Over at Merrill Lynch we find another Goldman Sachs co–president, John Thain. Thain’s moving on up after rendering selfless public service to the NYSE, where he succeeded Dick Grasso. Apparently, he did some movin’ an’ shakin’ at the Big Board.
“Since taking over for his scandal-racked predecessor, Dick Grasso, in 2003, Thain has transformed what was once an insular, semi-private club into a modern, public corporation. He’s introduced technology that allows investors to trade stocks with zero human intervention, dropping the average execution time from about fifteen seconds to as little as 300 milliseconds. And thanks to a recent vote of confidence from the shareholders of Euronext, he’s on his way to taking the operation abroad.
“Wall Street had come to regard Grasso as a fast-talking Luddite who was rapidly turning the NYSE into a 46,000-square-foot museum, but his successor has reversed course. Thain has introduced more major changes in his three years as CEO than the Big Board underwent during its previous 211 years combined.
” But his tactics have raised eyebrows. “There was no due process,” says one floor critic. “We were completely blindsided.” One gets the impression that Thain, in his sober engineering way, has identified what he believes to be the optimal approach to these conflicts: Appear soothing and gracious to your interlocutors—then quietly undermine their cause.”
More at the New York magazine.
So, let’s see….
Who’s replacing the upwardly mobile Thain at the NYSE? That would be Duncan Niederauer, who just happens to be late of Goldman Sach’s equity division.
[That’s the same Goldman whose former co-CEO, Robert Rubin is now back at his old haunt, Citigroup – by popular request, no less].
So it’s here a Sachsman, there a Sachsman, everywhere a Sachsman..
Then again, Thain, the mild-mannered, has a resume just chequered with un-mild-mannered stuff.
Like his participation during his Goldman days in the coup that ousted John Corzine, then the firm’s CEO. Thain was once Corzine’s best buddy, until he formed a troika with John Thornton and Hank Paulson ( in his Goldman incarnation before he was loosed on the country’s treasury as Treas. Sec). The three cut Corzine’s throat.
Thain does seem to be a coup kinda guy, because the Grasso replacement at the NYSE was also a coup…. puppeteered by – guess who? – Hank Paulson. Grasso was ousted for accepting an excessively fat pay package, right?
But righteous Hank was the guy who okayed that pay-packet in the first place, before turning around and using that as the excuse to kick Grasso out and put a Goldman guy in . Set up, anyone?
(And here’s a quote: “Note also that the erasure of the line between commercial and investment banking and the loosening of regulations in 1999 coincided with the transformation of Goldman into a publicly traded firm and the shift of risk from partners to shareholders. The firm’s spectacular success was a creation of the easy money Robert Rubin and Stephen Friedman, along with Federal Reserve chief Alan Greenspan, lavished on the economy. The credit bubble that drove the dotcoms to Himalayan heights in the nineties simultaneously enabled the credit-hungry Goldman to create its own possible bubble – that of derivatives. In its quest to expand and tighten its grip on world markets, it was Goldman which invented many of these complex and fragile financial instruments, just as it was Goldman which pioneered nearly every other high-risk instrument that we associate with modern finance – everything from global debt offerings to electronic trading….” as I wrote in 2006 in a cover story for Money Week.
Of course, it’s not all fun and games being banker to the nation:
” Orin Kramer, chairman of the New Jersey State Investment Council and a close friend of Mr Corzine says life can sometimes be made more difficult for Goldman because of its ties to public life,” says the Financial Times.
Poor, poor things…
By the way, Orin Kramer is the big bucks hedge fund manager who’s backing Barack Obama’s run.
And the reason no one in the press is talking about GW’s admininstration being overrun by Goldman bankers is because they’re the same folks who overran the Clinton administration. That’s what Charles Geisst, a Wall Street historian and professor at Manhattan College says. He adds that the Goldman take over is happening at a time when no other bank or brokerage has any thing like the same clout:
Here’s a reminder of that clout from that same Financial Times piece:
“Hank Paulson, the Treasury secretary and former Goldman chief executive; Reuben Jeffrey, a former Goldman managing partner who is the chief regulator of commodity futures and options trading; Joshua Bolten, White House chief of staff who served as a Goldman executive director; Robert Steel, the former Goldman vice-chairman who advises Mr Paulson on domestic finance; and Randall Fort, the ex-Goldman director of global security who advises Condoleezza Rice, the secretary of state.”
