Streetwise — Chapter 16: The Unforeseen

1. 1. After the IPO, only 15% of Goldman Sachs shares were sold to the public, with partners and former partners still owning about 85% of the firm.
2. 2. Hank Paulson dissolved the six-person executive committee and expanded the management committee to 29 people to broaden participation in decision-making.
3. 3. The partnership election process used 'cross-ruffing,' where partners from different divisions independently ranked candidates to ensure objectivity.
4. 4. From 1998 to 2006, Goldman Sachs' top-line revenue more than quadrupled from $8.5 billion to $37.7 billion, driven by banking deregulation and globalization.
5. 5. Goldman Sachs expanded globally by localizing foreign offices, filling senior roles with local lateral hires rather than moving people from New York.
6. 6. Jim O'Neill, recruited as chief international economist, coined the term 'BRIC' to describe the most dynamic emerging-market economies: Brazil, Russia, India, and China.
7. 7. In Russia, Goldman used its Business Investigations Group to vet oligarchs and determine which were appropriate business partners, drawing on connections with intelligence and law enforcement.
8. 8. Goldman Sachs acquired Spear, Leeds & Kellogg for $6.5 billion, the most expensive acquisition in the firm's history, to gain a foothold in Nasdaq trading during the dot-com boom.
9. 9. The author compares the AI boom to the dot-com bubble, stating that while the technological change is real, much speculation will prove overblown, and many AI startups will fail.
10. 10. After the September 11 attacks, Goldman Sachs arranged the first major block trade—$2 billion for 135 million shares of Disney stock sold by the Bass brothers—to help reopen frozen markets.