Morning Coffee: Blankfein says 'Government Sachs' is OK. Beware Machiavellian management tactics
Several former Goldman Sachs employees have joined the Trump administration, including the chief economic advisor to the president and former Goldman COO Gary Cohn; chief strategist Steve Bannon; treasury secretary Steven Mnuchin; Mnuchin's deputy James Donovan; and deputy national security adviser Dina Powell.
Goldman Sachs CEO Lloyd Blankfein thinks this is OK. In his annual letter, he defended his firm's tradition of sending alumni to government positions, as quoted in Business Insider:
"Gary was not the first person from Goldman Sachs to join the government, and we hope and expect that he will not be the last. Five of my most recent predecessors went into government service, and that has not been by happenstance. One ethic that has long pervaded Goldman Sachs is a commitment to public service if one is given the opportunity to serve. And that has been true over time and in many of the geographies in which we operate.
“We have been criticized for the fact that some of our colleagues, after long careers at the firm, have moved to work in the public sector. The charge is that Goldman Sachs is able to extract certain advantages that others cannot. In fact, the opposite is true. Those in government bend over backward to avoid any perception of favoritism."
So what are these ex-Goldman execs up to?
Bannon got the press – the "opposition party" – to bite hook, line and sinker on a story linking his “fiery” right-wing populism to his father losing $100k by selling off his AT&T stock during the depths of the financial crisis.
Mnuchin, facing increasing fears that Trump’s “America First” economic platform could trigger a retaliatory series of damaging sanctions around the world, is doing damage control to assure everyone that the administration doesn’t want to start any trade wars.
Cohn has been advising Trump on which government programs to cut in his initial budget proposal.
All of them are making suggestions for the Federal Reserve’s vice chairman for supervision, a powerful Trump appointment that will signal just how much regulatory relief Wall Street can look forward to under his administration.
Separately, it’s well known that many employers on Wall Street and beyond “manage out” unwanted staff using a variety of tactics, often traumatic for those on the receiving end. However, they usually don’t admit to doing so.
“I am always looking for people I can manage out,” a vice president at the U.K. headquarters of a U.S. multinational financial services company told the Financial Times.
“Redundancies are a huge hassle and we did so much of this after the financial crisis that we are not doing these big programs anymore. But profits are not great ... If I can get my team of 300 down to 250, my boss will love me.”
Upper-crust headmistress takes the banking industry to hand over its “patronizing, exploitative attitude to women who are seen as merely ‘diligent’ and ‘safe pairs of hands’ rather than as ‘great minds.’” (finews.com)
The former manager for one of two ex-Barclays swaps traders on trial in London for allegedly rigging a key interest rate benchmark wishes that he hadn’t written an email showing that he was well aware that his desk was trying to influence Libor. (Law360)
Goldman Sachs has become the largest buyer of severely delinquent home loans from mortgage giant Fannie Mae during a year-and-a-half $4.5bn binge. (WSJ)
Lloyd Banking Group is hiring for its investment bank (Bloomberg)
New father quits investment consulting role for former public sector job for better work-life balance (Financial News)
Deal-maker Kuo-Chuan Kung is setting up a new private-equity firm, Nexus Point, in Hong Kong, after leaving another firm he co-founded, MBK Partners, which has invested more than $10bn in Asia. (WSJ)
Companies are crunching lots of data about their employees to figure out who works best with whom. (WSJ)
Stress is caused not by other people or external events, but by your reactions to them – in the workplace, many people blame their high anxiety levels on a boss, job, deadlines, or competing commitments for their time, but peers who face the same challenges do so without stress. (Harvard Business Review)
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