josef-ackermann-mit-diesen-lobbyisten-traf-sich-die-bundesregierung. 21. Lawrence Lessig, Republic, Lost: How Money Corrupts Congress—and a Plan to Stop

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citizenship,” 63, 95 Global corporations, 178–179 Global Risk Report, 212 Globalization, xxvi, 8, 95, 97, 211, 213, 220 Goethe, 76 Goethe University Frankfurt, 142 Goldman Sachs, 23, 36, 44, 52, 76, 84, 88, 91, 121, 136, 151, 156, 165–166, 168, 184, 189, 217 Goodbye Gordon Gekko, 24 Google, 40, 114

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, 168 at Bildersberg conference, 121 capital network of, 170 at Citigroup, 167 Council on Foreign Relations participation by, 105, 168, 170 education of, 166 at Goldman Sachs, 170 Hamilton Project, 169 Larry Summers and, 168, 186, 189 on National Economic Council, 166 personality of, 169, 186 power of, 166 in private sector

Too big to fail: the inside story of how Wall Street and Washington fought to save the financial system from crisis--and themselves

by Andrew Ross Sorkin  · 15 Oct 2009  · 351pp  · 102,379 words

Partners Roger C. Altman, founder and chairman Fannie Mae Daniel H. Mudd, president and chief executive officer Freddie Mac Richard F. Syron, chief executive officer Goldman Sachs Lloyd C. Blankfein, chairman and chief executive officer Gary D. Cohn, co-president and co-chief operating officer Christopher A. Cole, chairman, investment banking

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again. “And for AIG filing.” Another pause. “And for Morgan Stanley filing.” And after a final, even longer pause he added: “And potentially for Goldman Sachs filing.” There was a collective gasp on the phone. As Dimon had presciently warned in his conference call, the following days would bring a near

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any suggestion that he would favor his former employer, he voluntarily signed an extensive six-page “ethics” agreement that barred him from involving himself with Goldman Sachs for his entire tenure. His declaration went far beyond the regular one-year time period required for government employees. “As a prudential matter, I

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phone, which he did somewhat famously, leaving interminable messages at all hours of the day. Only four years later, in September of 1994, however, Goldman Sachs was in turmoil. An unexpected spike in interest rates around the world had hit the firm hard, sending profits tumbling more than 60 percent during

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plan that allowed them to take failing banks safely into receivership and auction them off. But the FDIC had no authority over investment banks like Goldman Sachs, Morgan Stanley, Merrill Lynch, Bear Stearns, and Lehman Brothers, and unless Paulson was given comparable power over these institutions, he said during the meeting,

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stammering even at routine Treasury meetings. The two men had known each other since 1976, when Steel went to work at the Chicago office of Goldman Sachs after graduating from Duke University. Like Paulson, Steel came from a modest background, growing up near the campus of Duke University. His father serviced

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the class and wrote the solution to the supply problem on the blackboard. Dimon was right, the professor sheepishly acknowledged. After a summer working at Goldman Sachs, Dimon sought career advice from the portly, cigar-chomping, serial deal maker named Sandy Weill. Jamie’s family had become close to the Weills

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. “Absolutely,” Dimon replied. “Can I have a summer job?” Weill was happy to oblige. After graduating from Harvard Business School, Dimon received offers from Goldman Sachs, Morgan Stanley, and Lehman Brothers. Weill invited Dimon to his Upper East Side apartment and made his own offer: a position as his assistant at

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false information about Lehman’s health. Fuld had been told by several people that the “whisper campaign” against the firm was emanating from one place: Goldman Sachs. It made Fuld sick. His son, Richie, worked at Goldman as a telecommunications banker. He decided the time had come to call Lloyd Blankfein

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obviously there’s some room here.” After Bear Stearns’ near-death experience, the Fed had decided to open the discount window to brokerage firms like Goldman Sachs, Morgan Stanley, Merrill Lynch, and Lehman. “Yes,” Geithner acknowledged, but said that it would require the approval of the entire Fed board and,

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it away. At Treasury, Dan Jester, Paulson’s special assistant, had just returned to his office when his assistant announced something surprising: David Viniar, Goldman Sachs’ chief financial officer, was on the telephone. Any call from Goldman would mean an awkward conversation for Jester, given that he used to work there

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with the firm. As they were making yet another pass through the earnings call script, Kirk’s cell phone rang. It was Harvey Schwartz from Goldman Sachs, phoning about the confidentiality agreement that Kirk was preparing. Before Schwartz began to discuss that matter, however, he said that he had something important

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to tell Kirk: “For the avoidance of doubt, Goldman Sachs does not have a client. We are doing this as principal.” For a moment Kirk paused, gradually processing what Schwartz had just said. “Really?”

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difficult time keeping track of everyone in the growing crowd and, as the weekend wore on, whom they actually represented. When Christopher A. Cole from Goldman Sachs appeared with a small army of bankers, John Studzinski, AIG’s banker from Blackstone, became alarmed. Goldman? Who invited them? “Who are you working

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by everyone else in the room. Was Goldman actually there for itself? “We’re here,” Cole started speaking again, “working with Allianz, Axa, and Goldman Sachs Capital Partners.” It was all so confusing and conflicted. Skeptical about the answers he was getting, and perhaps a bit paranoid, Studzinski raced up to

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under 10 percent. It was nearly the same arrangement that Thain had originally been seeking from Lewis. They agreed to meet the following morning at Goldman Sachs’ offices. The instructions were specific: Don’t use the main entrance of the New York Federal Reserve on Liberty Street; use instead the employee

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of investors’ money locked up inside the now-bankrupt Lehman Brothers, that means only one thing: the two remaining broker-dealers—Morgan Stanley and Goldman Sachs—could actually be next. The panic was already palpable in John Mack’s office at Morgan Stanley’s Times Square headquarters. Sitting on his sofa

