The Times Live reports that Goldman Sach is doing "god's work".
(emphasis mine) [my comment]
Inside the gold mine
For CEO Blankfein it comes down to one thing: finding the best way to make money with money, then make some more money, with money on top
Nov 8, 2009 12:13 AM By - © The Sunday Times, London
The men and women of Goldman Sachs are in line to take a share of $20-billion pay-and-bonus package. And their boss says it's because they're doing God's work. How do they get away with it. John Arlidge gains unprecedented access to the world's most secretive bank.
'A great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money'
Number 85 Broad Street is the home of Goldman Sachs.
The world's most successful investment bank likes to hide behind the tidal wave of money it generates and sends crashing over Manhattan and most of the world's other financial capitals. But now the dark knights of banking are being forced, blinking, into the cold light of day. The public, politicians and the press blame bankers' reckless trading for the credit crunch and, as the most successful bank still standing, Goldman is their prime target.
Politicians and commentators compete to denounce Goldman, contrasting the bank's recent record results - profits of $3.2-billion in the last quarter alone - and its planned bumper bonus payments with what has happened to ordinary people's jobs and incomes in 2009.
Rolling Stone magazine ran a story that described Goldman as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money".
Goldman's reputation is suddenly as toxic as the exotic financial instruments it used to buy with glee. That's bad for the one thing it values more than anything else: business.
So it has, reluctantly, decided that the time has come to speak out, to fight its corner. That's how, on a bright autumnal New York morning, I find myself walking past the security guard and into the building with no name.
But what about the charge sheet? Bankers brought the world to the brink of bankruptcy, and, instead of doing the decent thing and jumping out of the nearest window [I like this guy's sense of humor], they turned up cap in hand to governments to vacuum up taxpayers' money.
Now, just one year on, they are carrying on as if nothing has happened, gambling, and winning, handsomely, with our cash.
Goldman is coining it again for two reasons. First, global markets are booming - up 50% from the credit-crunch lows, as new money, much of it from governments, has gushed into the financial system. Second, with Lehman Brothers and Bear Stearns off the street, Merrill Lynch a crippled shadow of its former self, and neither Citigroup nor UBS the forces of old, Goldman has a bigger slice of a growing pie.
"We didn't f*** up like the other guys. So, now we've got a bigger and richer pot to piss in," is how one Goldman banker puts it. Small wonder the bank is on course to set aside over $20-billion for salaries and bonuses.
'You should be happy'
So far, so lucrative. But isn't it simply unfair? Isn't Goldman acting as the modern equivalent of a war-time profiteer? Even the veteran financier George Soros says the big profits made by Wall Street banks are "hidden gifts" from the state.
Blankfein dismisses any suggestion that Goldman needed to be bailed out, and, by extension, rejects any notion that the firm is now profiting from public support. Sure, he took $10-billion from Washington's Troubled Asset Relief Program. But the bank has since repaid the cash, with healthy interest - 23%. Goldman also benefited from the federal bail-out of the huge US insurance firm AIG and, at the height of the crisis, the Federal Reserve broke with an 80-year-old tradition and let Goldman turn itself from a pure investment bank into a bank holding company. This meant it could borrow funds at the same cheap rate as commercial banks for as long as it wanted. Blankfein says Goldman changed status not for the money, but because it had become clear, following the collapse of Bear Stearns and Lehman, that the market had lost faith in the ability of the US Securities and Exchange Commission to regulate investment banks. Being regulated by the central bank, the Federal Reserve, would help to restore confidence in the financial system as a whole.
Whatever the truth behind the bail-out, not even the smartest Goldmanite can deny that it is only thanks to government aid that the bank still has a financial system to work with.
Does Blankfein not acknowledge that it is maddening for most of us to watch Goldman gobble up so much cash while we struggle? Quite the opposite. He insists we should be celebrating his bank's success, not condemning it. "Everybody should be, frankly, happy," he says. Can he be serious? Deadly. Goldman's performance, he argues, is the firmest indication of a nascent economic recovery that will benefit not just him and his firm but all of us. "The financial system led us into the crisis and it will lead us out."
Blankfein goes on to say something equally audacious. We should welcome the return of titanic paydays at Goldman. Goldman is exempt from President Barack Obama's cap on bonuses because it has paid back bail-out cash.
"You will see a complete correlation throughout our history of having remuneration match performance over the long term. Others made no money and still paid large bonuses. Some are not around any more. I wonder why."
Okay, forget bail-outs, forget bonuses, forget all the money stuff, if you can. Surely Blankfein cannot dodge the playwright David Hare? Through his latest work, The Power of Yes, which tackles the issue of the credit crunch, Hare argues that it is "blackmail" to say that there cannot be a recovery unless we let bankers get on with what they have always done and pay themselves squillions.
The special sauce
Blankfein has no time for such soft talk. "I've got news for you," he shoots back, eyes narrowing. "If the financial system goes down, our business is going down and, trust me, yours and everyone else's is going down, too." [Translation: when Goldman Sach goes down, it will try to drag as many people as it can with it.]
So, it's business as usual, then, regardless of whether it makes most people howl at the moon with rage? An impish grin spreads across Blankfein's face. Call him a fat cat who mocks the public. Call him wicked. Call him what you will. He is, he says, just a banker "doing God's work".
My reaction: I have already made an entry on Goldman Sachs Arrogance, but still... Wow. Goldman CEO Blankfein has the gall to say "Everybody should be, frankly, happy," with the bank's success (and massive bonuses) because it is "doing God's work".
As the True Slant blog put it, "It's like Blankfein wants to be attacked by a ferocious mob."