Confessions of a Banker's Wife

This week I have been following the 'Goldman Saga' with interest. Our building stands at a right angle between Goldman's brand new glossy skyscraper on the West Side Highway and Wall Street to the south. So, I feel physically connected to the ups and downs of the financial crisis, to the point where the physical proximity has become an emotional one. I almost feel like I could be the hinge in the 90 degree angle, that could snap at any point. But why such an ego centric and personal view of these issues?

The most obvious answer is that my husband works for a bank and it was also my first career. Although, both of us work/worked on the other side of the 'Chinese Wall', through which knowledge and information on these deals does (should!) not pass. [ Note: If this sounds like I am being defensive, I am]. In those early, heady, days Goldman was the pinnacle of a banker's career. If you could make it there, you could make it anywhere. Goldman had a reputation, an aura, like it was almost tinged in gold...on a pedestal. But, like, anything, what goes up must come down. When I read the SEC's case last Friday afternoon, the first words that came to mind were 'Those slimey expletives!'. Like the rest of the world, I felt a sense of revulsion and anger. How could anybody think they could get away with it? But in the next heartbeat, I feel a sense of fear rising up...What if other banks were doing the same thing? What if the SEC doesn't stop at Goldman and digs into the books of all the other banks? What if this is the last apple to topple the apple cart? The simple truth is that if the apple cart tips over, our life in Manhattan could be over. And, well, regular readers will know that is going to be upsetting for all of us. Unlike some CDO traders, who are probably still enjoying the benefits of their windfall, we came to Manhattan on a wing and a prayer. If it all goes south, there is no underwriter waiting to keep things as they are . Not to mention the fact that we would have to leave the country within 30 days, according to the terms of our visa. Pretty scary stuff.

So, taking the issue at arms length, I agree with President Obama. The system should be fair, it should be regulated, greed should be replaced by the core banking values of creating wealth and opportunities for industry and business. As the New York Times said, Wall Street was originally created to provide leverage for the building of railroads, factories, jobs. That is not to say there is no place for derivative trading. If people want to gamble, play the game of 'who holds the hot potato last, gets burnt', then fine. It isn't even a problem, in Goldman's case, that they were wearing heat protective gloves, in the form of insurance like swaps, during the game. It is sensible business practice to hedge your positions. We all take insurance out on our mortgages. It is the fact that they had invented a new game, a bit like 'Musical Chairs'. According to the SEC, they set up the chairs, got someone else to choose the music, and then as the game started they pulled away all the chairs at once, plonked their well fed backsides in the only remaining chair and left their clients sitting in the side of the room, with no party prize.

Watching the footage of the grilling of the Goldman Executives by the Senate Committee, I again felt this mixture of emotions. Boy, they looked uncomfortable! I kind of liked it. But then, I started to feel uncomfortable, these people have wives, kids, mothers, fathers, friends, if it was my husband/friends under such scrutiny, it would be very difficult. If what the SEC says is true, then these people have made grave errors of judgement and they should pay the price for that. But I can't help feeling empathetic for the fall out that may descend all those that surround and depend on them. How far they will have fallen off that golden pedestal.

Still, following my usual pattern, I have catastrophised (Goldman has been naughty [allegedly]=end of the world as I know it) and now I will rationlise. Firstly, my cynical side, says that the SEC's case is just a big stick that the Democrats are using to drum up support for their financial reform bill. Goldman is the chosen pupil, they will get their pants pulled down, their bottoms smacked and sent merrily back to class. The end. That might work, if the financial reform bill really does clean the system up. The world will be a much better place and banks will go back to do what they do best - keep the economy ticking along, while keeping their nose clean. Secondly, my proactive side, tells me to take out some insurance of our own. Protecting our life here (school!, friends!, joy!, inspiration!) will take two forms and we have taken two important steps this week: we have applied for our green card and I have applied for a job. With these two things, I feel that I am supporting my husband and taking the pressure off all his shoulders and giving my kids the thing they need the most - an underwritten guarantee that if the music stops there will still be a chair for each of them. It is only fair.

yours, choosing her own playlist

Torie B
xx