Goldman Sachs is having an identity crisis
I miss Lucas van Praag. He was Goldman's spokesperson during the 2008 financial crisis, and he became known the world over for his sharp tongue. He regularlyreporters for being stupid and failing to understand finance. He once described a Wall Street Journal story as"effluent.
That was the voice of Goldman Sachs 2009 — the adamantine firm that managed to make its way through the crisis relatively unscathed. The Goldman Sachs of 2023 could never. What in 2009 was a disciplined force of finance's greatest killers has been humbled, weakened. The source of this stagnation is both strategic and cultural. The public outcry and regulatory changes following the crisis forced all of finance to be more transparent. But ultimately the bank's stumbles come down to the leadership of David Solomon — the 61-year-old CEO who thinks it's cool to. When he took power in 2018, Solomon set out to morph the bank into something less highbrow, more ordinary.
These are lean times. As dealmaking has dried up and losses in his pet projects pile up, Solomon has laid off."Deal flow is highly correlated to board confidence," one Goldman banker told me, and right now, that's at an all-time low."The knives are out." Back in the bad old days, van Praag quipped to the Sunday Times of London that"vampire squid are very small and harmless to humans." This sort of dry humor worked back then, but for today's Goldman Sachs, the joke just doesn't hit the same way. The essence of comedy is truth, and right now the truth hurts.Lucas van Praag's Goldman may have been hated by society, but on Wall Street it enjoyed the prestige of being feared.
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