News for today's 2018

GOLDMAN SACHS AND THE VATICAN:

<br /><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><span style="font-family: "Verdana","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";"><br /></span></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgx2d-K4wW95mzeE4WX1lPAeIuD8AC0upHBLKhXZIjaqgitwUPqBxZ1EAv8yX-7rzCb6wA8845FG_S5As4VCYUyVu4GdhhX9gijIFEtBCEO7Nym_VSr1gtRrPNPvCqASGZXWCxLosg7NLXK/s1600/gs+vati.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgx2d-K4wW95mzeE4WX1lPAeIuD8AC0upHBLKhXZIjaqgitwUPqBxZ1EAv8yX-7rzCb6wA8845FG_S5As4VCYUyVu4GdhhX9gijIFEtBCEO7Nym_VSr1gtRrPNPvCqASGZXWCxLosg7NLXK/s320/gs+vati.gif" width="215" /></a></div><div class="MsoNormal" style="color: red; line-height: normal; margin-bottom: 0.0001pt;"><br /></div><div class="MsoNormal" style="color: red; line-height: normal; margin-bottom: 0.0001pt;"><br /></div><div class="MsoNormal" style="color: red; line-height: normal; margin-bottom: 0.0001pt; text-align: center;"><span style="font-size: x-large;"><b><span style="font-family: "Verdana","sans-serif";">TWO CULTURES OF INFALLIBILITY </span></b></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt; text-align: center;"><span style="font-family: "Verdana","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">By Stephan Richter via The Gobalist</span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in;"><br /></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;"><b><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">Greg Smiths tell all resignation from Goldman Sachs last week was evidence that the culture of greed is alive and well in one of the world’s top investment banks, He wrote of a “toxic and destructive” culture and a “decline in the firm’s moral fiber.” But Goldman has a lot in common with another global institution, the Catholic Church and its doctrine of infallibility <span> </span></span></span></b></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;"><br /></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;"><br /></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">From the perspective of Goldman's management, the recent path of the Catholic Church is probably the most nightmarish thing to think about — assuming their imagination and sense of seriousness reaches this far. </span></span></div><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">Look at the long list of parallels: None, of course, is more powerful — and disastrous — than Goldman's and the Vatican's unceasing belief in the doctrine of infallibility. </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">The rot, one says, starts at the top — and in the age of democracy and participatory learning, no organization can successfully hold onto the belief that, as far as dealings with the outside world are concerned, its staff members are really incorrigible. </span></span></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">I am not suggesting that there isn't plenty of rigorous debate about the organizations' direction and business (or spiritual) practices — but it occurs strictly in the inner sanctum. </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDn883r4G-phVP0ZokFwy9TsXv_eOuMNj2LTSrfl98if0x3m7RaPTx-xoLXWzXIMZNHLi2ORZIVn7oBcO_swha5tEBWVD1hxT7WGYZanXMIS3QmrLOBIWQiG8gE14sqI8VOYc8VkoEOdWM/s1600/dome.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="303" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjDn883r4G-phVP0ZokFwy9TsXv_eOuMNj2LTSrfl98if0x3m7RaPTx-xoLXWzXIMZNHLi2ORZIVn7oBcO_swha5tEBWVD1hxT7WGYZanXMIS3QmrLOBIWQiG8gE14sqI8VOYc8VkoEOdWM/s320/dome.jpg" width="320" /></a></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">The instrument of doubt plays a role in both organizational learning cultures. However, it is viewed solely as a method of rigorous inquisition to come to a decision internally, which — once made — is upheld externally with a united front. One for all, all for one. </span></span></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">With regard to interactions with the outside, such a frame of mind can quickly result in presenting a fiercely clannish, if not secretive, front. That unquestioned commitment to the cause, 24x7x365, surely breeds a strong internal culture, but it also makes the organization as a whole ripe for systemic denial. In short, wrongdoing simply cannot occur because we are perfect, aren't we? </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">What Goldman must realize is that the Vatican had tried to hush things up. It simply could not happen here, it argued. But the harder and longer it tried, the more pushback there was among the victims. </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">It is simply inconceivable that a firm with the breadth and depth of Goldman's client dealings in the markets — and its relentless hunger for profit maximization — did not leave behind a lot of broken china. </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">The second applicable lesson for Goldman which the Vatican's troubles foreshadow is this: While child molestation and sexual abuse are definitely qualitatively different charges than manipulating financial markets, the ultimate fallout of denial on one's reputation, financial well-being and inner morale may well be the same. </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">It all starts with the inner logic of the real temptation — "overlooking" the respective crime in question. Regarding the internal culture of the two organizations, there are stunning parallels. </span></span></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">Both cultures are rooted in an intense sense of loyalty to the "company." Both firms' staff members have a strong sense of mission, even though one is very much focused on the immaterial, while the other is very material-minded. </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">Selection into the ranks of upper management is generally very much merit-based, although it happens in a manner that is totally non-transparent to outsiders. As a result, the selectees' devotion to the organization's cause is unparalleled compared to their peers in the respective "industries." </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQiZoNd2pvmBMqoKvNtLM4JWtM31xBFqQd0t_lBD6eMbOBN9dGdp7rPgknpWMcMqHIcrZ38ykNFXrSkbzNT7AwQrSksCN34S2LkkyBoQTRnKbW5aj0x0SUZi-w8-WL8l3FkjIxkKwjbfi6/s1600/WYWH-front.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="215" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiQiZoNd2pvmBMqoKvNtLM4JWtM31xBFqQd0t_lBD6eMbOBN9dGdp7rPgknpWMcMqHIcrZ38ykNFXrSkbzNT7AwQrSksCN34S2LkkyBoQTRnKbW5aj0x0SUZi-w8-WL8l3FkjIxkKwjbfi6/s320/WYWH-front.jpg" width="320" /></a></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">For all those qualities, high potential and performance, the evidence seems overwhelming that both Goldman and the Vatican, inside their high walls, suffer from a serious organizational birth defect, which is at the root of their respective troubles today. </span></span></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">The archaic, anti-modern and perhaps anti-human vow of celibacy for the Vatican finds its equivalent in the out-of-this-world God-like self-perception of many senior Goldman staffers. </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">They clearly feel as anointed — and selected — inside the financial world of today as were the prominent clergy in the Middle Ages and into the early modern era. Appointment to "the firm" came — and comes (in Goldman's case) — with immense social status and access to immense economic wealth. </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">True, in the case of the Catholic Church's senior leaders, that wealth was, in effect, "rented" and temporary — and definitely not transferable to one's heirs (hence the requirement for celibacy!). But one could live on the Church's "dime" in a splendor that would make even many a modern hedge fund manager go pale with envy. </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">Ultimately, it is all a function of an overbearing internal corporate culture. If you put yourself on the pedestal this much, if you promote a sense among the staff that they are the anointed ones, such zeal is bound to come crashing down sooner or later. </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal" style="line-height: normal;"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif";">In fact, once you are no longer considered untouchable, the whole litany of past transgressions will come to haunt you. Outsiders, previously oppressed and hunted, will come out of the woodwork and contribute to taking you down for all those past sins. </span></span></div><div class="MsoNormal" style="line-height: normal;"><br /></div><div class="MsoNormal"><span style="font-size: large;"><span style="font-family: "Verdana","sans-serif"; line-height: 115%;">In conclusion, in the age of democracy and reason, no culture rooted in a doctrine of infallibility will survive. They must adapt. In both Goldman's and the Vatican's case, the lawsuits are the last wake-up call.</span></span></div>

GOLDMAN SACHS AND THE VATICAN:

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GOLDMAN SACHS AND THE VATICAN:

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