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Hoyt’s recommendation. “I have determined that the magnitude of the government’s interest in your participation in matters that might affect or involve Goldman Sachs clearly outweighs the concern that your participation may cause a reasonable person to question the integrity of the government’s programs and operations,” Knight wrote

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security of the United States and international financial systems. You currently have an interest in a defined benefit pension plan through your former employers, the Goldman Sachs Group, Inc. Your total investment in this plan represents only a small fraction of your overall investment portfolio. For this reason, your financial interest

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precisely that expectation. Thirty people each from Morgan Stanley and Wachovia showed up at Wachtell Lipton’s Fifty-second Street offices. Wachovia, purposely not using Goldman Sachs as an adviser for this project given its rivalry with Morgan Stanley, brought a new set of advisers from Perella Weinberg Partners: Joe Perella,

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Morgan Stanley and Citigroup. Morgan Stanley and JP Morgan Chase. Morgan Stanley and Mitsubishi. Morgan Stanley and CIC. Morgan Stanley and Outside Investor. Goldman Sachs and Citigroup. Goldman Sachs and Wachovia. Goldman Sachs and Outside Investor. Fortress Goldman. Fortress Morgan Stanley. It was the ultimate Wall Street chessboard. Lloyd Blankfein arrived at his office at just

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reached him. “We think you should connect with Lloyd!” Steel, reading between the lines, was stunned: The government was trying to orchestrate a merger between Goldman Sachs and Wachovia! On its face, he knew that it could be a politically explosive deal, considering the two firms’ connections to Treasury. Paulson, he

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the financial crisis, beginning with a plan to raise capital. One of Immelt’s primary concerns, however, was what would happen if its adviser, Goldman Sachs, went out of business. General Electric was more about manufacturing than financial engineering, but roughly half of its profits in recent years had come from

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quality, surely too low for JP Morgan to lend against. “This stuff is crap,” Hogan told Steve Black, JP Morgan’s president. By midday, Goldman Sachs and Wachovia, which was represented by a half dozen executives whom Bob Steel had brought along, were making rapid progress toward completing a deal. Peter

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said wistfully. Warren Buffett was at his home in Omaha on Sunday when he received a phone call from Byron Trott, a vice chairman at Goldman Sachs. Buffett, who disliked most Wall Street bankers, adored Trott, a mild-mannered Midwesterner based in Chicago. Paulson had introduced the men years earlier,

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and “a blunt acknowledgment that their model of finance and investing had become too risky.” CHAPTER NINETEEN On Monday, September 22, the day after Goldman Sachs became a bank holding company, Lloyd Blankfein, his face puffy with exhaustion, sat staring at a framed cartoon from Gary Larson’s The Far Side

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Ruth Porat of Morgan Stanley, Merrill Lynch’s Peter Kraus, and Ned Kelly of Citigroup, among others. They intentionally did not call anyone from Goldman Sachs, concerned that the conspiracy theory rumor mill was already in overdrive. Norton and Nason asked them all the same questions: How would you design the

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, putting him in charge of the TARP plan. The appointment was already generating a firestorm, with accusations that Paulson was once again favoring his former Goldman Sachs employees. (At Goldman, meanwhile, none of the senior management seemed to know who Kashkari was, and some of them asked their assistants that morning

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said in closing. Geithner now read off the amount that each bank would receive, in alphabetical order. Bank of America: $25 billion; Citigroup: $25 billion; Goldman Sachs: $10 billion; JP Morgan: $25 billion; Morgan Stanley: $10 billion; State Street: $10 billion; Wells Fargo: $25 billion. “So where do I sign?” Dimon

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money was used. More than a quarter of the bailout funds left AIG immediately and went directly into the accounts of global financial institutions like Goldman Sachs, Merrill Lynch, and Deutsche Bank, which were owed the money under the credit default swaps that AIG had sold them and through their participation

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(It didn’t help that foreign banks received some of the indirect aid, even though foreign governments hadn’t contributed to the rescue plan.) Because Goldman Sachs was the largest single recipient of the AIG payments, receiving $12.9 billion, much of the anger quickly settled on it, as theories proliferated

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kept coming, and the narratives grew more elaborate. “Is Goldman Sachs Evil?” asked the cover of New York magazine. The writer Matt Taibbi created a new popular metaphor for the firm, describing Goldman in a Rolling Stone article as a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood

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. PROLOGUE “Lehman Races Clock”: Susanne Craig, Deborah Solomon, Carrie Mollenkamp, and Matthew Karnitschnig, “Lehman Races Clock; Crisis Spreads,” Wall Street Journal, September 13, 2008. Goldman Sachs, ranked at the top of the five leading brokerages: Harper, “Wall Street Bonuses Hit Record,” Bloomberg. Blankfein, alone took home $68 million: In addition to

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Wartime General,’” Washington Post, November 19, 2008. pushing especially hard for Paulson: See Fred Barnes, “Bolten’s White House: And Why Hank Paulson, the Former Goldman Sachs Chief, Is the New Treasury Secretary,” International Economy. had been a “pioneer” for Bush: Landon Thomas Jr., “Paulson Comes Full Circle,” New York Times, May

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31, 2006; Terence Hunt, “Treasury Secretary Snow Resigns, Replaced by Goldman Sachs Chairman Henry M. Paulson,” Associated Press, May 30, 2006. “This is a failed administration”: Ellis, The Partnership, 662. “I love my job”: Susanne Craig,

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Bloomberg News, June 22, 2006. “Given how [Hank] moved from a low-ranking position”: Valerie Shanley, “Profile: Hank Paulson,” Sunday Tribune (Dublin), September 14, 2008. Goldman Sachs in turmoil: “Goldman Seeking Capital Investment; Firm Beset by Falling Profits, Departing Partners,” Bloomberg, September 16, 1994. “Hank, nothing could please me more”: Ellis, The

