the understand fully that goldman sachs is going to compete with them they're going to goldman sachs is going to probably trade on their inside information they understand this but there's no choice there's nobody willing to do with goldman sachs does which ultimately frankly isn't potentially good for goldman sachs but it's very bad for the rest of us it's very bad for our capital market system it's very bad for capitalism and you know i've been writing about this for years and how they should change and nobody is listen to me now maybe this will get people goldman sachs to wake up but frankly in lloyd blankfein as one page letter response today i didn't get the sense that there's any contrition anything that they're willing to change in what they've done and so i don't see much changing and i don't see the clients being in a position to force them to change no now from that response by definitely didn't seem like he was sorry at all or felt bad if anything they just tried to maybe not smear a greg smith but demote him to some low level employee that really didn't matter but y

he also said it took him until until 2012 almost 12 years after signing up at goldman sachs to figureut something toxic was going on. other words why why didn't didn't he resign earlier. now he's saying all these bad things about goldman. but as smith explained the culture changed over that time. then finally mr. smith's role was vice president, a relatively junior position held by thousands of employees around the world. where do they get that information? from an unnamed goldman sachs source, really who would have figured. when you tell the truth about goldman sachs the media pounces against you. isn't that amazing? now, let's tell what you goldman sachs normally does. carl levin challenged them on the senate. here watch. >> july 1, 2007, tells the sales course the top priority timber wolf. your top priority is to sell [bleep] deal. >> i don't recall the sales. trying to sell. >> okay, you're trying to sell [bleep] deal. and it's your top priority. come on, should the goldman sachs should be trying to sell--by the way it sold it, and a lot of it after that day. should goldman sachs

clients as nuff it's that was just one of his scathing remarks about goldman sachs but you know maybe it's those employees that actually have the most in common with muppets look at this. trucker great show for trusting north. star so. look at that what do you know muppet mortgage lenders now muppets got a walk on the hollywood star on the hollywood walk of fame today a good time to bring out some of the muppet commentators that have come forward other goldman employees who have come out talking about their former employer let's bring up some of the ones that caught our eye got a former partner with goldman sachs jacki zehner who said so much junk was created that should have never been with disastrous consequences and that will be a black mark on the whole industry for a long time as it should be that in and of itself is a testimony to the industry in general having lost its way when you can create toxic waste and make it as if it was not you are indeed harming your moral fiber and then there's henry gold the third great grandson of goldman sachs founder marcus goldman on an op

-- the goldman sachs folks would be quite happy to see that happen.to them if they have that happen. that's $15 on the price of filling up your tank if you have a pickup truck. so goldman sachs's got a lot at stake basically to go back to the future which is what got us in this so much trouble. the bottom line here -- >> but let's be fair, mr. welsh, you and i know that democrats have already received money over the years from goldman sachs, indeed the president's 2008 campaign was not shy whether it came to receiving donations from that very bank. >> you are absolutely right. in fact, democrats played a significant role and it was under bill clinton that we got rid of glass stiegel. we broke down the walls between investment banks and commercial banks. so, yes, democrats were complicit in this. and we've got to do better ourselves. but bottom line, what we have to incent is the model of main street banks where their relationship to their clients is one of partners and advisors rather than predators. >> indeed. congressman peter welsh, thank you for b

but the fact that our publicly subsidized them backed banks like goldman sachs and j.p. morgan take these guys seriously you know obviously the cia you can see in the e-mails treat these guys as a joke that you know these guys think they're like super high tech spies for googling perhaps or drinking a martini shaken not stirred while googling and that's what they think is like our spy is but one member of the in the case of wall street who buys the research these are the these are the wall street banks to get bailed out by the taxpayer exactly so the taxpayer get bailed out of goldman sachs or without without the largest of of warren buffett of the taxpayer an insider crony information dollar sized went bankrupt or reading but because of all the money that's through now they can use those money their money to buy worthless research but the fact of it doesn't mean anything as worthless as a motorist their money that they're spending their spending our money as you see in this next seven massive insider secret dealings scheme with strat for injury sacks maybe so the e-mail

but the issue here, too, the next step is goldman sachs has a big asset management in public pension ey are selling pension funds in copper hedges and those pension funds nnevada fired goldman for underperforming. if they donned happened what goldman sachs is selling them and they are under water and they need bailout mon from the the u.s. taxpayer, that's a danger zone that the government needs to be paying attention. that's a danger zone when the federal reserve allowed am-ex and all sorts of companies to avail themselves of bank money. certainly, the government did that with a.i.g. goldman sachs is all about covering their bets for their own clients and shareholders to get that. but with u.s. taxpayer and the federal reserve not told what was going on, that's the issue. >> greta: i have to go. next time, we will get in on how much the lawyers make. that's the next one. >> sure. >> greta: thank you. >> sure. >> greta: coming up, former governor rod blag is heading to prison. but he had a few things to do in his final day of freedom. what did he do? you may be surprised. and gabriell

