Please don't give in, I won't let you down
It messed me up, need a second to breathe
Just keep coming around
Hey, whataya want from me
Whataya want from me
Whataya want from me"
"Whataya Want From Me" by Adam Lambert
We seem to be hearing it a lot lately...Whataya want from me?
Two storied franchises, at the top of their professions, envied by their peers, loved by their supporters; faced with handling an unseemly incident that can destroy decades of image building.
First, my beloved Steelers. As everyone is aware, the owners of the Steelers are faced with the dilemma of what to do with a franchise quarterback who is a step or two slow in understanding the meaning of the word "NO". Now this is a quarterback that has already helped the team win two Super Bowls and is only 28 years old. He was signed to a ten year $100 million contract, and the hope was that he would at least match Terry Bradshaw's record of four Super Bowl victories. But he is also turning out to be the dumbest quarterback in Steelers history (yes, Bubby Brister is now safe). Four seasons ago Mr. Roethlisberger nearly died by riding a motorcycle without a helmet, last year he was accused of sexually molesting a young woman in Las Vegas who apparently said "no", and then this year he is pretty much guilty of, at the very least, plying a 20 year old college student with alcohol and then following her into a bathroom where she reportedly said "no". Mr. Roethlisberger's teammates may publicly support him, but how can they look at him in a huddle and respect him. Does he have any moral authority left? Moral's are really what this is about. Clearly Ben is lacking, and the Steelers front office knows and believes that morals still count for something. Morals are tricky, they are hard to teach and very hard to legislate, but in business and in life morals count. Professional football is a business, a very big business, and the Steelers have consistently been ranked at the top of that pyramid by making good decisions (three coaches in 41 years). This decision seems rather simple, to protect a franchise known as Steeler Nation, that has the largest percentage of female fans in the league, get rid of Ben. In a business where the average employee lasts three years, and the best last eight, you've probably gotten the best out of Ben. And in a business, where your customers are no longer buying one of your products (say number 7 jerseys), but actually burning them, it may be time to get rid of product number 7. Yesterday the Steelers signed Byron Leftwich, and now enter the draft with four quarterbacks, one of them suspended for six games. I think the Steeler Nation would love to see what kind of draft picks they could get for a morally challenged number 7. If the Rooney's are asking, "whataya want from me", the Steeler Nation is saying, "do the right thing."
Second, Goldman Sachs, the pinnacle of the investment banking world, who finds itself charged by the SEC of fraud. Now this is a much more complicated issue than an employee who shows incredibly bad judgement, but it still comes down to morals. I know some of you are laughing because I used the word morals in conjunction with a Wall Street firm, but bear with me. Wall Street serves a very valuable purpose in our society, they help individuals and corporations raise capital, manage risk, and invest. And as anyone who has ever worked with or for a Wall Street firm should know, their main goal is to help clients while collecting a fee. Sometimes, the collecting the fee part outweighs the helping the client part, but this is known (or should be known) by all participants. For every client that wants to create a security to sell, there is another client on the other side of the trade buying. Wall Street's job is to facilitate the creation of the security and see that the buyers and sellers get together, collecting fees along the way. Of course this doesn't excuse civil or criminal wrongdoings, but it does mean that you have to look after your own positions, and do your due diligence better than the other guy. Caveat emptor. Hopefully you are not shocked by this revelation.
Goldman, like the Steelers, has always been considered the creme de la creme of their profession. In fact the CFO of the NFL is a former Goldman media analyst (Anthony Noto). Not only would Goldman hire the best and brightest, but the best and brightest really wanted to work for Goldman. Sure they wanted the money, but they also craved the prestige and respect that came with becoming a Goldman partner. In simplest form, Goldman is charged with helping one client create a security that that client (Paulson) was pretty confident would prosper if housing collapsed, and then selling it to another client without disclosing to that other client that Mr. Paulson helped create the product. Again, this is basically what Wall Street does, but what makes this incident so morally challenged is that Goldman is being accused of taking advantage of one client to benefit another. An analogy would be a dealer in a Vegas casino encouraging a clearly inebriated gambler to bet heavily, to the benefit of the other players at the table. Not only is that unethical, but it is illegal, and a firm that condones such behavior will quickly be out of business. Now Goldman intends to fight these allegations vigorously, and that may or may not work. But what Goldman really has to do is restore its image as the fairest of the fair when it comes to dealing with their clients. Not an easy task, but if Goldman were asking "whataya want from me", the investing public would say, a little less arrogance, a little more transparency, and the knowledge that "not everything is for sale".
Be careful out there,
Chris Wiles
This article contains the current opinions of the author but not necessarily those of the Rockhaven Capital Management. The author’s opinions are subject to change without notice. This article is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed.
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