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Why I Am Leaving Goldman Sachs

nytimes.com

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Re: Why I Am Leaving Goldman Sachs

#251

Post by tucson »

JumpCrisscross wrote: post #15

I was an esoteric derivatives trader at an investment bank making money off clueless clients. We actualy prided ourselves, as a prop desk, on not being client facing. I went in expecting to parse global markets for inefficiency while pioneering the frontiers of 21st century finance. As time went on I found that the firm was content with mediocrity (as it could survive by simply existing in its role) and had no time f…

If you are so good as you make it sound, why don't you trade your own money and give part of the profits to charity?

Re: Why I Am Leaving Goldman Sachs

#252

Post by DanBC »

jarek wrote: post #243
DanBC wrote: post #232

Earlier quoted context omitted.

Partly they're hiding from people with guns and bombs.

People don't really wander around downtown Manhattan with bombs or assault weapons. If they're looking to bomb GS, figuring out GS is at 200 West is unlikely to be the greatest of their challenges. (There's few ways it could be more public than being listed in their Wikipedia infobox.)

I don't claim it makes any sense, but after 9/11 one of the things that JP Morgan did was remove their name from many of their buildings in the UK.

I agree that most people don't have assault weapons or bombs. "Blogger Bob" shows what a few people take into airports (many training grenades, which look real to scanners and cause delay). It's surprising how many people try to take loaded handguns onto planes.

Re: Why I Am Leaving Goldman Sachs

#254

Post by mjwalshe »

jarek wrote: post #243
DanBC wrote: post #232

Earlier quoted context omitted.

Partly they're hiding from people with guns and bombs.

People don't really wander around downtown Manhattan with bombs or assault weapons. If they're looking to bomb GS, figuring out GS is at 200 West is unlikely to be the greatest of their challenges. (There's few ways it could be more public than being listed in their Wikipedia infobox.)

They did in the 1920's the first ever car bomb (a horse drawn cart) was used against the NY stock exchange. I belive you can still see the shrapnel scars on the buildings facade.

Re: Why I Am Leaving Goldman Sachs

#255

Post by danssig »

yummyfajitas wrote: post #117
danssig wrote: post #73

Earlier quoted context omitted.

That Forbes article is a great one. Personally I think now that the cat is out of the bag, we should start to see things changing at the executive level (though it's going to take years). For a long time, many of us have speculated that CEOs were overpaid but suggesting this was met with claims of being "anti-capitalist" and other such nonsense. Now thanks to the Forbes article and the book it's talking about, we can…

Could you define what you mean by "overpaid"? Is it merely a complaint that CEOs are paid more than you wish they were, or something else? Meanwhile the rest of us produce vastly more than, say, 20 years ago, yet wages remain mostly flat. This claim betrays a misunderstanding of how productivity is measured, and how workers are compensated for their productivity (i.e., comp is wages + benefits, not wages). Wages + be…

>Could you define what you mean by "overpaid"?

I already did. We can now prove that revenue has actually decreased per dollar paid to a CEO. One might say that that that is because salaries have gone up, but for everyone else wages have stayed mostly flat. So by what possible logic would CEOs now make more money for accomplishing less? And why wouldn't these same factors apply to anyone else?

>This claim betrays a misunderstanding of how productivity is measured

I understand the theories of how it's supposed to work just fine, thank you. In theory, if I can accomplish more than those before me I should make more because I'm creating more value. In my career I've made an uncountable number of jobs unnecessary through automation. But did I capture any of this productivity boost? No, the executives took it all.

The system is broken because CEOs have been gaming it ever since this idiotic "Shareholder value" focus came about. Everyone has known this deep down for years and now we're finally starting to prove it concretely. To me it's going to be funny watching so-called "experts" explain why they spent decades preaching nonsense about CEO pay being correct as it's systematically shown to be a product of system exploitation.

Re: Why I Am Leaving Goldman Sachs

#256

Post by danssig »

yummyfajitas wrote: post #139
monkeyfacebag wrote: post #131

Earlier quoted context omitted.

