November 14, 2023 • 5 min read |
But first, the times they are a-changin. |
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Did Goldman Sachs need to die to survive? The prestigious Wall Street bank has drawn plenty of bad headlines over the past few years, often focused on CEO David Solomon. But was Solomon merely evolving the bank to stay ahead of a financial world starting to pass it by? Famed journalist Bethany McLean, who had a stint in the bank's analyst program, examined the turbulence and the role played by Solomon in this must-read deep dive on the state of Goldman Sachs. McLean, who coauthored the bestseller "The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron," spoke to Solomon, among other top executives, about the state of affairs at 200 West Street. And while Solomon has undoubtedly had some missteps — most notably in consumer banking — he's had his fair share of wins, including raising the bank's share price. Still, that hasn't stopped people from viewing Goldman's bygone era with nostalgia. It is "fantasyland," Solomon told McLean.
But scathing media reports and unhappy partners only matter to a certain extent. The group that ultimately decides Solomon's fate — Goldman's board of directors — still supports him, according to McLean's reporting.
| Michael Kovac/Getty Images |
McLean's story provides a fascinating look at not just Goldman Sachs' evolution but Wall Street's. Private-equity firms' power has swelled for years, but that process seems to have accelerated more recently. Regulations requiring banks to sit on more and more of their capital, thereby limiting the risks they can take, have essentially upended the world of finance. Banks' origin story — lending — has even been loosened from their grip. Private credit has become the topic du jour on Wall Street. But the most significant risk to banks in this new version of Wall Street might be where talent is headed. Goldman COO John Waldron told McLean it's a "big, big issue" at the bank.
All of that is to say, with so much changing on Wall Street, why wouldn't Goldman adjust accordingly?
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Markets 🔔 Before the opening bell: US stock futures are little changed early Tuesday as investors ready for the October consumer price index reading. |
1. UBS is feeling optimistic about big interest-rate cuts next year. The bank predicts a sharp slowdown in economic growth in 2024. As a result, it sees the Fed cutting rates by nearly 3% starting in March. 2. US debt is back in the spotlight. Moody's Investors Service cut its outlook for the US's credit rating from "stable" to "negative." Here's what played a role in the decision, from rising rates to a sky-high deficit, and how the market reacted. 3. Inside Man Group's AI strategy. The new head of data and machine learning at the $161 billion investment firm highlighted the capabilities his department is developing. The ultimate goal is a so-called "alpha assistant" to which investors can pass off their grunt work. |
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Jeff Bottari/Getty Images |
1. Instagram and Facebook are growing faster than TikTok. For the first time in a while, Mark Zuckerberg's apps are beating TikTok on several major metrics, including daily usage and app downloads. 2. A billionaire investor suggests that VCs could be replaced by "an automated system." Chamath Palihapitiya is the CEO of a VC firm, but he says that the rise of AI could lead to VCs being replaced by "an automated system of capital against objectives." 3. OpenAI recruiters are reportedly trying to lure Google AI employees with $10 million pay packages. The ChatGPT parent company has already hired dozens of former Google and Meta employees. Plus, it's offering people top dollar thanks to a recent share sale. |
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Ian Grandjean for Insider |
1. Chatbots just showed scientists how to make social media less toxic. Researchers built a few fake Twitters and filled them with 500 bots. One was an echo chamber. Another showed posts liked by the greatest number of other bots — regardless of their political beliefs. And the last showed posts that got the most "likes" from bots of the opposite political party. 2. Is that $35 Apple Watch real? Misleading TikTok videos could be the next big headache. TikTok has struggled to keep prohibited products and knockoffs out of its marketplace. Many TikTok creators have been pitching apparent knockoffs for brands like Apple, Lululemon, and Crocs. 3. Bright pink ads could help fix search. The steady creeping of poorly labeled ads among search results is a major problem with search engines today. A simple solution would be to require all search ads to be bright pink. |
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- It's World Diabetes Day. The observance is meant to raise awareness of the disease and falls on the birthday of Frederick Banting, who helped reach the discovery of insulin.
- Happy birthday, Travis Barker. King Charles III, Yuna, Condoleezza Rice, and Claude Monet were also born on this day.
- Earnings today: Home Depot, and other companies.
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