Every now and then, a single quotation summarises a complex situation.
In August 2007, CitiGroup CEO, Chuck Prince, described their blindness to the financial crisis about to unfold. “We see a lot of people on the Street who are scared. We are not scared. We are not panicked. We are not rattled. Our team has been through this before.’ We are ‘still dancing’“.
Similarly, a quote from Lloyd Blankfein, Goldman Sachs CEO, may well come to typify the aftermath of the crisis, as regulators begin to sift through the wreckage. Giving evidence to Congress in January, the New York Times (NYT) quoted him as saying “when Goldman sells a security that subsequently goes up (i.e., on which the other party makes money), “we wish we hadn’t sold it“.”
As the NYT commented, “so much for putting the customer first“.
Today, the Wall Street Journal reports that the main US regulator, the Securities and Exchange Commission, has charged Goldman with fraud in respect of a sale of mortgage securities which the SEC says left investors with “losses of more than $1bn“. The SEC says Goldman earned “about $15m for structuring the deal and pitching them to investors“.
Last year, Blankfein also described himself to the London ‘Sunday Times’ as “doing God’s work“. The blog is not sure that investors would necessarily agree.