Top positive review
98 people found this helpful
Inside scoop on the "giant vampire squid"
on April 17, 2011
In his now famous - infamous? - Rolling Stone article Matt Taibbi refers to Goldman Sachs as a "...great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells of money." Cohan,whose earlier books gave you the inside scoop on Lazard Freres and Bear Stearns now turns his searchlight on Goldman Sachs, arguably one of the most powerful financial institutions that ever existed.
It is not really a Goldman "bashing" book but there is plenty of hard reporting that lead one to wonder how Goldman can get away with proclaiming itself to be a temple of team play and a firm where customer interests always come first. Team playing culture? Cohan gives you details about the unusually sharp knives that came out frequently in succession struggles from earlier days - Gus Levy clashing with Sid Weinberg - to more recent events - Hank Paulson ousting Jon Corzine - and paint a picture quite at variance with Goldman PR.
Customer comes first? Cohan reveals that way back in the sixties Goldman was sued for "...fraud, deception, concealment, suppression and false pretense..." in connection with the Penn Central fiasco. Creditors claimed that Goldman "...made promises and representations as to the future (of the company) which were beyond reasonable expectations and unwarranted by existing circumstances." You make up your mind about whether this was a disgruntled customer trying to splash mud or a depiction of Goldman's approach. It certainly was a harbinger of later developments such as the firms disingenuous statement that it was not "betting against its customers" during the sub-prime crisis but merely and prudently managing its risk profile. If you believe that may I interest you in a solid gold brick I found on Fifth Avenue the other day? I will let you have it real cheap because I like you.
Whether you like it or not Goldman executives - past and present - play larger than life roles on a global stage. Cohan gives you engaging details about the real person behind the persona. Did you know that Robert Rubin dropped out of Harvard Law to bum around Europe and persuaded the dean of the school to hold his admission for a year by getting a psychiatrist to testify that he was making a "reasonable" decision?
Cohan does a splendid job of describing how Goldman grew from a small but influential investment bank - and a partnership where the partners were liable to the full extent of their personal net worth - to the titan that it is today with the ability to shake the central banks of major nations and tentacles into the inner political circles of many countries and where Croesus may envy the amount of moolah the senior guys rake in with limited liability.
It is possible, indeed likely, that Goldman is actually the "good guy" in the field in which it plays and that its competitors are far worse in morality and tactics. And that, my friend, is the really scary story.