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The mystique of Goldman Sachs

washingtonpost.com

61–70 of 93 posts

Re: The mystique of Goldman Sachs

#61
I've been out with my fair share of brokers and salespeople, and Goldman's guys always stick out.

They're always incredibly nosey about what your firm is up to, what your opinion on the market is, what you're thinking in general.

All other brokers are happy to just eat an expensive meal and be pals.

GS guys act like they've all been personally told to get some useful information from the client.

I've noticed the difference when a guy moves away from GS, they stop being so focused on getting info.

Re: The mystique of Goldman Sachs

#62
post #6

Earlier quoted context omitted.

It's disgusting to me that that much brainpower was/is dedicated to stock trading. All that programming and the only thing we get for it is that we can correctly value a company.

Let's, for an argument sake, believe that what Goldman Sachs does is hideous, counter-productive horseshit. Following that, let's outlaw the giant, and move all its employees into a more productive force. What do we have? Do we have more minds working on real problems like cure of cancer? I guess not; the probable result is thousands of unemployed programmers. It's a misguided belief that we can solve more problems w…

I agree with this and your point brings up some other implications. I especially agree that there are a lot of companies with very questionable business models. Ironically, Goldman is helping many of these companies make money and be perceived in the market as "valuable" regardless of common sense, evidence, or more thorough financial models.

Most financial and economic theory seems to indicate that even moving all the Goldman employees to some other company will just result in other companies taking its place.

If we put in place rules to prevent another Goldman forming, another company will find a loophole at some point or even be far worse. I'm certainly not justifying their existence, actions, or anything else. Rather, I am pointing out that the market will just swallow brain power and redistribute it some other way that isn't ostensibly any different or "better."

If there is a problem that needs to be solved, it is not redistributing tech people from Goldman somewhere else, but rather fixing whatever societal, financial, economic, legal, and political conditions among other factors created the perceived evil entity swallowing the universe. If we chastise the tech people for working there or the situation itself, we should also instruct all the other people there to stop wasting their brains and apply them somewhere else.

Re: The mystique of Goldman Sachs

#63
post #16

Earlier quoted context omitted.

Why do people always say this? It's such an thoughtless thing to say. You know what's a real waste of brainpower? 3.5 million truck drivers. People driving cabs. Fast food workers. We can, and should, train more software developers. It's the one job that might be useful in 30 years. At the very least, people will hopefully have enough education to move to another field.

Innovation occurs at the edges. Far be it from me to suggest all truckers are dumb, I'm sure many are not, but the fact is that finance is sucking in many of our brightest and best who might carry the west forward. Instead they are not even doing something pointless, it's appropriating wealth away from other productive endeavor.

GS employes 9000 programmers and engineers. I'm sure they only hire the best, just like everyone else. You are exaggerating the opportunity cost of people working at other firms, like Facebook, Google, or Apple, for example.

Re: The mystique of Goldman Sachs

#64

If the market is so efficient why are so many people working in it? The answer is it's parasitic. They don't allocate capital efficiently, progress has slowed dramatically in the west and a culture of rent seeking has taken over. It's a huge misallocation of resources but of course people simply point to the fact that they are "making money" as a sign of success. And yes, they are indeed "making money". That is the p…

Your comment started out ok, but became increasingly grandiose in its rhetoric, which may explain some downvotes. If you do this, however:

> EDIT: fascist hacker news doesn't like it when you talk about usurers

you forfeit your place in the thread. Name-calling isn't allowed here, nor going on tilt. I'm pretty sure many HN users agree with you, or are open to your point, but you discredit it by commenting like this.

We detached this subthread from https://news.ycombinator.com/item?id=13185513 and marked it off-topic.

Re: The mystique of Goldman Sachs

#65
post #38

Earlier quoted context omitted.

Though even if all it did was value companies, a 1% improvement in accuracy on the NYSE would correctly allocate $200 Billion dollars of miss-allocated capital to do more work for the economy. And that's just in the US. Globally it could route half a trillion dollars into more deserving companies, creating new jobs, services and products and pushing down unnecessarily high prices. This is why a well functioning finan…

> a well functioning finance industry I'm fully prepared to argue we don't have that, though. Traders are throwing many millions of dollars at projects without even a pretense of improving market accuracy, or adding meaningful liquidity. Algorithmic trading hasn't been especially good for accuracy - we suddenly have flash crashes with markets dropping 30% and recovering, based on no change in fundamentals. High speed…

> But suggesting that the industry's growth in the last ~decade is about improving accuracy seems pretty questionable.

Finance companies overwhelmingly make money by more accurately allocating capital whether that's channeling investment, arbitrage, executing a trade before the other guy, whatever. In every case that's money that went to a better place to do more economic work faster. It's what finance companies are for.

Yes there's the occasional dodgy deal or rip off, but to read your post you'd think that is the only thing financial companies ever do. In reality trillions of dollars spent on research, technology, infrastructure, business growth and jobs got there via financing. Better financing means more and better quality of all of those things.

