I just read a Time magazine (print? Whassat?) article on Goldman Sachs. It was a nice fluff piece, but I agree with Cringely’s view on why GS is evil — they’re a trading house masquerading as an investment bank. Their most profitable business has so little to do with investment and so much to do with exploiting market “inefficiencies” (through techniques like millisecond trading, flash trades, and programmed trading) that it’s a joke to even use the word investment when talking about them.
Cringely’s point about trading being a parasitic activity, a necessary evil as part of the larger investment world, is right on the mark. We’ve gone from investing in long-term, often humanity-benefiting companies and ideas, to millisecond trading. And the parade is being led by firms like Goldman Sachs. Invest in the next microsecond or miss the boat!
Lloyd Blankfein is somehow shocked that in this era of giant Ponzi schemes, bankrupt financial institutions, and sleeping regulators, greed for greed’s sake isn’t going over all that well. Huh.
If you’ve got money in Goldman Sachs, you probably don’t need a lecture on greed. But the tide’s changed, and you will likely be getting many of them.
Now maybe GS will stop sending me those weekly invitations to invest with them just because I live in the “right” zip code…