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seven-month delay, Goldman went public—selling an oversubscribed 69 million shares for $53 each—and officially ending its 130 years as a private partnership. “Goldman Sachs Shares Soar in Long-Awaited Trading Debut,” Dow Jones, May 4, 1999. a $4.3 million home: Marc Gunther, “Paulson to the Rescue,” Fortune

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, Robert Diamond Jr., chief executive of investment banking and investment management, joined the board as an executive director, while Robert Steel, former vice chairman of Goldman Sachs, joined as a nonexecutive director. “Barclays PLC—Directorate Change,” Regulatory News Service, May 27, 2005. Diamond had so abruptly left Morgan Stanley in 1992:

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rely on asset-backed commercial paper”: “American International Group Investor Meeting—Final,” Fair Disclosure Wire, December 5, 2007. In 2007 one of its biggest clients, Goldman Sachs, demanded: Serena Ng, “Goldman Confirms $6 Billion AIG Bets,” Wall Street Journal, March 21, 2009. “It means the market’s a little screwed up”:

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), December 18, 2007. “I don’t speak Russian”: Ellis, The Partnership, 37. Yeltsin’s new government named the firm its banking adviser: “Russia Hires Goldman Sachs as Adviser,” Washington Post, February 18, 1992. Goldman pulled out of the country in 1994 but would eventually return: Joseph Kahn and Timothy L. O

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shorted subprime before anyone else: Andy Kessler, “The Paulson Plan Will Make Money for Taxpayers,” Wall Street Journal, September 25, 2008. analyst report issued by Goldman Sachs raising questions about the firm: Hugh Son, “AIG Falls as Goldman Says a Capital Raise Is ‘Likely,’” Bloomberg News, August 19, 2008. As the

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Fabrikant, “WaMu Tarnishes Star Equity Firm,” New York Times, September 27, 2008. Paulson hated Flowers, and the antipathy was mutual: Peter Truell and Joseph Kahn, “Goldman Sachs Nears Decisive Talks on Going Public,” New York Times, June 2, 1998. “Urgent. Code name: Equinox”: Craig, McCracken, Lucchetti, and Kelly, “The Weekend that

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2008, the Federal Reserve released the following: “The Federal Reserve Board on Sunday approved, pending a statutory five-day antitrust waiting period, the applications of Goldman Sachs and Morgan Stanley to become bank holding companies.” See http://www.federalreserve.gov/newsevents/press/bcreg/ 20080921a.htm. CHAPTER NINETEEN “It would be a grave

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“AIG CEO Demands Apology from Mad Money’s Jim Cramer,” WSJ/ Deal Journal, October 20, 2008. “Is Goldman Sachs Evil?” Joe Hagen, “Is Goldman Sachs Evil? Or Just Too Good?” New York, July 26, 2009. “great vampire squid wrapped”: Matt Taibbi, “The Great American Bubble Machine,” Rolling Stone, July 13, 2009. Goldman reported a profit

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later, its second-quarter earnings soared to $3.44 billion. See http://www2.goldmansachs.com. Goldman’s VaR rising to record high: Christine Harper, “Goldman Sachs VaR Reaches Record on Risks Led by Equity Trading,” Bloomberg, July 15, 2009. “emergency actions meant to provide confidence”: Department of the Treasury press release

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People All of the Time: A Long Short Story. New York: Wiley, 2008. Ellis, Charles D. The Partnership: The Making of Goldman Sachs. New York: Penguin Press, 2008. Endlich, Lisa. Goldman Sachs: The Culture of Success. New York: Touchstone, 1999. Faber, David. And Then the Roof Caved In: How Wall Street’s Greed

Young Money: Inside the Hidden World of Wall Street's Post-Crash Recruits

by Kevin Roose  · 18 Feb 2014  · 269pp  · 83,307 words

$50 billion. AIG, an insurer weighed down by towering piles of credit default swaps, had to be given a massive $182 billion bailout, and Goldman Sachs and Morgan Stanley, the last freestanding American investment banks, turned themselves into bank holding companies in order to give themselves better access to the Federal

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Lehman Brothers and the sale of Merrill Lynch, the so-called bulge bracket of top-tier American banks was whittled down to just five firms: Goldman Sachs, Morgan Stanley, Citigroup, Bank of America Merrill Lynch, and JPMorgan Chase. And even those firms looked to be in jeopardy. All around the financial

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labor at any moment. The banks themselves reinforce this people-as-assets view, referring to their flesh-and-blood employees in purely transactional terms. (At Goldman Sachs, for example, what used to be the human resources department is now known as “Human Capital Management.”) For first-year financiers—who just months

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they just want some sleep. Chapter Six “IDS,” THE BOUNCER grumbled. Jeremy Miller-Reed and Samson White, two first-year sales and trading analysts at Goldman Sachs, fished into their wallets, pulled out driver’s licenses showing that they were, respectively, twenty-two and twenty-one, and handed them over for

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prep from northern Virginia who favored polo shirts and Sperry Top-Siders—as one of the most like-minded people in his intern class at Goldman Sachs the previous summer. They had both been rising seniors at Ivy League colleges (Jeremy at Columbia, and Samson at Princeton), and their elite educations

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prop”) trading units, where traders had made millions of dollars a year making big, leveraged bets with the firm’s own money. A group called Goldman Sachs Principal Strategies had popped up to focus on proprietary trading, but there had been others, including prop-focused commodities and mortgage traders, and an elite

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backlash had started in the summer of 2009 with a Rolling Stone story, written by Matt Taibbi, that accused Goldman of being “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Then came a series of stories about Goldman

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CDO as a “shitty deal” and others privately gossiped about the fact that the entire housing sector looked ready to collapse. If Goldman was a vampire squid, the mortgage desk appeared to be the part doing the sucking. That April, when the Senate Permanent Subcommittee on Investigations called on a number

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feel transactional. And the world inside the capital markets starts to appear bigger and bigger, while the world outside it shrinks to a distraction. One Goldman Sachs analyst told me about the change that had befallen him during his first year on the job. “You sort of lose your nonfinance friends,”

