FeedBurner makes it easy to receive content updates in My Yahoo!, Newsgator, Bloglines, and other news readers.
Learn more about syndication and FeedBurner...
Former Lazard banker William Cohan's new book about Goldman Sachs is called Money and Power: How Goldman Sachs Came to Rule the World. But in a Q&A;, the author suggests that it might be better titled, "The Book of Revelations." Too bad that was taken.
A lot of Wall Street books have come out since the financial crisis. I’d say approximately one million, including several about Goldman Sachs. Why should anyone read yours?
First of all, this is not a financial crisis book. It’s about unlocking the black box that is Goldman Sachs. It’s about revealing to all of us, for maybe the first time, what this firm is all about and how it got the way it is, and how the financial crisis was like the perfect combination of events that let it’s DNA sort of bloom and flower, if you will.
I will!
Everything came together for Goldman in the crisis. Everything that makes Goldman tick, which is how they managed to become a winner as opposed to one of the losers.
So, ok, I’m ready: What’s inside the black box? What’s the big mystery behind the workings of the world's most notorious financial firm?
The big mystery to me is how adept Goldman is at public relations and spin, and how it has been for 160 years. When you sort of peel back the onion you realize that basically, they’re not so much different from other firms. But they’ve created a mystique.
Wait, that’s it? You got in there and it was just like the Wizard of Oz, you pulled back the curtain and it was just Lucas van Praag, cackling madly?
Well, no.
There are some things they do better than other firms. Number one is they put a premium on finding the best and the brightest. They like them young, before they’re fully formed, mentally, because they like to indoctrinate people in the Goldman way. The second thing is they have a high reliance on teamwork, and sharing information. You know the expression, every part of the pig including the squeal? That’s what they do, they use every part of every bit of information they get including the squeal, and they figure out how to make money on it. And everyone reaps the rewards. It’s like a beehive that is perfectly designed to make honey and reproduce.
Isn't the sharing of information at a multiservice firm like Goldman sort of, like, legally dubious?
The rap on Goldman for a long time is that they front-run their clients. I talked to Eliot Spitzer about this, and basically he said he’d heard the rumors like everybody else, but he could never find the evidence. But clearly a lot of clients I have talked to, whether they be private equity firms or hedge fund managers or corporate clients are really pissed off at Goldman for this.
I feel like whenever those kinds of people complain about Goldman Sachs, they also sound a little bit impressed by them, by how awesome they are.
It’s at once being pissed off at them and in awe of them. They know if they want to best execution, they have to go to Goldman. It’s like the Yankees. They’re feared, and loved...
I don’t understand sports metaphors.
It’s like hating Duke in college basketball...
No, sorry...
You envy them and you hate them, it’s the same idea.
They’re the Gwyneth Paltrow of banks, is what I’m hearing?
Ok. And yes, Americans, we love this sort of thing. We love a narrative where you build someone up and then we tear them down. We’ve spent decades building Goldman up, and now they’re being knocked off their perch.
Earlier this week Janet Maslin gave your book a scathing review, in which she called it “schmoozy” among other things, and suggested much of the information in the book had been reported elsewhere. This is especially awkward as you’re a contributor to the New York Times. Are you pissed?
I obviously don’t agree with her review. I think she didn’t get it. She started the review talking about how I don’t get into a polemic like Matt Taibbi. One of the things about the post-vampire squid era is if you don’t immediately put up your own version of the vampire squid, you’re looked at somehow like you are in Goldman’s camp or an apologist for Goldman. In fact, I do have a point of view as strong a view as Matt Taibbi’s, but I don’t use “vampire squid” language. I basically lay in out in 628 pages how basically I cannot believe how close to the line Goldman plays it, how they’ve been in and out of trouble their whole existence, and how they’ve frankly, done a lot of things that I would say are ethically challenged, some would say immoral. It’s frustrating. You spend a year and a half of your life pouring your heart and its dismissed on the front page of the New York Times Arts section as pablum. You know, as rehashed material. I mean, there’s so much new material in here, there is so much incredible detail, there so much that hasn’t been explored before. It makes me almost question whether she got through it. So.
Janet Maslin can suck it, is what you’re saying.
