customers ok well we're talking about goldman sachs why i'm leaving goldman sachs this is the viral video of this week the kone twenty twelve this week greg smith goldman sachs executive director and head of the firm's united states equity derivatives business in europe the middle east and africa he spent twelve years at the firm is now wrote a letter he resigned with a letter to the new york times explaining why he's resigning and said that the company is toxic and destructive and he said what are the three quick ways to become a leader at 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 go. or c find yourself sitting in a seat where your job is to treat any illiquid opaque product with a three letter acronym right well the take them in order the first idea around the axis of the product line i mean goldman like any

broadly because your bank is about the all the banking all of our we saw of course that greg smith goldman sachs op ed which said that profit is the only motive and you have people in the financial press saying come on this guy is kind of naive obviously profit. only motive i'm wondering if this is more broadly the egos on ball street and if so what lengths are broadly acceptable to go to to achieve these profits well i hope the profit is the motive this is the money business after all there's nothing wrong with making a profit the question is how you make a profit and what are the quality of those earnings and what we saw prior to the financial crisis if the earnings that were being reported were very much putting their institutions at risk what was going on at many of our major financial institutions is what we call control fraud and in a control fraud the employees the host they're like parasites on their own financial institutions so financial institutions that say we were innocent we lost money on their trade they actually are getting it wrong because whether or not you need money isn't the

goldman sachs for $100 million. if you could imagine $100 million in that day and age. goldman sachs has been in and out of trouble it's whole existence. i'm not sure what rock greg smithed out from under during his 12 years of gold goldman sachs. but goldman sachs has been in this kind of trouble since it's existence. that's part of its dna. >> i think he has a good point about the timing. we all agree that is the culture at goldman sachs. so the main argument that the rest of the critics use against him is not true and i think we agree on that. but whether it's different in the last 12 years. well, it kind of coincides with back in 1999 they went public. >> yes. >> when the company went public they no longer had to worry what if we lose the money. if we lose the money, it's shareholder money. it's not our money. when in the old days it was their own top bankers who were on the line if they lost the money. >> i do agree with you there. there is a degree of increased incentives across wall street, not just goldman sachs that give people rewards for taking big risks with other people's money, and then waiting to see what happens so they can get a big bonus. but i could

and shannon on the story that we've just can't let go it's too good we have more on the goldman sachs greg smith fallout we've heard some say that a former goldman executive will no longer have a place on wall street because he came out with this take a listen. here is. you know who you close in terms of wall street there's no question about that. but as zero hedge posed in a post today that really caught our eye you know with compensation being low on wall street logo are ok relative and also with wall street shedding jobs and are seeing layoffs hey you know whistleblowers maybe have an incentive to come forward there's not so much to lose and with there was another story saying that was so close were flocking to blow the whistle because of incentives from regulators as a part of dr frank that basically said that they can get a cut out of any settlements that result from their tips so hey is whistleblowing the next. growth strategy. i think it is and i think you know what i think if there's anything we've learned from wall street it's that they will stop at nothing to make a profit and if anyth

and that was the former goldman sachs employee, greg smith. he blasted goldman in a new york times ad saying that the campanili was more interested in making money for itself than for clients and clients were called muppets. what's your take? >> well, first of all, that's one man's view. so i can't really speak to it other than my own eye test which is to look at what he said and see what the ceo said in his voice. if i had to relate to one or the other, i would relate more to the employee who left because i thought he sounded pretty sincere to me. i thought that the ceo of goldman was kind of deflective. i think the more important point here, maria, it's about culture today. i mean, we're really looking at what it's like to work at a company. i think there's a key virtuous seamarkle. and that starts with really enjoying your members and serving up the right product and service. if you're doing that and your customers love you, then your employees are going to love working there. if they love it and you're serving them that, that's a great cycl

think we have to get to some of the points that he makes because it seems like greg smith is still optimistic that goldman sachs can change if it wants to any thinks that clients are eventually going to wise up brady says that have clients don't trust you they will eventually stop doing business with you but i think you have to question how true that is and there is an interesting thing that made the empty theatre day about balance by the way. the one thing i would take issue with in this fascinating amazing story op-ed is the idea that they will lose clients because at this point they haven't even though most of the clients i spoke to are fully aware of how goldman plays them and they still do business with them because they feel they have to. think that's true all right we have bankers you big to fail and firms like goldman sachs they're just too big to try to invest with anyone else. i think the speaker in the c. and d. c. clip is absolutely right. i think it's sort of before on your air as a cartel goldman sachs is king of the cartel after the financial crisis we've lost pierce stearns we've lost lehman bro

goldman sachs says it has reached out to former executive greg smith to learn why he chose to publish his resignation in the op-ed section of the new york "times." and tomorrow, the big board gets revved up for allison transmission. the autoparts maker could be the largest manufacturing i.p.o. this year for more financial news, tune in to "nightly business report" weeknights on this public television station.

