By now you've undoubtedly heard that Greg Smith's Why I Left Goldman Sachs: A Wall Street Story (Grand Central Publishing, 2012) has little to add to, or even to support, the charges he leveled against the firm in his New York Times op-ed piece. Those looking for evidence that Goldman Sachs (NYSE:GS) really is, in Matt Taibbi's phrase, a great vampire squid, will have to turn elsewhere.
It's hard to fathom how the author levered his op-ed into an alleged $1.5 million advance except perhaps to suggest that he really did learn how to rip people off at Goldman. As long as I'm being snarky, I might as well point out Smith's fixation with status and salary. He regularly compares himself to others who advanced through the ranks more quickly than he did. And, although he was initially euphoric over his salary, he begins to feel shortchanged. In the London office, making less than $500,000, he was miffed; he asked for (and not surprisingly did not get) a $1 million bonus.
Smith, who was an intern in the summer of 2000 and became a full-time employee in 2001, essentially divides Goldman into the pre- and post-financial crisis eras. Pre-financial crisis the firm had the highest ethical standards; the client always came first. Post-financial crisis, with former trader Lloyd Blankfein at the helm, the firm lost its moral compass in the search for profits. Such a stark contrast is undoubtedly unwarranted. We mustn't forget that Smith himself was transitioning from a wide-eyed newbie to a somewhat jaded employee who was not convinced the firm appreciated him sufficiently.
When Smith isn't being polemical or self-serving, however, he tells a compelling coming-of-age-on-Wall-Street story. He learned what to wear on the trading floor (Brooks Brothers khaki dress pants and dress shirts in different shades of blue) and to how to hang onto clients, even if it meant intentionally losing at ping pong. It was pounded into him that he had to admit and rectify any trading mistake quickly (as he proudly announces, he made only one, which cost Goldman all of $80), and I guess it was a matter of personal judgment just how smashed he could get with clients.
The eager-to-please junior trader is a much more sympathetic character than the vice president who balked when offered the London job. He? London? I don't know what he expected. Getting sent abroad is often part and parcel of moving up at Goldman. I used to socialize on weekends with a Goldman partner who had earlier logged several years in Hong Kong and London. It was part of the drill.
I'm glad I read this book- if for nothing else than the descriptions of trading floor action. But Goldman lawyers won't have to stay up late worrying about the potential fallout from Why I Left Goldman Sachs. And I suspect that much more public relations damage was done with the op-ed piece than will be done with this book.