Your words, not mine. She’s my colleague at the New York Times. [Shrugs, as though to say, “But yes, Janet Maslin can suck it.”]
What is your favorite hard-won, revelatory nugget?
You know, I call this the Book of Revelations. And why I do say that? I say that because I worked on Wall Street for 17 years. I thought I understood Goldman. And I just couldn’t get over the things that I uncovered.
Like what. What's one thing?
There’s so many one things. Everything from the brief story about James Cofield, who was a Stanford business school student in the ’70s who happened to be black, and was trying to get a job at Goldman and then got blackballed, no pun intended, from working there, and was told that it was because a senior partner in the firm does not like blacks—
Right, and there’s a story from the same era about a female executive who got shut out of a dinner because it was at the Yale Club and they didn’t allow women. But racism and sexism at that time weren’t unique to Goldman Sachs...
Ok but fine. The story about Penn Central bankruptcy. It’s extraordinary, because even though it happened in the 1970s, I felt like it could have been in 2010...
I’m sorry I am laughing. But what is one new thing.
What’s the big recent revelation? I think I lay out in clear, narrative prose—with all due respect to Janet—how Goldman shorted the mortgage market. They got the idea from John Paulson, the hedge fund manager. They were making fees off him placing his trades. Then in December 2006, they saw he was right about the mortgage market. But they didn’t call up Hank Paulson and say, “We’re worried about the mortgage market, let;s shut it down” Instead they basically decided to mimic the trade. They put this big short on, while they were still selling mortgage-backed securities to investors on the long side. They had these two things on at the same time. I don’t know if that’s genius — going by Einstein’s definition being able to keep two opposing thoughts in your head at the same time — or whether it’s immoral or unethical or illegal. But it is something. And as Josh Birnbaum told me, John Paulson went from being their favorite call, to one of their least favorite calls, because they were basically competing with him to do that trade. Which is prima facie evidence of how Goldman takes the information that its clients share with it, concludes the client is onto something, and constructs a trade themselves, even if it's not in the clients best interests. It's not front-running, because it happened afterward, but it's something. The thing I find most incredible is at the Levin hearing, [Goldman CEO Lloyd Blankfein] basically denies it all. The political environment we live in now is such that he would rather look like they were as dumb as the other firms on Wall Street. And yet the evidence is overwhelming. They didn’t do it nefariously. They did it because they thought they could make money. And they did. I think they made $13 billion pre-tax in 2007.
You spoke to Lloyd for the book, what did he say when you confronted him about that disparity?
He stuck to this story that they did not make a lot of money in the mortgage markets.
Speaking of, in House of Cards, your book about the collapse of Bear Stearns, I’ve always assume you goy access to Bear's CEO Jimmy Cayne by agreeing not to mention his pot-smoking...
Time out girlfriend! Time out! It’s in there. I mentioned the Kate Kelly story.
Well, that’s a back-door way of getting it in there. Anyway: Why did Lloyd Blankfein and other top executives at Goldman agree to be interviewed for this? What do you have on him?
I don’t know why they did that. My wife says to me, why do people talk to you, I don’t know. Why do people talk to Bob Woodward? I‘m not comparing myself to Bob Woodward —
Mmmm.
But you know. Maybe because I worked on Wall Street, that I understand their language. Because it’s better to participate than to not. I’m sure Goldman’s first choice would be that I would have gotten hit by a bus rather than do the book.
It’s weird, then, they didn’t try to arrange that.
They may have, but maybe I got lucky and managed to sidestep the bus.
I noticed my description of Lloyd as a “chipper elf”, made it into the book, though you neglected to credit me. Do you find him at all...adorable?
He can be incredibly charming when he wants to. He can also be ruthless. You don’t get to the top of Goldman Sachs always being charming. I talked to some of his colleagues and has very sharp elbows. He was kind of ruthless about getting rid of anybody who was pretender to the throne. It was Machiavelli 101 or something.
But he’s sensitive, right?
Course he’s sensitive. He’s called me up when I’ve written things about him...
Did he cry?
No, but I can hear the angst, the anguish. How could you do this to me, Bill?
