Ativo Capital

Rigorous Thinking

Financial and economic commentary reflecting Ativo’s world view:

Goldman Sachs, Right vs. Wrong, and How is their Business Model Sustainable?

Thursday, April 22, 2010


The following comments were made by a friend of mine who chose to remain anonymous.

He writes:

“I have my own experience with them but just by the numbers they post every year, people keep buying stuff from them and paying them a lot of commissions no matter how much they were hurt whether it is dot-com or subprime. The Greek thing really reminds me of what Enron did with California and the bad PR they are getting is just relentless which means their management might be completely oblivious. It seems like the firm is always pushing the boundaries of what their lawyers tell them is “legal” to make money as opposed to looking at whether, despite whatever legal loophole they think they found to find to make money, their behavior might be morally reprehensible, against the spirit of the law and a depraved way to treat their counterparts, sophisticated or not. They just don’t seem to have the intelligence to abstract things enough to understand right from wrong.

Again I might be biased because of our own personal experience with these guys, but looking at the German government, the Chinese, the SEC here and the general attitude of the public and commentators, I probably would not want to be named in the papers as the next sucker who lost money with GS as a counterpart but if you look at their earnings seems like others might not think the way I do.”


  1. I’m also told that in Germany the local boss of Goldman Sachs has gone into “virtual hiding” and is refusing to speak to the press.

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