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on 4 May 2011
Try to get past the snake on the cover and the subtitle - there's nothing lazy or simplistic about this book. It's an amazingly complete look at an institution that says an awful lot about modern capitalism and how we got into this mess.

The most striking thing about the book is how much of it there is - almost 700 pages in the print edition. Mr Cohan has done a lot of research, interviewed an awful lot of people and come up with a lot of new facts. It's not for the faint-hearted - as a finance nerd I enjoyed reading for hours on how Goldman turned the subprime situation from a disaster to the foundation of global financial dominance, but many will have less patience.

The first half of the book covers the earlier history of the bank, and I'll confess I skimmed some of this. Mr Cohan uses this to build up to the central theme of what makes Goldman different from other banks; then, covering the period from 1998 on, the story changes gear and it becomes clear what we're hearing is based on verbatim accounts from interviews (and a lot of material that was subpeonaed by the US Congress).

Crucially, Mr Cohan has the skill to appreciate two things - in my experience it's rare for people to get both : just how good Goldman Sachs are at what they do; and just how few people outside the bank benefit from what they do. There's something deeply depressing about the maths genius (who found the Math Olympiad "laughably easy") who now spends his days building models to help good traders exploit suckers. Mr Cohan's refusal to follow the cheap sneer route makes the book actually all the more damning about our financial system.

Another of Mr Cohan's books "House of Cards" - covering Bear Stearns - makes an ideal companion to this book, covering as it does the *worst* of the investment banks, and the first to go under. If I had to define one thing about Goldman that defines it as a model of effectiveness it would be its trust in its people and hence its willingness to listen to relatively junior people, like those who picked up on the subprime meltdown and were allowed to build a bank-saving position. At the same time, the top men (and they were all men) at Bear were distracted by politicking and went under.

Yet even Goldman's skills were not enough, and the account of the rescue of the US financial system - as seen from inside its biggest beneficiary - are a compelling look at who controls our economy.

Mr Cohan writes well, has a nice sense of humour, and clearly a huge appetite for hard work. He bends over backwards to ensure he has the "Goldman line" on many of the accusations thrown at the bank, but shows no signs that I detected of having been "captured". If you read this book, you'll come away with a great sense of what makes a strong financial institution, but also a graphic account of how we created the environment where trading skills and political connections - rather than wealth-creating innovation - make a person fabulously rich.
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on 26 September 2012
There are loads of great quotes in this book, but perhaps the best one goes to the previous president of the USA, George W. Bush. When he announced in May 2006 that Henry "Hank" Paulson would be his new treasury secretary Bush stated, "The American economy is powerful, productive and prosperous, and I look forward to working with Hank Paulson to keep it that way."

That was just before the financial catastrophe that is still happening started to hit Wall Street and the rest of the world economy. Henry Paulson had just resigned as CEO of Goldman Sachs, the most successful financial institution on Wall Street.

Paulson's appointment to one of the most important positions in Bush adninistration is one reason why so many people point an accusatory finger at Goldman: they rig the game. In the previous Clinton administration another former Goldman CEO, Bob Rubin, was also in the government. Can these people really be impartial?

Put it another way: Would Henry Paulson have considered an "aggressive" action that may have harmed Goldman Sachs (and other banks) and eased the pain on the American taxpayer? Goldman's aggressive mark-down of its mortgage securities in the spring of 2006 could have been countered with an equally aggressive counter-measure - by the Treasury and the Federal Reserve. All the government, and the Reserve did, was to give vast amounts of taxpayer's money to help the banks. Was this really Hank Paulson at his brilliant best?

If you want a (biased) rundown of the financial crisis try looking a chapter 14 of Bush's Decision Points, though former British Chancellor Alistair's Darling, Back from the Brink: 1,000 Days at Number 11 is also good, and slightly less biased!

Cohan's book covers most of the major events that have shaped Goldman Sachs in the 20th and 21st centuris. Perhaps the major omission is Goldman's CDS (credit default swap) with the Greek government which fudged Greece's figures so that the country could enter the eurozone. But you can't have everthing.

