Goldman Sachs

The Partnership: The Making of Goldman Sachs
$20.00
I picked up The Partnership to try to understand what Charles Ellis rightly calls the "global juggernaut" that is Goldman Sachs. Goldman operates "with almost no external constraints in any financial market it chooses, on the terms it chooses, on the scale it chooses, when it chooses, and with the partners it chooses," Ellis writes in his dry study of the world's most powerful financial firm.

Ellis has been granted extraordinary access to Goldman's partners, including two former Treasury secretaries, a former undersecretary of State and a former chairman of the New York Federal Reserve. Ellis is the highly regarded founder of Greenwich Associates, a consulting firm that advises large institutional investors (and employs several Goldman alums). Opening up to an insider like Ellis was a smart move on Goldman's part, perhaps, but not for the poor reader who shells out $40 for this tome. It's as though Tiger Woods had commissioned his caddy to tell the story of his life.

As a result, despite the personalities behind Goldman, The Partnership is remarkably lacking in personality. Readers hoping to learn about the firm's modern reach and influence -- as I was -- have to slog through years of corporate history. Ellis doesn't have the narrative flair of William D. Cohan or Michael Lewis, and Goldman itself seems like a soulless place, where ambitious men sacrifice marriages and children in the hopes of someday joining the ranks of making partner and earning a fortune.

The view from competitors might have helped here by providing some much needed drama from those who have the scars from their battles with Goldman over the years. But there's no sense of fun or drama in The Partnership, only cold relentless striving, and the book reads like an official corporate history. Even the scandal involving British publisher Robert Maxwell whom Goldman helped embezzle money from pensioners, becomes an example of how Goldman skillfully used its influence to make problems go away.

Following the Great Panic of 2008, Goldman's power and influence gained it much attention, not all of it from admirers like Ellis. Goldman has emerged as the preeminent investment bank and it used its position and the weakened state of its competitors to grow even stronger. For a firm that has such influence at the top reaches of our government, this raises a troubling question of whether Goldman is too powerful, too entwined with policymakers that some cynically refer to it as Government Sachs.

Bottom line: For finance professionals or managers and business consultants, The Partnership might offer up some interesting insights into what makes a successful organization and how it deals with inevitable failures, conflicts and mistakes. But this isn't the book for the general reader who wants to understand why the world wouldn't be any better off without Goldman in it.

Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System---and Themselves
$32.95
It is hard to imagine a more complete and riveting history of the 2008 financial crisis. It is not enough to have "lived" through this crisis--this book is a must read for everybody. It is filled with behind the scenes "calls to and from Warren Buffett and other CEOs" and fascinating merger hook ups that nearly, but never got completed. Did you know that Goldman Sachs tried unsuccessfully to sell itself to Citigroup at the height of the crisis???

"Too Big to Fail" is the 2009 version of "When Genius Failed," a definitive report of the fall of the Long Term Capital Hedge fund by Roger Lowenstein. First one should read Lowenstein's book...then Sorkin's. If you read these books in order, you will see the true potential of moral hazard: because the Fed orchestrated a bail out of the risky hedge fund and all it's banking partners in 1998, the banks didn't learn the true dangers of too much leverage and too many fancy derivatives. They therefore continued to load up on leverage and derivatives...thus the collapse of 2008. Obviously the crisis was more complex than that...but avoiding leverage and derivatives would have eased some of the pain.

The Goldman Sachs Group, Edition: WetFeet Insider Guide
$24.95
Goldman Sachs is more straitlaced than most of its competitors, but it¡Çs a good fit for people who like working as part of a team. For wannabe Goldman-ites, this WetFeet Insider Guide explores why the firm is so esteemed; how it differentiates itself from its competitors; how the firm is organized; and what employees love?and hate?about working there.

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance
$22.00
This book contains a great amount of detail and is generally written in an entertaining style with a suitable amount of "gossipy" type items. My criticism would be the over use of the semi-colon - why not just use shorter sentences? Chernow also makes some statements that are inconsistent with the overall quality of the book such as "they were so handsome that women would chase them down the street". This is silly writing that borders on idolatry and the editors should have picked up on this as it detracts from the quality of the work. There is also a bit too much of what I would describe as hero worship - these men could not have been nearly as capable and almost other-worldly as they are depicted. J.P. and Jack are treated a bit unkindly in my view.

Still a good read and well worth the investment of time. It is a "weighty tome", literally.