Month: March 2012

Religious Awakening in Mexico and the Pope’s Visit

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Here is a link to my latest article on AQBlog, titled “Religious Awakening in Mexico and the Pope’s Visit” , published on March 22th, 2012. Please feel free to visit and comment. Here is a verbatim copy of it in case you prefer to read it on my personal blog, though I recommend actually going to the site because of additional content, other blogger’s articles, etc.

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Pope Benedict XVI’s first visit to Mexico will begin on March 23 but unlike his predecessor, Benedict will not feel as comfortable calling Mexico siempre fiel—and so hopefully some of his agenda will include discussion on religious diversity. 

Pope John Paul II called Mexico “forever faithful” in 1990 due to Catholicism being the dominant faith in the country. However, rising popularity of other religions and the emergence of atheist and agnostic thought in the country could very well be pushing Mexico to a tipping point, leading to question the favored role Catholicism plays in sociopolitical life.

To this day, many large companies in Mexico (national and international) hold posadas, celebrate Christmas and observe other Catholic holidays such as Easter. Some even hold mass within their facilities to kick off special events. On the flip side, there are very few companies in Mexico that observe Yom Kippur or Ramadan. It is still a commonplace human resource practice to ask potential employees what their religion is during recruitment and—though none will publicly accept it—religion still plays a criteria in actual talent selection (otherwise, why would they ask about it?). This, by the way, is illegal under Article 3 of the Federal Labor Law.

Catholicism is not just favored in the private sector. During the first weeks of December and leading up to the 12th (Day of the Virgen de Guadalupe) Catholics are not only allowed to march on some of the busiest streets in the cities as part of their pilgrimage while causing transit chaos, they are even escorted by public officials to guarantee their safety. This is a nicety not usually awarded to other faiths and it is funded by taxes paid for by people of all faiths.

In Monterrey, people who park in unauthorized spaces close to a Catholic church on Sunday seldom get a ticket and, in the municipality of San Pedro, traffic officials stop cars in order to let the faithful cross the street to and from mass. This is the same municipality which in 1996 famously repealed (without clear legal justification) a permit given to the Mormon Church to build a temple next to a Catholic school. The Mormons were then left with the only option of establishing it in the outskirts of the metropolitan area. 

This differentiated treatment expected and accepted for and by many Catholics, is usually justified through statements such as “95 percent of the country is Catholic so it is ok to favor them” or the less defensive “this special treatment doesn’t hurt anyone. It doesn’t really matter.”

But religious intolerance does hurt society and becomes even more relevant when a critical mass of it is affected.  When my taxes are being used to protect and legitimize a group of people who block an avenue not because they are participating in some form of social protest but just so they can practice their faith, it matters. Every time somebody gets a parking ticket for breaking the law but a Catholic doesn’t because public officials look the other way if the offender is on their way to Sunday mass, it matters.

Moreover, according to the 2000 census the percentage of Mexican Catholics was not 95 percent, but actually 76.5 percent and rapidly dropping. It would be a conservative assumption to think that today at least 30 percent of the population is not Catholic—so when a governmental action disregards or minimizes the beliefs of more than 33 million people in the country, it certainly does matter.

It is understandable that Mexican Catholics would want to hold on to this favored position (who wouldn’t?) but for the sake of social wellbeing, they need to come to terms with the fact that Mexico can no longer be thought of as “a Catholic country.” Forward-thinking companies and government agencies would do well in recognizing that they need to start revising the assumptions under which they operate and evolve their practices in order to become more inclusive. The non-Catholic groups and their rights cannot and should no longer be ignored.

Why I am leaving Goldman Sachs – By Greg Smith

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This was published today bythe NYTimes. An interesting Op-Ed “artilcle”/resign  letter by Goldman Sachs Executive Director worth discussing:

TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

 

To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.

But this was not always the case. For more than a decade I recruited and mentored candidates through our grueling interview process. I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video, which is played on every college campus we visit around the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied.

I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.

When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.

Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than a trillion dollars. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave.

How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.

What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.

 

Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all.

It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.

It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.

These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.

When I was a first-year analyst I didn’t know where the bathroom was, or how to tie my shoelaces. I was taught to be concerned with learning the ropes, finding out what a derivative was, understanding finance, getting to know our clients and what motivated them, learning how they defined success and what we could do to help them get there.

My proudest moments in life — getting a full scholarship to go from South Africa to Stanford University, being selected as a Rhodes Scholar national finalist, winning a bronze medal for table tennis at the Maccabiah Games in Israel, known as the Jewish Olympics — have all come through hard work, with no shortcuts. Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn’t feel right to me anymore.

I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.

 

Dear John Lennon…

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Dear John Lennon,

So things have drastically changed since you were roaming around the streets of New York and I feel it’s about time that I write to you and let you know that we need you to get back here and finish what you started. It just hasn’t been the same without you.

After a huge lull period where youth simply gave up and decided to become part of the broken rat race system (we called that the 90s and pretty much carrying on until 2008), we now see a weird cuasi rebellious group raising their voice to speak out against that which is unfair and inherently wrong in society. Well, not really. For some reason, young people no longer raise their voices to speak out against or for something. It’s become a lot simpler… now they “Like” and “Share” things they feel passionate about for around 5 minutes and then it’s on to the next thing.

The face of idealism changes faster than Mitt Romney’s mind. Oh wait, you don’t know who Mitt Romney is. In sum, he’s a pompous asshole who thinks he can oust the current black US president. Yes, if you can believe it, a black guy made it to Penn 1600 and he didn’t do it by way of your pals at the Black Panther Party for Self Defense.

Anyways John, I’m kind of getting off subject here. I was telling you about today’s hope for a better tomorrow. They’re not as lazy as my generation but they are pretty close. But now they have the social media tools to make them build up a cloud of smoke through which they can feel good because they “support” something onerous. Again, the concept of supporting and becoming involved is nothing like when you were around. The movement is virtual in developed and developing countries. The only difference is that where in developing countries social media technology has become a habilitator and facilitator for social movement, in the developed world, it’s made people feel proud about “changing the world” by being couch potatoes and for the most part. doing nothing of real relevance or significance.

We lacked the spirit to raise our voices so we did the inexplicable: we shut up. But hey, at least we were honest about it. Your generation believed in symbols. Mine became a symbol of conformity. The next one copy-pastes symbols on their little bit of virtual reality and feels they’ve stopped the world’s injustices.

They’re ready to be inspired, John. But they need something or someone to inspire them by not trying to sell them a product as opposed to pushing an idea and breaking the boundaries of social awareness. They need you.

And for that matter, your wife needs you BAD. I’m telling you buddy, Yoko has been getting weirder and weirder ever since they came out with that Twitter thing. You know I love you and would never say anything mean to you about your choice of women but it is because I love you that I have to be honest and say: bitch’s gone off the reservation, man.

So you see, you’ve got to figure out a way to get back here and sort these people out (both the youth generation and Yoko). That asswipe Justin Bieber just ain’t cutting it, man.

Talk to you soon,

Arjan