Greg Smith, the Executive Director of Goldman Sachs, published his resignation letter as an op-ed in the New York Times on Wednesday. In the letter, he stated that he was leaving due to the company's deteriorating morality; the company no longer focuses on helping its clients, but instead only focuses on making profits. He states that when he first began working there, the leadership was based on doing the right thing and setting the best example. But now, promotions are given to the people who make the most money for the company, who often do so through unethical means including persuading clients to invest in stocks that seem to have little potential profit.
Do you guys think that this resignation letter will hurt the company (i.e. profits, loss in the number of clients, etc.)? Do you think the company will respond to/change from this letter?
3 comments:
“Goldman Sachs Are Scum” according to Max Keiser, a financial analyst in an interview on France 24 TV. His argument was that during the financial crisis Goldman had their former CEO and at the time Secretary of the Treasury Hank Paulson help them out by eliminating their big competitors like Bear Sterns and Lehman Brothers so they became the dominant investment bank. So I doubt very much with Goldman Sach’s resources that anything will come of this. In fact since the start of the year the GS share price has shown solid gains from a low $90 to around the $120 range.
Goldman Sachs' is essentially the "Evil Empire" of the past decade. Due to their major ties to the 2008 financial crisis-shorting many clients to buy into the housing mortgage despite the bubble on the brink of popping- many have looked down on Sachs' as a banking firm because it cannot be trusted. It is ultimately no surprise that Smith renounced his position.
I believe that Smith's resignation is only an indicator that Goldman Sachs' is already on a decline. I also believe that it is too late for Goldman Sachs' to take initiative to save themselves--their record is extremely bad, and they have already been bailed out by the Fed in '08. Now is a time for JP Morgan and its respective branches, Morgan Stanley and Chase Bank, to surge as the top financial services.
I would argue that it *isn't* easier for people to see whether a president is moral or not. The vast majority of the country never meets, or even sees the President in person. When the public *does* see the president, it's on an electronic device, and is often skewed by the media. Although modern technology has made the President much more accessible to average Americans than in the past, how do we know that the decorum we see on the screen isn't all acting? How can we see past the scripted speeches and the political ploys?
However, I do agree that it's also difficult for people to find misconduct among leaders of corporations.
I think the resignation letter will hurt the company in the short run. However, in the long run, I don't think this resignation will affect the company a substantial amount. I also doubt that the company will change for the better after Smith's comments on the morality of the business.
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