There’s been rumors that he’s going to retire this year. Given your relationship with him, what do you think?
I don’t buy it at all. I don’t believe it for a second. Short of this Levin report turning into something bigger, Lloyd Blankfein’s not going anywhere.
This interview has been condensed and edited.
Read more posts by Jessica Pressler
Filed Under: goldman sachs, justify your existence, lloyd blankfein, william cohan
“It’s great to see you guys here because, actually, I’m your boss. We’re in tough times and you work very hard, and you will never, ever hear me say a bad thing about you. You make all the difference for our children and I will always sing your praises. We have to look at what’s in the best interest of our schools and with me that starts tomorrow. My goal is to lower the tension level and lower the rhetoric and try to engage a variety of different people who agree or disagree with us and make sure they understand the common vision of where we're going." -- Talking to thirty public school teachers in the congregation at a Bronx church on Sunday, incoming New York City schools chancellor Dennis Walcott makes the prudent decision to kick off his new gig by seeming really sweet. [NYP, NYDN]
Read more posts by Mike Vilensky
Filed Under: bon mots, dennis walcott, school daze
Tokyo Electric Power Company said Sunday that it hopes to bring the reactors at the crippled Fukushima Daiichi nuclear power plant to stability -- "cold shutdown" -- within the next nine months. Japan recently raised the crisis level at the Fukushima Daiichi plant from Level 5, on par with the Three Mile Island incident, to Level 7, the worst possible disaster rating on an internationally recognized scale. However, conditions at the plant have reportedly stabilized over the past few days, giving the company the confidence to unveil the timetable, according to the Times. Tokyo Electric plans to install "a cooling system" to lower the temperature in the reactors and spent fuel pools, "as well as reducing radiation in the surrounding area." The company then plans to pump more water, introduce "a heat removal system," and reduce the amount of contaminated water. More simply, the long thought-out plan is, essentially, fix it.
Now that radiation conditions around Japan have steadied, the U.S. has lowered its warning for travel to Japan. To prove it, Secretary of State Hillary Clinton visited the country, noting the U.S.' "very strong bond of friendship" with Japan, and calling the earthquake, tsunami and nuclear crisis “a multi-dimensional crisis of unprecedented scope." Clinton's visit included a tea date with Emperor Akihito and his wife, Michiko, at the Imperial Palace. The Times was on the scene: "Mrs. Clinton kissed Michiko on both cheeks," the paper reports. "'I’m so, so sorry for everything your country is going through,' she told them, before they entered the palace for tea. She added, 'If there was anything we can do...'"
Nine-Month Plan Is Set for Crippled Japanese Plant [NYT]
Read more posts by Mike Vilensky
Filed Under: meltdown, fukushima daiichi, japan, secretary of awesome
A Ukranian man purchased a three-story, 25,000 square-foot apartment at One Hyde Park in London, back in 2007, for $221 million in cash, making him the proud owner of the United Kingdom's most expensive flat ever. Even after spending $221 million on the flat, the owner thought the place was more of a fixer-upper, and he's been spending an additional £60 million on interior work. The One Hyde Park complex -- completed this past January, and equipped with its own movie theater and bulletproof windows -- has become the most expensive residential development in the world, with almost £1 bn of sales transacted across 45 apartments.
We took a look at some pictures of what the place will look like. It sure is nice: Plenty of comfortable seating for sitting down with one's laptop and blogging, and even some room to run around when you get antsy. Plus, awesome views of London; you could stare out the window doing nothing for hours. But, frankly, we wouldn't spend $221 million on it. Maybe we'd shell out $220 million for it, bargain them down a little, but $221 million just seems excessive.