Re: The mystique of Goldman Sachs

#66

Earlier quoted context omitted.

> It's a huge misallocation of resources These resources are self "allocated". No one was forced or coerced into joining Goldman Sachs. Did you ever think that maybe those people enjoy their job? Or that Goldman Sachs isn't the net negative harbinger of the apocalypse you claim it to be? One could even argue that the success of "the west" is due to availability of capital, of which GS has played a role.

Nope, they are abusing their monopoly on credit creation and access to markets / lobbying. The west has been struggling big time since the 1970s. Yes we have "growth" but that is just counted in fiat. We now have families with both parents working all the time for the same home their parents had. Because of the banks issuing credit ahead of the rate of increase of wealth creation. It's been a total disaster.

> We now have families with both parents working all the time for the same home their parents had.

This is not true. Homes are much larger now than they were in the past: http://www.aei.org/publication/todays-new-homes-are-1000-squ...

Both parents working happened due to women _wanting_ to enter the workplace. It had nothing to do with Goldman Sachs.

Re: The mystique of Goldman Sachs

#67

Earlier quoted context omitted.

> It's disgusting to me that that much brainpower was/is dedicated to stock trading. Is it more or less disgusting to you to spend brainpower on banner ads, or social media exchange of cat memes, or something? I'm honestly curious.

For one individual to make their own decision to do those things, no issue. But when a group of wealthy elite make it their mission goal to vacuum up money from everyone below, that's disgusting. The executive team at GS decided that they wanted to hire programmers to handle investing, instead of hiring programmers to handle nobler tasks. At least when Google develops banner ads, they are providing value to the milli…

Google (or Facebook) developing those ads aren't providing value in a vacuum. Now my Internet experience sucks, my privacy is exploited, I'm psychologically manipulated to buy more shit I don't need (to increase the stock value of companies that GS is evaluating), and I become addicted to getting updates, and receiving the latest fake news.

It's easy to come out with a trendy anti-investment banking stance and claim that it's not noble. Meanwhile we also have genius developers working on CandyCrush and finding ways to get grandma to make in-app purchases for their own little business vacuum.

I actually find GS (or anybody really) developing a better trading algorithm to be much more of a benefit to humanity than annoying banner ads that I have to download software to block. Capital speculation, valuing companies, buying companies, mergers and acquisitions, etc... are all things that benefit the entire country and allow us to have free enterprise and for billionaires to fund crazy fun endeavors on the hope of receiving more money.

Re: The mystique of Goldman Sachs

#68
>Cut to 2008, when Goldman made money off the economic collapse by shorting the housing market. The firm was charged with fraud in 2010.

First of all, that's non-sequitur. Second, why is it evil to short the housing market?

Washington Post really knows how to cater to its readership...

Re: The mystique of Goldman Sachs

#69
post #60
post #16

Earlier quoted context omitted.

Why do people always say this? It's such an thoughtless thing to say. You know what's a real waste of brainpower? 3.5 million truck drivers. People driving cabs. Fast food workers. We can, and should, train more software developers. It's the one job that might be useful in 30 years. At the very least, people will hopefully have enough education to move to another field.

Based on my experiences over the past year, the real shortage seems to be in competent contractors, plumbers, and electricians--at least in areas with growth.

Only anecdotal, but I have observed as much over the past few decades. It's hard to be certain why as there are so many factors at play, but I suspect that a part of it may be due to how we perceive certain jobs. There's a certain stigma with most traditionally "trade" jobs like electricians and plumbers. Many of these type jobs actually make more, especially if you own your own business or have a fee structure that is tied to your actual work.

I've known journalists, biologists, programmers, middle managers, government employees, and many white collar jobs to scoff at or look down on other jobs. In some conversations I have reminded these same people that the filthy guy in line they are making fun of might be pulling more than twice their salary, and often may still be university educated or have needed to go through some rigorous training. I am not sure what makes some people think they are above certain jobs or better than other people.

The Obama administration sentiment that everyone needs to go to college has done no favors helping certain classes of jobs. White collar jobs or being a celebrity, athlete, or famous in some other way is seen as success, while anything else regardless of quality of life, salary, long-term prospects, independence, and so on is seen as failure, second-class, or even undesirable. I respect anyone who works hard, and especially those that do things that I can't do. I need these people to survive or at least have a better quality first-world life, therefore I always make sure to treat them well. It helps when you come from a culture that considers it rude to not at least offer to feed your plumber or make a coffee.

Re: The mystique of Goldman Sachs

#70

Earlier quoted context omitted.

While I agree its parasitic, I dont think its the end of the world. Its more like they are taking all of the cream from the milk, and just delivering skim milk to consumers with out telling them. People notice the milk is different, but can't quite put a finger on it. Its just part of the problem with income inequality.

Okay that taking the cream part, which you clearly agree with. That is doing enormous damage. This is IMHO why you have Trump. The system simply is not allocating resources to people who are creating value.

This is part of the reason that we have discontent around the world.

The US has Trump because too many people want to say FU to the system and don't realize the are really just screwing themselves.

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