WaMu execs speak candidly about Goldman Sachs, Lehman Brothers and others

So what do executives really think of Goldman Sachs (NYSE: GS)? The evidence that the Senate Permanent Subcommittee on Investigations amassed on Washington Mutual (WaMu news) included some interesting back-and-forth among executives about the pros and cons of top investment banks.

WaMu was apparently looking for help in off loading some souring assets. As noted by Crain's, Todd Baker, executive vice president for corporate strategy and development, sent an email to Chief Executive Kerry Killinger (Kerry Killinger news) and three other senior executives spelling out his views. He wrote that "our strong first choice for this effort would be Goldman Sachs." He called a banker there, John Mahoney, "the smartest banker overall, the best at thinking about financial structures, and his firm is the deepest." However, Goldman "is very expensive and we may have trouble getting John's full attention...We always need to worry a little about Goldman because we need them more than they need us and the firm is run by traders."

Killinger replied about an hour later: "I don't trust Goldy on this. They are smart, but this is swimming with the sharks. They were shorting mortgages big time while they were giving CfC [Countrywide Financial Corp.] advice. I trust Lehman (Lehman Brothers news) more for something this sensitive. But we would need to assess if they have the smarts we need."

It's unclear which firms WaMu hired. Do other companies share this view of Goldman Sachs? Is it really a bank run by traders, who swim with the sharks? 

For more:
- here's the article

Related Articles:
WaMu executives knew about fraud
Could WaMu have survived?
Still paying for the sins of WaMu
Revisiting the role of big banks in subprime fiasco

Post a comment