After almost 12 years at the firm, Greg Smith left Goldman Sachs today. He wrote an open letter explaining his motivations for doing so and his issues with the ethics – or lack thereof – of the company.
How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.
What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.
Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.
Why I Am Leaving Goldman Sachs [NYTimes]
Winner of the Best Documentary Feature at the last Academy Awards.
The film has received very positive reviews, earning a 98% “fresh” rating on Rotten Tomatoes website, which compiles reviews from multiple critics. One viewer-reporter characterized the film as “rip-snorting [and] indignant [with] support from interviews with Nouriel Roubini, Barney Frank, George Soros, Eliot Spitzer, Charles R. Morris and others. But the most effective presence,” he continues, “may be the trusted voice of all-American actor Matt Damon, who narrates the furious takedown of the financial services and the government. It’s a fairly bold move by the actor.”
It was selected for a special screening at the 2010 Cannes Film Festival. A reviewer writing from Cannes characterized the film as “a complex story told exceedingly well and with a great deal of unalloyed anger. [It] lays out its essential argument, cogently and convincingly, that the 2008 meltdown was avoidable. Less familiar faces, including a brothel madam and a therapist who each catered to Wall Street in the bubble years are also seen, and the movie ends not long after Robert Gnaizda, formerly with the Greenlining Institute, a housing advocacy group, characterizes the Obama administration as ‘a Wall Street government’, a take Mr. Ferguson clearly endorses.”
An Irishman on the global economic crisis.
Over the last 50 years, foreign oil companies have spilled over 1.5 million tons of oil in the Niger Delta, with absolutely no convictions or compensation payouts. The clip from al-Jazeera above is about the fight for their lives the local people are engaged in against, in this case, Royal Dutch Shell. Writing in The Guardian, John Vidal says:
With 606 oilfields, the Niger delta supplies 40% of all the crude the United States imports and is the world capital of oil pollution. Life expectancy in its rural communities, half of which have no access to clean water, has fallen to little more than 40 years over the past two generations. Locals blame the oil that pollutes their land and can scarcely believe the contrast with the steps taken by BP and the US government to try to stop the Gulf oil leak and to protect the Louisiana shoreline from pollution.
“If this Gulf accident had happened in Nigeria, neither the government nor the company would have paid much attention,” said the writer Ben Ikari, a member of the Ogoni people. “This kind of spill happens all the time in the delta.”
Nigeria’s Agony Dwarfs the Gulf Oil Spill. The US and Europe Ignore It. [The Guardian]
Posted in Orwellian, Places, Technology
Tagged Corrupt, Environment, Greed, Nigeria, Oil, Poisonous, Pollution, Shell, Spill
Great video that explains the financial crisis in a more comprehensible fashion. Part 2 is below.
Karl Rabeder, a millionaire from Austria, is giving away all of his fortune after he realized that it was making him unhappy:
“For a long time I believed that more wealth and luxury automatically meant more happiness,” he said. “I come from a very poor family where the rules were to work more to achieve more material things, and I applied this for many years,” said Mr Rabeder.
But over time, he had another, conflicting feeling.
“More and more I heard the words: ‘Stop what you are doing now – all this luxury and consumerism – and start your real life’,” he said. “I had the feeling I was working as a slave for things that I did not wish for or need.
I have the feeling that there are lot of people doing the same thing.”
He intends to raffle off his house and all of his other possessions and use the money to fund a charity he’s created which helps people in South America start their own businesses without having to rely on loan sharks. After that, Mr. Rabeder plans to move into a small shack with a minimum of possessions.
Millionaire Gives Away the Fortune Which Made Him Miserable [The Telegraph]
Research carried out by the New Economics Foundation in the UK suggests that hospital cleaners generate £10 of worth to society for every £1 that they’re paid. They had similar findings for childcare workers and recycling workers. However, bankers and advertising executives were towards the bottom of the list as they cause a drain on society.
“Play a vital role in the workings of healthcare facilities. They not only clean hospitals and maintain hygiene standards but also contribute to wider health outcomes. For every pound paid, over £10 in social value is created.”
The industry “encourages high spending and indebtedness. It can create insatiable aspirations, fuelling feelings of dissatisfaction, inadequacy and stress. For a salary of between £50,000 and £12m top advertising executives destroy £11 of value for every pound in value they generate”.
I completely agree, especially about the advertising executives. This seems to sum up the profession rather well:
Cleaners ‘Worth More to Society’ Than Bankers [BBCNews]
Posted in Five Kinds of Awesome, People, Thought-Provoking
Tagged Advertising, Bankers, Beauty, Brilliant, Cleaners, Cost, Greed, Hospital, Society, Value, Worth
James Hansen, one of the first scientists to model anthropogenic climate change and director of NASA’s Goddard Institute for Space Studies, now feels that the problem is much worse than we thought, and it’s almost too late to fix it.
Hansen has now concluded, partly on the basis of his latest modeling efforts and partly on the basis of observations made by other scientists, that the threat of global warming is far greater than even he had suspected. Carbon dioxide isn’t just approaching dangerous levels; it is already there. Unless immediate action is taken-including the shutdown of all the world’s coal plants within the next two decades-the planet will be committed to climate change on a scale society won’t be able to cope with. “This particular problem has become an emergency,” Hansen said.
He’s been attending protests worldwide, which is unusual for someone of his position. Apparently he’s been arrested at a demonstration in West Virginia coal country.
Posted in End of the World, Flaming Ball of Death, Nature, Science
Tagged Arrogance, Climate Change, Coal, Environment, Global Warming, Greed, NASA, Pollution, Waste