The Partnership: The Making of Goldman Sachs

The Partnership: The Making of Goldman Sachs

The inside story of one of the world?s most powerful financial Institutions Now with a new foreword and final chapter, The Partnership chronicles the most important periods in Goldman Sachs?s history and the individuals who built one of the world?s largest investment banks. Charles D. Ellis, who worked as a strategy consultant to Goldman Sachs for more than thirty years, reveals the secrets behind the firm?s continued success through many life-threatening changes. Disgraced and nearly destroyed in 1929, Goldman Sachs limped along as a break-even operation through the Depression and WWII. But with only one special service and one improbable banker, it began the stage-by-stage rise that took the firm to global leadership, even in the face of the world-wide credit crisis. " Rich with insider lore as well as the closed-door dramas of partnership clashes." -"The New York Times Book Review" "Exhaustively researched . . . paints a convincing picture of an institution that has got most of the important things right." -"The Economist" aThe book is rich with insider lore as well as the closed-door dramas of partnership clashes. [Ellisas] experience graced him with a sure hand in writing about the world of traders, analysts and deal makers.a a"New York Times Book Review" aAt a time of economic uncertainty, Charles Ellis's banking history "The Partnership" may offer a kind of cathartic glance backward.a a"The New York Sun" aLively and engaginga]Ellis sheds light on events through dialogue and descriptions of peopleas thoughts and feelingsa a"Publishers Weekly" aEllis, the author of 14 books and managing partner of Greenwich Associates, a strategy-consulting firm, here provides a history of Goldman Sachs, which is arguably the most profitable and powerful investment bank in the world todaya]Ellis has done a thorough job of researching the prestigious organization, providing a look at the many personalities that have made the famous name what it is today.a a"Booklist" ailluminatinga][Ellis] explicates with clarity and vervea]He provides intriguing, specific descriptions of notable eventsa]He offers astute character sketches of the principal playersa]Mapping the firmas tangled loyalties and fiefdoms, Ellis paints a Darwinian portrait of fierce competitors who played people along with the markets.a a"Kirkus Reviews" aIn tracing its more than 100 years of history, Ellis follows a constant roller- coaster ride from life- threatening disasters to glorious triumphs and back again, showing all the while how an ever- growing penchant for risk propelled the firm into the new world of complex derivativesa]At this moment, "The Partnership" is a must-read.a a"Barronas" aJust 10 days ago, Goldman Sachs chief executive Lloyd Blankfein made the stunning announcement -- during this season of jaw-dropping developments on Wall Street -- that the renowned investment-banking firm would morph into a traditional bank holding company, accepting onerous regulation in exchange for much-needed access to cash reserves. How could this happen to the country's most powerful investment bank? Charles D. Ellis's engaging history of the company, ""The Partnership,"" provides some clues -- about Goldman Sachs and about Wall Street writ large. ""The Partnership"" follows the firm from its beginnings as a commercial- paper dealer in 1869 (essentially recruiting investors to extend lines of credit to companies) to its emergence as the world's pre-eminent financial- services firm. A much-debated decision to sell Goldman shares to the public in 1999 was a watershed event, perhaps encouraging riskier behavior than would have been tolerated by partners with their own capital at stake. Similarly, the explosion in proprietary trading profits in recent years -- from trades using the bank's own money -- propelled overconfident Goldman bankers to up their bets. Obviously, Mr. Ellis, a longtime consultant at Goldman, finished his chronicle before the big storm hit Wall Street. Still, his reporting suggests a company that, through well more than a century of investing and trading, has repeatedly found ways of reinventing itself, by exploiting the weakness of its rivals and by mastering new financial specialities -- e.g., block trading, corporate underwriting, commodities trading and arbitrage. Though recently transformed, Goldman is unlikely to slink away. Goldman's longascent to Wall Street's first ranks began a century ago when Henry Goldman undertook to raise money for industrial enterprises, many of which were regarded as "Jewish" companies and shunned by the established Wall Street firms. Struggling to find investors for companies light on assets, Goldman hit on a novel concept for determining market value: earning power. In partnership with the well-capitalized Lehman Brothers, Goldman floated financing for companies that included United Cigar, Worthington Pump and Sears, Roebuck & Co. In an eerie forerunner of today's disasters, W