“...they’re really into capitalism.”
May 28, 2016 6:10 PM   Subscribe

Don’t Know What To Read? Let Goldman Sachs Tell You. [Melville House] "Goldman Sachs: financial giant, hotbed of enthusiasm for subprime mortgages, and hapless recipient of your hard-earned money. Who better to tell you what to read? Well, now they are telling you what to read, in the form of a recently-published recommended book list [PDF]. We’re talking about people who incurred $550 million in fines for schemes to turn a profit on the civilization-threatening financial crisis they themselves had helped create, and the line between genius and chutzpah is notoriously hard to draw, so, yeah, I’d like to know what’s on these folks’ bedside tables."
posted by Fizz (50 comments total) 27 users marked this as a favorite
but have they read my best-seller 'how to gobble my knob for fun and profit you thieving scumbag criminals'?
posted by quonsar II: smock fishpants and the temple of foon at 6:15 PM on May 28, 2016 [28 favorites]

Brass tax baby!
posted by clavdivs at 6:21 PM on May 28, 2016 [1 favorite]

I'm one of those "stupid college students" that somehow turned leftwing and a intersectional feminist. This would be great for my post-graduation reprogramming!

P.S. - if anyone wants to read a sublime article, one of my professors wrote this bomb article called ""Gambling with Debt: Lessons from the Illiterate" in the Race, Empire, and the Crisis of the Subprime special issue of American Quarterly. Super brilliant and really interesting to read.
posted by yueliang at 6:29 PM on May 28, 2016 [16 favorites]

They had me at "Industry Background and Flavor".
posted by uosuaq at 6:34 PM on May 28, 2016 [1 favorite]

OMG, check out that reading list. 'Den of Thieves' is on there but for context. They wouldnt dare read 'The Day The Bubble Burst'. WHY, because then all would become clear, that planning global micro compressional Pre-lubrication leveraging analysis on the weight of pollution is all sweat, dice and fears, something that resembles Mr. Bumbles slowly sawn chair.
posted by clavdivs at 6:38 PM on May 28, 2016

The Heretic's Guide to Global Finance recommends knowing your enemy - i.e. reading at least some of this stuff.

However, the Financial Times and [now McKinsey, was Goldman Sachs] Business Book of the Year Award would make for a better reading list. Piketty's Capital was even a winner a couple of years ago.
posted by clawsoon at 6:42 PM on May 28, 2016 [4 favorites]

American Psycho is not on the list.
posted by mochapickle at 6:46 PM on May 28, 2016 [26 favorites]

I'd assumed such a list would be two books long, both by Rand.
posted by feckless fecal fear mongering at 6:46 PM on May 28, 2016 [12 favorites]

This is...kind of dumb? Looking at the actual list, the PDF seems to have been nicked from goldmensachs.com/careers. So the "you" whose reading list Les Vampire Squids are attempting to curate is "people who want to work at Goldmen Sachs." In which case, suggesting a bunch of books about the history of Wall Street and its culture seems....reasonable, no?

I mean, if Goldman Sachs was somehow saying "everyone on earth should read these books," that would indeed be risable, fire away. That Goldman Sachs should metaphorically be dumping a bunch of homework on the desks of today's young Ivy League Tracy Flicks and Ted Cruzes seems...entirely to be expected, really?

I mean, it's not like Goldman Sachs isn't a target rich environment. But it just seems so sad when people start thundering rants without actually understanding what they're trying to make fun of. If you wanted to sneer at them more cleverly, the line to take is point out the fact that's they're so nearly on their uppers that they're stooping to retail banking just to get more money in the door.
posted by Diablevert at 6:53 PM on May 28, 2016 [43 favorites]

Oh, I see, this is like if I was holed up somewhere and heavily armed but had no reading material and they wanted to try and force me out. They'd keep sending these books in and eventually I'd say fuck it, I'd rather go out in a blaze.
posted by bongo_x at 6:57 PM on May 28, 2016 [4 favorites]

Hm, I can't seem to find Pounded in the Butt by my Crippling Debt
posted by Mr.Encyclopedia at 7:12 PM on May 28, 2016 [56 favorites]