UK's most expensive flat sold for £135.4 million [Telegraph UK via Gawker]
London flat breaks record by selling for £136m [Metro UK]
Read more posts by Mike Vilensky
Filed Under: how the other .0000001 percent lives, one hyde park, real estate, ukranian men with money
Prince Harry, the handsome red-headed 26 year-old Apache helicopter pilot, has been promoted to Captain in the British Army. According to People, "With his success at training on the high-tech Apache attack aircraft (which included a stint in the French Alps), Captain Harry Wales, as he will now be known in the military, is ready for the next stage of his training." Palace aides will neither confirm nor deny that Harry plans to show up to his brother's wedding in uniform. [People]
Read more posts by Mike Vilensky
Filed Under: heroes, prince harry, royals, the most important people in the world
Powerful storms moving through the Southeast have killed at many as 44 people over the past three days, according to CNN. The National Weather Service said more than 100 tornadoes have been spotted across the region, which has also seen flash floods and "hail as big as softballs." On Saturday, 14 people were killed in a single rural county in North Carolina, and Governor Bev Perdue declared a state of emergency for the entire state, where 143,000 people are still without electricity. Virginia also saw three deaths and 64 injuries as a result of Saturday's fast-moving storms. "The outbreak of severe weather in North Carolina is unusual because of the intensity and frequency of tornadoes," said a CNN meteorologist. "This doesn't happen very often in this part of the country." [NYT, CNN]
Read more posts by Mike Vilensky
Filed Under: storms, bev perdue, north carolina, scary things, tornadoes, weather
Egypt’s Supreme Administrative Court formally dissolved the country's fallen National Democratic Party on Saturday and seized its assets, as its former leaders adjusted to life in jail. Gamal Mubarak, "a prince of the political scene," according to the New York Times, is now "prisoner No. 23" at the Tora Farm jail — "a two-story block of poured concrete that held those deemed enemies of the powerful" — and his older brother, Alaa, a former leader among the business elite, is "prisoner No. 24." Other prisoners at Tora Farm include the former prime minister, Ahmed Nazif, and Zakaria Azmi, the president’s closest confidant. Former president Hosni Mubarak, currently at a military hospital, is expected to join his former colleagues at Tora Farm soon. In jail, the former leaders are, well, pretty shaken:
They make docile inmates, their captors say, still stunned to find themselves behind bars. Gamal often refuses to eat. He shares a cell with Alaa. "Bear in mind they are very broken,” said a prison official. “They do everything they are asked. They don’t raise their voices.”
Gamal has reportedly lost half his weight and "doesn't sleep very well." Alaa "keeps to himself," officials said. “They are in a very, very bad psychological state."
The Egyptian people are, understandably, captivated by the sudden reversal of fortunes. According to the Times, all over Cairo, Egyptians are gathering in coffee shops, cafés, street corners, and homes to "marvel" at the fact that the former core of a tyrannical power structure is behind bars. Sobering up after months of excitement, some protesters are feeling whole new waves of emotion:
“I feel bad about the feeling that is growing in me, this rejoicing about how this guy was caught or that guy is now in prison,” said Mohamed el-Sawy, the founder of a youth cultural center trying to promote a dialogue about the future. “We now need revolutionary ideas; there is so much to change and do on all levels and in all directions.”
Other Egyptians are less conflicted. "The tables have not turned; the tables have been set right,” said Ayman Nour, a former presidential candidate once sentenced to five years at Tora Farm for allegations believed to be driven by a political vendetta. "The thieves are inside the prison now, and the honest people are free.”
As Inmates 23 and 24, Stunned Mubaraks Adjust [NYT]
Read more posts by Mike Vilensky
Filed Under: revolt like an egyptian, egypt, hosni mubarak, tora farm
The Standard, the meatpacking district's uber-glamorous and semi-controversial hotel and hang-out, was evacuated on Friday owing to an electrical fire. Firefighters put out the blaze and everybody was fine, but it was probably really annoying for drunk young couples on the roof deck and European tourists in the mini swimming pool. Still, "So decadent, we were almost smote" would make a nice marketing campaign. [NYP]
Read more posts by Mike Vilensky
Filed Under: neighborhood news, fires, standard hotel
Last week, a LaSalle University professor came under scrutiny for inexplicably hiring strippers to appear during a classroom symposium on business ethics. ("[One stripper] was just kind of laying on top of [the professor]," a witness explained. "Not laying on top of him but straddling him. It was like a lap dance, you could say.") It's a strange thing to do, but it's also a great story for a college newspaper. Getting wind of the news, the university-funded paper quickly prepared an article about the incident, but was ordered by administrative officials to hold the story pending the school’s official investigation. They complied, and, of course, ABC broke the story a week later. So frustrating.