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female executive wasn’t willing to stand up for young women like her, maybe nobody was. Chapter Nine IT WAS A slow afternoon in the Goldman Sachs commodities division, and Jeremy Miller-Reed was finishing up a conversation with one of the vice presidents in his group. He spun around to

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of most of this stuff until the previous summer—and yet, in a matter of months, he’d been able to assimilate himself into the Goldman Sachs machine and act as an official representative of Wall Street’s premier investment bank. Compared to the bankers upstairs, the salespeople and traders on

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and the hours wouldn’t fucking matter. I’m trying to determine whether or not I learned anything this week. Anything? That summer and fall, Goldman Sachs continued to struggle with both its public image and its profitability. In July, it settled the Abacus fraud lawsuit by agreeing to pay a $550

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million fine to the SEC, without admitting or denying guilt. In September, it began to disband Goldman Sachs Principal Strategies, its profitable prop-trading hub, due to the Volcker Rule and other new regulations. A month later, the firm announced mediocre quarterly

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the bank’s cutthroat business model. And so, while they could contemplate their direct, everyday tasks on one hand and the ethics of working at Goldman Sachs on another, the two strains of thought rarely crossed in their minds. The compartmentalization phenomenon turned out to be bigger than Jeremy and Samson,

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and bigger even than Goldman Sachs. As I interviewed dozens of young analysts at firms across the financial sector, I heard the same kinds of answers to my questions about

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clean this up?’ And then everyone would go back to work.” It was mid-March 2011, more than halfway through their first year at Goldman Sachs, and Jeremy and Samson were both trying their hands at gallows humor. Their initial excitement about working at the most esteemed bank on Wall Street

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amount of their annual bonuses, and placed in top, middle, and bottom “buckets,” according to their performances over the previous year. (The exception is Goldman Sachs, which gives its analyst bonuses in January.) Bonuses for analysts are nothing like the eight-figure executive bonuses you read about in newspapers, but they

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trajectories a bit more honest than the one taken by many of their classmates, the path that starts with private nursery schools and ends at Goldman Sachs because they’re addicted to status and structure. I asked the guys at Black Diamond about the difference between them and their Johnny-come-

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poking through her resilient exterior: fear. He saw that after the financial crisis, Penelope, just like him, just like Samson, just like everyone at Goldman Sachs, was concerned first and foremost about protecting herself. At the height of his anger that spring, Jeremy’s behavior toward Penelope had bordered on sabotage

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noses: Silicon Valley tech companies, who were staging a massive land grab for their junior analysts. Typically, tech firms compiled lists of analysts at Goldman Sachs, Morgan Stanley, and other top firms and blasted out messages to large groups of analysts at once, inviting them for a drink and a sales

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while still making lucrative wages, many bank analysts were finding the balance tipping in Silicon Valley’s favor. “The new status jobs aren’t at Goldman Sachs,” one bank analyst, who was himself considering making the jump to tech, told me. For Wall Street analysts, the tech world seemed to represent

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Occupy found oppressive, young analysts had opened themselves up for criticism. Jeremy Miller-Reed had always been discreet about telling people that he worked at Goldman Sachs. But now that the Occupy movement was increasing the heat on banks, with Goldman often bearing the brunt of the criticism, he found himself

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her face for the remainder of the appointment, and Jeremy left feeling depressed. If a nurse in downtown Manhattan was judging him for working at Goldman Sachs, what did the rest of the world think? Aside from periodic embarrassment, the biggest change Occupy Wall Street created in the lives of young

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.…In light of these actions, we protest the campus culture that whitewashes the crooked dealings of Wall Street as a prestigious career path.” At a Goldman Sachs information session the following night, the Princeton protesters repeated their grievances, and added a message to their fellow students: “Dear Fellow Princeton Students, we

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Dow Chemical, the company that made much of the napalm that was being used in the Vietnam War. In the early 1970s, Stanford University banned Goldman Sachs from recruiting on campus for five years, after a black Stanford Graduate School of Business student named James E. Cofield Jr. filed a lawsuit

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I’d heard lots about the existence of Kappa Beta Phi, whose members included both incredibly successful financiers (New York City mayor Michael Bloomberg, former Goldman Sachs chairman John Whitehead, hedge fund billionaire Paul Tudor Jones) and incredibly unsuccessful ones (Lehman Brothers CEO Dick Fuld, Bear Stearns CEO Jimmy Cayne, former

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, made Wall Street’s collective blood pressure rise. “Seriously man, sinking ship,” Jeremy Miller-Reed wrote me after one particularly disappointing earnings report at Goldman Sachs. “I’ve been thinking more and more these days that I need to get out after bonuses hit in January. Although that is, of course

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use to juice their trading returns. That winter, JPMorgan Chase reported fourth-quarter profits that were 23 percent lower than the previous year’s. Goldman Sachs’s profits for all of 2011 fell more than 50 percent from the previous year’s levels. The net income earned by Bank of America

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possibility of a job loss—made many twentysomething financiers fret that much harder about their futures. “I’m interviewing for jobs in Asia,” one anxious Goldman Sachs analyst told me that winter. “With all the regulatory things over here, they’re the only ones hiring.” What bothered many of Wall Street’

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if that happens, the financial crisis will have sparked at least one good change. Chapter Thirty-Two “COME IN, JEREMY.” The Senator, rightfully known as Goldman Sachs managing director Graham Campbell, beckoned Jeremy Miller-Reed into his office. Jeremy entered the room, sat down, and crossed his legs. “How are you

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momentous step he’d just taken. In the status box, he wrote: “The nightmare is over. As of today, I am no longer a Goldman Sachs employee.” Chapter Thirty-Three DERRICK HAVENS’S APARTMENT, a two-bedroom walk-up on Fourteenth Street, was the platonic ideal of a young Wall Street

