An Ode To Lloyd

In honor of Lloyd's legacy, I thought it'd be appropriate for this thread.. Here's a little slice of Lloyd Blankfein's life, history, and highlights.

Origins

Born in the Bronx, Lloyd lived a very humble life growing up. His father was a clerk at USPS and his mother worked a daytime receptionist job. LLoyd himself was a hard worker, and while attending public school in NYC he worked in concessions at the Yankee stadium; a true hard working New Yorker - not someone brought up with a silver spoon in his mouth - as some uneducated, occupy wall street feminist-vegan Prius drivers would say (nothing against vegans - or feminists ;~) ).

This hard work and humility would go on to reflect in his accomplishments and achievements; in Spring of 1971, Lloyd graduated from Thomas Jefferson High School as Valedictorian - with an acceptance letter from Harvard.

At Harvard, Lloyd studied History in undergrad, immediately enrolling in Harvard Law afterward as part of the J.D. Class of '78.

Career before Goldman

He began his career working in law at the prestigious firm known today as Proskauer Rose. After a few years at PR, Lloyd jumped ship to Donovan, Leisure, Newton & Irvine; a firm that would eventually fall due to scandals in which a senior partner was hiding documents in a major anti-trust case. Lloyd switched track, and joined a commodity trading firm J. Aron & Co. in London, as a precious metals salesman.

The Goldman Sachs

J. Aron & Co. was acquired by Goldman Sachs, and because he was such a strong performer, he was given a managing position in the Currency and Commodities Division; from 1994 to 1997.

He very quickly made a name for himself with strong performance and insight - generating tons of revenue for the firm; in 2002, he was appointed as vice chairman in charge of the Fixed Income, Currency and Commodities Division and Equities Division. It should be noted, when Goldman went public in 1999, a lot of potential rivals of Lloyd's left the firm due to "internal combustion." Setting Lloyd up to be in the right moment at just the right time.

Again, he was always a strong performer, and in 2006 was appointed chairman and chief executive officer. What motivated him and drove him to such heights? How did he do it? Many say that he just had a knack for the markets and kept on top of things as every second passed. However, according to some former partners of his, he would never stop wanting to make more money - a result of his humble life growing up..


He Also had a talent for making money—“commerciality” was the word he coined— and in as Darwinian and profit-driven an environment as Wall Street, and at Goldman in particular, this quality did not go unnoticed at the top levels of the firm. Blankfein preferred not to dwell, though, on his ability to make money, although a number of his former partners believe he was obsessed about his own compensation and making as much money as he possibly could— partly haunted by the memory of his parents’ financial struggles.

Money indeed came his way, in 2006 he made just over $50 million dollars. A reflection of Goldman's strong performance at the time; generating just shy of $10B in net earnings.

The Financial Crisis of 2008

Right at the peak of disaster during the financial crisis, when Lehman Brothers fell, the govt. allowed Goldman (and MS) to switch their status from standalone Wall St. firms to regulated banks, falling under the safety net of taxpayers. This not only saved Goldman, but opened the door for them to make a KILLING. Goldman would heavily expand their commodities business and ate up physical commodities assets (oil, gas, coal, electricity, etc.). With backing from the fed, Lloyd and Goldman were able to do what most other firms couldn't, and grabbed a hold of these assets while they were hot and while they could.

Not to forget mentioning.. Warren Buffett also invested $5 billion dollars to show his faith in Goldman's capacity to not only survive the crisis, but to thrive afterwards.

Post 2008.. God's Work.

Despite all the criticism, backlash, and hate by the general public; Lloyd firmly believed in himself and his firm. He said that banks were "doing God's work."


We're very important. We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It's a virtuous cycle. We have a social purpose. Others made no money and still paid large bonuses. Some are not around anymore. I wonder why?

I know I could slit my wrists and people would cheer. I'm just a banker doing God's work.


Retaliation

The SEC would go on to sue Goldman Sachs for the fraudulent selling of a synthetic collateralized debt obligation tied to subprime mortgages. Lloyd testified before the FCIC that he considered Goldman's role as a "market maker," not a creator of product. As such, he argued that the firm had no legal or moral obligation to inform it's clients that it was betting against the same products they were buying from Goldman. Lloyd would go on to be criticized "by lawmakers and pundits, for issues from its pay practices to its role in helping Greece mask the size of its debts."

However, Lloyd hired high profile defense lawyer Reid Weingarten (represented WorldCom and Enron). Him and the firm would continue operations, and continue to thrive. In 2011, Lloyd was listed as #43 in Forbes Magazine's List of The World's Most Powerful People.

Summary

Lloyd Blankfein is one of the most successful CEO's of our time, and has led a top firm very well when considering all of the obstacles and scrutiny they have faced. Surely, there were some bailouts and life-savers that came his way, but he has held his head up high and taken full ownership and pride in his accomplishments, while also facing his faults honorably.

I know a lot of you probably know even more than this basic summary post, but surely it is a great way to recognize who he is and what he's done, while opening the door for discussion of what is to come.

What are your thoughts on Lloyd's career? Love him or hate him? What would you do next if you were Lloyd, and what do you think is actually to come? Gary Cohn for CEO of GS? Major changes at GS afterwards? Do you see Goldman continuing to stay at the top - or do you see this as the mark of the beginning of the fall of GS's rule? Share all your thoughts and speculation below.

 

Wow, talk about an elaborate way of unconsciously revealing your love for the guy.

Just tell him how you feel dude.

'I'm just a banker doing God's work.'

Someone should tell this guy bankers don't fit into any conception of God's work, regardless of what part of the world you're in/what area of faith you lean towards. I wish him luck in continuing to rationalize his life, one where he'll eventually realize for all his wealth and prosperity, it came during a time when the world was upside down in what it should actually value and that he had no more of a positive net effect on humanity than any peasant he looks down on.

I share the above sentiment. Fuck this guy. And his UPS clerk dad. Fed Ex all day.

 

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