The student paper again prepared to run the story on page one, but was ordered by the administration, once more, to hold it, before the dean gave them permission to run the story “below the fold," on the lower half of the front page, which cannot be seen from a vending box or in a stack of newspapers. Finally, these kids remembered they're in college, and they did something ballsy. "The story ran Thursday on the bottom half of the front page," the Philly Inquirer reports. "The top half was left blank, except for four small words: 'See below the fold.'"
Nice. A solid fuck-you to the man from Vinny Vella, the executive editor of the paper, who plans to pursue a career in journalism. Vella says he doesn't know how the school will react to the rebellious issue, but it was also his last as editor. "You need to stand up for yourself every once in a while," he explained. "You can't let authorities intimidate you." Kudos. He'll be smoking cigarettes topless in no time.
Collegian editor at La Salle gets his point across [Philadelphia Inquirer via Runnin' Scared/VV]
Read more posts by Mike Vilensky
Filed Under: ink-stained wretches, censorship, college, lasalle university, media, vinny vella
Sex. At one point, it was placed on the bottom rung of the hierarchy of needs, generally considered to be an immediate human desire, alongside such things as breathing, food, and water. Thought to be fun, sex, in its heyday, was believed to be the result of basic human impulses, a manifestation of romantic feelings, and, in many cases, even credited with the continued existence of the human race. But the New York Times is the latest to explore the idea that sex just isn't what it used to be. Meg Wolitzer writes:
Suddenly, being touched by one’s husband or partner could seem so ... last year. I began to imagine that a kind of sex-themed Andromeda Strain had fallen upon the post-30s female population of Earth, causing them to turn away from men. But no, said another friend; sexual disengagement was an equal-opportunity employer when it came to gender, not to mention age ... and saying no to sex with actual partners is being acknowledged more openly ... No may now be more co-ed than ever, and may have a particularly contemporary, techno-sheen to it.
Citing mostly anecdotal evidence, the Times wonders if sex is now but one of many distractions. "There are just so many seductions," Wolitzer writes. "Facebook! Wikipedia! Love! Hulu! Curriculum Night! Art! — and we are human, and mortal, and inevitably we have to choose." Not having sex, Wolitzer concludes, "is like being in graduate school; you’re allowed to think for a while, and not be in the world."
However, some stigmas persist: "Because we’re all post-Freudians, it’s as if we still believe sex equals strength, health and life," she writes. Imagine that. Sex. What kind of freaks would pursue it anymore?
The Sex Drive, Idling in Neutral [NYT]
Read more posts by Mike Vilensky
Filed Under: just saying no, curriculum night!, meg wolitzer, sex, trends
Seventeen people have been killed in the south as a result of powerful storms and tornadoes. A tornado warning was issued for parts of Georgia early Saturday, and Alabama Governor Robert Bentley declared a state of emergency on Friday. States of emergency were also declared in 14 Mississippi counties and 26 Oklahoma counties. In Mississippi, more than 23,400 people are without power. Thunderstorms and tornadoes are expected to continue moving throughout the southeast and Midwest today as the storms head northeast. [CNN]
Read more posts by Mike Vilensky
Filed Under: extreme weather, georgia, mississippi, thunderstorms, tornadoes
Correction: Santorum's new slogan, "Fighting to Make America America Again," was borrowed from the title of a pro-union poem by gay poet Langston Hughes, "Let America Be America Again." That's like the least Santorum-y thing in the world, so obviously Santorum had no idea until ThinkProgress reporter Lee Fang informed him yesterday.
FANG: Today, you unveiled your new campaign slogan, “Fighting to make America America again.” But was it intentional that this line was borrowed from the pro-union poem by the gay poet Langston Hughes?
SANTORUM: No, because I had nothing to do with that so-
FANG: Oh, alright thanks. Wait did you have a clarification there? Was it just a coincidence?
SANTORUM: I didn’t know that. The folks who worked on that slogan for me didn’t inform me that that’s where it came from, if in fact it came from that.
FANG: Do you like Langston Hughes? Is he a favorite poet?