. >> greg smith, employee of goldman sachs, at an op-ed this week in "the new york times" about why het goldman sachs. what did you think of it? >> i was glad to see somebodody younger quit for moral reasons as opposed to somebody on the way ou is a 33-year-old guy. i do not believe all the efforts to undermine him. i take him at hihis word that he thought that the pla was not what he had joined up to do. >> "i realized i could no loer looks students in the eye and tell them this was a great place to work." >> thihis was after lloyd blankfein told us that they to the lord'work. is is a coany that sold customers a product, a risky, complicated product, designed solely for a hedge fund manager who wanted to bet against it. how could you believe anything negative about goldman sachs? >> there is an ethos too much on wall street about being cocky and disdainful of your clients. to the extent that this s exposes that, this isseful. but like all things, it is more complicated. what happened at goldman sachs where they had a private equity trading where it was in their long-term interest to b

dimitri and shannon are here to stay on this goldman sachs thing because there's just so much and we've got to hash it out one of the big takeaways greg smith is leaving goldman sachs one of those little nuggets in another excerpt he describes managing directors at the firm who refer to their clients like this. muppets they call the muppets here's the excerpt over the last twelve months i have seen five different managing directors refer to their own clients as it's sometimes over internal e-mail even after the ses the fabulous found out they can't gods work carl levin vampire squid no humility no no humility that's the take away they don't care they're so removed from it that they don't have to care for making that kind of money what incentive is there to care for this more than a pleasure from actually screwing their clients and if you talk to people on wall street ever worked on wall street people have an attitude a special interest which is i'm going to we're going to screw this guy we're going to take his money and we're going to go and we're good and that the stock from aggressive attitude so i think it's part that's part of the game

that sentiment ultimately reflected in this week's damning public resignation of goldman, sachs director greg smith. according to his "the new york times" op-ed, he couldn't take the destructive nature. take away credit requirements and make credit insurance fraud legal, what do you expect the culture to do. many criticized smith for comments, more as a reflection of airing dirty laundry in public, and not everyone disagreed. henry goldman iii, the grand son, tells business insider he thinks smith's scathing review was actually spot on. goldman says it is not just at his great grandfather's firm, but he believes the toxic culture effected all of wall street. i would say removal of all capital requirements in legalization of opaque, secret credit insurance sales to the tune of $700 trillion, and pretending it is not a problem, walking around like it is all good may have something to do with that. i want to bring in the former chairman of the inquiry commission. his op-ed posed a question we have been asking since the collapse. will wall street face justice? i can't think of anything greater than for

greg smith worked for goldman sachs for 12 years. on his last day the investment banker ripped his former bosses in a resignation letter published for the world to see. if makes me ill about how callously they talk about ripping their clients off. over the last 12 month, i've seen five different managing directors refer to their own client as muppets. these days, the most common question i get about junior analysts is how much money did bee make off the client. in the wake of the financial collapse, goldman sachs faced allegations it made profits off the failures of clients. a subcommittee accused the firm of selling financial products to its -- while pushing to gain if they failed. goldman sachs responded to the letter reading in part in our view we'll only be successful if our clients are successful. this fundamental truth lies at the heart of how we could be duct ourselves. smith's letter may have had -- shares of the company were down more than 3% on wednesday. >>> on "moneywatch," the rising cost of a college loan and life after

fraud or personal responsibility, but some of the responsibility lies with the bank and greg smith on from goldman, sachs not back in the banks. >> brenda: todd? >> how did they take on too much debt without, without knowing about it, i'm confused about this. >> people don't understand the loans, todd. everywhere. >> you should know what you're getting into. you get the little check you know the amount that has to go back to the bank. nobody is telling the people they had to buy a home. nobody put a gun to their head and telling them to sign. you guys are talking about fraud. i get the fraud in robo signings, but people have to take personal accountability, not even responsibility and nobody is doing that. >> brenda: jonas, you see a little bit of gray in there, don't you? >> yeah the thing i don't understand, the ways of the bank, jp morgan, makes money. the home lending department was the squarest deal to the consumer and the credit card lending department is total robbery, 30% default rate. nobody cares about those people or renters, home owners getting a lot of money low interest deductible rate and