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Street. One out of every six Ivy League seniors now applies to Teach for America, and in 2011, the program recruited more seniors than Goldman Sachs at schools like Brown and Columbia. These organizations have figured out that they don’t have to offer six-figure paychecks to entice students to

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the workers were simply “bailing out with no Plan B.” In their recruiting drives, Wall Street firms still had no trouble finding eager young workers. (Goldman Sachs president Gary Cohn announced in 2013 that the bank received 17,000 applications for 350 summer intern spots—an acceptance rate of 2.1 percent

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2010. As they struggled to keep their workers from jumping ship, Wall Street firms began reconfiguring their young analyst programs to make them more attractive. Goldman Sachs formed a task force to examine the working conditions of young analysts, and announced it was ending its “two and out” analyst programs in

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, 2010. Rolfe, John, and Peter Troob. Monkey Business: Swinging through the Wall Street Jungle. New York: Warner Books, 2000. Smith, Greg. Why I Left Goldman Sachs: A Wall Street Story. New York: Grand Central, 2012. Sorkin, Andrew Ross. Too Big to Fail: The Inside Story of How Wall Street and Washington

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/forums/are-banks-really-not-hiring-for-the-fall. “The most famous example was Sidney Weinberg”: More on Weinberg’s rise to the top of Goldman Sachs can be found in Malcolm Gladwell’s New Yorker article, “The Uses of Adversity,” published November 10, 2008. “there had been a Lebanese-American

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2010.) Chapter Five “young bankers are ‘oriented into a culture of instability and competition where they must hit the ground running.’” Ho, chapter 2. “At Goldman Sachs…what used to be the human resources department is now known as ‘Human Capital Management’”: Most other Wall Street firms have stuck with “human resources

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.” If, for some odd reason, you’re interested in why corporations like Goldman Sachs call their employees “human capital,” and how the term differs from “human resources,” there is an entire book on the subject: Human Capital Management: Achieving

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Michael Jensen (Weybright and Talley, 1976) is cited in the introduction to Ho’s Liquidated. Chapter Six “the Series 7”: In Why I Left Goldman Sachs, former Goldman vice president Greg Smith describes the Series 7 as “your first big test on Wall Street, a rite of passage that allows you

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Trading Unit,” Wall Street Journal, September 4, 2010. “an elite team of investors known throughout the bank as SSG—the Special Situations Group”: Christine Harper, “Goldman Sachs’s SSG: Lending or Trading?,” Bloomberg Businessweek, March 31, 2011. “a successful trader with several years of experience could easily make $500,000 or $

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600,000 a year”: A 2013 Bloomberg Businessweek article put the average Goldman Sachs worker’s pay for three months at $135,594, which translates to about $542,000 per year (Peter Coy, “At Goldman, the Average

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2013). “The commodities division’s prestige could be traced to 1981, the year that Goldman bought J. Aron”: Susanne Craig, “The J. Aron Takeover of Goldman Sachs,” New York Times (DealBook), October 1, 2012. “200 West Street in Battery Park City, was a $2.1 billion monument”: Paul Goldberger, the architecture

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into part of a book, Griftopia (Spiegel & Grau, 2010). “a mortgage-backed CDO called Abacus 2007-AC1”: Gregory Zuckerman, Susanne Craig, and Serena Ng, “Goldman Sachs Charged with Fraud,” Wall Street Journal, April 17, 2010. “Goldman’s mortgage trading desk, the same one Samson was slated to work on, was at

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always completely accurate case for clients to buy them.” Smith also writes that “double GCs were sometimes awarded for axe-filling successes.” (Why I Left Goldman Sachs, p. 231.) “In July, it settled the Abacus fraud lawsuit”: Sewell Chan and Louise Story, “Goldman Pays $550 Million to Settle Fraud Case,” New

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York Times, July 15, 2010. “In September, it began to disband Goldman Sachs Principal Strategies”: Christine Harper and Saijel Kishan, “Goldman Sachs Said to Shut Principal Strategies Unit,” Bloomberg News, September 3, 2010. “the firm announced mediocre quarterly earnings that were down 40 percent

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for America Fields Largest Teacher Corps in Its 20-Year History,” May 24, 2010, via teachforamerica.org. “in 2011, the program recruited more seniors than Goldman Sachs at schools like Brown and Columbia”: John Gower, “A Closer Look at Top Employers of College Graduates,” Nerdwallet.com, June 20, 2012. Epilogue “In

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.” “the workers were simply ‘bailing out with no Plan B’”: Leslie Kwoh, “Taking Early Exits Off Wall Street,” Wall Street Journal, October 26, 2012. “Goldman Sachs president Gary Cohn announced in 2013 that the bank received 17,000 applications for 350 summer intern spots—an acceptance rate of 2.1 percent

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that applications to its MBA programs had declined 12 percent since 2010”: Melissa Korn, “What’s Wrong With Wharton?,” Wall Street Journal, September 27, 2013. “Goldman Sachs formed a task force”: Michael J. Moore, “Goldman Pushes Junior Investment Bankers to Take Weekends Off,” Bloomberg News, October 28, 2013. “announced it was

Makers and Takers: The Rise of Finance and the Fall of American Business

by Rana Foroohar  · 16 May 2016  · 515pp  · 132,295 words

.47 Thanks to these changes, our economy is gradually becoming “a zero-sum game between financial wealth-holders and the rest of America,” says former Goldman Sachs banker Wallace Turbeville, who runs a multiyear project on financialization at the nonprofit think tank Demos.48 Indeed, one of the most pernicious effects of

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the 1980s and 1990s, and the failure to reregulate the banking sector properly after the financial crisis of 2008. Individuals from J.P. Morgan and Goldman Sachs may (or, more often, may not) go to jail for reckless trading, but the system that permitted their malfeasance remains in place. The problems are