Then there’s Bush’s working group on financial markets.
“The panel – which is composed of Mr Paulson, Mr Jeffrey, Ben Bernanke, the Federal Reserve chairman, and Christopher Cox, chairman of the Securities and Exchange Commission – would be Mr Bush’s first port of call in the event of a financial crisis.
Mr Dudley would also play a crucial role in stabilising the markets in the event of a meltdown, as one of his predecessors, Peter Fisher, did following the near collapse of Long Term Capital Management, the hedge fund. The former executives will also be influential in issues ranging from the regulation of Fannie Mae (NYSE:FNM) and Freddie Mac, the housing giants, to tax policy, to how heavily the energy markets should be regulated; all issues that Goldman Sachs lobbies heavily on in Washington….”
Nice work if you can get it…
Update:
I should not fail to mention that in many circles, criticism of the big bankers is on its face “antisemitic” (how’s that for an antisemitic assumption, since a glance above will show that there are several non-Jewish names among them including Paulson, a Christian Scientist):
Thus this blog:
“But almost every anti-Semite worth his salt knows in his heart what the mention of banks in the same breath as the military-industrial complex conspiracy means: Jewish control of the financial destiny of this country.”
The writer goes on to ask:
“Banks get nowhere near the federal dollars that defense contractors get. Why include them?”
(that’s the reasoning behind calling criticism of the bankers antisemitic).
Well, here’s what. It’s not only that the banks are subsidised – they’re also bailed out in a way defense contractors are not, and under the guise of protecting the economy. They’re also capable of manipulating all sorts of important elements of the economy – from the money supply to the level of stock trading.
And, anyway, who’s NOT criticizing the defense contractors? We’re on record with our endless complaints about Blackwater and its evangelical Christian CEO Eric Prince…as well as of Pat Robertson….and of Zbigniew Brzezinski…and of Condoleeza Rice….and Dick Cheney…and George Bush…..no one complained about anti-Christian rhetoric, did they?
No…I don’t recall it.
To some folks the only motivation for criticizing the financialization of the economy is antisemitism. It’s that easy. And these days it’s real easy to be antisemitic. You only have to criticize:
1. Big media
2. Big banks
3. Neocons.
4. Israel
5. Hollywood
All these are simply code words, we’re told, for “Jews.”
Now, let me ask – how antisemitic is an assumption that sweeping?
And here’s a criticism of Pat Buchanan on the same score:
“Seymour Martin Lipset, a professor of Public Policy at George Mason University, said Mr. Buchanan echoes this in his references to Jewish names, like those of Robert E. Rubin, the Treasury Secretary, Alan Greenspan, the chairman of the Federal Reserve, and the investment firm of Goldman-Sachs when criticizing Wall Street and big business.
“Whenever he picks on an institution that’s doing badly,” Mr. Lipset said, “he picks on a Jew, not on others.”
Now, in Buchanan’s case, I think it would be fair to say he’s sometimes guilty not of racism but of an ethnic chip on the shoulder. Still, there’s one problem with Lipset’s argument. The problem is that many of the big names in the banking business seem to be Jewish – if you wanted to look at it in that light (not that that means anything….a successful community is likely to be well represented at the head of any field in which its members work. Chinese dominate the private economy in Malaysia. Does noticing that make you an anti-Sinite?
As a matter of fact, their ethnicity is not very interesting to me. What matters is the cronyism, the possibility of affiliations that corrupt their responsibilities to this government, and their support for a more and more disastrous foreign policy and an equally disastrous domestic regime of double-speak and covert censorship. They could be Chinese or Mexicans or Anglos – it wouldn’t matter.
Picking on Goldman Sachs is also not antisemitic, because The Firm happens to be the most politically connected of all banks now (incredibly so). It’s quite easily the most influential bank in US history from the early 1920s.
Millionaire and billionaire crooks can become ethnic victims too, don’t get me wrong. A chauvinistic prosecutor might target one banking crook rather than another….
But Goldman Sachs has been playing the system for all its worth for decades – if not longer. They were heavily involved in the Ponzi schemes that led to the Great Crash of 1929.
Crying antisemitism when people call them on it, is about as plausible as Lorena Bobbitt invoking misogyny to excuse her facility with carving knives or Michael Jackson crying race when he got caught in his kiddie-krimes. …
And MJ seems to have had some excuse…