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The Poor, Tortured Life Of Goldman Sachs

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A lot of people think that life inside Goldman Sachs is just the tits. In reality, that assumption could not be further from the truth. Yes, it is true that they never lose money, the government is at their beck and call, their clients ask to be front run (it's an honor), and the twice daily happy ending massages? Let's just say the guy in the sky has the perfect touch. But that's all on the surface. It belies The Real Goldman Sachs, deep down, layers below the handies, and the gifts from Tim Geithner. And TRGS hurts. It bleeds. It suffers from paranoia and self-doubt. It's neurotic. It keeps itself up at night with the persistent thoughts of, "Why can't I be like Jim Chanos?" (Marc Spilker cut down those hedges out of jealousy.) It wonders, "Why doesn't anyone like me?" and in the summer months, gazes wistfully at less successful but beautifully tanned financiers and thinks, "Why can't you look like that? All this money and you're a pasty motherfuck."
But no one sees that. They just see Blankfein and God, shooting hundos out of those t-shirt cannon things they use at sporting events. Maybe today you'll start to get it. The awesome Bethany McLean, in her latest piece for Vanity Fair, walks us through the hurt.
First off, they can't even enjoy their money. Everyone's just a ball of nerves all the time. Strip down naked and roll around in it? I think not.

[Goldman Sachs] does not ooze the smug satisfaction that often comes with great wealth. Rather, it oozes anxiety.

And even if they wanted to they wouldn't, because no one wants to see some pasty guy sans clothes. Which they are, since no one's allowed to go to the beach. (Or even spruce up with a Mystic Tan.)

I worked there as an analyst for three years in the early 90s, and I remember that most people couldn't take advantage of the long line of black cars that waited until midnight outside 85 Broad Street to take them home. Instead, they had to call for cars, because they never got out early enough. I also recall being told that having a tan in the summer was a bad sign, because it meant that you weren't working hard enough.

And you want to know the craziest thing of it all? They don't even make that much money! Not enough to really matter, anyway. Not like those...[trails off...Those what? Go on, you can say it]...those hedge fund guys. In fact you want to know what Goldman says to itself on payday? It says "YOU SUCK." Then it tightens the cilice around its thigh and thinks about how it'll never be as good as Stevie or Jim or even that crazy little guy they used to work with.

There's a sense that the [bonus] numbers matter because the new Goldman cares about keeping up with the hedge-fund guys. "Everyone loves to hate Goldman Sachs, and Goldman loves to hate the hedge-fund community," says one trader. "They've gotten rich, but they haven't gotten rich like Louis or Julian or George."

But nobody understands that! Nobody gets that when Goldman pays itself huge ass tax-payer supported bonuses they're only doing it so they can keep up with the HF guys. No, all anyone does is point to the fact that Goldman should count its lucky starts it's not a hedge fund because hedge funds sometimes lose.

These questions are particularly pronounced among hedge funds. "People worry that they're in my business, and they're better than I am," says one money manager. Asks another hedge-fund trader, "Are they the Yankees? No, the Yankees actually lose! Goldman never loses. And people say they are a hedge fund! This ain't no hedge fund. Hedge funds lose money."

And no one ever really, sincerely gives them credit for the work they do. No one ever says, you know what Goldman? You've worked really hard, and it's paying off. No one ever acknowledges that, or event thinks to mention, "You look really nice tonight." No, it's all about organized crime.

When I ask him if he does business with Goldman, however, he replies, "Of course we do business with them. We have to. It's like the Mob who picks up the garbage. You pay their fees, because you need your garbage picked up."

Or allegations its leader has a juicing problem.

"Blankfein is Paulson on steroids," says one client, referring to Blankfein's competitiveness, even though he rarely engages in a show of brute force.

No one ever thinks to ask if Goldman would like some ice cream (which is just great, since they already have a complex about their bodies. Warren might as well have said "no dessert for you, fattie").

Buffett said he would invest $5 billion in exchange for a hefty 10 percent dividend and rights to buy additional stock over the next five years at a price of $115 a share. "I'm taking my grandkids out to Dairy Queen," he told the Goldman men. "Call me and let me know what you want to do."

And no one understands Goldman. No one gets that when Goldman says one thing but does another, THERE'S NOTHING WRONG WITH THAT. No one gets that there's nothing wrong with not wanting an actively regulated market when you're splicing and dicing toxic debt and selling that shit as if it's shinola to unwitting third world countries who have difficulty with potable water. And then, when the market bitch slaps you one down day after five years of offering up its fake breasts for you to snort the toxic lines of cocaine that is shit debt like Tony Montana, getting your undescended testicles in bind, crying to the paradoxically named Chris Cox and asking him to change the rules. No one gets that that's okay!

But that week [last year], as the crisis escalated, Blankfein changed his mind. When Mack and Blankfein spoke on Tuesday, Blankfein said, "You're right. We have to do something about this." He then told S.E.C. chairman Christopher Cox, whose agency can use emergency powers to ban a lawful activity, that he was for the ban. "I'm for markets," says Blankfein, who today describes the situation as "tricky." "But when it felt like it had gotten abusive, when it was free money to short-sellers who were piling on, it felt less like the market and more like it was being manipulated." He adds, "I crossed over."

Nor do they understand a little something we at 85B like to call the art of "just joshin' ya.

Overall, the firm conveys an attitude of dispassion about the whole affair. When I ask Gary Cohn if he was worried about Goldman's stock price, which plunged from $207.78 in February 2008 to $47.41 in November, he says, "It wasn't scary at all." When I ask Gary Cohn and David Viniar, the firm's chief financial officer, if, barring a financial Armageddon, Goldman would have survived without all the various forms of government intervention, Viniar says, "Yes!" almost before I can finish the question. "I think we would not have failed," says Cohn. "We had cash."

And above all? Nobody gets that Goldman is just trying to do the right thing. FOR AMERICA.

Blankfein professes no doubt. "I'm charged with managing and preserving the franchise for the good of shareholders, and while I don't want to sound highfalutin, it is also for the good of America," he says. "I'm up-front about that. I think a strong Goldman Sachs is good for the country."


Goldman Sachs Can Fix This

A week ago today, a man named Greg Smith resigned from Goldman Sachs. As a sort of exit interview, Smith explained his reasons for departing the firm in a New York Times Op-Ed entitled "Why I Am Leaving Goldman Sachs." The equity derivatives VP wrote that Goldman had "veered so far from the place I joined right out of college that I can no longer in good conscience say I identify with what it stands for." Smith went on to note that whereas the Goldman of today is "just about making money," the Goldman he knew as a young pup "revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients." It was a culture that made him "love working for the firm" and its absence had stripped him of "pride and belief" he once held in the place. While claiming that Goldman Sachs has become virtually unrecognizable from the institution founded by Marcus (Goldman) and Samuel (Sachs), which put clients ahead of its own interests, is hardly a new argument, there was something about Smith's words that gave readers a moment's pause. He was so deeply distraught over the differences between the Goldman of 2012 and the Goldman of 2000 (when he was hired) that suggested...more. That he'd seen things. Things that had made an imprint on his soul. Things that he couldn't forget. Things that he held up in his heart for how Goldman should be and things that made it all the more difficult to ignore when it failed to live up to that ideal. Things like this: