CNBCfix review: Gary Kaminsky interviews Goldman Sachs CEO Lloyd Blankfein, gets rare crack at Meredith Whitney

          Posted: Monday, April 30, 2012

Just getting Goldman Sachs CEO Lloyd Blankfein on camera is a major challenge; he hasn't done a TV interview in 2 years, and he stood up CNBC's David Faber in 2010.

That CNBC's Gary Kaminsky (and Bloomberg's Erik Schatzker, albeit afterwards, in a coup for that network as well) got this assignment surely reverberates through CNBC's anchor stable and Wall Street reporting crew.

It represents an almost instant payoff for Kaminsky's promotion to Capital Markets Editor last fall and suggests a highly promising niche for a financial commentator with an edge who even the most elite CEOs find comfortable on-camera. It's also a reminder that too much of the network's regular business day programming is filled by analysts, publicity-seeking doomsayers, and a small clique of too-friendly and too-much-time-for-TV chief executives.

Certain lines of questioning could've been sharper, but Kaminsky, and Schatzker as well, produced a healthy amount of headline material from Blankfein, who clearly aimed to convey that Goldman is a China growth story, that his predecessors (presumably Hank Paulson) didn't embrace Asian expansion (even called it "Red China," he told Bloomberg), that Gary Cohn is not the automatic No. 2, and that Blankfein himself isn't going anywhere. Blankfein volunteered the belief that "poor performance" of rivals "was" (he used past tense) the biggest threat to Goldman's existence, and that the mystery person next up in Goldman's succession plan does "not specifically" even know who he or she is.

Kaminsky was comfortable throughout, perhaps too comfortable. A few questions were peppered with unnecessary explanatory intros better suited for the "Today" show ("every public company has a board of directors" ... "we've got this presidential election later this year" ... even revealing "I woke up early" on the Greg Smith op-ed day (perhaps he had a premonition?)). Such descriptions probably didn't erode that much of the limited time but could've sapped some of the snappiness from a quicker back-and-forth dialogue.

There was a lot of corp-speak in Blankfein's answers, which is to be expected, but it could've been improved/minimized with sharper follow-ups and more questions of a personal nature. Blankfein wasn't asked in either interview if Lehman Brothers should've gotten a bailout nor whether Carl Levin's trumpeting the word "sh----" in a congressional hearing was appropriate. Rather than defining the Goldman board's mission, Kaminsky could've bluntly asked if there's any chance of this becoming an HPQ-style disaster.

Neither interviewer asked whether elite job applicants have expressed concerns about the firm's image.

The time allotment for Kaminsky — roughly 16 minutes; Bloomberg got a tiny bit more — was enough to deliver relevant headlines, though not nearly enough for the amount of newsworthy questions that could've been asked.

Kaminsky opened with a good start and important question, why is Blankfein doing this now, which Blankfein sidestepped by noting they're hosting a BRICs conference and "how could I say no," and Kaminsky didn't pursue. His 2nd question, and follow-ups, got much more traction, concerning the New York Times op-ed written by Greg Smith, a subject Schatzker inexplicably didn't bring up in his own interview, although CNBC went first and Schatzker may have been seeking different questions (there was some overlap but not a great deal).

Here, Blankfein implied the company has underrated the importance of public perception and wasn't prepared to defend itself; "haven't really had those muscles ... didn't exercise them."

Blankfein let loose with an expected series of statements of client defense, that they were "unbelievably supportive" (how "unbelievably" ... opening new accounts?) and that the internal reaction to Smith was "shock."

But Blankfein asserted, "We've gotten used to surprises," and this was an opening Kaminsky let pass, not asking, what else has surprised you ... Perhaps the SEC case (that couldn't have been a complete surprise), perhaps Raj Gupta, perhaps all those reports over the years that Blankfein might not be staying long, perhaps when Michael Moore showed up for that "Capitalism" documentary ...

Kaminsky brought up 2 interesting angles about Smith. One was whether the New York Times called the firm about Smith's op-ed. That's a good one for the journalism watchdogs at the Poynter Institute; assuming the Times verified Smith's tenure at the firm, there's probably no journalistic obligation to call. On the other hand, given the likely reaction to such a piece, the Times could've gotten ahead of its own scoop.

Kaminsky also asked Blankfein if the firm would share its "360" personnel reviews of Smith with the Times. In a reasonable answer, Blankfein said he believes firm policy "doesn't allow us."

Critics who wish Kaminsky had been rougher might seize on Kaminsky's suggestion to Blankfein that Smith's opinion is "typically a one-off" while confirming with Blankfein that Goldman does not (at least publicly) believe it has a "muppet" problem. Nor did Kaminsky ask exactly how a firm of 30,000 can actually verify this sort of determination.