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at how many top positions in the Treasury Department, the Securities and Exchange Commission (SEC), and other regulatory bodies are filled by former executives from Goldman Sachs and other major financial institutions. These are the people who’ve advocated for tax and regulatory “reforms” that have, since the early 1980s, decreased capital

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roots in industry. Chapter 6 will focus on one of the most dangerous areas of the financial sector, derivatives, and show via the tale of Goldman Sachs and its manipulation of the commodities market how banks have come to control the natural resources that companies and consumers depend on—and what that

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real time. “Do CEOs of large, complex financial institutions today know everything that’s on their balance sheet? It’s not possible to know,” former Goldman Sachs partner and former head of the Commodity Futures Trading Commission Gary Gensler told me in 2014. “There are just too many things going on for

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They needed greater amounts of funding from more secure domestic sources to finance that growth, as did the US government itself. Private banking firms like Goldman Sachs and J.P. Morgan as well as commercial banks like the National City Bank of New York—the predecessor of today’s Citigroup—evolved to

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cochaired the Senate investigation into the roots of the 2008 financial crisis, grilling the heads of Wall Street institutions like Washington Mutual, Moody’s, and Goldman Sachs over the subprime debacle. But hardly anyone knows that there was a precedent for these spectacles seventy-seven years earlier, in 1932, when the Senate

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fund corporate growth. The obvious solution was to take Ford public. The IPO was done by none other than the country’s leading investment bank, Goldman Sachs. One of the junior partners on the deal, John Whitehead (who’d eventually come to lead Goldman—one of the last pure investment bankers to

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Ralph Cioffi and Matthew Tannin, two Bear Stearns hedge fund managers who were prosecuted (and later acquitted) for fraud.52 Hubbard had also coauthored a Goldman Sachs report in 2004, entitled “How Capital Markets Enhance Economic Performance and Facilitate Job Creation,” in which he said that credit derivatives were protecting banks from

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field at many of the country’s best engineering schools.58 “Not only are these people not making scientific progress,” says Greg Smith, the former Goldman Sachs quantitative trader who famously published his resignation letter in the New York Times, “but the complex derivatives products they create are being sold to unsuspecting

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financial crisis of 2008. Indeed, though its role has not been as widely reported as that of, say, Fannie Mae and Freddie Mac, or even Goldman Sachs and Lehman Brothers, America’s original innovator played a huge role in the subprime mortgage meltdown. The assets of GE Capital, which had swollen from

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ago, Cargill, the Minneapolis-based agricultural firm, registered in the United States as a swaps dealer, right alongside banking giants like J.P. Morgan and Goldman Sachs, and expanded its office in Houston to make room for more than 100 traders, supplementing the 1,000 it already employed in Geneva. (Switzerland, which

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falling in sync with one another—a historically unusual trend. In April 2011, journalist Frederick Kaufman wrote an article for Foreign Policy magazine titled “How Goldman Sachs Created the Food Crisis,” which put the blame squarely on Wall Street.10 Kaufman outlined many of the headline statistics about just how financialized food

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dollars invested into commodities-linked index funds. It was a shift that was due to several things: the creation of a commodity index fund by Goldman Sachs in 1991, which allowed raw materials to become securities that could be bought and sold by investors; the deregulation of commodities markets in 2000, which

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another problematic wrinkle that finance has brought to the commodities markets: Today bankers can both trade commodities and buy up the physical goods being traded. Goldman Sachs can technically own farmland, for example, and trade the grain grown on it. Although Wall Street has long bought and sold commodities futures and swaps

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rule the world. But as a recent scandal in the commodities market illustrates, they are nothing compared to Too Big to Fail financial institutions like Goldman Sachs. This point was brought into sharp relief in the summer of 2011, when executives from Coke began publicly complaining that something dicey was happening in

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to put aluminum in, and six months to get it out.”12 Guess who Coke, Coors, and their thirsty consumers were paying that premium to? Goldman Sachs. It’s an amazing tale that provides a window into the complex and costly shenanigans that can result when banks move too far out of

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or even in practice, to self-regulate. There was another troubling wrinkle in the story, too: As one of the world’s top derivatives traders, Goldman Sachs may well have made a large chunk of money trading commodities-linked derivatives based on the privileged information that owning the raw materials would have

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whole, is that until quite recently they weren’t subject to very much federal oversight. According to former CFTC head Gary Gensler, also a former Goldman Sachs derivatives expert (and now CFO of Hillary Clinton’s presidential campaign), prior to the 2008 crisis around 90 percent of the entire derivatives market was

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THE HENHOUSE Many of the biggest institutional investors who are now in the market for oil and other commodities have gotten there via banks like Goldman Sachs and Morgan Stanley, who run dedicated commodities trading desks that specialize in betting on the future prices of natural resources. Both Goldman and Morgan, unfettered

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trading markets for these things. What was already a hot business heated up further after the repeal of Glass-Steagall regulations in 1999. Banks like Goldman Sachs and Morgan Stanley were suddenly facing competition from much bigger publicly traded and publicly backed institutions. They needed to come up with more revenue fast

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so do big firms like BP or Cargill, as we learned in chapter 5. Then there’s market making and pure trading—that’s what Goldman Sachs or Glencore, the Swiss-based trading firm founded by Marc Rich, might do—though, again, industrial companies like BP can also do it in

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market’s information hourglass” that allows them to do so.46 Indeed, that’s exactly what some academics and regulators believe was happening with the Goldman Sachs aluminum case—lines blurred between the interests of the bank and its clients, and what may have started as a legitimate business could have ended

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, “We’ve got to get banks out of this kind of business because of the risk to the economy and the possibility of manipulation.”49 Goldman Sachs, for its part, denied all wrongdoing in the aluminum case and claimed in Senate hearings and public comments that it was always acting on customer

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walls.’ And I said, ‘well if you’ve really constructed Chinese walls, then where are the synergies?’ ”56 Interestingly, the crisis of 2008, which turned Goldman Sachs and Morgan Stanley into Fed-regulated Too Big to Fail bank holding companies as a condition of getting government bailouts, also legitimized their meddling in

