Press Esc to close

Welcome to Money Morning - Only the News You Can Profit From.

Close

With Two New Deals, This "Double-Your-Money Stock" Could Go Vertical

I was on the phone trading “war stories” with author and veteran journalist Alecia Swasy – a longtime friend – the other night. And we found ourselves talking about my days with Gannett Co. (NYSE: GCI) newspapers on the Eastman Kodak Co. (NYSE: KODK) beat – when I got to chronicle the early death throes of a once-iconic American company.

My time on the beat began in the summer of 1993, when the company fired CEO Kay R. Whitmore, a chemical engineer and career Kodaker who’d risen through the ranks to take the top spot at the film giant…

  • Featured Story

    "Jerry Maguire" Waves Goodbye to Goldman Sachs (NYSE: GS) and its Muppets

    By now you've heard about Greg Smith.

    He's the former executive director of Goldman Sachs (NYSE: GS) who pulled a Jerry Maguire on Wednesday while resigning from the illustrious Vampire Squid.

    In his New York Times op-ed piece, otherwise known as the scorched-earth letter, Mr. Smith explained that he resigned from Goldman because he could no longer abide by the firm's culture of ripping-off clients to line their own pockets.

    The blunt frontal assault on the firm he once revered was a career move. What kind of career move remains to be seen.

    But before I get into what really goes on behind Wall Street's velvet ropes and what Mr. Smith's pronouncements about Goldman's culture says about Goldman, let me say this about his future employment prospects.

    I'd come out of retirement and start a new hedge fund if Mr. Smith would come on board.

    In fact, after hearing all the hoopla about how he has burned any and all bridges he might have had as a Goldman alum and how he'll never work on The Street again, I can't help but laugh.

    And I'm not the only one.

    Bill Singer, a noted New York securities attorney who's not shy about speaking his mind openly and honestly, said to me, "Seriously, if the guy has as little as a $10 million book of business there'll be people all over him to come on-board. Not only that, but there are a lot of firms that would want to throw this in Goldman's face by hiring the guy."

    Greg Smith's Jerry Maguire-like moment might just be the best career move he's ever made.

    And I'm serious; I think he'd be a great addition to my new hedge fund operation. What do you say Greg?

    Nothing New About Goldman Sachs

    One thing is for certain: as biting as Smith's commentary was on Goldman Sachs, there were no new revelations about how the firm operates.

    The bottom line about Goldman, according to Smith's op-ed piece, is that "people [at Goldman] push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client's goals. Absolutely. Every day, in fact."

    Like I said, Smith's not delivering any revelations. It's not an insight into just Goldman, either. This mantra is essentially the Street Creed.

    Wall Street only needs clients to make money for itself.

    If you don't understand that, you don't know how the game is played − or how it's won.

    To continue reading, please click here...
    Read More...
  • Greg Smith

  • The Greg Smith Goldman Sachs (NYSE: GS) Letter Led to $2.2 Billion Loss – More to Come? The scathing op-ed piece by former Goldman Sachs Group Inc. (NYSE: GS) employee Greg Smith did more than draw attention to a "toxic and destructive" firm culture - it drove down Goldman's market value by $2.2 billion yesterday (Wednesday).

    Goldman shares fell 3.4% Wednesday, the third-biggest decline in the Standard & Poor's 500 Financials Index.

    Smith pointed to Chief Executive Officer Lloyd Blankfein and company president Gary D. Cohn as responsible for letting the firm falter.

    "I truly believe that this decline in the firm's moral fiber represents the single most serious threat to its long-run survival," wrote Smith.

    Smith painted a picture of executives with zero respect for their clients, saying it makes him "ill how callously people talk about ripping their clients off," and that in the past year he's heard five different managing directors refer to their clients as "muppets."

    Even though Smith's Goldman letter weighed on the bank's share price Wednesday, shares had almost made up the losses by midday trading today (Thursday).

    So just how much will the Goldman letter actually weigh on GS stock and popularity?

    Click here to continue reading...

    Read More...