Friday, December 31, 2010

Lloyd Blankfein as the New John Gotti?

Well, well, whenGoldman Sachs Chairman and CEO Lloyd Blankfein isn't spreading propaganda that he is "doing God's work", he thinks he is the new John Gotti.

EPJ's Taylor Conant spotted this in the new book, Superclass:
Recalling a situation in which [Timothy Geithner when he was president of the New York Fed] had to manage a crisis in the derivatives market, he said, "What we did is, we got the fourteen major firms in a room down the hall here with their primary supervisors, a group of the largest global institutions and their supervisors from five countries. And we said to them, 'You guys have got to fix this problem. Tell us how you are going to fix it and we will work out some basic regime to make sure there are no free riders to give you comfort, so you know that if you move individually everybody else will move with you.' And there is nothing written, no guidance, no regulation, no formal process. We did it without a formal request to us. We told everybody we were going to do it but we were not asked to do it."

"These fourteen firms," he continued, " accounted for something like 95 percent of all the activity in this market. The Fed, the SEC, the FSA, the Swiss, and the Germans were there. And those were the principals, and each firm brought three people, they had an executive committee of four firms that ran, almost weekly at the beginning, a conference call among the other firms. And the best thing about the process was that it was efficient, there was nothing written except letters from the firms laying out their commitments... [chairman and CEO of Goldman Sachs] Lloyd Blankfein jokingly called them 'the fourteen families,' like in The Godfather...

1 comment:

  1. All that talk of dealing with the "free riders" (aka firms that didn't totally eff up) puts a whole new spin on the idea of making people offers they can't refuse.

    The message Don Geithnerleone seems to be pushing is people can either work with the Family or sleep with the fishes.

    And never mind what "the law" says! He is "the law".