"Jerry Maguire" Waves Goodbye to Goldman Sachs (NYSE: GS) and its Muppets <http://moneymorning.com/2012/03/16/jerry-maguire-waves-goodbye-to-goldman-sachs-nyse-gs-and-its-muppets/ <http://moneymorning.com/2012/03/16/jerry-maguire-waves-goodbye-to-goldman-sachs-nyse-gs-and-its-muppets/> >

March 16, 2012

By Shah Gilani, Capital Waves Strategist, Money Morning

By now you've heard about Greg Smith.

He's the former executive director of Goldman Sachs (NYSE: GS <http://www.google.com/finance?q=NYSE%3AGS> ) who pulled a Jerry  Maguire on Wednesday while resigning from the illustrious Vampire Squid.

In his New  York Times op-ed piece <http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html> , otherwise known as the scorched-earth letter, Mr. Smith explained that he  resigned from Goldman because he could no longer abide by the firm's culture of  ripping-off clients to line their own pockets.

The blunt frontal assault on the firm he once revered was a  career move. What kind of career move remains to be seen.

But before I get into what really goes on behind Wall  Street's velvet ropes and what Mr. Smith's pronouncements about Goldman's  culture says about Goldman, let me say this about his future employment  prospects.

I'd come out of retirement and start a new hedge fund if Mr.  Smith would come on board.

In fact, after hearing all the hoopla about how he has burned  any and all bridges he might have had as a Goldman alum and how he'll never  work on The Street again, I can't help but laugh.

And I'm not the only one.

Bill Singer, a noted New York securities attorney who's not  shy about speaking his mind openly and honestly, said to me, "Seriously, if the  guy has as little as a $10 million book of business there'll be people all over  him to come on-board. Not only that, but there are a lot of firms that would  want to throw this in Goldman's face by hiring the guy."

Greg Smith's Jerry Maguire-like moment might just be the  best career move he's ever made.

And I'm serious; I think he'd be a great addition to my new  hedge fund operation. What do you say Greg?

Nothing New About Goldman Sachs

One thing is for certain: as biting as Smith's commentary  was on Goldman Sachs, there were no new revelations about how the firm  operates.

The bottom line about Goldman, according to Smith's op-ed  piece, is that "people [at Goldman] push the envelope and pitch lucrative and complicated  products to clients even if they are not the simplest investments or the ones  most directly aligned with the client's goals. Absolutely. Every day, in fact."

Like I said, Smith's not delivering any revelations. It's  not an insight into just Goldman, either. This mantra is essentially the Street Creed.

Wall Street only needs clients to make money for itself.

If you don't understand that, you don't know how the game is  played ? or how it's won.

Now, You Don't Have To Pay Lots Of Money To Make Lots Of Money

Click here to learn more <https://purchases.moneymorning.com/MMPLNCHEVRGRN/WMMPN207/ <http://purchases.moneymorning.com/MMPLNCHEVRGRN/WMMPN207/> >  <https://purchases.moneymorning.com/MMPLNCHEVRGRN/WMMPN207/ <http://purchases.moneymorning.com/MMPLNCHEVRGRN/WMMPN207/> >

The pinnacle of success on Wall Street is not having to have  any clients. In other words, you've got so much money that you spend all your  time making yourself more money with your own money.

But that's a fool's game.

Because the real truth is that if you're that successful  managing money, trading, or doing deals, you want client money to play with.

Sure, the good guys pool their money with their clients, and  that's the kind of manager and banker everybody wants to be in bed with.

But, no matter how big you get yourself, you'll never be as  big as the sum of the client money you can manage and profit from.

Ultimately, having clients makes you money when you win, and  doesn't cost you much when you lose, because it's their money your losing.

You may lose a client here and there, but there are always  clients to be had. There are always "elephants" to bag.

However, Goldman takes unique advantage of its position on  the Street. Not that all the other banks don't do the same, or try to ?  they do.

But Goldman's perceived power keeps clients coming in the  doors and keeps unhappy clients from leaving, too.

The Real Truth Behind Goldman Sachs

Of course you're going to hear that this is all nonsense,  and how Goldman couldn't survive if it constantly ripped off all its clients.

Well, the truth is it doesn't rip off all its clients all  the time.

There are always sacred cows at every firm that aren't  messed with and are treated with white gloves. Why? Because they're either too  big to lose, too lucrative to mess with, or too high profile to ever get into a pissing match with.

As far as the rest of the clients?

They're there for the taking with excessive fees, front  running, and saddling with insane swap deals that keep making money for the  likes of Goldman (can you say Greece?) while sinking clients into such a hole  that they have to do another swap to get out of the first one that's sinking  them. And that next one, you better believe it will cost you.

Muppets? That's what Mr. Smith says clients have been  referred to as. That's cute.

With all the cursing and name-calling on the Street, calling  clients Muppets is laughable to me. After all, referring to clients as puppets  is like calling the Grand Canyon a ditch.

Whatever they're called, they are something else very  important. Clients are tools.

They are used to make money for the firm. Sorry, folks, the  truth is the truth. Besides, you already knew that.

What Greg Smith was saying about Goldman is that it has  changed. And, of course, he's right.

It has gotten better at making money by ripping off its  clients for bigger and bigger fees and commissions.

The culture that Greg Smith thought he was becoming a part  of has been in rapid decline since the day Goldman went public, right about  when Mr. Smith joined the bloody fray.

No, there were no revelations in Greg Smith's letter to The New York Times.

There are no hidden truths about Wall Street. Its  bare-knuckled, winner-take-all tactics are front and center and woven into the  lining of every banker's custom-made suits.

We'll see what becomes of Goldman's own Jerry Maguire and  we'll see what becomes of Goldman Sachs.

The question is whether there is enough room for both of  them on Wall Street.

--

Kind Regards

Carol

Phone: 02 9945 0841

Mobile: 0466 977 822

Look here: www.genius.gosmartmedia.com  <http://genius.smartmediapays.com>

Get it FR.EE <http://FR.EE>   - www.onlinecashoverflow.com  <http://www.genius.homepagepays.com>  

• Next Generation Gateway to the Internet for the World’s Internet Users
• Unique – Revolutionary – Amazing Breakthrough Technology… Includes:
• The ONLY  Web Browser in the World that PAYS!
•  
• Up to 5 x FASTER & MUCH MORE SECURE than the top 5 browsers
• A Bar/gain Shopping Finder… Education… Entertainment
• A Central Hub for Social Media…
•  
• The Ultimate BRANDING SYSTEM… brand yourself, your business, etc.
• Cheaper advertising for your business
• Tap into the For/tunes being made from 8 of the World’s Biggest Trends!

Learn all about it here:

http://genius.smartmediatechnologies.com <http://genius.smartmediapays.com>