Wall Street traders may be manipulating a key derivatives market and front running Fannie Mae and Freddie Mac, hurting the US-owned mortgage giants in the process, according to an FBI intelligence bulletin reviewed by Reuters. Using what Federal Bureau of Investigation agents described as “unsophisticated tradecraft,” such as hand signals and special telephone ring tones, some traders are conspiring to rig rates on large orders submitted by Fannie Mae and Freddie Mac, or front running them in the interest rate swaps market, the document says. –Reuters, Jan 14, 2014
In the ping pong game of life, even your most trusted blade can’t swat away an opponent with super-sized balls.—Unknown
On Monday morning, Grand Central Publishing will release Why I Left Goldman Sachs: A Wall Street Story, a memoir penned by former Goldman employee Greg Smith, based on his op-ed for the New York Times entitled, “Why I Am Leaving Goldman Sachs.” When Smith’s piece came out last March, few if any senior executives inside the bank were pleased, in part because it came as a total shock. No one at Goldman had known Smith was planning to have his resignation letter printed in the paper. No one had known he had issues with the firm’s supposedly new and singular focus on making money at all costs. No one, at least at the top, even knew who Greg was. Obviously all this left the bank at a competitive disadvantage in terms of fighting back and for the time being, Smith appeared to be handing Goldman its ass. Getting cocky, even. Perhaps thinking to himself, “When all of this is over, I could be named the new CEO of Goldman Sachs.” As anyone who has ever won a bronze medal in ping-pong at the Maccabiah Games will tell you, however, winners are determined by best of threes. And that anyone going to to the table with Goldman Sachs should be prepared for things to get ugly.
* He’s described as a petulant child with unrealistic expectations for his career advancement
* It’s suggested, by saying outright, that his op-ed complaints about the firm were nothing more than him having “an axe to grind” on account of not advancing beyond vice-president, as demonstrated by the fact that as of 2010, he was happy with the firm, wanted to become a managing director and had no intention of leaving
* People are left to connect the dots re: Smith and lady bosses (“Goldman Sachs put a different managing director in charge of Smith as it considered giving him a sales job. The report says he ‘found the transition difficult’ and considered the female MD who ran the desk a peer at not his boss”)
Anyway, as we head into the final game of the set with a tie score, the following is a tremendous anecdote from Chapter 3 of Why I Left Goldman Sachs involving an actual game of ping-pong, John Whitehead’s Business Principles, and the lessons one learns as a first-year at GS about the importance of throwing a match to a client despite knowing full-well you could wipe the floor with him or her (and thinking you were sent to Boston to do just that), if you so chose. Read more »
Yesterday, at approximately 10:30AM, scores of financial services employees breathed a collective sigh of relief. Relief that months of studying had paid off in the form of a passing score on the Level I and II CFA exams. Relief that, even though months of studying had been a total waste of time with nothing to show for it, they could get on with their lives and stop wondering. One guy was less lucky. He’s in a CFA holding cell right now pending an investigation, thanks to some supposedly suspect fidgeting and a couple proctors with itchy trigger fingers, possibly hoping to impress their superiors. Read more »