Also risible would be recommendations for airport business book Wisdom Literature, from some boardroom Bodhidharmas. But they seem to have restrained themselves.
posted by thelonius at 7:15 PM on May 28, 2016

It Takes A Pillage
posted by a lungful of dragon at 7:22 PM on May 28, 2016 [36 favorites]

There are at least two books on that list -- Burton Malkiel's A Random Walk Down Wall Street and Roger Lowenstein's When Genius Failed -- which are both really really skeptical about the financial industry and really really good.
posted by escabeche at 7:34 PM on May 28, 2016 [8 favorites]

What? None of Trump's books? Well, that shows that even GS has SOME standards.
posted by oneswellfoop at 7:39 PM on May 28, 2016 [2 favorites]

How worried should I be about having read or owning several of these titles?
posted by indubitable at 8:06 PM on May 28, 2016

At least as worried as your clients and business partners should be.
posted by notyou at 8:21 PM on May 28, 2016 [6 favorites]

The only relatively new (as in not over 10 years old) books on this list all seem to be by Michael Lewis. So the "recently-published" designation may be true of the list, but if this list is recommending that potential titans of business read material that's mostly way out of date (much of it from the 80s and 90s), something is seriously wrong all around.
posted by blucevalo at 8:35 PM on May 28, 2016 [1 favorite]

I'd be more worried about not reading some of these books. Having said that, the list is hugely flawed by what it leaves out (see below) if it's meant to be a primer on finance and investing.

There's a natural and deserved antipathy that Goldman Sachs attracts but a book is not responsible for its reader, nor its recommender. I say this because books like Wigmore's "The Crash and its aftermath" are good reads, if you want to know about key economic events (in this case the Crash of 29 and the Great Depression).

Books like "Liars' Poker" by Michael Lewis and "Barbarians at the Gate" are seminal dissections of finance gone wrong.

Peter Bernstein's "Against the Gods" is an entertaining and well-written story about risk management. Malkiel's "A Random Walk on Wall Street" is probably the one book that can steer you away from financial disasters of various kinds. (Though another book, Will Bernstein's "Four Pillars of Investing" would give it a good run for the money, but isn't listed).

"Essays of Warren Buffett" is another good one, and better imo than the other books on the list that are written about Buffett.

"Extraordinary Popular Delusions and the Madness of Crowds" is an early behavioral psychology book which is a colorful read (think Tulipmania and the South Sea Bubble). But surprisingly, there are no behavioral finance books. Kahneman's "Thinking, Fast and Slow" is a huge omission. We've learned a lot in the 150 years since "Extraordinary Popular D and the M of C" was published.

And if we're talking about bubbles, then John Kenneth Galbraith's books are essential -" The Crash" and "A Short History of Financial Euphoria" are sadly missing. We wouldn't have had the housing bubble and financial crisis if more people had taken Galbraith's insights to heart.

The list of recommended periodicals is embarrassing, (no Bloomberg Businessweek and the Economist?) as is the lack of any books at all on spotting accounting fraud and impropriety. Howard Schilit's "Financial Shenanigans" for one. (yes, I can see some eye-rolls but whether you're the baddie or the goodie, and especially if you're the goodie, you need to know about this)

Comically, one of the largest sections in that list is about "trading" and "technical analysis", a field which is characterized by results indistinguishable from luck.

Finally, the list lacks a solid general introduction to investments like Bodie/Kane's "Investments" which is very useful as a framework for everything else.
posted by storybored at 9:05 PM on May 28, 2016 [39 favorites]

blucevalo: From the cluster of books from the '90s, I'd guess the list was thrown together around 2000 and got a few additions in later years. No one's even bothered to add to the self-promoting "by Goldman Sachs employees" section.