Yeah, except he didn't say compensation was flat. He said wages were flat. The fact that we have a higher percentage of our compensation tied up in the skyrocketing cost of health care only underscores his point.

I wasn't disagreeing that CPI-adjusted wages are flat, I was pointing out that there is no reason for CPI-adjusted wages to be related to productivity.

Wages are related to creation of value, which itself is related to productivity. By what logic would productivity go through the roof but CEOs realize the gains of it?

You can try to claim that's simply the market value of getting a CEO, but this doesn't hold up: CEO salary-to-revenue has decreased. We're paying more and getting worse performance. Further, your argument depends on efficient markets which don't pass the common sense test and has been shown to be an N!=NP problem.

Re: Why I Am Leaving Goldman Sachs

#257

Post by tomkarlo »

rutipo wrote: post #214
tomkarlo wrote: post #166

I used to work for Lehman Brothers; since then I've worked for Amazon and Google in product capacities. (I was a PM before I went to MBA and then LB.) The biggest problem was that there's little incentive in financial products to pursue true creativity or innovation that generates value for your clients. Both the market and the regulatory climate make it very hard, and very risky, to develop and market new products.…

I used to work for Lehamn too, M&A. Now working on my own startup. I also found that the focus was on our incentives, and this is where the tech industry is different in that it sets the incentives aligned with the users. Wall Street could do the same by changing its incentives, and grow massively together with their clients. Once they understand that clients all the way to the end ("crowd") investor can also be happ…

I think he burned his bridges because he believes that GS is on a path that will lead to its collapse if it continues unchanged. I don't think he published the letter to be vindictive. It's supposed to be a wakeup call and it's not like they were going to distribute that company-wide internally for him.

Wall Street can't really grow that much more. It's already something like 11% of US GDP and that's way too much for an industry that really doesn't produce anything much. Fin services shouldn't be more than 3-4% of an economy, barring export of services to other countries.

I'd argue this is part of why it's starting to eat its own young; it's an industry full of extremely driven, competitive people but it has started to run into the natural limits of its potential size. If the industry starts to shrink a bit, things will get even uglier. It's not like there's a natural other industry for all these people to work in that's growing and will take the oversupply - if things get worse it will look like a piranha pool in the dry seasons where a million fish have been concentrated into one puddle.

Re: Why I Am Leaving Goldman Sachs

#258

Post by seertaak »

egwor wrote: post #185
seertaak wrote: post #25

Earlier quoted context omitted.

FYI Executive Director at GS means the same thing as VP, which sounds much more impressive than it actually is. There are literally thousands of them. To put it another way, ED is a level up from Analyst. The real cheese begins at Managing Director -- which is the first level you don't reach through seniority, but through "skill" (or politicking!).

No, Associate is a level up from Analyst. Executive Director == EMEA version of VP. There are a few thousand of Vp's but there are also what, 25K staff.

You're right; I stand corrected.

Re: Why I Am Leaving Goldman Sachs

#259

Post by jarek »

mjwalshe wrote: post #254
jarek wrote: post #243

Earlier quoted context omitted.

People don't really wander around downtown Manhattan with bombs or assault weapons. If they're looking to bomb GS, figuring out GS is at 200 West is unlikely to be the greatest of their challenges. (There's few ways it could be more public than being listed in their Wikipedia infobox.)

They did in the 1920's the first ever car bomb (a horse drawn cart) was used against the NY stock exchange. I belive you can still see the shrapnel scars on the buildings facade.

Can you quickly recount what has changed in lower Manhattan since the 1920s?

Re: Why I Am Leaving Goldman Sachs

#260

Post by j2labs »

ilkandi wrote: post #235
vnorby wrote: post #171

Earlier quoted context omitted.

I thought the same thing, it's very obvious that he's starting either his own firm, or will land somewhere else, and this article is a public attempt to retain his clients and advertise to new ones.

Er, this is the age of technology. Why write a NYT article when you've already got a copy of the virtual rolodex at home?

Because you want people outside your rolodex too. :)
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