Goldman Sachs and conflict of interest

[CitizenCain]

Being an IT guy (now) doesn't mean I work for a tech company or get calls from stupid users. I'm not in end-user support, and don't work in the tech sector these days.

Seriously, think about all the people in the world, how dumb most of them are, all the half brained ideas and then consider that these people generally hire professional labor and/or have employment, so they're someone's client. Whether or not someone contracts me to setup a VM farm has no bearing on how big of an idiot or asshole, or whatever else they may be (some of them even have their shit together), and when you get right down to it, lots of clients are absolute retards, as you'd expect, since being a drooling dumbass doesn't preclude having money to spend on professional services.

[Loki]

The reason you might think a client is a moron is because they ask stupid questions or make ridiculous requests. I assume it's not because you're able to trick them into buying stuff they don't need from your own company while you neglect to mention a possible conflict of interest. I.E. The stupidity claim is made on the basis of the client's independent actions, not things you trick them into doing.

[CitizenCain]

So, what I've been saying all along about it being a problem if your client's a moron because they're your client?

Yeah, yeah, I do agree with what I've been saying all along.

[Loki]

I also wonder how much of the problem is caused by Goldman's new recruits being cocky know-it-alls who think they're God's gift to mankind just because they managed to get hired by Goldman. Everyone else must by default be dumb and worthy of any abuse Goldman sends their way. This wouldn't be so much of an issue if they really were that good, but in reality, a vast majority are as mediocre as the NYU grads working in the middle office. The way they prove their self-worth to themselves and their colleagues is by the only metric that's comparable between all workers: sales.

[CitizenCain]

I also wonder how much of the problem is caused by Goldman's new recruits being cocky know-it-alls who think they're God's gift to mankind just because they managed to get hired by Goldman. Everyone else must by default be dumb and worthy of any abuse Goldman sends their way. This wouldn't be so much of an issue if they really were that good, but in reality, a vast majority are as mediocre as the NYU grads working in the middle office. The way they prove their self-worth to themselves and their colleagues is by the only metric that's comparable between all workers: sales.

Well, you're going to have that problem in any prestigious organization. For that matter, you have that problem everywhere. For that matter, the bigger problem is caused by morons who get a nothing job they're incompetent in with a nobody organization and still manage to get a big head about it. But I digress onto personal matters...

Anyway, to a large extent that's just a problem everywhere, and is aggravated by the fact that the law forbids the rest of us from beating people like that back to reality with a steel pipe. As to the rest of it, it's still an organizational problem. Salespeople are arrogant assholes with an undeserved sense of... everything... who, like small children and the mentally challenged, require constant attention and supervision so they don't fuck everything up and burn down the house on top of it.

If GS is hiring jackasses like that into advisory positions, it's an organizational problem, as is failing to supervise them. And actually, I'd argue that hiring people like that for any position is an organizational problem, given the nothing but problems they cause.

[GGT]

I'm surprised you of all people is falling for this. If the government had a slam-dunk case there, they would have pursued it. This is the Justice Dept and the SEC under a left-wing Democratic president. They effectively have an unlimited mandate and funding to pursue an epic trial.

The only reason Goldman settled is the same reason most companies settle litigation. Trials are costly and can lead to massive holdups to the normal course of business.

The government wanted to be able to have a big dollar amount and a "settlement" to point to so they could say they "won". They counted on people not seeing the difference between a settlement and victory.

Too much in your post to let slide, even though you were talking to Cain and Loki.

1. The SEC budget had been gutted over the years and had a skeleton staff, even though financial transactions had skyrocketed.
2. Most of the scrutiny/investigation was started by Attorneys General (mostly Cuomo from NY) in response to complaints and law suits.
3. Some of the products GS had created and sold were traded OTC, in no-man's land where there's no regulator oversight at all.
4. The government negotiators are also political beasts that didn't want to be perceived as anti-Wall Street, or air their dirty laundry either.
5. What's illegal is outlined by laws meant to protect the investor from shams and scams; including advisory and consultant groups selling something they expect will fail, then taking the other side of the bet for their own profit.

No, there isn't unlimited federal funding, or political will, to "pursue an epic trial". GS is adept at playing both sides of every trade, for their own profit, including legal battles. Both sides settled for the same reasons---expediency in saving-face, for pennies on the dollar. Business as usual.

The 'guy who quit and wrote an Op-Ed' about unethical business in finance could just as easily been from Iceland, Pennsylvania, Northern Rock, AIG, or Bear-Stearns. (That means any nation, US state, commercial bank, insurance company, or investment firm.) They may operate within the law, or skate along the edges, but that doesn't make their decisions ethical.

What's illegal and unethical? You're basing this off the hearsay of some guy who quit via an Op Ed in the newspaper. If various Goldman divisions were regularly hosing clients, why are there still so many clients?

GS still has so many clients for the same reason Bernie Madoff kept clients for decades. Profits. Plus a certain willingness to put on blinders, thinking they're part of a small/elite group using a superior skill-set and expertise for making money from money, no matter how that money is made. Yeah, even investors can want to make profits from some things ethically questionable (tobacco, alcohol, fast food, guns, big oil, big pharma, defense contractors, etc.)

But individual 'investors' can't de-fund fire departments in drought-dry areas, then sell homeowners' insurance policies with wild-fire riders (with a commission fee)....while also lending money to new home-builders (and getting their application and interest fees). If ya catch my drift.