I'll even go further and project that the additions start as someone noticing the list, thinking it's embarrassingly out of date and would be fun to revise, so they e-mail until eventually they find the person officially in charge of that part of the public facing site, who didn't even realize the list existed. There's brief conversation about comprehensively revising it but by then they used all the energy they had, so whatever Michael Lewis book they originally named as an "example" of a more recent good book gets tossed on as the only actual addition.
posted by mark k at 9:05 PM on May 28, 2016 [2 favorites]

My favorites:

Hit and Run Trading II: Capturing Explosive Short-Term Moves in Stocks

Wall Street Women - 177 pages
posted by JackFlash at 9:07 PM on May 28, 2016

mark k;
I'm sure that can't be true because I'm assured relentlessly that only government works that way and the private sector is always efficient.
posted by bongo_x at 9:10 PM on May 28, 2016 [7 favorites]

Well, not spending time revising a pointless reading list is a kind of efficiency.

I often feel people who praise the efficiency of the private sector have must have never held a private sector job in their life.
posted by mark k at 9:15 PM on May 28, 2016 [9 favorites]

JPMorgan publishes an annual summer reading list as well. We could order the books on the list at reduced prices from Amazon to give as client gifts.
posted by reenum at 10:51 PM on May 28, 2016

I guess this is interesting for what it leaves out. It would have been a genuine shock if someone like Stieglitz was on there.
posted by teponaztli at 2:22 AM on May 29, 2016 [1 favorite]

Reading through the list... it's all flummery, of course. Goldman Sachs (and the others) are rich and powerful because they're rich and powerful, because they've essentially captured government to enact laws that benefit them and insure them against loss while allowing them to extract the maximum amount of money possible. There's no coherent philosophy behind it, as such: the list might as well be Deepak Chopra and macrobiotic cookbooks for all the difference it makes to the operation of Goldman Sachs (although, yes, I suppose that would fill new recruits with the wrong set of delusions). The important thing to realise is that they don't understand that if you extract all the money out of society, eventually there won't even be enough left to maintain the society at a minimum level and it will collapse.
posted by Grangousier at 2:32 AM on May 29, 2016 [5 favorites]

Thanks OP this is an interesting list and I have added at least one of thee books to my own personal reading list. I would never have seen this list if it weren't for mefi, so thanks again.
posted by Faintdreams at 4:45 AM on May 29, 2016

It's amazing how obtuse people can be about things they don't like. Goldman has a tiny fraction of the balance sheet of the largest global financial players. It prospers because for many decades it has had far more than its fair share of extremely smart people and manages to retain them for lengthy periods of service even often when their short term self interest could be served by leaving -- raw intelligence given good personal incentives magnified by esprit de corps channeled by culture and disciplined by institutional memory. If you want to do ANYTHING of interest in the world, there's no better way to do it than the Goldman Sachs way.
posted by MattD at 7:32 AM on May 29, 2016 [5 favorites]

Yeah, I'm pretty confused by the rabid hatred of Goldman (compared to any random other financial institution). They made it through the financial crisis almost unscathed ... That doesn't mean they had any special role in causing it, they're just better at reacting quickly and are maybe a bit lucky. Anything negative you could say about them also applies to much, much larger banks.
posted by miyabo at 8:51 AM on May 29, 2016 [1 favorite]

On the list but not yet mentioned in the comments: Greider's "Secrets of the Temple." Pretty much a must read for anyone interested in the Federal Reserve.

Not too long ago I rewatched the movie, "Barbarians at the Gate." I still have the same complaint--that the movie doesn't rise to the standards of the book--but it's worth a watch, especially if you liked "The Big Short." (Or James Garner!)

I suppose that the S&L crisis is not represented on the list because it's not strictly Wall Street, but imo, one cannot understand modern financial history without diving into this major inflection moment. In this vein, I'd recommend 3 books:

Martin Meyer's classic: "The Greatest Ever Bank Robbery."
"S&L Hell" by Kathleen Day.
"The Best Way to Rob a Bank is to Own One" by William Black.

In 1990 I wrote Henry Gonzales and asked him to run for President in 1992. He sent me a kind reply but I still wish he'd done it.
posted by CincyBlues at 8:53 AM on May 29, 2016 [2 favorites]

One of the reasons that Goldman is selected out for criticism more than other institutions is that it has been a pretty significant nexus for the intersection of Finance and Government. Like a revolving door for some folks.
posted by CincyBlues at 8:55 AM on May 29, 2016

The following popular works are, of course, exaggerated depictions of the darker side of the industry.

