Or the paranoid view could this be so kind of trap if

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error for a managing director, that it simply didn’t matter? Or (the paranoid view) could this be some kind of trap? If I didn’t say anything, would Bill-Jo somehow pass judgment on me? Phil said I should mention the thousand dollars later, in some casual way—maybe buy Bill-Jo a dozen golf balls or something at a later point—but for now say, “Thanks for treating me.” I did exactly that: he seemed to have only the vaguest idea what I was talking about. And oh yes, a day or two after I returned, Dave Heller once again pulled up to the urinal next to mine in the company washroom. He gave me a quick, sphinxlike smile. “That was a fun time this weekend,” he said. The king of understatement. ——— The year 2006 was a big one for Goldman Sachs. The markets kept booming, and Derivatives Sales continued to rack up revenues. Clients were confident: they were trading; they were taking risk. I was executing well for them, which led to more business, because they knew I was looking after them. My clients included some of the biggest asset managers, quantitative hedge funds, and sovereign wealth funds in the world. The commission business—flat, transparent fees on agency orders in things such as futures, exchange-traded funds, and options—was flourishing. The cash register was ringing. But change was in the air. At the end of May, our CEO, Hank Paulson, was appointed U.S.
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secretary of the treasury, and Lloyd Blankfein became CEO and chairman of Goldman Sachs. Many at the firm were shocked that Paulson had left when things were going so well. Remember: times were good. Hank could have stayed at Goldman and collected a few more years of multimillion-dollar pay packages. He was liked and well respected by both bankers and traders. But he accepted President George W. Bush’s call, in the tradition of a long line of former Goldman leaders who went into government service at the top of their careers. I admired his decision. In retrospect, I recognized that this was also the trade of the century for Hank Paulson. To avoid conflict of interest while at the government, he was obligated to sell all his Goldman stock ($500 million worth) at the top of the market, before the crash. Also, due to a tax loophole, for accepting government service he avoided paying capital gains tax. But as hard as it might be to believe, I think Paulson’s going to Treasury when he did would end up being an even better trade for the American people. However, there was a group of people at the firm who thought that Paulson left because the writing was on the wall for him at Goldman. Paulson was a banker; Blankfein was a trader. Blankfein’s trading divisions (FICC and Equities) were bringing in massive revenues: two to three times any other division and sometimes more than half the revenue of the firm. This was a big transition from the late 1990s and early 2000s, when investment banking (things such as mergers and acquisitions and corporate finance) had been an equal or greater part of Goldman’s profit engine. On Wall Street, often the power goes to the person bringing in the most profit.
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