. >>> greg smith, an executive at goldman sachs investment bank in london for 12 years, resigned yesterdayetailing his complaints in the "new york times". smith called the culture at sachs toxic saying the firm's interest came first with cal can louse talk about ripping off clients. the ceo said smith was disgruntled and his claims did not reflect the culture. >>> a jury in virginia determined that officials at virginia tech were negligent in waiting to warn students of a gunman on campus in april 2007. 33 people died in the massacre. >>> former illinois governor rod blagojevich goes to prison to start serving a 14-year sentence for corruption. he said what he did was legal and an appeal of his conviction will succeed. >>> the remains of 22 belgian children and 6 adults killed in a bus crash in switzerland are being returned to their home country. the victims were mourned in a church service and vigil are yesterday in belgium. >>> nasa assembled an amazing video animation tracing the history of the moon. it shows the moon forming into a molten rock formation of the surface and the many col

in his "i quit" letter, greg smith, a mid-level executive for goldman sachs, said he was sick of a culture where clients were called "muppets" and employees were expected to "hunt elephants" by getting clients to make big trades that led to big profits for goldman. smith closed with this parting shot: "people who care only about making money will not sustain this firm or the trust of its clients for very much longer." "hard-hitting and accurate"-- that's how charles ellis, author of the partnership, the making of goldman sachs, describes smith's op-ed. >> goldman sachs had a unique, privileged position of trust, and it needs to rebuild the base upon which its clients can trust it. >> reporter: and ellis has some advice for blankfein as he struggles to revive goldman's reputation. >> pay attention to the real, real difficulties that are behind some of the rude remarks that are made about the firm and recognize that those problems have to be dealt with. and i know you are dealing with them, but you are going to have to deal with them even more intensively than you have. and you're probably g

. >>> greg smith, an executive at goldman sachs investment bank in london for 12 years, resigned yesterday detailing his complaints in the "new york times." smith called the culture at sachs toxic saying the firm's interest came first with callous talks about ripping off clients. the ceo said smith was disgruntled and his claims did not reflect the culture. >>> a jury in virginia determined that officials at virginia tech were negligent in waiting to warn students of a gunman on campus in april 2007. 33 people died in the massacre. >>>>p >>> remains of 22 be childrp children achildren crap crash in switzerland a returned to their home country. tthe victims returned to their home country. tthe victim were mourned in ata churchurch servic church servi belgium. >>> nasa assembled an amazing video animation tracing the history of the moon. it shows the moon forming into a >> and now here's an early look at one of your top health headlines. most women between the ages of 30 and 65 can go five years between cervical cancer screenings. however, experts say extending the time between pap tests may

it all started with that famous op-ed by greg smith, a goldman sachs employee who finished with thatright in the middle of the "new york times." smith alleged that clients were referred to as muppets. the implication was clear, being a muppet was a bad thing. the muppets are fighting back with this video from allegedly inside the boardroom. >> we'd like to lodge a formal complaint about gold mman sachs use of the word muppet in a derogatory fashion. >> we're not going to take it anymore. >> yeah. >> do you think you guys can come in here and intimidate us? i've got suits made out of things like you. >> sure we call our clients muppets. and sure, we advise them against their own best interest to make us richer. but does that make us bad guys? >> yes. yes, it does. >> we also do a lot of good. we pay taxes. kind of. i passed a bum in the street today and didn't kick him. >> i own a yacht! >> how is that doing good? >> it doesn't, it just feels to good to say it. all together now -- i own a yacht! >> why are you so greedy? >> i don't know. why are you so hairy? >> touche. >> either way,

for you to make any money you market unless you give goldman sachs your money you spiking the ball but as it's called those exactly right the greg smith letter got a little too close to goldman sachs federal reserve bank so they're going to flood the room with a lot of cash which will make a lot of people some short term gains and you know as we've talked about on the show before taken i. p.o. initial public offering like facebook for example goldman sachs takes a huge position for fifty billion dollars illegally by the way that's an uncontested now they're going to take it public for one hundred billion plus so all the lawsuits are going to result from greg smith they'll say look don't sue us we'll put in the guaranteed winner in your account of course on game day one if you drop your charges that's when my peels all about having worked on wall street i myself i've done that many times hello mr jones don't sue us here paine webber oppenheimer or shearson early men because who put this hot i.p.o. in your account and you make instant profits so drop your lawsuit ok how planes every single day that's the law as written by brokers with h

hollywood walk of fame much better treatment you could say than the real life was goldman sachs according to greg smith's op ed and more goldman alum who have come forward about the firm's buffett customers will give you the round up . as a new round of staff cuts a cold men are god's latest work let's get to today's capital account. as you heard me say federal reserve chairman ben bernanke he began his college lecture series today he spoke to undergraduate students at george washington university right here in d.c. becoming the first fed chairman ever to help teach a college course now eighty students apply wrote as they really wanted to be a part of this to become indoctrinated and why the federal reserve is important i would argue let's highlight a few of his powerpoint lessons since we listened and watched his lecture attentively so here's where he's talking about the fed being the lender of last resort he says the qualities there are that they lend freely against good assets at o'connel too great to discourage excessive use honey ok so that's what he told those students that's funny though because w