Goldman Sachs had a rough morning.
Everyone's favorite bank released its Q1 results this AM, revealing that it got hammered on revenue, it's share price took a hit, and Lloyd Blankfein had to acknowledge that the rough environment will stay rough. It was, frankly, a very un-Goldman earnings call and the bank took its lumps for about an hour as analysts lined up via conference call to ask why and how Goldman f@cked up.
But then, through the miasma of bad numbers and shame, a voice was heard. There was a pause, and then the operator said "Your next question is from the line of Richard Bové with Rafferty Capital Markets..."
With those words, Goldman's inquisition became an intervention.Bové's love for the bank seemed to beam through the phone line, letting Goldman CFO Harvey Schwartz know that he was not alone...He was strong enough to change.
Bové:Morning. I was wondering; if we take as a given that your balance sheet is in pristine condition, and that you’re the very best - or among the very best - in each one of the businesses in which you operate, we run up against the situation that the world has changed dramatically. We’re now nine years into Goldman Sachs not being able to come close to what it did in 2007. It’s revenues have been flatlining for let’s say five years. It’s pre-tax earnings this year - certainly last year - are half of what you did in 2007.
When does Goldman say that the time has come for transformational change? That we must do something radically different because we’re getting nowhere. We’re just treading water for nine years now, the stock is going nowhere, earnings are going nowhere, revenues are going nowhere, and yet we are the very best at what we do.
When do you start doing something radically different? When do you say “We’ve got to change?”
Schwartz seemed almost knocked off balance by Bove's adoration. He thanked Dick for reminding the audience that Goldman is the best before falling back into the habit of defending Goldman Sachs from the haters.
But Bové gently stopped him. He clearly wanted Harvey to know that he didn't disagree with him. Dick Bové doesn't see Goldman as the problem, he sees the world as the problem.
Bové:No, no I agree with you. I don’t see things wrong with Goldman Sachs. I see things wrong with the world.
And then Bové went into full-on "Oprah staging an intervention" mode...
Bové:When do you get control of your destiny as opposed to sitting her for nine years and letting the world control what you’re doing?
Dick Bové just wants Goldman Sachs to recognize its power, and live its truth. Is that so wrong?