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Home > Blogs > Leslie Kossoff > Genius or Sucker? The Dilemma of Being a Goldman Sachs Client

Genius or Sucker? The Dilemma of Being a Goldman Sachs Client

The Dilemma of Being a Goldman Sachs Client Leslie Kossoff

So there you are - a bazillionnaire. Or, possibly, someone responsible for overseeing the bazillions of others. Like the investment manager of a pension fund.

You're always being approached by the Big Boys - from investment banks to private equity houses. They want your money. And why wouldn't they? After all, their job is to turn your money into more.

But for whom?

That's the big question - now more than ever - if your bazillions ever touch the corporate shores of Goldman Sachs.

All because of Greg Smith.

If you've missed the excitement, Mr. Smith resigned from Goldman in a big way. Fifteen minutes after emailing his resignation to management, his NY Times Op-Ed piece was published.

That one little piece of personal journalism led to media hordes over-crowding outside Goldman's portals, innumerable articles being written on every conceivable platform and medium and commentators of all kinds (yours truly included) talking about the lessons learned and yet to be learned.

Which brings us back to our bazillionnaire Goldman client - because, let's face it, Goldman only deals with bazillionnaires. Even the low end of the 1% isn't that interesting to them.

The question for this person, based on all the media coverage, is:  So? Are you a genius or a sucker for doing business with these guys?

Why that has become just as compelling a question as the hue and cry that Mr. Smith's writing raised is because it makes one wonder.

Here's a company that has been indicted and settled with the Government (to the tune of $550 million) as a result of their 'questionable' practices toward their clients. Like selling an investment instrument to their clients that another client developed specifically to bet against the suckers who were doing the buying.

Nothing like having your cake and eating it, too - especially because Goldman was making money on all sides of the deal.

And that's just one case. There are others still pending.

Because what everyone learned is that rich people are just as big suckers as everyone else when they get just the right pitch from just the right person. Or company.

Which leads us to the clients - anonymous and otherwise, individual and institutional - who are telling anyone who's willing to listen that they know what Goldman is doing. That they've known it all along. That there's no surprise there.

And that means, of course, that even as they were doing business with Goldman, they didn't trust them as far as they could throw them.

Or so one hopes - especially if that client is a fund manager who has just dumped a good portion of what will be your retirement into Goldman's - or, to be fair, most any other investment bank's or broker's - hands.

Where does that leave us?

The answer is: With a system that is gamed by the institutions that pay big bucks to hold the cards by pushing legislation exactly where they want it to be. On their side. With no accountability in sight.

Until that changes, all the Greg Smith's and unhappy bazillionnaire clients will just have to take it as it comes.

As suckers.

Further readings on Goldman Sachs:




Tags: behavior , behavioral economics , Goldman Sachs , Greg Smith , investment banks , investments , New York Times , private equity houses
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