For more than a century, the name “Goldman” has been a byword on Wall Street for elite. The best of the best. The most farsighted and forward-thinking. To be awarded the coveted title, “partner,” was to have your life changed; to be deprived of it forever mind-warping and embittering.
Now, there is a new reward to be sought:
On the firm’s New York trading desks, new employees dream of being named a Goldman partner. On Main Street in Salt Lake City, they vie for “Big Bird” status, a top title on the floor earned through positive customer feedback…
Goldman, of course, is also the last name of the firm’s founder. He had a first name, and it is that appellation that his successors seem intent on dragging through the mud. For it was not bad enough to name the august bank’s foray into the unseemly world on online lending, Marcus, for him. No: The indignities continue to be heaped upon the once proud name of Marcus Goldman.
Struggling to make money in the postcrisis world, Goldman is pushing into businesses it once dismissed as pedestrian and gimmicky, assembling a suite of banking products for the middle class it hopes will power growth.... New initiatives under way include checkout-counter loans for shoppers, wealth management and household-budgeting tools for the masses as well as insurance, mortgages and car loans, according to people familiar with the plans.
And wait until you hear about the people who are doing this to Goldman—er, Marcus—and what they are wearing. I mean, we know beards are sort of OK now at certain levels of the bank, but JFC.
He was sporting Allbirds, a knit woolen sneaker popular in Silicon Valley—the footwear equivalent of a hoodie…. Walking the floor in Western boots and helicopter cuff links…. Goldman has made a flood of outside hires, many of whom don’t fit the mold of its blue-blooded bankers and traders. Marcus’s head of marketing, Dustin Cohn, spent a decade at PepsiCo Inc.’s Gatorade division and underwear retailer Jockey International Inc. The division’s chief systems architect, ex-PayPal Holdings Inc. executive Greg Berry, has a nose ring. When advised to wear a suit to a Goldman orientation session, he showed up in a purple jacket, silver bow tie and Converse tennis shoes.
And just what are they doing? Why, things called “Project Cookie” and answering calls from the unwashed masses within 30 seconds and offering credit to people—presumably people wearing stained sweatpants in public—at the cash register where they are buying a flat-screen TV they neither need nor can afford, and working with Apple to help them buy iPhones about which the same could be said. It is even—gasp—looking into going into the mortgage and car-loan business. Lloyd Blankfein himself is calling Marcus customers to thank them, while Goldman’s former strategy chief is fielding complaint e-mails. Do you not know who you are, sirs? Do you care nothing for your glorious history of exclusivity and aloofness?
Goldman dominated the institutional end of finance, as an adviser to corporate CEOs and trading partner to hedge-fund managers. It ignored retail banking, which executives deemed small-time. Longtime finance chief David Viniar for years kept a toaster in his office as a reminder of Main Street gimmicks to avoid.
Viniar, certainly, would not have “hired an improve-comedy troupe to riff on consumer debt” while guests ate “truffle ‘mac and fees’ and artisanal doughnuts” and walked off with scented candles bearing the formerly hallowed named of Goldman freakin’ Sachs.
Then again, Viniar never had to deal with the kinds of things that Blankfein now faces.
Consumer lending is more profitable than many of Goldman’s other activities, particularly trading, which can no longer rely on vast borrowings to boost returns. Goldman estimates Marcus loans will produce a return on equity in the high teens, compared with Goldman’s firmwide figure of 9.2% over the past three years.
It truly is an end of an era, a break with the past sharper even than the decision to abandon the partnership in 1999 or its acceptance of a bank charter and TARP funds nine years later. On the bright side, not everything is changing at 200 West.
The consumer business was born in the summer of 2014 in the Hamptons, according to people who were there, when a half-dozen executives gathered for a strategy session at the weekend home of Gary Cohn, Goldman’s then-No. 2 executive who later left the firm to join the Trump administration.