It's not easy being Lloyd Blankfein these days. I have to believe he was one of the only people on the planet to feel relief when the Deepwater Horizon exploded. With news of Goldman Sachs seeking a back-channel settlement with the SEC, a recent FCIC subpoena accusing Goldman of stonewalling, and Time Magazine opining about his possible successors, you almost have to feel bad for the guy.
Is anyone else surprised that he's lasted this long? From a strictly strategic standpoint, wouldn't he have been of greater utility to the bank as a scapegoat, falling on his sword after the bank went hat-in-hand to the Treasury for a bailout? All the subsequent revelations of wrongdoing could have then been conveniently blamed on Blankfein, in much the same way Obama likes to blame his screw-ups on Bush.
How much longer can Lloyd last? Even with a successful settlement, the SEC is going to force the bank to cop to a charge that makes the bank look like they screwed customers. That black eye isn't going away for a while. And now the FCIC is accusing Goldman of trying to cover up other misdeeds by burying the facts in millions of pages of documents. Right or wrong, it's a public relations nightmare.
Incidentally, the names being put forward for Blankfein's replacement all make sense: Forst, Cohn, even Suzanne Nora Johnson (imagine the pop in the stock price if she were handed the reins). But the one notable absence from the candidate list has to be a complete oversight: Tim Geithner. Let's not forget the role Timmy played in the salvation of the firm, and keeping the AIG stuff off the radar. Tribute must be paid.
I don't envy Lloyd Blankfein one bit. The nature of his career path is such that he's spent the majority of it above the fray, wholly unconcerned with what the peasants might think or say. This has to be a rude awakening. Be that as it may, at what point does keeping him in the CEO position start costing the bank far more than the outward show of indifference is worth?
I'm not really qualified to say, because my personal opinion is that each and every application for TARP assistance should have come with the CEO's resignation letter attached. But we don't live in a world of consequences anymore, do we?