Of course.

Not my call, but I would have added some fiction. The Book of Daniel Drew, The Way We Live Now, Bonfire of the Vanities. Bombardiers, possibly. All a little dated, I suppose, but then, so am I.
posted by BWA at 9:04 AM on May 29, 2016

FWIW, Goldman did an extraordinary job in the financial crisis -- made everyone else look pretty much like amateurs.

First, it recognized the bubble in housing-related securities FAR earlier than any other comparable institution. It was unwinding exposure by early 2007 and of course was also playing a notable role in the big short(s). It was an aggressive advocate for the targeted bailouts which ended up preventing a depression and costing the taxpayers relatively little. (The bailout in which Goldman had the greatest direct stake, that of AIG, has generated a significant profit to the taxpayer.) It acted without hesitation to raise capital (and a public gesture of good faith) from Warren Buffet at a critical time, even though it was hugely costly to it to do so. In a somewhat less heralded (but very familiar to me) move it didn't sell its Lehman and Washington Mutual exposure at the depths of the crisis, but held on to it, both stabilizing the market to an extent AND making itself huge profits in the long run as those exposures ended up being worth multiples of their market values at the lows.
posted by MattD at 9:27 AM on May 29, 2016 [6 favorites]

Maybe people don't like the name.
posted by bongo_x at 10:15 AM on May 29, 2016 [1 favorite]

Can't imagine why.
posted by dersins at 10:41 AM on May 29, 2016 [2 favorites]

Goldman Sachs : The Culture of Success by Lisa Endlich

posted by chavenet at 10:50 AM on May 29, 2016 [2 favorites]

Some people may recoil at the name, because GS positioned themselves to make a lot of money off a market collapse that transferred a lot of wealth — homes, particularly — into even fewer hands. They also have a lot of investments in and financial relationships with the federal political machinery, including a prominent candidate who shall go unnamed. Hard to believe why any of that would be controversial, I know, but there it is.
posted by a lungful of dragon at 10:58 AM on May 29, 2016 [1 favorite]

I'm pretty confused by the rabid hatred of Goldman.

It's not that complicated. Goldman Sachs is despised for the same reason all of the large banks are despised: because they are criminal enterprises run by sociopaths that will lie, cheat and steal anything in their lust for more money. Among others:

Securities fraud
Money laundering
Price fixing
Document fraud

Goldman alone has paid over $6 billion for its criminal activities just in the last few years.

What should have happened to Goldman Sachs and the other banks is the same thing that happened to General Motors.

1. The bankrupt firms should have been taken over by the government
2. Wipe out all of the equity holders.
3. Give bondholders a haircut
4. Replace all of the management
5. Sell the restructured banks back to the public for a profit.

Instead we have the same criminal thugs running the banks as before, collecting the same multi-million dollar bonuses on the backs of the American taxpayer.

Matt Taibbi had it right back in 2010 when he wrote that Goldman Sachs "is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
posted by JackFlash at 11:52 AM on May 29, 2016 [11 favorites]

We were worried about a freeze on short term bond markets at the height of banking crash, JackFlash. We could've kept those flowing either by authorizing the treasury to buy those bond directly, or by capitalizing smaller banks and credit unions to do it. In either case, if more personnel were needed to operate the loans, then we could've simply assigned personnel from the SEC, or NSA, CIA, military intelligence, etc., vaguely like sending in the military to run the mines. In other words, there is no reason even the name Goldman Sachs should've survived the crash since the economy could operate fine without them.

We'd preserved much of the equity in non-financial institutions since they'd get their payday loans as cheaper rates for a while, but the derivatives market might've taken a bigger hit this way. We could've intervened similarly directly in derivatives that actually matter, like the commodities markets. like say by seizing useless deliveries, if that were a concern.
posted by jeffburdges at 1:04 PM on May 29, 2016

What should have happened to Goldman Sachs and the other banks is the same thing that happened to General Motors.