betting against or john pozza rather i get the pulses mixed up was benny gantz was a fund that goldman sachs help put together but paulson help pick out the mortgages and they were they picked the ones that were the most likely to fail yet when i think the allegation is when goldman sold them to its other customers it didn't point this out it and pretended that this was structured to be a good investment not to be a bad investment so somebody else was was betting that they would fail and in fact baldwin themselves was betting against some of the very products that they were recommending their customers buy but the reason that some of this is able to go a lot is the fact that these that wall street has so much employee when's in washington. yeah that's what we've got to stop i'd like to open up first of all we need to get rid of these regulatory bodies i don't like i don't think that a brokerage firm or an asset management firm should be licensed by the government you know i think that individuals should be able to decide who they want to work with and they should be able to work with any bro

broker the goldman sachs brokerages eyes out and ruined his life that's the doctor's responsibility but a pension fund manager is managing money for other people it's a third party transaction they have no idea what's going on in a lot of times we find out that these pension managers are in cahoots with these brokers on wall street and they're ripping these people off unmercifully in a way that's true through a third party so here you have third party institutionalized fraud now this is a this is a huge problem no baxi when i really see eye to eye on that point and i think to the fact that the regulations stay sickly state that you know an institution is on their own because. as they're smarter they should know better is not really taking into account the fact that the money that the institution is managing is retail money at the end of the day if you're managing a pension fund yes you're an institution but the people whose money is with you that's individual investors money that's people that are expecting to retire so i don't understand why there would be two different sets of pro

don't really know what's going on but you know i think there is a hell of a big connection between goldman sachs and the government i mean certainly a lot of goldman exacts work in the government work with the treasury department you know and they go back and forth and i don't like this relationship but i think goldman sachs a lot of other firms have been on the receiving end of giant government subsidies big balance goldman sachs is able to go to the federal reserve and borrow a bunch of money real cheap i can't go to the federal reserve i can't borrow any money at at those lows rates and if my firm goes out of business no one is bailing me out i'm going to i'm going to fail i don't have friends in washington that are going to come to my rescue so i don't think there's a level playing field i think it's back and i think firms like goldman sachs have helped the stack and some of the three hundred s. so you'd figure on the f.c.c. the regulators go after the small firms to keep them from competing with the big for and some of the reason that you just cited are why some people are a lot of people t

all right speaking of grapes just brown people were shocked shocked that goldman sachs refers to its clients as the muppets despite all the wealth destruction of the past decade the population still believes that wall street is there to help them make money of course in your book you explain why that's not the case but why what about this great smith letter do you think it's a much ado about nothing or is it going to have legs as they say in the in the in show business you know i was i was actually pretty critical of of his of his op ed and people are somewhat confused about what the difference is between me and him because i've just written this kind of tell all wall street book so the major difference is that greg is delusional he seems to think that over the last five years something has changed so i think i think greg is is kind of full of himself in thinking that everything was fine for twelve years and then all of a sudden something changed it's always been this way if you do the research in the history of wall street and main street relationships which is what my book called h

and from stress tests to black eyes, goldman sachs' reputation takes a hit as a top executive resigns with a very public goodbye. it's "nightly business report" for wednesday, march 14. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by: >> susie: good evening, everyone. my colleague, tom hudson, is off tonight. the sounds of relief are audible on wall street today. just a day after the federal reserve unveiled the results of the bank stress test. 15 of the -- 19 of the largest banks passing hypothetical tests which are their ability to withstand a severe recessio citigroup was among those that didn't pass and today shares fell over three percent as investors weighed the bank. looking at what's in store for shareholders. >> reporter: one day after getting snubbed by the federal reserve, citi shareholders are perplexed. the fed says the nation's third largest bank isn't worthy of an invitation to the big bank party, yet citi says its capital levels are strong and it would've passed the fed's dreamed-up doomsday scenario if