The style is readable though sometimes the author gets trapped in using the normal argo of traders. As an accountant I can follow most of the stuff, but I am not an experienced (or any kind of) trader, so even I get a little lost. Hence I found Gillian Tett's Fool's Gold: How Unrestrained Greed Corrupted a Dream, Shattered Global Markets and Unleashed a Catastrophe a little easier to follow.

But why is Goldman Sachs so successful at making money, especially during a period (2007) when others were losing theirs. As one commentator expressed it: "Think about that statement: making a record amount of money in a year when everyone else was losing their shirts."

The answer is: They are disciplined and aggressive; they take the hard pain so that they avoid the even harder losses. Or they are simply borderline crooks who do whatever it takes to make money. As someone said in the book, "They are a little more comfortable lying to your face than other firms." Take your pick.

Perhaps they are just more confident that other firms; they simply know the (rigged) market better than everyone else:

"By the strength of my hand I have done this, and by my wisdom, because I have understanding. I removed the boundaries of nations, I plundered their treasuries; like a mighty one I subdued their kings [or presidents and prime ministers]. As one reaches into a nest so my hand reached for the wealth of nations. (Isaiah 10:13-14)

"It is the nature of modern politics in America that people who want to be president of the United States must first audition for people like the chairman of Goldman Sachs."

Can you work out why they make so much money, and why you don't?

Perhaps the only thing missing was some photographs of both past and current employees of Goldman Sachs, like in All The Devils Are Here: Unmasking the Men Who Bankrupted the World. But I suppose we can all see them on the Internet, should you want to!
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on 15 August 2013
After Cohan's utterly compelling Last Tycoons (surely the best business book ever written) and the jaw dropping House of Cards, I was as excited as an investment banking nerd can be when I heard that Goldman was next up for the Cohan treatment. This really had to be the number on Goldman, right?

Alas, for those of you hoping for the real deal, the wait continues. This is a fine read, no doubt, and Cohan really comes as close as you can to understanding how the bank works and some of the tricks of the trade embedded in its wonderful model. But in the end, there just isn't enough inside insight into the personalities, the power struggles and the transactions to really match his earlier reads.

There can be two explanations for this. Conventional wisdom says it's because nobody at Goldman ever talks out of school so the concept of a Michel David Weill spilling the beans over cigars cannot exist in the Goldman diaspora - therefore, the truth is out there but omerta means you won't find out what it is. But I think that conspiracy theory is Goldman's best PR.

An alternative view on why the great work on Goldman hasn't been written is more prosaic: it's boring. There isn't a Bruce Wasserstein or an Andre Meyer or an Ace Greenberg (manufacturing by turn brilliant coups or stunning disasters) in this story. It's a type A machine full of rich people - and that's about it.
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on 4 August 2011
This is a great book. Following William D Cohan's The Last Tycoons: The Secret History of Lazard Frères & Co.: The Secret History of Lazard Freres & Co. and House of Cards: How Wall Street's Gamblers Broke Capitalism on the crash on Wall Street I am not at all surprised that he has decided to publish an unauthorised history on Wall Street's enfant terrible, Goldman Sachs (GS). And he does an excellent job. In 2008, Charles D. Ellis published The Partnership: The Making of Goldman Sachs and whilst that is also a rather good book, I must admit that I prefer Cohan's writing style over that of Ellis.

About the first favour you can do yourself when you spot this book is to ignore the snake on the cover and the second title. I suppose they are there for marketing purpose but they confuse the issue. Once you have read the first 50-odd pages you are beginning to understand what a tremendous amount of research must have gone into the book.

Cohan tells the history of GS from its beginnings in 1869 and although it is a well-told story the more interesting period for me personally were the 1980s right up to now.
It seems that GS never really had any succession problems until the time Robert Rubin decided to join the Clinton Administration; every succession after that appeared to involve a lot of infighting. That's at least the impression the author left me with.
One of the things which horrified me was the insider trading scandal one of the GS chaps was involved in the 1980s and even though it became pretty obvious pretty quickly that the chap was innocent he still pleaded guilty to escape the witch hunt. That makes you wonder how many other innocent people ended up in prison just to get their privacy back.

