Wednesday :: Mar 14, 2012

Wall Street Secrets Revealed

by Mary

It seems that Goldman Sachs has a toxic culture where the client is a "muppet" waiting to be fleeced. The culture of greed is good comes back to haunt Wall Street.

And in further news, it seems that you would never want to have a credit card with JP Morgan Chase.

Matt Taibbi explains very nicely why these stories are needed:

These guys have lost the fear of going out of business, because they can’t go out of business. After all, our government won’t let them. Beyond the bailouts, they’re all subsisting daily on massive loads of free cash from the Fed. No one can touch them, and sadly, most of the biggest institutional clients see getting clipped for a few points by Goldman or Chase as the cost of doing business.

The only way to break this cycle, since our government doesn't seem to want to end its habit of financially supporting fraud-committing, repeat-offending, client-fleecing banks, is for these big "muppet" clients to start taking their business elsewhere. Right now, many clients stay because they think that even if Goldman takes a bite out of them here and there, the bank still has the smartest guys in the room. But as Forbes writes this morning, this incident may turn Goldman into such a pariah that the best young bankers won't want to work there anymore:

Until a wave of talented people leave Goldman and go work for some other bank, many clients will stick with Goldman and hope for the best. That's why the biggest threat to Goldman's survival is that Smith’s departure — and the reasons he publicized so nicely in his Times op-ed — leads to a wider talent exodus.

So have you moved your money yet?

Mary :: 10:41 AM :: Comments (4) :: Digg It!