On main street, GS is known as the "great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money"
Well they took a huge hit with their investors when leading up to the 2008 real estate bubble they were pushing and selling toxic assets to their clients, while they were liquidating their own positions of those very assets.
Initially they claimed there was no conflict of interest and that’s simply how finance works, but then internal communication leaks showed they knew the assets they were selling clients were not just shit (but knew the underlying mortgages were fraudulent themselves going back to 2005) and they were doing that in mass as part of an effort to artificially prop the asset value up as they were liquidating their own.
It all came out in a case they settled for $5B with the government. From the department of justice : “This $5 billion settlement includes a $1.8 billion commitment to help repair the damage to homeowners and communities that Goldman acknowledges resulted from its conduct, and it makes clear that no institution may inflict this type of harm on investors and the American public without serious consequences.”
yet they still operate, are more powerful than ever, and there is a revolving door with them and top levels of government...so I agree with you reputation is irrelevant to them. Plain and simple everyone knows they are scumbag oligarchs at the top of that organization, but they are oligarchs nonetheless.
Are you aware that the major players on Wall Street and Mainstreet all donated to Clinton far more than Trump? Clinton’s corporate contributions dwafted Trumps.
I mean, I’m not fan of Trump but to say he is looked upon favorably by corporations over his opponent is verifiably untrue. Let alone claims of “the messiah”.
FYI for those not getting the reference, "Main Street" is typically used to refer to investors who aren't large institutions, in contrast to "Wall Street". https://www.investopedia.com/terms/m/mainstreet.asp
(Neither of these terms are particularly accurate—I used to work a block away from Wall Street, and all the actual trading happened by ssh to New Jersey—but they're metonyms with specific meanings.)
Let's see, where to begin. Their role in 2008 crisis, the commodities bubbles (food, metals, oil) they deliberately created, their role in the collapse of the Greek economy, countless examples of stock price manipulation, insider trading, securities fraud, ripping off their own customers repeatedly and so on.
I don't think there is another investment bank on Wall St that has had its short term greed and disregard for society exposed to the degree that GS has.
But is it justified? Do people actually know what Wall St does?
I would expect people to have more animosity for consumer facing banks like Wells Fargo or Bank of America as their nickel and diming practices actually hurt average people.
I doubt your average joe even knows what GS does beyond being a “vampire squid.”
I don't think we can reasonably expect everybody to really know everything. Wall Street in particular is a highly complex world, where only some of that complexity is really necessary. I've been reading the financial press since before I was in high school and spent years working in the industry. I don't feel like I fully understand it, and I'm sure I never will.
That said, I think the reputation is reasonably justified. Many smart people have pointed out that the financial sector has increased drastically in size, soaking up an awful lot of money relative to the value it creates in the economy. I'm sure people do dislike their banks, but at least those banks do something for them. Goldman Sachs extracts billions from the economy and doesn't do jack for average people. If those average people hear from people closer to the problem that Goldman Sachs is a vampire squid, I don't think it's unreasonable of them to trust that and tie it to their very reasonable economic resentments.
Neither does Oracle, MemSQL, Mongo, MSSQL, C#, Java, or anything we technical folk talk about. That doesn’t mean it doesn’t create value for the world.
It doesn't mean it doesn't, but it doesn't mean it does.
Oracle in particular is an interesting example here. Their revenues are $40 billion per year. I know for a fact that some of that revenue is from companies that are stuck using Oracle for historical reasons; they wouldn't use it if they were starting fresh today with, say, Postegres. Oracle surely knows this, and so has an extractive, rentier approach to pricing.
Are they a company that creates $40 billion in value every year? I doubt it. Is it possible that net of costs, they are a net negative? Definitely.
This is even more true with financial companies, who act as intermediaries or are external actors to transactions. I used to work for a proprietary trading firm. We had no customers. Our job was to go into the markets and turn a pile of money into a bigger pile of money. As market-makers, we provided a little more liquidity to the markets. But did we create societal value in line with how much money we extracted? I sure don't think so. Which is part of why after a few years I got out and never went back.
Why does it matter if Goldman Sachs doesn't do jack for average people? Neither does SpaceX, or Virgin Galactic, or Tesla Motors. Companies specialize in whatever field they want, and some make the conscious decision to cater to a certain clientele.
We're talking about public perception of a company, so whether people find them personally useful is definitely one factor in that.
Another factor surely is notional utility. Even if somebody buys a different car, they can understand what Tesla might do for them. They might never fly on Virgin Galactic, but they could imagine doing it. What Goldman does is something most people will not only never need, but would have a very hard time imagining that they need.
But they do. They provide services people pay for.
GS OTOH is a meta entity that moves your assets around in a never ending quest to find bigger fools willing to pay more than they did to acquire them. There is literally nothing useful about it and eventually it destroys the value of your assets once there are no more fools left. But it’s legal because they seek out and fund, make rich (IPO), or (apparently) pay off enough socially important people that the practice is allowed to slide. And it’s sure nice when you get the modest kick backs to your account, amirite? Let’s just hope the supply of fools never runs out and we can keep growing money forever. Not an unsafe bet either, unfortunately.
Put another way, what the corporations you cited do is called produce goods. It’s the economic model in many places and despit capitalism having its own set of problems at least companies produce things that people pay for. There are many useful services the financial industry supplies but here we are talking about the guts of how the investment banking subsector operates. If the industry was honest 2008 wouldn’t have happened. When was the last time Tesla royally fucked over your personal assets?
> I doubt your average joe even knows what GS does beyond being a “vampire squid.”
..which is a prime example of bad reputation. Reputation, does not care about justification, it just exists once it started existing.
It must be tempting for GS to just not care about their reputation on main street since they don't engage in that kind of business, but the business they do engage in does not get easier when everyone they might want to interact with is carefully weighing the benefits against the risk of getting tainted by association.
>I doubt your average joe even knows what GS does beyond being a “vampire squid.”
I guess the question is whether it matters what the average joe thinks. If it does, then GS is in a bad place because all the joes I know wouldn't touch them with a 10ft pole. If not, then we only need to consider what the financial folks think (which I can't speak to).
Well, it's not just Main Street that dislikes GS. They've done plenty wrong, benefited from the bailout, and are accused of being crony capitalists(1).
Did anyone know what actually GS do anyway? Yes, they are an investment bank, they are dealing with money, they are going after ever bigger margin for profit. But how they get there is anyone's guess, and doubt there are that many people in the whole world understand what exactly GS did to get those money.
Average joes might not know what GS is, as with most of us here on HN, but they surely feel pain that the investment bankings brought to them. In that sense, 'vampire squid' is actually quite useful metaphor: It is mystical, it is malicious.
Speaking as a somewhat average joe, we dislike Bank of America for giving us terrible service and hitting us with obnoxious fees, but we really hate Goldman Sachs & friends for torpedoing the entire American economy with their greedy fraud.
Wall Street investment banks have a much, much worse reputation than ordinary retail banks.
Sure, but how many Main Streeters need to securitize their bond offering, hedge their massive foreign currency holdings or take their startup public in Hong Kong?
The only consumer product I know of is a savings account from Marcus.com, and since it’s a brand new product, the growth is strongly positive.
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
This description fits Goldman Sachs to a "T". And I think they would probably like the description, given its origin.
A life contained only to the US is still miserable for the jet set spoiled. There is good chance they will leave US eventually and be Huaweied to Malaysia.
Don't think so. I'm having a hard time figuring out what it actually means. No urbandictionary entry, and the only other time it seems to have been used was another HN thread last month.
Also, I know for a fact that they really care about their reputation, and that internally, they are stressing about this.