BOOKS - Goldman Sachs - The Culture of Success by Lisa Endlich - Alfred A Knopf £18.99 - Blush-making kiss and tell.
Howard Davies is disappointed that potentially interesting insights are marred by gushing prose and a lack of an authorial point of view.
There is a growing public appetite for 'kiss and tell' books by former employees of US investment banks - or at least publishers clearly believe that there is. Fiasco, by Frank Partnoy, exposed some of the more exotic trading practices of Morgan Stanley's derivatives dealers: now Lisa Endlich gives the inside story of Goldman Sachs' on/off flirtation with a public offering of shares in itself, and trawls through some of the less glorious episodes in the firm's history: chief among them the 1987 insider dealing scandal and the Maxwell affair.
There is a marked difference of tone between the two, however. I do not imagine that Partnoy gets too many Christmas cards from his former employers.
Endlich is more careful, more polite. I guess she still aspires to an invitation to the annual alumni bash.
Her politeness, even reverence at times, is both a strength and a weakness: a strength because she clearly tries hard to explain the motivations of the firm's leadership group in an empathetic and insightful way; a weakness in that much of the writing remains essentially descriptive. It is hard to know what the book is for - there is no authorial point of view, no clear thesis being advanced. If you want to know a little more about that subset of Tom Wolfe's Masters of the Universe who work at 85 Broadway, or in the old Daily Telegraph building off Fleet Street, then this is the book for you. Do not look for more.
The historical chapters are competent but perfunctory. As presented here, the founding fathers of the firm, Goldman, Sachs and Weinberg, are straight out of central casting. It is not until Robert Rubin takes the stage in the 1970s that the story comes alive. Endlich seems to be what one used to call 'gone' on Rubin. He is 'deeply humble and unpretentious', 'deft', 'searingly smart', 'self-effacing' and 'universally admired'. All this before we get to the 'dark eyes and thick dark hair that over the years has become peppered with gray'. It is blush-making stuff.
His successor Jon Corzine, by contrast, merely 'says thank-you to waiters and speaks graciously to hired drivers'. But he does wear a 'signature sweater' or, later, a 'trademark sweater'. (I guess it's not surprising that the head of an investment bank can afford two pullies).
These powerful insights into life at the top come thick and fast. And the British end of the firm, which has been outstandingly successful over the past two decades under John Thain and Stephen Thornton, gets a degree of exposure also. We hear lots about their dealings with Robert Maxwell, and about the firm's positioning around the time of the UK's departure from the Exchange Rate Mechanism.
Gavyn Davies features largely, at the head of Goldman's much admired economics team. So admired were they that 'Tony Blair appointed him an adviser to the Bank of England in 1997'. It is odd that neither Davies himself, nor Eddie George, has yet been informed of this appointment!
But the longest sections of the book are devoted to the debate about Goldman's partnership status. Would they, wouldn't they, go public? Endlich poses as a fly on the wall in the decisive partners meetings in 1986, and again last year. One can only presume that her reconstructions are accurate. If so, they certainly give an interesting insight into the culture and dynamic of the firm, and explain the financial calculations in a detailed and balanced way.
It is just bad luck on her, I suppose, that the film finishes in the middle of the last reel. We end in the autumn of last year, as 'the firm found itself at a crossroads' and the management reorganisation announced a few weeks back lies still in the future.
Perhaps a second edition can remove the howlers and some of the gushing prose. There is a decent management book in here somewhere, struggling to get out.