What happened to the global economy and what we can do about it
with 21 comments
By Simon Johnson, co-author of 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown
In a surprise announcement earlier this morning, Time Magazine brought forward its annual "Man of the Year" award "“ and conferred this honor on Lloyd Blankfein, CEO of Goldman Sachs. April 1st apparently is at least 7 months earlier than anyone else has ever won this award, since it began in 1927.
As the award has previously been conferred on controversial figures (including Joseph Stalin in 1942 and Mrs. Simpson in 1936), Time also saw fit to issue a statement clarifying Mr. Blankfein's merits,
"[Goldman is] very important. [They] help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It's a virtuous cycle. [They] have a social purpose.”
A spokesperson for Goldman responded quickly,
"It was always clear to us that had [Lloyd not won], it would have been quite disruptive to the world's financial markets. We would have had to spend money, other people would have had to replace transactions as well. Generally for us, volatility is good for our trading business, however it would not have been good for the financial markets as a whole, so it would not have been good for our business"¦We would not have been affected directly by our exposure to [him], but the world's financial system would have been affected"¦there would have been no losses vis a vis our credit exposure."
Now it seems the Nobel Peace Prize Committee feels pressed to follow suit. Their statement just released in Oslo begins,
"The Norwegian Nobel Committee has decided that the Nobel Peace Prize for [2010] is to be awarded to President [Lloyd Blankfein] for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples. The Committee has attached special importance to [Blankfein]’s vision of and work for a world without [credit derivatives]."
There may be more to this story. According to the website Market News Video, "Goldman recently upgraded Norway-based oil and gas company Statoil (STO) from neutral to buy, and even put the stock it on its conviction buy list". And Goldman has long predicted that oil prices would hit $200 per barrel "“ a forecast that has greatly helped buoy Norway's public finances and restrain pressures to join the eurozone.
In a conference call, David Viniar (Goldman's CFO) scoffed at the idea of a connection between the firm's market activities and Mr. Blankfein's recent slew of prizes,
"We had no material exposure to [Norway]."
Mr.Viniar further remarked, somewhat enigmatically,
"We also have taxpayer money at GS and it's our responsibility not to lose it."
He did not, however, clarify to which country's taxpayers he was referring "“ nor how exactly Goldman got its hands on their money.
Meanwhile, there are persistent unconfirmed rumors that Mr. Blankfein is the front-runner to win the Pillsbury Bake-Off.
This would be controversial, as we are still 10 days away from the competition itself and Mr. Blankfein is not one of the named finalists.
Still, Mr. Blankfein did recently win the Financial Times 2009 Person of the Year award "“ despite also being at the same time "a keen judge for the Financial Times and Goldman Sachs Business Book of the Year Award."
In fall 2009 Mr. Blankfein had seemed to commit to stop fixing the results of various kinds of competitions that are widely believed to be free and fair – like the stock market:
"We participated in things that were clearly wrong and have reason to regret. We apologize."
But there may be divergent views within Mr. Blankfein's own senior management team. David Viniar, for one, is holding to a harder line. With regard to what happened in the basketball gold medal game at the Vancouver Olympics, he was quite firm:
"There's no guilt whatsoever."
Written by Simon Johnson
April 1, 2010 at 12:12 am
Posted in Commentary
Tagged with April 1st, goldman sachs
What a great post to start secular humanism day!!
LosGatosCA
April 1, 2010 at 12:22 am
4/1 arrives early for east-coast guys. Unfair.
Preston L. Bannister
April 1, 2010 at 1:53 am
How true. I read this last night and have been puzzling over it for 12 hours. (I probably dreamed about it.)
“Has Simon Johnson lost it? Is he testing the waters of satire? If so, please GOD let him stick to the lovely dry land to which he is supremely adapted by evolution.”
April Fools’ on me. Why do I never read the small print on the bottom of the day’s box on the calendar?
The reason I didn’t realize Why This Day Is Different From All Other Days is that I bought the initial premise, hook line and sinker: awarding the MoY to Blankfein (though maybe not in April) is exactly in character for Time, as is the Reader’s Digest-like pedantry of the Blankfein-adapted exegesis on the Goodness of Goldman. So even when it got truly absurd, I thought it was all a riff on the absurd-but-true. Sucker.
bklyn437
April 1, 2010 at 12:33 pm
Hahahaha! Had me there for a microsecond.
Alex
April 1, 2010 at 2:13 am
Thanks. I needed the humor after reading your book.
Xorox
April 1, 2010 at 4:21 am
Nice. Simon, I think someone is a bit jealous!
haha
April 1, 2010 at 4:23 am
Geeze Simon, you had me frozen for a moment.. I had heavy bets on Timmy. Wonderful, Thanks.
Paul Cohen
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