Old(ish) entry I hadn’t found the right time to post, and then with the whole Greg Smith NY Times Why I Am Leaving Goldman Sachs op-ed I decided to refresh it…
The China Club where we had reunion dinners over the last Chinese New Year is within walking distance of the main branch of HSBC in Central, which is where one of the larger demonstrations against various structured product sales has been (ref my previous post and comments here) and that’s where all these pics are from…
We brought both sets of parents here, to walk through the site and read the posters after dinner around 9-10pm, as a way of telling them what is happening in the banking industry now. Each time we came, there were always some people camped out here, and as we read some of the posters in English, someone would politely come up to the main desk, ready to answer any questions we might have, I guess. One entertained Rockstar with a little stuffed dragon.
As I explained to my parents, I was also highlighting to myself – some of these people must have lost virtually everything, to sit here in the cold even during CNY, day and night… We couldn’t read what the donations box says, because a lot of the stuff is only in Chinese, and I felt strange/ guilty/ uncomfortable/ hypocritical/ can’t describe. We’re in banking/ formerly in banking ourselves, and though we didn’t have jobs selling to individuals, we were certainly in derivatives.
Funny (kind of) story, Kings on occasion used to also buy some of the stuff he was asked to come in and conduct training for client’s RMs on. In case you’re wondering, he stopped doing that after a giggly phone call on his cellphone one day, from a bunch of young RMs on speaker, “We know your REAL birthdate! You’re not really 31, you’re 29! HEE HEE HEE!” (Yeah. My husband LIED about his age over drinks with a bunch of them. He didn’t want them to know he hadn’t crossed his 30th birthday. He is evil.)
I thought it was nice (fine, hilarious) they had felt comfortable enough with him to pull that prank, but…… He got so freaked out he eventually discreetly closed his personal accounts there… No, not telling you which bank. Not even telling you if that call was from Singapore, Malaysia or Hong Kong.
But back to the demonstration. You still feel real shitty looking at all this. You wonder if they can smell it on you, that you dealt in derivatives. There’s an exhibit with an axe in it and people are so angry you wonder if, if they knew you had a job in the industry they’d just pull the axe out of the theatrically bloodied box/ dead body/ whatever it is that it was too dark for me to get a good pic of and then bury it in your scalp, like one of the paintings I took a pic of at China Club…
So maybe I’m just asking for it. I could’ve simply kept mum and pretended I don’t have anything to say or there’s nothing there at the bottom of where, starry-eyed, I first came to train on one of the derivatives desks about 10 years ago. (And boy, was I starry-eyed.) But that night, temperatures dropped to around 7 degrees Celsius………… You’ve got to really care, to still be sitting here.
A few sat in these tents in the pics, playing cards or occasionally horsing on what sounds like one of the lion dance drums at a time when many people were home with their families for the hols. On the Bloomberg almost every other day you find another article about the thousands of bankers who will be out of a job – and more recently there’s that hugely parodied Why I Am Leaving Goldman Sachs by Greg Smith. I mean, you must have really arrived if Darth Vader copies your style. He has the whole evil empire thing going for him and all those former-Jedi powers and he chose your style.
There is no doubt there were irresponsible mis-sell cases. But it’s practically the entire banking industry that is being vilified. Oh, and everyone loves jumping on the Let’s Hate Goldman Sachs bandwagon. Comparatively less is said about another group, let me loosely call them The Gamblers. These are the people who lost their investments thru taking on way too much risk due to greed, and who now try to also get their money back through a system already shaky to pay the ones who were really wronged, the ones who have to sit here in the cold because they don’t have anywhere else to be at CNY.
But having come from the banking sector and done derivatives to boot, I felt I was typing the un-type-able. Except I really do want Rockstar to read this entry one day.
Can you easily claim that the number of unethical bankers selling derivatives even clearly outnumbers the number of irresponsible gamblers around?
Years ago around the time this all started, one of my former RMs showed me a chinese tabloid with a picture of an “auntie-type” crying. She was trying to sue one of the private banks (one I’ve never worked for) for – I think it was – HKD 80million in losses. How could she truly have understood equity flow products (“flow” = fairly simple option-embedded products), given her level of education and her job?
It was David-and-Goliath-esque imagery. Housewife-type with modest job that barely makes ends meet takes on big bad private bank (which was one of our competitors). My RM (who was one of the more conservative team heads) had remarked that on a slow day, he’d made an estimate of the maximum her modest day job was paying her, against the amount of loss she was suing her bank for. No matter how conservatively (and in her favor) he ran the numbers, the amount of risk and leverage she must have taken on in order to arrive at that sum in that amount of time was just massive.
