Friday, March 16, 2012

The Muppets object!

Readers are doubtless familiar with the allegations of Greg Smith, a former executive of Goldman Sachs, who published a devastating opinion piece about the organization in the New York Times. Amongst his other complaints was that clients of the firm were sometimes referred to as 'muppets'.

The Wall Street Journal points out that this is a relatively 'clean' term for clients compared to some others that have long been in circulation. Furthermore, former Federal Reserve chairman Paul Volcker pointed out that the 'culture of contempt' identified by Mr. Smith was "a reflection of a market mentality". NPR reports:

Volcker suggested the mentality problem is one that can be solved by enacting the Volcker Rule, which would ban commercial banks from making speculative, proprietary trades.

Volcker recalled the period in the 1990s where commercial banks were allowed to buy and incorporate trading firms into their business, and diagnosed this as toxic not only to the culture at places like Goldman but to the country as a whole.

. . .

Volcker noted that commercial banks hold the money of average Americans, and are insured by the federal government. "Should the government be subsidizing or protecting institutions that... are essentially engaged in speculative activities, often at the expense of customer relations?"

This is exactly what Smith described — it was known inside Goldman as hunting elephants. "In English [this means]: get your clients — some of whom are sophisticated, and some of whom aren't — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don't like selling my clients a product that is wrong for them."

There's more at the link.

Be that as it may, the Sydney Morning Herald reports (with tongue firmly in cheek) that the real Muppets aren't happy at their name being taken in vain like this.

Attorneys for the Cookie Monster and Big Bird have reacted angrily to claims that clients of Goldman Sachs are muppets.

"Never at any time have my clients, or for that matter any anthropomorphic furry animals with long necks and googly eyes, been clients of Goldman Sachs's structured products division," said a statement by plaintiff lawyer Zachary L. Writstein yesterday.

"The claims have irreparably tainted our clients' reputations. It is unconscionable and libellous to suggest that, like Colonel Gaddafi or the Greek government, muppets are so gullible they'd buy derivatives from Goldman Sachs."

Flanked by his legal team, Kermit the Frog also announced he was reserving his rights. "I'm bewildered," he told a press briefing. "The claims are definitely actionable. Miss Piggy and I intend to file in either the Supreme Court of NSW or Victoria. Australia has the best defamation laws in the world you know. The plaintiff can still get up even if the story is true!"

"Look, it's common knowledge that when Goldman recommends 'buy', the firm is dumping stock, and when they say 'sell' it's time to buy," Kermit's attorney said. "To suggest that a muppet would acquire financial products from Goldman Sachs is a shameful and egregious slur upon the person of any children's television icon, let alone one as knowledgeable as a muppet."

A spokesman for Fozzie Bear concurred. "They might be able to dupe those really early childhood characters like IgglePiggle and Makka Pakka, but even Dorothy the Dinosaur is awake to the fact that a client of Goldman is just a target for the prop [proprietary trading] desk."

Again, more at the link.

To make matters even more amusing, it turns out that the Muppets - in the guise of the family of their creator, Jim Henson - are, or were, clients of Goldman Sachs! Is that a case of fiction being stranger than truth?


1 comment:

trailbee said...

There was a good reason for the passage of Glass-Steagal, and Wall Street and people like Greenspan, Rubin and Summers, who wanted it removed knew exactly what they were doing. G-S was a huge winner.