Lloyd, Lawyers, Lies and Life

When it rains it pours and in times of trouble we are often reminded that nobody can stay dry forever. It seems that this reality was lost upon Lloyd Blankfein until recently but is coming back to bite him in the face at the most inopportune time. As the Department of Justice continues its cavity search of Goldman's nether regions, Blankfein has officially lawyered up on his own. This is certainly an ominous sign for a man who has [/embed] lost $52 million of his personal wealth this month alone.

In retaining prominent D.C. based attorney Reid Weingarten, Blankfein is tacitly admitting that his situation has gone from uncomfortable to unavoidable. As whispers of Goldman turning its back on Blankfein, which have slithered through the street's back allies are slowly growing to chatter which will likely end up as rooftop screams. Good days are certainly not ahead for Goldman Sachs, but with each passing day it is becoming more clear that Blankfein will be called on to fall upon the sword and play the scapegoat.

I just want to make two general points for all of you younger guys climbing the ladder with regards to Lloyd, Wall Street and any other profession or situation where big money is involved. They are not revolutionary, but certainly too easily forgotten. Simple as they may be, they are best learned early, repeated often and forgotten never.

Rule#1

Easy Come, Easy Go.

Back at the peak of the Model'n'Bottle era of 2006, Lloyd took home a bonus of $54.4 million, with half the amount coming in cash. The following year he would come in slightly below that amount, but could still pat himself on the back and sit back with that Mini Me, Cheshire Cat, shit eating grin of his. The thing is boys... those were the best of times. It will be a long, long, long time before another IB head sees that sort of payout. Today, it is bad...but it is by no means, the worst of times. Yet, Lloyd gave back a full year's worth of candy canes in one month's worth of painful trips to the dentist. Those cavities are a bitch when left to fester and a dollar hard earned is very easily lost. You are by no means required to hop on the Illini Programmer frugality bandwagon, but think long and hard before you spend that next buck. It might not be anywhere near as easy to earn it back, once it is sunk. Word to the wise:

It ain't how much I make, it's how much I keep.

Rule#2

No Honor Among Thieves.

Don't fall too deeply in love with your firm's culture. Don't be so quick to fling monkey shit at this post because you sliced bacon off your back to get into TMT. Don't think that they love you because they pay you well. Most importantly, don't think that because you are on your way (or have made it) to the top, that you cannot fall down. Your friends, allies and cohorts will turn their backs on you at the snap of a finger when going gets tough. You may be able to count on them in a small shop, but in a global jungle like Goldman Sachs...it's every animal for itself.

Lloyd Blankfein has been placed on the deferred Dick Fuld plan. He will be the whipping boy for the mistakes of an organization. As the story goes, a gangrenous organism will gladly cripple itself by hacking off an afflicted limb. Lloyd has been deemed that limb and he's coming off. It no longer even matters if he was diseased or not. The system will do anything to survive... remember that.

No matter how big you get within the system, it will always cut you down to size if it is endangered. Friendly reminder for those on those riding the private elevator up to the ivory tower.

Comments (7)

Aug 23, 2011

Very well written and informative post, Midas. But I do wonder--if Lloyd can afford the best, why not get the best? Could it just be acute paranoia over his job that might even be a little overplayed?

Metal. Music. Life. www.headofmetal.com

Aug 23, 2011

great post

Aug 23, 2011

Midas, if you aren't a CEO of a bank and don't have a guy like Reid on speed dial, you are doing something wrong. It's pretty hardcore to be a CEO and not have a power lawyer on call. I'm not certain that is will be the death of Lloyd or that Goldman is moving against him, but it does say something about the culture of Wall Street and how easy it is to be removed from the power you hold.

Aug 23, 2011

I too agree with Frieds. I am not so sure what this says about Lloyd and the security of his position as CEO of Goldman as much as it is an indicator of the scrutiny Wall Streeters will be coming under in the near term. The market has been speculating on Lloyd's resigning for some time now, frequently predicting successors but Goldman has time and time again reaffirmed their belief in him. Maybe (and quite probably) this just has to be their official stance on the issue but the whispers you talk of, I believe at this time are just that, maybe rumors at best.

Aug 23, 2011

Well put

Do what you want not what you can!

Aug 24, 2011

Frieds is always right, so annoying.

;)

Aug 24, 2011
Comment

Pages