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Wednesday, June 20, 2012

Motley Fool Money, Fool Me Once March 16 Podcast

So ever since I started business school, I've been looking for a good business podcast that doesn't focus on fluff, but on real companies, real events, real prices.  I thought I found it with Motley Fool Money, there isn't the madness of some of the MSNBC shows, and there's less of the bias on Fox Business (which isn't nearly what Fox News is, but still swings obviously right).

Regardless, in general I enjoy the podcast.  As usual, I'm behind in my podcasts, I'm just now listening to the March 16th podcast.  In it they discuss the New York Times Op Ed written by Greg Smith, a former executive of the company.  In it, Smith lambastes the company for not serving its clients, and for a general turn in the business, saying, among other things "I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work."

Worse: "What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym. "

Another "Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail."
It's a great Op-Ed and you should read it.  But I won't post more of it here.  However, I was shocked, and angered to hear three of the podcast commentators responses to this piece.  I should say, I don't know who the hosts are, and they have a roving band of commentators each week.  Ok, so the host starts out by asking what each thought of the letter.

The first guy says, paraphrasing, "I sort of thought it was unprofessional.  I mean, if you're there and you're unhappy, that's fine.  Quit.  But don't tar the company on your way out."

And the second guy says, again paraphrasing, "Yeah, I agree, but I mean, as an investor in Goldman Sachs, and as someone whose recommended it before, they've been around for years, what kind of business model would they have if they were screwing clients all the time?"
 Guy 3:  "A month from now we won't remember this guy's name."


Answer to First Guy:  Whistleblowing is an incredibly courageous, and rare act.  There are virtually no protections, and in fact, U.S. Whistleblower laws purposely eskews meaningful protections.  Not only did this Greg Smith ruin any career of he might have in finance going forward, he also exposed himself to litigation that could cost him millions of dollars.  Go blow out your ear First Guy.  If you've ever been as courageous in any part of your life, let me know and I'll retract this statement, but as it stands:  Whether Greg Smith was right or wrong, you must be an idiot if you think this guy did this for any reason other than having great courage.

Answer to Guy Two:  Not only are you incredibly naive.  You've also just blocked out all the facts, real black and white, cold hearted facts about what caused the Great Recession!  This selfsame day, March 16, NPRs PlanetMoney did a podcast about Angelo Mozillo, and the fraud at Countrywide Financial.  As this litigation consumed an entire year of my life--I can tell you--those guys were crooks. The story interviews the executive who was brought in to run a companywide survey on internal satisfaction.  And her report was purposely rewritten, and completely censored so that no one would ever hear the truth.  Which isn't to say that they didn't know the truth.  But Board Minutes are the first things securities lawyers ask for, and so they're much harder to hide than some powerpoint presentation in a company thirty-thousand employees strong.  Countrywide Financial was screwing its investors, its employees, its clients, and the rest of the goddamn planet, and they were hailed as one of the giants of the financial world. It's this sort of naivete which dooms us to repeat this same thing over and over again.  Just three months ago people were hailing Jamie Dimon as a banking expert who avoided the crisis, and created a profitable extremely safe brand.  And then boom a 2 billion dollar loss that could be as high as 13 billion! Seriously Guy Two, where do you get off saying this crap?

Answer to Guy Three:  I don't even know your name.  But here is his:  Greg Smith, Greg Smith, Greg Smith.  Frankly Guy Three is right.  But his utter contempt shows him for what he is: blissfully ignorant, and thus, part of the problem.

Lastly, I'd like to say that Goldman Sachs is nothing to me.  And I to them.  I will never make the kind of money, or have the kind of money that will require someone like me to use their services.  So I am so completely beyond their notice as to be laughable.  That said, for their part in electing Barack Obama in 2008, I'm grateful.  If they go Romney this year, then all bets are off.

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