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companies declined to comment for this book about the banks’ involvement in the issue. No wonder. Coke has been a longtime investment banking client of Goldman Sachs, and at the time of the LME complaint, it had recently hired the bank to advise it on a $12 billion acquisition.68 “If I

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became “a discussion between an emergency manager, from a law firm dedicated to the financial sector, and the financial sector,” explains Wallace Turbeville, a former Goldman Sachs banker who is now a senior fellow at the nonprofit think tank Demos. “The people [meaning pensioners] tried to get a seat at the table

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those charges by paying more than $9 billion. Yet the cities victimized by bad deals are still paying. Oakland, California, for instance, has already paid Goldman Sachs more than $50 million in interest on a dicey bond deal. Even after the city passed a resolution to boycott Goldman, it remained legally obliged

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fifty American corporations have done such deals in recent years, with twenty occurring from 2012 to 2014. The deals have been a boon for banks—Goldman Sachs, J.P. Morgan, Morgan Stanley, and Citigroup have made nearly $1 billion in fees over that time advising firms on executing the maneuvers. But not

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that on the Citi-influenced spending bill alone, a post-vote analysis showed that the PACs of financial institutions such as Bank of America, Citigroup, Goldman Sachs, and J.P. Morgan, which control more than 90 percent of the swaps market, gave on average 2.6 times more money to members of

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as the examples above indicate, formal lobbying is only one facet of Wall Street power in Washington. Jamie Dimon isn’t a lobbyist. Nor is Goldman Sachs chief Lloyd Blankfein, nor are any of the other top financiers who regularly consort with the people who regulate them. Yet these and other top

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agencies and regulators that were crafting the Dodd-Frank reform rules. As just one example of many, in the year after Dodd-Frank’s passing, Goldman Sachs (the most active among financial institutions) paid eighty-three visits to regulators to discuss topics like derivatives reform.11 In 2013, Duke University academic Kimberly

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into finance following their tenure.16 The most notable such officials in recent memory are Robert Rubin and Hank Paulson, both of whom worked at Goldman Sachs, an institution that has always exerted a special influence in the nation’s capital. Top regulators are as often as not from the Street. (SEC

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head Mary Jo White, who worked previously at a white-shoe Wall Street law firm, and former CFTC chair Gary Gensler, who’d been a Goldman Sachs partner, are two recent examples.) This isn’t to say that former financiers can’t be good public servants. Gensler, for example, was a true

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2014.22 They tell in painful, crackling detail how the Fed’s financial cops slipped on their velvet gloves to deal with banks such as Goldman Sachs, and how Segarra, one of a group of examiners brought in after the financial crisis to keep a closer watch on the till, was

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privatized returns and socialized risks. Only in banking do control rights and incentive wrongs combine so uncomfortably.”34 You can certainly see the effects at Goldman Sachs, which gave up its traditional partnership structure to go public in 1999. It would be naïve to say that the bank wasn’t changing even

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. Charles Ferguson, director, Inside Job, Sony Pictures Classics, 2010. 52. Charles Ferguson, “Romney’s Other Credibility Problem: Glenn Hubbard,” Huffington Post, October 27, 2012. 53. Goldman Sachs Global Markets Institute, “How Capital Markets Enhance Economic Performance and Facilitate Job Creation,” by William C. Dudley and R. Glenn Hubbard, November 2004. 54. Khurana

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). 59. Michael Schuman, “How Germany Became the China of Europe,” Time, February 24, 2011. 60. Cook made the remark during his address at the 2015 Goldman Sachs Technology and Internet Conference in San Francisco. See Tim Higgins, “Apple CEO Cook Says Company Doesn’t Want to Hoard Cash,” Bloomberg Business, February 10

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-11,” Economic Information Bulletin No. 113, May 2013. 9. Rana Foroohar, “Hunger: The Biggest Crisis of All,” Newsweek, May 10, 2008. 10. Frederick Kaufman, “How Goldman Sachs Created the Food Crisis,” Foreign Policy, April 27, 2011. 11. Saule Omarova, “The Merchants of Wall Street: Banking, Commerce, and Commodities,” Minnesota Law Review 98

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, but to Banks, Pure Gold,” New York Times, July 20, 2013. 16. Kelly, The Secret Club That Runs the World, 151. 17. J. C. Reindl, “Goldman Sachs Sells Its Network of Detroit Warehouses,” Detroit Free Press, January 18, 2015. 18. Kocieniewski, “A Shuffle of Aluminum.” 19. Ibid. 20. Pratima Desai, Clare Baldwin

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, Susan Thomas, and Melanie Burton, “Heavy Metals; Goldman Sachs Turns Aluminum and Warehouses into Money Machines,” Reuters, July 29, 2011; Kocieniewski, “A Shuffle of Aluminum.” 21. Ryan Tracy and Christian Berthelsen, “Banks Face Senate

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, former banker, derivatives expert, and author of The Two Trillion Dollar Meltdown. 42. Kelly, The Secret Club That Runs the World, 153. 43. Ye Xie, “Goldman Sachs Hands Clients Losses in ‘Top Trades,’ ” Bloomberg, May 19, 2010. 44. Stout, “Regulate OTC Derivatives by Deregulating Them.” 45. Bank for International Settlements, “OTC Derivatives

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interview with Omarova for this book, 2015. 56. Author interview with Stiglitz for this book. 57. “Metal Bashing,” Economist, August 17, 2013; Matt Taibbi, “The Vampire Squid Strikes Again: The Mega Banks’ Most Devious Scam Yet,” Rolling Stone, February, 12, 2014. 58. United States Senate Permanent Subcommittee on Investigations, “Wall Street Bank

