CEO OF Goldman Sachs Can't Sleep At Night. What's Keeping Him Up?

Discussion in 'Wall St. News' started by ByLoSellHi, Jan 13, 2007.

  1. The poor bastard. He got the shaft on his bonus. :p

    What Keeps Lloyd Blankfein Up at Night?
    January 12, 2007, 12:35 pm

    Goldman Sachs C.E.O. Lloyd Blankfein

    The trouble with being at the top of your game is that there is so much room to fall. That may be why Forbes’s profile of Goldman Sachs, like some other recent media coverage, tends to characterize the giant securities firm as beset by potential peril. Once you are on a pedestal, everyone wonders what will knock you off, and when.

    Goldman has set two annual earnings records in a row. The firm leads the pack in mergers and acquisitions. Its wealth managers attracted $94 billion in new money last year. Total revenue grew by 50 percent. Goldman’s stock climbed 55 percent.

    But according to Forbes’s article on the firm and its chief executive, Lloyd Blankfein — whom writer Neil Weinberg describes as a “nebbishy Master of the Universe” — threats abound. Goldman may have become too dependent on trading, he writes, “a volatile, random, risky business” that could make it “more vulnerable in a worldwide market meltdown.”

    Mr. Blankfein himself sounds a bit nervous, especially for a man who just received a $53.4 million bonus. Forbes says that he:

    can’t sleep some nights, fretful over what could go wrong “when the unforeseeable happens,” he says. “What keeps me up nights is how changes in sentiment because of unforeseen events could unravel years of wealth creation.” He adds: “How much wealth would leave how quickly? And what would be the knockoff effects? I worry about scenarios like that.”

    And Wall Street itself shares those concerns, which may be why Goldman’s price-to-earnings multiple is so low compared to competitors Morgan Stanley and Merrill Lynch, even though its profits per employee are two to three times higher.

    The difference, perhaps, is that neither of those firms could be described the way Forbes described Goldman: “a giant hedge fund with some consulting services attached.”
  2. Artie21


    Every American Jew born before WW2 had or has the fear of going broke and ending up on a park bench, no matter how rich and successful he might be. It's a cultural gene. Most of that has faded in my generation (b. 1961) but apparently it's still alive in the Blankfein clan, despite his birth after the watershed mark.
  3. I've never been jewish and born in 71. But when you look over the abyss once you don't want to go back.
  4. S2007S


    He should give back the 50+ million dollar bonus if he cant sleep at night, must have a guilty conscience.
  5. Artie21


    That's exactly it. Blankfein came out of the Co-op City, perhaps the ugliest lower middle class development on the Eastern seaboard (it's a collection of 25 story ugly red brick hi rises in the middle of nowhere on the edge of the Bronx. His parents no doubt instilled thrift and caution in him. I do not question for one second his fears of catastrophe, whether they are rational or not.

    The lesson of going broke or being dirt poor is as strong as the lesson of touching a hot stove: you remain eternally vigilant.

    The cultural gene I refer to goes back further, echoing the generations of insecurity as the outcast or victim class in European society
  6. maybe he needs to read Fooled By Randomness :)
  7. jem


    You dont have to be jewish to be that way. My dad grew up in queens NY and his dad barely keep a job thruogh the depression and although my dad has a comforatalbe amount of money he has been scared of losing money his whole life.

    The funny thing is since he retired he trades his ass off. so now he really could lose all his money.