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"I am the mouth of Sauron"

Golden Sacks spokesperson Lucas von Praag.

I think van Praag is completely on-message. I think he is conveying exactly what Lloyd Blankfein and the other executive managers of Goldman Sachs want him to convey: that Goldman Sachs has done nothing wrong, that we deserve our fearsome reputation and our outsized compensation, and, if you don't like it, you can all go fuck yourselves.

This is a trader's mentality. A trader never apologizes. A trader never admits he made a mistake. A trader never says he's sorry. To do so, in his mind, would be to admit weakness. Another trader could use such an admission against him in the next trade. By the same token, a trader never sits back and takes it. If someone attacks him, he attacks back, preferably in greater strength, to discourage similar attacks from his opponent or others in the future. Perceived weakness is blood in the water in trading, and it attracts other sharks.

At the same time, a trader understands that all other traders behave in the same fashion, and he should not take sharp elbows or direct attacks personally. After all, most trading is conducted among a relatively small number of firms, among a relatively small number of traders, all of whom know or know of each other. At the end of the day, you've gotta shrug off your wounds and bruises from the battles of today and get ready to trade with the same bunch of assholes tomorrow. No harm, no foul. No hard feelings.

Goldman Sachs is run by traders. Lloyd Blankfein is a trader. Gary Cohn is a trader. Lucas van Praag's career at Goldman has coincided with the rise of traders into positions of power during the Great Moderation and credit boom. van Praag made partner in 2006, not too long after Henry Paulson, the last of the Goldman investment banking old guard—corporate finance client guys—left the CEO slot for Treasury. Traders already held most of the executive power by then anyway. Lucas van Praag has been running public relations at Goldman Sachs just like he would have for a giant institutional hedge fund. Because that's what it has been.

I suspect the disconnect in many people's minds—including mine, I must admit, on occasion—comes from the fact that Goldman perfected the image so many years ago of being a selfless, anonymous, client-first organization dedicated solely to their clients' success. Parts of it still operate that way, but the power and most of the money are made elsewhere. And it is made for Goldman alone.

Traders, eh? Traders and trader types must truly be at the top of the greasy pole, then -- since so many other elites and wannabes are imitating them...

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Submitted by gmanedit on

Maybe three years ago, when Goldman was first caught betting against their clients, I predicted that no one would want to do business with them.

I was wrong. Still don't understand why.