1. Welcome to SportsJournalists.com, a friendly forum for discussing all things sports and journalism.

    Your voice is missing! You will need to register for a free account to get access to the following site features:
    • Reply to discussions and create your own threads.
    • Access to private conversations with other members.
    • Fewer ads.

    We hope to see you as a part of our community soon!

NYTimes Op-Ed: Why I Am Leaving Goldman Sachs

Discussion in 'Sports and News' started by lcjjdnh, Mar 14, 2012.

Page 5 of 6
  1. Bob Cook

    Bob Cook Active Member

    Re: sucked into hype and bubble.

    I was covering Wall Street when Netscape popped. The desperation from New York investment banks for the hot IPO was palpable, in no small part because these nobodies from San Francisco were bringing the companies to market. The brown shoes were flat-footed.

    Of course, they solved the problem by paying big bucks to buy those San Francisco nobodies just in time for the hot Internet IPO market to fizzle.
     
    Bob Cook, Mar 14, 2012
    #49
  2. Boom_70

    Boom_70 Well-Known Member

    The saying on Wall Street is that whenever Merrill Lynch starts buying it's time to get out because the party
    is over.
     
    Boom_70, Mar 14, 2012
    #50
  3. YankeeFan

    YankeeFan Well-Known Member

    My fist broker was my cousin -- at Merrill. I soon realized he wasn't a broker, he was a sales guy, pushing whatever they told him to push on the morning call.

    I was 21.
     
    YankeeFan, Mar 14, 2012
    #51
  4. The Big Ragu

    The Big Ragu Moderator Staff Member

    If you read what I posted and read the "the ratings didn't matter" then you either aren't reading what I posted or you are framing an all or nothing question to suck me into an all or nothing proposition.

    I said that S&P and Moody's and Fitch became a convenient punching bag after the financial collapse, but the main reason for the bubble and pop wasn't those ratings agencies. Not even close.

    Investors who live and die by their performance don't outsource their due diligence, roll the dice, and see what happens.

    All S&P or Moody's did with CDOs was feed the same bubble the investors looking to get in on the CDO frenzy were already buying -- with or without S&P or Moody's or Fitch.

    Suggesting anything otherwise is a simplistic, and wrong, narrative.
     
    The Big Ragu, Mar 14, 2012
    #52
  5. Boom_70

    Boom_70 Well-Known Member

    Pick your game analogy - musical chairs, old maid, Russian roulette, that's what it was.
    Everybody was willing to play but someone was going to get stuck.
     
    Boom_70, Mar 14, 2012
    #53
  6. LongTimeListener

    LongTimeListener Well-Known Member

    Fair enough, but I disagree on the impact of the ratings agencies, and I think most people would agree that regardless of whether those agencies ***should*** have had that kind of impact, the fact is they did. In any case, due diligence becomes a lot more difficult when the other party is actively hiding information -- and I'd like to see a true criminal investigation into that question. When Goldman became an investment advisor AND a counterparty in the same deals, it had ample reason to play both sides of the fence.
     
    LongTimeListener, Mar 14, 2012
    #54
  7. lcjjdnh

    lcjjdnh Well-Known Member

    Not so sure I agree with this. This doesn't respond to my arguments about causation. Wouldn't many of these investors have been prevented from buying the securities but-for the triple-A ratings because of regulatory and capital requirements? That doesn't necessarily make them the "main reason for the bubble and pop"--nor do I think anyone is arguing they are--but it certainly makes them one of the but-for causes.
     
    lcjjdnh, Mar 14, 2012
    #55
  8. The Big Ragu

    The Big Ragu Moderator Staff Member

    It's worse than that. The broker is feeding you investment advice that comes from equity analysts (assuming you were buying stocks) and strategists higher up on the chain.

    Historically, though, since investment banking was where the money was, the analysts were taking their direction from the investment bankers. And there is a huge conflict of interest there.

    At best, an analyst will put a hold on a stock when they really meant sell, so as not to piss off the company and compromise the investment banking dollars. But when the investment bankers are leaning on an analyst, and hold his job in their hands, you end up getting plenty of analysts who have been pressured to put buys on stocks they thought were dogshit.

    Just like ratings from a ratings agency, it's not like any institutional (not talking individuals) investor didn't know that was the game, and ever bought anything because Merrill Lynch (or Salomon Brothers or Lehman Brothers, or anyone else) had a buy on it.
     
    The Big Ragu, Mar 14, 2012
    #56
  9. Drip

    Drip Active Member

    Yeah, wait for it.
     
    Drip, Mar 14, 2012
    #57
  10. Killick

    Killick Well-Known Member

    Here's a fun related read:
    http://finance.yahoo.com/news/bonus-withdrawal-puts-bankers-malaise-050100338.html

    THE HOUNDS, RELEASE THEM!
     
    Killick, Mar 14, 2012
    #58
  11. Bob Cook

    Bob Cook Active Member

    Richard Scheiner, 58, a real-estate investor and hedge-fund manager, said most people on Wall Street don't save.

    Cue Patrick Ewing.

    http://itsjustmoney.blogs.com/its_just_money/2006/04/sure_nba_player.html
     
    Bob Cook, Mar 14, 2012
    #59
  12. LongTimeListener

    LongTimeListener Well-Known Member

    One question about the article and the criticism of the writer: For how many years have we been told that all the criticism of the banking industry is uninformed.

    Then Michael Lewis writes about it and he's just a populist simpleton trying to sell books.

    Then Elizabeth Warren gets on the case, and she knows this stuff, but she's just an angry shrew who's trying to use it to get elected.

    Then this writer speaks out and is immediately discredited because he was in the belly of the beast.

    So who can be deemed a credible critic of the industry whose greed and lack of moral (and probably legal) responsibility led to the meltdown?
     
    LongTimeListener, Mar 14, 2012
    #60
Page 5 of 6
Draft saved Draft deleted

Share This Page