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, September 17, 1997.) The sizes of the US futures market and swaps market are based on CFTC estimates as of June 2015. 61. Taibbi, “The Vampire Squid Strikes Again.” 62. Gina Chon, Caroline Binham, and Laura Noonan, “Six Banks Fined Total of $5.6 Billion over Rigging of Forex Markets,” Financial Times

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, Working Paper 20894, January 2015, 3. 11. Ben Protess, “Wall Street Continues to Spend Big on Lobbying,” New York Times, August 1, 2011; Nancy Watzman, “Goldman Sachs, Financial Firms Flood Agencies to Influence Financial Law, New Dodd-Frank Tracker Shows,” Sunlight Foundation, July 18, 2011. 12. Kimberly D. Krawiec, “Don’t ‘Screw

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of British Banking Stability, 1800 to the Present (Cambridge: Cambridge University Press, 2014). 34. Haldane, “Control Rights (and Wrongs).” 35. Steven Mandis, What Happened to Goldman Sachs? An Insider’s Story of Organizational Drift and Its Unintended Consequences (Boston: Harvard Business Review Press, 2013). 36. Peter Weinberg, “Wall Street Needs More Skin

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. W. Norton & Company, 2012. Malleson, Tom. After Occupy: Economic Democracy for the 21st Century. Oxford: Oxford University Press, 2009. Mandis, Steven G. What Happened to Goldman Sachs? An Insider’s Story of Organizational Drift and Its Unintended Consequences. Boston: Harvard Business Review Press, 2013. Markham, Jerry W. A Financial History of the

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The City

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Why We Can't Afford the Rich

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Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown

by Philip Mirowski  · 24 Jun 2013  · 662pp  · 180,546 words

Tower of Basel: The Shadowy History of the Secret Bank That Runs the World

by Adam Lebor  · 28 May 2013  · 438pp  · 109,306 words

Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze  · 31 Jul 2018  · 1,066pp  · 273,703 words

The Best Business Writing 2013

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Other People's Money: Masters of the Universe or Servants of the People?

by John Kay  · 2 Sep 2015  · 478pp  · 126,416 words

Straight to Hell: True Tales of Deviance, Debauchery, and Billion-Dollar Deals

by John Lefevre  · 4 Nov 2014  · 243pp  · 77,516 words

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay

by Guy Standing  · 13 Jul 2016  · 443pp  · 98,113 words

Who Owns England?: How We Lost Our Green and Pleasant Land, and How to Take It Back

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Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley

by Antonio Garcia Martinez  · 27 Jun 2016  · 559pp  · 155,372 words

Stress Test: Reflections on Financial Crises

by Timothy F. Geithner  · 11 May 2014  · 593pp  · 189,857 words

Devil's Bargain: Steve Bannon, Donald Trump, and the Storming of the Presidency

by Joshua Green  · 17 Jul 2017  · 296pp  · 78,112 words

How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy

by Mehrsa Baradaran  · 5 Oct 2015  · 424pp  · 121,425 words

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril

by Satyajit Das  · 9 Feb 2016  · 327pp  · 90,542 words

The Cost of Inequality: Why Economic Equality Is Essential for Recovery

by Stewart Lansley  · 19 Jan 2012  · 223pp  · 10,010 words

Competition Overdose: How Free Market Mythology Transformed Us From Citizen Kings to Market Servants

by Maurice E. Stucke and Ariel Ezrachi  · 14 May 2020  · 511pp  · 132,682 words

The Controlled Demolition of the American Empire

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Investing to Save the Planet: How Your Money Can Make a Difference

by Alice Ross  · 19 Nov 2020  · 197pp  · 53,831 words

Days of Destruction, Days of Revolt

by Chris Hedges and Joe Sacco  · 7 Apr 2014  · 326pp  · 88,905 words

The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything

by Jason Kelly  · 10 Sep 2012  · 274pp  · 81,008 words

The Black Box Society: The Secret Algorithms That Control Money and Information

by Frank Pasquale  · 17 Nov 2014  · 320pp  · 87,853 words

Rentier Capitalism: Who Owns the Economy, and Who Pays for It?

by Brett Christophers  · 17 Nov 2020  · 614pp  · 168,545 words

Fed Up!: Success, Excess and Crisis Through the Eyes of a Hedge Fund Macro Trader

by Colin Lancaster  · 3 May 2021  · 245pp  · 75,397 words

The Middleman Economy: How Brokers, Agents, Dealers, and Everyday Matchmakers Create Value and Profit

by Marina Krakovsky  · 14 Sep 2015  · 270pp  · 79,180 words

The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations

by David Pilling  · 30 Jan 2018  · 264pp  · 76,643 words

Fault Lines: How Hidden Fractures Still Threaten the World Economy

by Raghuram Rajan  · 24 May 2010  · 358pp  · 106,729 words

Money: The Unauthorized Biography

by Felix Martin  · 5 Jun 2013  · 357pp  · 110,017 words

Rise of the Robots: Technology and the Threat of a Jobless Future

by Martin Ford  · 4 May 2015  · 484pp  · 104,873 words

The Social Life of Money

by Nigel Dodd  · 14 May 2014  · 700pp  · 201,953 words

McMindfulness: How Mindfulness Became the New Capitalist Spirituality

by Ronald Purser  · 8 Jul 2019  · 242pp  · 67,233 words

The Inner Lives of Markets: How People Shape Them—And They Shape Us

by Tim Sullivan  · 6 Jun 2016  · 252pp  · 73,131 words

A Pelican Introduction Economics: A User's Guide

by Ha-Joon Chang  · 26 May 2014  · 385pp  · 111,807 words

Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence

by Jerry Kaplan  · 3 Aug 2015  · 237pp  · 64,411 words

For Profit: A History of Corporations

by William Magnuson  · 8 Nov 2022  · 356pp  · 116,083 words

Disaster Capitalism: Making a Killing Out of Catastrophe

by Antony Loewenstein  · 1 Sep 2015  · 464pp  · 121,983 words