here's a sample, dear goldman sachs, you're fired, best kermit. sly awaiting kermit the frog's response to "the new york times" goldman op-ed piece. and finally, that goldman sachs refers to their clients as muppets is the best explanation of the current crisis. how big of a ding is it to goldman's reputation, let's ask cnbc's senior editor, john carney. good to see you all. first, what are you hearing from guys inside? they must just be -- john, tell me. is this a cranky guy who should have been managing director by now but isn't and he's leaving, is he a sour apple, what? >> it resonates with a lot of people. the very first person i spoke to at goldman said, you know, this exactly what i feel has happened to the culture inside. this isn't a universal opinion, however. i want to add that some people said this guy is a jerk, he waited until after bonuses to resign and he's blaming us for being greedy? there's a bit of mixed reaction inside goldman. >> how about, susanne, what are you hearing from guys and women presumably? >> the same thing. it res

you don't buy goldman sachs or sell goldman sachs because some guy who happens to have gripes in london convinces "the new york times" and every other news organization in the country that there is a problem at goldman sachs. if goldman sachs has a problem, earnings will go down. if goldman sachs doesn't have a problem and if business model is sound, if customers like doing business with them, their earnings will go up. >> understood. what about the other banks? main names we talk about almost every day. jpmorgan, citigroup, bank of america. >> we have buys on all of those stocks because if you take a look at the prices of those stocks relative to the book value of those companies, you'll see that in many cases they are selling at significant discounts to book value. if you look at book value and you compare it to the cash in the company, what you will see is that the cash in the company in many cases exceeds book value. the stocks are not just selling at a discount to book value. although jpmorgan is premium. the stocks are not just selling at a discount to book value. they are selling

>> it's corroboration for a lot of people who have been saying that goldman sachs is evil. on the one hand, you can dismiss this guy as goldman is trying do as a disgruntled relatively junior level employee who is just one person out of 30,000 and certainly doesn't speak for the firm. on the other hand, what he's saying is nothing new. it's nothing other than people, be they clients, hedge funds and former senior goldman people have been saying privately for years now. i think there's the challenge forever goldman sachs is there's a ring of something about this. >> and what can they do about that and how damaging is it for them? >> well, i'm not sure there's much they can do about it in terms of the public perception. it's very damaging in that respect because it come on the heels of accusations about their misbehavior in the mortgage market. it comes after a lot of questions about another deal in which they were conflict-ridden on all side of the deal and the judge in the case issued a scathing opinion of goldman sachs. it's scratching something that's not a scab. it's very

of goldman sachs he ordered this transfer now just basically what happened is so brian transferred the money from a segregated client account to the m.f. global account and then to j.p. morgan so thus delivering to her boss plausible deniability plausible deniability made famous by oliver north and iran contra scandal now just called the uncertainty principle of finance well let's move on to another headline from j.p. morgan here j.p. morgan claims number one for government debt after jefferson county so j.p. morgan has emerged from the worst financial crisis since the one nine hundred thirty s. as the most profitable u.s. bank has parlayed crisis era loans to cities and states and a willingness to outbid other firms and local government bond auctions into becoming the top underwriter of municipal debt last year this is a turnaround they say for j.p. morgan's municipal bond department which has been marred by its involvement into the biggest scandals in the history of u.s. public finance a so-called pay to play scheme in jefferson county alabama that contributed to the biggest ever u.s

goldman sachs helps the state sell bonds. a spokesman for the state treasurer says there are no plans to alter the relationship, but says "the state of california is not a muppet when it comes to bond sales and our relationship with banks." the california treasurer's office adds that even though it's a goldman sachs client, it hires independent financial advisers to help make decisions. in the bigger picture, though, former federal reserve chairman paul volcker says there's been a dramatic transformation on wall street with firms focusing on profits and away from clients. mary snow, cnn, new york. >> i've been blogging on this subject myself over the course of the last day or so. check it out at cnn.com/business. basically, one of the issues here, andrew, is that goldman sachs may be a very well-known name for most of us, which is one of the reasons, presumably, by "the new york times" decided to publish this piece by greg smith. but actually, how well do we know it? it doesn't engage in retail banking, it tries its best to o

company is toxic and destructive and he said what are the three quick ways to become a leader of goldman sachs a execute on the firm's axes which is goldman speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit be hunt elephants in english get your clients some of whom are sophisticated and some of who aren't to trade whatever will bring the biggest profit to goldman or c find yourself sitting in a seat where your job is to trade any illiquid opaque product with a three letter acronym right well take the lead author of the first idea around the axis of the product line i mean goldman like any law street shop is in the business of repeat. ging stocks and bonds into some exotic flora and fauna the idea is you can charge huge commissions on these products and the big spread these are the usually never reported to the customer they mark it up five percent six percent the last as you can mark it up by more than a small percentage but they never actually report the markup as an intern