We continue to think Lloyd Blankfein will be forced out at Goldman Sachs.
Not because he is directly responsible for the behavior that led to the fraud charge, and not because we find the evidence that the firm committed fraud persuasive (we don't).
Simply because Blankfein now embodies Goldman Sachs during one of the worst periods in the firm's history with respect to reputational damage. When the public sees Blankfein these days, they think "that's the guy who runs that firm that made billions while the rest of the country collapsed." And, understandably, the public's not happy about it.
The SEC understands this. As a result, we think the SEC might insist on Blankfein's resignation as part of a settlement deal. It will be important for the SEC to make it seem to the public that Goldman is acknowledging that it behaved abominably and that the fraud charge resulted in major changes to the firm. And there's no better way to illustrate that than sacking the guy at the top.
Even if the SEC doesn't insist on Blankfein's ouster, Goldman itself may decide that they best way to get a fresh start is to get a fresh face on the top. That way, the firm can blame all the stuff that led to reputational damage on prior management, and the firm can say that everything's different now.
Thus, we weren't surprised to hear that, within Goldman, Blankfein resignation talk has begun.
Read more: Winners And Losers From The Goldman Sachs Fraud Case
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Interesting how an analyst that was touting "alledgdely fraudulent" junk on Wall Street in 2000 determines all by himself that Wall Street was Fraud Free.......
Bring back Henry's friend Spitzer in 2012 to clean up this mess.....
Goldman had a very profitable last year. They invested their $25B TARP in stocks when stocks were at the bottom of the barrel and made the bulk of their profits on selling those stocks when the market rebounded. Big deal. That opportunity will not come again in any current stakeholder's lifetime. Before that, Blankfein demonstrated that he can produce profits in the type environment that will not exist in the future. In the future Goldman is going to have to make money the old fashioned way, as an investment bank instead of as a trading house.
Blankfein isn't the only one at Goldman that will need replacing for the firm to get refocused. As the economy comes back there will be a flood of investment opportunities from pentup demand, and the current management does not have the experience at that kind of banking that can attract capital, or know how to use it. That will be, hopefully, the metric the senior stakeholders use for replacing current management.
Great irreverent structure.
Glad your not part of the prosecuting team.
If they keep him, it will look bad.
Yes, I know it is fashionable these days to attack Goldman and its CEO, but hopefully Buffet's lucid logic might help to put some perspective into this :
http://finance.yahoo.com/news/From-Buffett-ThoughtOut-nytimes-1724696747.html?x=0
Hey Lloyd Blankfein, if you're reading this, don't get bullied by the SEC on this. It's obvious they are just looking for a way to clean up their discredited and tarnished reputation. While Goldman will want to get this suit out the away asap, at whatever cost, a settlement will forever mark your firm as guilty in the court of public opinion, a battle you have been so valiantly trying to fight in the past few days. Keep up the excellent work !
;- )
If I was a long term stakeholder at Goldman, I'd want Paulson back - just because of today's testimony. But I'm not, so like everyone else I'm wondering "Just what the hell is Hank up to?"
http://www.huffingtonpost.com/2010/05/06/hank-paulsons-wall-street_n_565891.html