The last 100-odd pages deal with the mortgage market crash. You do yourself a favour if you have read The Big Short: Inside the Doomsday Machine because it is excellent background information. You should also have a look at The Greatest Trade Ever: How John Paulson Bet Against the Markets and Made $20 Billion because it is a good account of John Paulson's investment strategy, which subsequently became that of GS.

If one were to look at this whole affair objectively (if that was possible) one ought to congratulate GS for coming to its senses and getting rid of its long position and shorting the market. At the same time, one ought to slap the heads of quite a few chaps from Bear Stearns and Lehman and a few other banks for betting their last shirt on one strategy without ever considering a potential downside. In hindsight this looked incredibly stupid.
I am not surprised that GS finds itself at the receiving end of the rest of the world. Success makes enemies, especially if it is one against the rest. Nevertheless, GS ought to continue to do what they do best and perhaps work on their PR a little bit.

All told I love Cohan's way of telling the story, his sense of humour and the suspense he manages to build up. Even though he uses a lot of information from GS it appears to be his own story rather than one written on behalf of GS.

Good show.
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on 1 June 2012
Whether you think Goldman Sachs is "doing "God's work" or acting like a money-sucking "vampire squid," William D. Cohan, a journalist and former investment banker, will challenge your opinion with his sweeping history of the vaunted Wall Street firm. From its beginnings in the 19th century to its dominance in the 20th and its slight ebb in the 21st, Goldman Sachs presents a fascinating case study of the talent, determination and hubris that informs Wall Street. Cohan compiles top reporting with interviews with Goldman's current and former leaders, and with insiders, outsiders, pundits and critics, to present a detailed, sometimes tedious but usually riveting look at the complex, secretive company. getAbstract recommends this history to those compelled by the enigma that is Goldman Sachs.
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on 31 August 2013
Its bit long and could have edited down bit to make it a sharper read also would mean that more people actually read this book as would imagine has low full read rate because needlessly long.

its interesting reading about these coperate employees the amognst the highest paid employees about.
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on 6 January 2012
I agree with the previos review, this book was not very interesting. The message seems to be that GS is such a great and excellent despite occasional bad apples. After reading 400 pages of rather dull description of daily life, I gave up. I believe I did not miss anything. I used to work with GS and went to see their offices in London and New York. Yes, there were some bright people, but also pretty averages. The difference between those two groups was that smart ones took me for a pizza whereas the lesser ones tried to presuade me with some Michelin stars.
Of course it is hard to write an interesting or entertaining book about perfect firm and its semi-gods. The book about Bear Sterns was much more fun to read, similarly to the one about Lezard. I would have liked to know more profound analysis why GS is such a glorious firm. Also instead of repeating constantly that getting a job is hard, it would have been interesting to understand why these people were picked, what made them different from the rest. Yes yes they all went to HBS or like and after 20 or so interviews got a job, but why? I bet a great majority of those interviewed were smart in their way, otherwise not get an interview in the first place?
If you have been reading FT, Economist and some alternative media, this book has very little extra.
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on 24 May 2013
A little long on the extreme detail but still the storyline seems to encourage me to plough on.... interesting in any case as it builds up a picture of the culture and legacy behind this bank of banks..
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on 15 January 2014
Great book about an amazing company. I have read two other books about GS and this is superior in terms of (i) comprehensive coverage of the firm's history, (ii) balanced and yet undiluted accounts of the bad behaviours in the firm's history and (iii) clear description of the firm's culture, its evolution and the personalities that shape it from the founding family, Sydney Weinberg, all the leaders up to the current CEO Lloyd Blankfein.
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on 31 July 2015
Chapter 1-12 is 0 stars and chapter 13-24 is 3.5 stars. The story up until 1990 is dry, boring and mainly derived from news and legal documents. After 1990 finally there is information from employees and former employees that does not consititute the officell Goldman version (as these people are still alive or gave interviews on things behing the scene).

Still, lots of info in the later part is rehashing of things we already have read in books by Lowenstein, Endlich and Partnoy. Sometimes one has to wonder if there were more than one writer. p423 “soon thereafter [9/11, i.e. September 2001] Paulson confided to some partners “I’m going to push Thornton out” but a few pages further one wonders what took so long p434 “by march 2003 Paulson decided Thornton had to leave Goldman, and quickly.”
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