Goldman Sachs is supposed to be a pleasant place to work – a place where the individual is subservient to the team and political machinations are neutralized by openness and meritocracy. The reality may be a little different.
There are indications that the big changes at the top of Goldman in the past year – the exit of Gary Cohn, the elevation of Marty Chavez, the disappearance of Michael Sherwood along with a whole layer of partners, have unleashed a power struggle within the firm. Galvanized by Goldman’s persistently poor results, Goldman insiders are trying to effect change – through dubious means if necessary.
Against this backdrop, there are suggestions that the recent revelations about David Solomon, the Goldman co-president who is also a D.J. known as D-Sol amount to some kind of smear campaign. Solomon is a potential successor to Lloyd Blankfein, Goldman CEO since 2006. Veteran analyst Dick Bove has already called for Blankfein to be ousted and in the jostling to replace him, the implication is that leading Goldmanites are leaking damaging news.
“It looks like someone is trying to make David look silly,” an anonymous Goldman executive told The Times of London. “So that opens up questions as to what sort of power games are being played. There are some legitimate concerns about what’s going on at the firm right now.”
Bove suggests Goldman is experiencing sclerosis under Blankfein and needs some deep changes to its structure. In fact, Financial News says there have been deep changes to Goldman’s structure already – just not of the kind that have been beneficial. It notes that the rates division, one of the fixed income units that had been performing well, was led for close a decade by Kostas Pantazopoulos, known for having a good risk strategy and always making money, but that Blankfein shifted Pantazopoulos to a new role as head of risk management strategies for the securities division in April. Hidehiro Imatsu, Nirubhan Pathmanabhan and Scott Rofey are now leading the rates team, which didn’t perform well in the second quarter.
In addition, Paula Madoff, the head of North American rates and mortgage sales, is retiring, and Thalia Chryssikou was moved from the head of EMEA rates sales to the co-head of global sales strats. Goldman is in flux and the change is releasing animal spirits internally.
Separately, if you’re speaking to a managing director who’s more important than you, you might want to raise the pitch of your voice. So says, a recent study reported by The Conversation, which found that both men and women tend to speak with higher-pitched voices to interviewers who they think enjoy high social status. If you’re used to seizing power by force and coercion, the study said you might want to talk in a low pitch no matter what. And if you think yourself prestigious, you might want to talk in a measured way, not increasing or decreasing the volume of your voice much at all. Something for Goldman bankers to bear in mind too?
Free Willy: Two former J.P. Morgan employees blamed for the bank’s loss of more than $6bn in the London Whale trading scandal are off the hook after a key cooperating witness, Bruno Iksil, recently set up a website where he wrote in great detail about his views on the case, embarrassing CEO Jamie Dimon and causing prosecutors to drop the case. (New York Times)
U.S. regulators told foreign-owned banks that, for the next year, they won’t enforce part of the Volcker rule, which prohibits them from holding certain types of investments. (WSJ)
Bank of America chose Dublin as its future E.U. hub, the latest major financial services firm to outline its Brexit plans. (New York Times)
French bankers pledged to create 1,000 jobs in Paris after Brexit. (Reuters)
Credit Suisse’s stock-trading group has lost almost a third of its market share to rivals after a push into Asia backfired, a team wagering money on algorithms caused revenue to plunge by hundreds of millions of dollars and a new unit set up for the most complex products frustrated traders. (Bloomberg)
Ten of the biggest U.S. banks together made $30bn last quarter, just a few hundred million short of the record set in Q2 2007. (Bloomberg)
Several Trump administration regulators have dropped pursuit of a long-running plan to restrict bonuses on Wall Street. (WSJ)
Ten senior staffers have left Guggenheim Partners and company profits have suffered in the past 15 months amid a power struggle between the firm’s two top executives. (Business Insider)
There’s a reason equities traders and portfolio managers are currently getting excited. (Bloomberg)
An unknown bond trader who placed a record wager on the Treasury options just scored a $10m profit. (Bloomberg)
BTIG hired Balraj Briah from CF Global to head its European outsourced trading desk and brought in ex-Barclays director Simon Martin to its institutional equity team. (HFMWeek)
Private equity firms are rushing to place big bets on fintech. (New York Times)
What is the most popular programming language? That depends on who you ask. (The Register)
Edited by Sarah Butcher (email@example.com)
Photo credit: Office Politics by Angs School is licensed under CC BY 2.0.