SANTORUM: I’ve read some of his poems. I’m not a big poetry guy so I can’t say I have a favorite poet, sorry.
But more than just not knowing the origins of his campaign slogan, Santorum isn't sure whether he even has a campaign slogan to begin with.
When asked a short time later what the campaign slogan meant to him, Santorum said, "well, I'm not too sure that's my campaign slogan, I think it's on a web site."
It's definitely "on a website," and it looks a lot like a campaign slogan. Santorum has obviously been heavily involved in the campaign-slogan-making process so far.
VIDEO: Rick Santorum Says He Has ‘Nothing To Do’ With His Own Campaign Slogan [Think Progress]
Santorum in NH: People want a President who believes in them [Union Leader]
Read more posts by Dan Amira
Filed Under: saint torum, 2012, campaign slogans, langsotn hughes, poetry, politics, rick santorum, think progress
Online gamblers looking for PokerStars, Full Tilt Poker, Absolute Poker, and other popular websites are now likely to find seizure notices from the Department of Justice. Eleven people, including the founders of three of the largest online poker companies (overseas firms that operate in the U.S.), have been charged with bank fraud, money laundering, and online gambling offenses. Prosecutors allege that the companies tried to get around laws prohibiting banks and credit cards from processing gambling payments by making billions of dollars from U.S. gamblers look like payments for golf balls, jewelry, flowers, and other items to online merchants that didn't actually exist. "Foreign firms that choose to operate in the United States are not free to flout the laws they don't like simply because they can't bear to be parted from their profits," said U.S. Attorney Preet Bharara, who better not have any skeletons in his closet if he wants to keep making up for lost time.
Poker Websites Targeted in Federal Crackdown [WSJ]
Related: The Next Best Crooks [NYM]
Read more posts by Nitasha Tiku
Filed Under: profits anonymous, absolute poker, department of justice, doj, full tilt poker, gambling gamblers, imaginary merchants, pokerstars, preet bahara
The MSNBC host, with whom I once spent a very pleasant afternoon on-air discussing the final book in the Harry Potter series, is already preparing for motherhood. [Facebook via TVNewser]
Read more posts by Chris Rovzar
Filed Under: blobs, cable news news, contessa brewer, good things happening to people we like, media, msnbc
The Bloomberg administration is known for its big ideas — especially when it comes to our verdant public parks. But for some reason, the big ideas never trickle down to one particular set of green rectangles: the city’s public tennis courts. Since Bloomberg-appointed park commissioner Adrian Benepe back in 2002, the parks have offered an endless number of splashy programming. The city is hosting a haiku contest this month, for instance, about a public farm the city helped spearhead in Battery Park City with eighty plots. Organic plots, of course.
But when it comes to the staples of park life, like tennis, the good-ideas people seem to be on another video conference call. Earlier this month, the Parks Department announced they were not only increasing the price for annual tennis permits, they were doubling it, from $100 to $200. Liam Kavanaugh, who serves as Benepe’s first deputy commissioner at Parks, says the agency was struggling to come up with ways to increase revenues to make up for budget cuts. They reasoned that doubling the price of permits would put them at a rate that was "still a good deal" for players.
Sort of. The truth is that for tennis junkies who will do anything to play (confession: I’m one of them), a season pass for $200 is fair. We are the players who play in the winter with gloves and long johns and can be found on the court many days of the week. But for novice or aspiring players, the $200 pass is a major turnoff, especially considering the byzantine way the Parks Department runs the courts.
When crunching the numbers, Kavanaugh says doubling the price might discourage some to purchase annual tennis permits, but over time it will average out and parks will able to recoup double the revenues. While this may be right, what’s troubling is how little the Park’s Department actually takes in each year. According to city figures, parks made $1.8 million selling tennis passes and permits. This figure has held steady in recent years. It stems from the roughly 4,000 annual permits sold citywide each year, and 40,000 single-play permits.
In short, the city will be selling permits and passes to the same people — not expanding it’s tennis-playing audience. The goal should be to get more players on the city courts to increase revenues, not keep them off by doubling the fees.
Read more posts by Geoffrey Gray
Filed Under: parks and rec, public parks, tennis, the sports section