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Goldman Sachs: The Reputation You Deserve

Posted by Larry Doyle on March 2, 2010 7:08 AM |

When you sleep with dogs, you wake up with fleas.

Of all the lines I heard bandied about during my time on sales and trading desks on Wall Street, the line I reference above is one of my favorites. Why? That line goes straight to reputation.

As much as anybody may want to whine, bitch, or moan about being treated unfairly, ultimately the court of public opinion will convey upon an individual or an entity the reputation he or they deserve.

As a parent, I have often had the discussion with my children that they had better be exceptionally careful as to what they do and with whom they hang because you carry your family name with you everywhere you go and you only get one reputation. For this very reason, I strongly believe the greatest risk in life is reputation risk.

How often do we hear people complain about being treated unfairly? All too often. In my opinion, nobody is anywhere close to being as good as they think nor as bad as others may say, but somewhere in that vast middle ground, the individual or company has the reputation they deserve.

I see this dynamic at work this morning in reading The Wall Street Journal’s review of Wall Street’s favorite punching bag, Goldman Sachs. The WSJ writes, Goldman Lists New ‘Risk’: Bad Press:

GOLDMAN

Goldman Sachs Group Inc. added something new to the laundry list of financial risks it faces: unflattering attention.

In its annual report, the New York company said “adverse publicity” could have “a negative impact on our reputation and on the morale and performance of our employees, which could adversely affect our businesses and results of operations.”

The unusual disclosure in a 12-page section of “risk factors” ranging from rocky financial markets to natural disasters is the latest sign of Goldman’s whipping-boy status among rivals, lawmakers and angry Americans because of the firm’s giant profits.

The fact that Goldman believes they need to highlight this adverse reputation risk in its annual report strikes me as just further evidence of an arrogant firm.

Lloyd and team need to take a hard look in the mirror.

Now that Goldman is flea infested is not an indictment of those highlighting their condition, it is an indictment of where and with whom Goldman is sleeping.

LD

  • Sunup

    Larry, Oscar Wilde said

    “With an evening coat and a white tie, anybody, even a stockbroker, can gain a reputation for being civilized.”

    I think this describes many on Wall Street and in Washington. I also think the time has come for a change of clothing, strips perhaps?.

  • phil trupp

    Not for nothing did Thomas Jefferson warn that banks are more dangerous than armies. Banks are predators by nature. I want to emphasize “by nature.” Predation is part of the banking culture’s DNA. Does Lloyd Blankfein toss and turn at night? No. He and his colleagues believe they are doing the right thing. They don’t understand the public outrage. They might argue that questioning a banker’s destructive behavior is akin to condemning any other creature for acting on its own natural instincts. But while other creatures stick close to their unique habitat, bankers roam freely among us, preying on the general public without a hint of conscience. Lloyd Blankfein is befuddled. He is thick. He hires a right wing PR firm linked to the discredited Bush Administration, and he believes that’s just fine. When, and until, civilized culture comes to Wall Street, we are best advised to heed Jefferson and know the know the true nature of the enemy.

  • divvytrader

    Mark Haines set you up to lacerate them Larry …… what happened !?! ( i know , you gots plenty of friends there and taking at shot at them on CNBC pretty hard to do given you then see them back home in town )

    • LD

      Let me go back and rewatch the clip but I think I hit the industry (an oligopoly), GS (reputation risk), and the industry again (stating that people may stop playing the game altogether).

  • Bill

    I don’t see what Goldman Sachs has to worry about. So what if the firm is reviled? It has so intertwined itself within the Government that it is immune from the laws and
    processes by which 99% of the country are governed. Digressing a bit but still on the subject of royal prerogative, it’s not confined to GS. Just look at how these financial captains walk away with millions from the
    wreckage after they’ve crashed their corporate vessels on the financial reefs. That guy O’Neal at Merrill going out the door with $200 + million, Rubin with $100 + million at
    Citi. Everybody else takes it where the sun doesn’t shine–bondholders, stockholders, taxpayers, ordinary employees. Why is that? Look at that guy Kraus–a Goldman pal brought in by Thain–who left Merrill Lynch with $25 million for three months work. What % of the population earns that in a lifetime? What could he possibly have done to earn that? Other than possibly aid in the facilitation of the absorption of Merrill by BOA that almost wrecked BOA?

    • LD

      Bill,

      Your comment goes right to the heart of my last point in the CNBC interview yesterday. Does the industry run the reputation risk that people just do not care to play the game?

      I believe that risk is significant and is already playing out.






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