That did happen to a number of financial institutions though. AIG, Lehman, Bear Stearns, Merrill Lynch. It didn't all happen in the same way but in many case shareholders were completely or almost completely wiped out. A number of these organisations no longer exist in any form, others were folded into other companies.

At one point the government owned 70%+ of AIG (most of that has since been sold). So basically your 1 - 5 did happen.

Goldman survived the crash because they managed to sell most of their mortgage exposure well before the crash and because they sold additional shares, diluting their existing owners.
posted by atrazine at 1:12 PM on May 29, 2016

Goldman survived because American taxpayers bailed them out.

Goldman survived because the Federal Reserve permitted a 100-year-old investment bank to be reclassified overnight as a bank holding company. This legal technicality allowed Goldman to borrow at the discount window and become federally insured like a small town bank. They did this by the fig leaf of buying a single small-town bank in the mid-west. Effectively this allowed Goldman Sachs to buy fire insurance for their bank after the bank was already on fire. Without this FDIC backing they would have gone under.

Goldman Sachs survived because Hank Paulson, Treasury Secretary and form Goldman CEO, bailed out AIG which benefited Goldman to the tune of $13 billion. Without the AIG bailout, Goldman would have gone under.

Goldman Sachs survived because they were loaned money by the taxpayers at below market rates. We know the market rate because Warren Buffett loaned to the same Goldman Sachs at a 10% rate plus stock warrants. Goldman was given loans by the government at half the market rate. The fact that the Treasury made a "profit" on the loans is beside the point. The fact is that the loans were a subsidized gift from taxpayers who made less than half the profit they should have on the loans.

And on top of this Goldman Sachs committed over $6 billion of criminal activity. No one went to jail. In fact, they instead used the government bailouts to award millions in bonuses to executives.
posted by JackFlash at 2:52 PM on May 29, 2016 [8 favorites]

oh god these are the most boring people on earth
posted by turbid dahlia at 3:01 PM on May 29, 2016 [2 favorites]

oh god these are the most boring people on earth

If only ...

Unfortunately they are also the most dangerous and destructive people on the planet, responsible for the ruin and impoverishment of millions of people not just in the U.S. but around the world.

For example, Goldman Sachs was the enabler for the phony banking and debt concealment that got Greece into trouble. Today the economy is in tatters and the unemployment rate is over 25%, but Goldman made billions on the crooked deals.
posted by JackFlash at 4:04 PM on May 29, 2016 [2 favorites]

The banality bibliography of evil.
posted by turbid dahlia at 4:42 PM on May 29, 2016 [3 favorites]

> Goldman survived because American taxpayers bailed them out.

Your list is good, but never forget the rot starts at the top. Good for laughs, apparently, if you get invited to the right parties.
posted by IndigoJones at 5:01 PM on May 29, 2016 [1 favorite]

I suppose that the S&L crisis is not represented on the list because it's not strictly Wall Street, but imo, one cannot understand modern financial history without diving into this major inflection moment. In this vein, I'd recommend 3 books:

Martin Meyer's classic: "The Greatest Ever Bank Robbery."
"S&L Hell" by Kathleen Day.
"The Best Way to Rob a Bank is to Own One" by William Black.

I'd add Inside Job: The Looting of America's Savings & Loans by Stephen Pizzo, Mary Fricker, and Paul Muolo.
posted by SisterHavana at 6:49 PM on May 29, 2016 [1 favorite]

Markets, Mobs & Mayhem: How to Profit From the Madness of Crowds

posted by destro at 7:47 AM on May 30, 2016 [1 favorite]

I really hope the recommendations on this list are out of date because the list is old, and not because those were the required reading books the list-makers read in their college classes before going to work at Goldman Sachs, but it's just as likely to be the one as the other.
posted by subdee at 3:56 PM on May 30, 2016

Another book will worth checking out is 'Disassembly required: a guide to capitalism as it actually exists.' it's goal is to set up a left/radical critique of capitalism as it has developed post-Marx, and manages to do so without being overly shrill, as the Marxist line generally can be. It's easily the best know-your-enemy econ book I've read.
posted by kaibutsu at 6:05 PM on May 30, 2016 [1 favorite]

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