I hesitated to mention this because for one thing I’m sketchy, having not taken note more carefully of what my RM showed me years ago. I don’t even know if anything came out of it after that tabloid pic. Obviously anyone selling these things looks like a total ogre saying it. But. If things really happened in that way, then how come this lady never thought she was in too deep or couldn’t understand the investment when she was making the HKD 80million or whatever? I don’t have many banker friends who even have HKD 80million to lose just on flow derivatives, leveraged or otherwise. (Ok, I’m not sure I have any banker friends with that amount.)
Oh, but I must be fair about this – shame on that hungry, commission-earning banker who makes a lot less, for not shutting her down. Other-industry commission earners aren’t that hungry or cut-throat. Right?
Irresponsible mis-sellers should burn. No contest. Their victims deserve to be compensated at their expense. Again, no contest. But we all know this, it is popular sentiment today. Sure, Rockstar will hear about that point of view if he ever (God forbid) wants to go into banking when he grows up. But why is there so little said about the people who are falsely claiming to be victims?
What are the odds someone who gambles irresponsibly and selfishly, taking on massive risk because they are greedy to make a quick buck, is going to say, “Oh, those poor genuine mis-sell victims. I hope they all get their money back, they didn’t deserve what happened to them. I, on the other hand, who knew exactly what I was doing and was simply too greedy and irresponsible to practice restraint, don’t deserve to be compensated.”
So the gamblers want their money back. They’re one of the reasons the real victims have to wait. While the victims vilify bankers and the HK government/ regulating bodies for dragging its heels, how come no one hates them, the gamblers?
I do. I daresay the ones who knew exactly what they were doing but were too greedy to stop and now claim ignorance are the ones who are getting away with it. Mad at me? You are irresponsible gambler meh?
I used to snipe at the bankers who spoiled it for everyone – greed, stupidity. But frankly that’s the easy way to go – everyone loves to hate bankers. If, as a (possibly disgruntled) banker yourself, you chose to write that op-ed on your last day to your former house of worship where they took you in, clothed you and fed you (fine, paid your salary – yes, Mr Smith, that’s you – did you think, to quote the Bloomberg editors, Goldman was “like the Make-A-Wish Foundation - existing only to bring light and peace and happiness to the world”?) someone’s going to agree with you. But it’s because they want to. Ambil peluang only. But you knew that, right?
Technically…….. I don’t qualify as a sore loser do I, I don’t think I’ve ever applied to work at Goldman <defensive!!! >. But well no wonder some ex-Goldies sound really offended (though there seem to be others that support him – I think it depends on whether you believe he’s sincere). Not because yet another person is reinforcing their evil-ness but because this guy voluntarily had the thing published, implying he is proud of that crap he wrote. (How can he be proud of that thing with the ping pong and what-not?? Was he high?) I joke about it, but honestly I tend to still be Wow Goldman about people who worked there. And then with this guy it’s…. Goldman hired someone who could think that letter was a good idea?
Another response, from Frank Partnoy, Law Professor at the University of San Diego put it, “Of course, no one should expect derivatives salespeople to be honorable, any more than we should expect a zebra to scrub off its stripes…” <uh, I’m not sure about the no-one-expecting-derivatives-sales-to-be-honorable but I’m asking for enough trouble as is>.
“…Nor should we be sympathetic to municipal treasurers and pension fund managers who succumb to their own animal instincts and sit at the poker table when they should not. The tough question for the future is whether less sophisticated institutions should be entitled to more protection. In other words, should they be treated as true clients?”
Oh and the Darth Vader Evil Empire parodies are fine, but can people stop calling it the Greg Smith – Jerry Maguire exit please? Mr Maguire was fired for having a conscience. If you’re the real thing you write the Maguire letter that (possibly) gets you fired. (And then you take the goldfish and Renee Zellweger.) Not leave and write a piece for the NYT including, among others, your ping pong skills on your last day.
It annoys me that people could think Greg Smith’s the real thing. (I will stand humbly corrected if he is.) Even more so if people know he’s not, but are pretending to think that anyway because his op-ed suits their own purposes. And- and- how dare they insult someone played by Tom Cruise?
So shame on Goldman. For ever hiring this guy.