Thursday, June 24, 2010

Michael Lewis: Goldman Sachs is Doomed

Lewis, author of The Big Short, tells CityAM:

This is a prediction that is going to come back and haunt me, but I think that Goldman Sachs is doomed. I don’t think that in its current form it can survive. We could be looking at four to five years, but the proprietary activities will split off, those people will end up in their own hedge fund – that is if new regulation doesn’t forbid it anyway...Their relationships with customers on every front are poisoned, and they can’t function as an investment consultant if they have this problem of honesty.

Did I mention that Goldman Sachs was a great short candidate? Oh yeah, months ago when the stock was trading near $200 per share. Today, it is trading at  $134. Blankfein is gone when the stock breaks under $100.


  1. RW - yes your GS call was a good one. You've actually had others and I do enjoy the news items. But what is the latest GE ad banner at the top of your site all about?

    I'm not suggesting your advertisers have to be idologically sympatico with you. But can't you think of some way to acknowledge the ironic nature of GE's "endorsement" of competition? On the other hand maybe advertisers have mis-used the term "competition" so frequently that it has lost its ironic flavor with readers.

    Excuse the random thought and keep up the good reporting.

  2. About half the ads on EPJ are ads placed directly through EPJ, the other half come via Google's advertising service.

    The GE ad is a Google ad, but I haven't seen personally it show up in Google's rotation yet, but once I do I'll make sure to comment.

    That said, as you indicate, there shouldn't be any problem with me taking ads from GE, Goldman Sachs or even Tim Geithner personally. I would love to have them support the anti-Oligarch position.