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Goldman Sachs on Global 'Muppet' Hunt

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The reactions to Greg Smith’s now-infamous “Why I Am Leaving Goldman Sachs” op-ed in the New York Times can generally be classified into two categories: Those who think Smith makes a great point and those who feel that Smith is serving up a large plate of self-serving bull. (Minyanville’s Michael Comeau falls into the latter category).
On their part, Lloyd Blankfein and Gary Cohn, the head honchos of Goldman Sachs (GS) who came under direct attack by Smith, swiftly released a statement defending the firm, pointing to surveys that showed that a large majority of Goldman employees believed they were providing good service to their clients.
However, it seems Blankfein did take Smith’s comments to heart. Speaking this week to partners on a conference call, the 57 year-old revealed that his firm has been scanning internal emails to see if employees have indeed been describing clients with derogatory terms, as Smith claimed.
What’s one of the keywords of the scan? “Muppet,” noted Reuters. Evidently, Blankfein is taking seriously Smith’s allegations that he witnessed five Goldman managing directors calling clients “muppets” over internal email. In America, the term might conjure up images of Jim Henson’s cuddly creations, but in the UK, where Smith was based, “muppet” is apparently a slang term for stupid people.
Because Goldman declined to speak to Reuters about this story, we don’t know when this company-wide review will be finished and what actions will be taken by the firm if “muppets” and other derogatory terms do come up in the search.
What exactly does Blankfein hope to achieve with this search process? As Tom Bemis from MarketWatch surmises, it’s a lose-lose situation for the Wall Street firm.

If it’s with a view to getting rid of evidence of ethical lapses, the destruction of the emails would only be a continuation of the dubious corporate norms that Smith complained of.

If it’s with a view to rooting out the “evildoers” and circling the wagons, it can only lead to more cynicism within what is already one of the world’s most cynical (and reviled) organizations.

Of course, the ultimate lesson to be learned or reinforced for the rest of us is: Never ever be stupid enough to make insulting comments about people you work with or work for over email, Facebook, Twitter, or the Internet in general.

(See also: Why I Am Applying for an Executive Director Position at Goldman Sachs)
POSITION:  No positions in stocks mentioned.