Kaminsky spent too much time on the board of directors, which saw a shakeup in April and experienced controversy with Raj Gupta in 2011. The first question about the board's role wasn't sharp enough, prompting Blankfein to deliver a Management 101 clunker, "The directors represent the shareholders, they oversee management, management of course makes decisions on how to run a business."

That thread got barely a little better when Blankfein claimed some separation of powers; "I leave the room" at some times, and even offered a dictionary-consulter, there's "quite a locus of authority in the lead director."

But Kaminsky got important remarks on the record about a succession plan, in which Blankfein explained "there's a lot of contingencies" without totally offering what those were, implying a different person might be expected to take over tomorrow than the person expected to take over in 5 years. One scenario evidently is the "if-you-get-hit-by-a-bus plan." Kaminsky asked if the successor knows who he or she is, and Blankfein responded cryptically, "not specifically," a curious business plan for any company whether Goldman Sachs, Berkshire Hathaway or Hewlett-Packard. Kaminsky asked if that means there's not a plan in place for Gary Cohn. Blankfein said, "We have a lot of terrific execs."

As for his own status, occasionally a subject of Wall Street reporters, Blankfein said "I have no plans to leave" and told Kaminsky, "I read the same papers you do," evidently referring to the "surprises" that he and the firm have to come to expect.

Kaminsky, like Schatzker but with slightly different questioning, asked if Goldman Sachs is "right-sized" for today's environment, but could've wrapped this question into a broader theme: Is Goldman Sachs too big for its own good? Can it ever be as exclusive as it once was, is an op-ed like Smith's inevitable in a firm of 30,000 employees, and are all of those employees practical for a post-2008 business model? Blankfein clearly felt compelled to parse here, first digging into some really inside baseball in referring to the "3rd or 4th quartile opportunity set" (a term he also used on Bloomberg), but then hinting again at a China play in stressing that for the longer-term, "we definitely have to expand our footprint overseas."

Blankfein suggested regulation (he notably said it's "our duty" to tell the government when rulemakers are perceived as going overboard) is not the biggest challenge to the business model and implied that it actually may be the biggest asset if it keeps the laggards from sinking the ship. "The biggest threat to Goldman Sachs ever, the existential threat to Goldman Sachs, was the poor performance and the bad risk-management practices of some of our comeptitors, with whom we had relationships," Blankfein said. An expected question, but it was followed up well when Kaminsky pinned Blankfein into conceding that the firm is adapting to government policy and if the business underperforms, there's no regulation excuse.

Clearly trying to please everyone politically, Blankfein insisted the firm has no position on the election and that opinions vary on the candidates. "I'm a Rockefeller Republican. A registered Democrat and a Rockefeller Republican," he added.

Schatzker opened by asking what the average American thinks now of Goldman Sachs. Blankfein said the average American probably didn't know what Goldman Sachs was 3 years ago and twice said "shame on us" for not exercising its "muscles" toward Main Street PR. One wonders actually if the average American even now really does know what Goldman Sachs is or whether the firm is merely playing an insider's PR ping-pong game with Congress and critics in some of the edgier media outlets. That aside, Schatzker blundered by allowing the non-answer to stand and not getting Blankfein on the record as to what the public perception is.

Schatzker did get bogged down in themes of firm priorities and conflicts of interests, and also asked about dividends way too early (a legitimate question, whether it's the best use of cash, but probably not a major concern of shareholders in this environment), but had very solid material on Arthur Levitt's doubts about the "customer first" slogan and the option to continue being a bank holding company.

Schatzker even got Blankfein to say "more prophlyactics" in regard to regulation, and complain about negative pundits who seem outsized on television, saying they are "80% of time negative and provocative," which "gins up some kind of interest in their, in their, sentiments."

Wall Street reporter/pundit Charles Gasparino, whose shop (Fox Business) was shut out of this Goldman Sachs media tour, tweeted that "analysts give lloyd's attempt to act like an 'average joe' before freindly (sic) media outlets a tentative 'A' but more work to do." Blankfein does well on television. One wonders why he does it so little, in contrast to beloved Wall Street chieftain Jamie Dimon. Blankfein does not resemble Gordon Gekko. They say people at Goldman Sachs would run through a wall for him (perhaps after asking first what it pays). He ironically comes across as far more of an everyman (to the extent that's possible) than his peers.

Henry M. Paulson Jr. can best be described as "austere." Jon Corzine nowadays is described in a lot of ways that are not exactly flattering. John Mack is retired. Peers — if they can be called that — Brian Moynihan, James Gorman and Vikram Pandit are accidental CEOs in over their heads and not impressive spokesmen for Wall Street's giant bonus machines. Those bonus machines, in their best form, are also the wheels of America's financing, a point Blankfein tried to make in both interviews Wednesday, telling Schatzker the "world needs institutions as big as we are," but clearly playing more defense than offense and not yet at least sealing the deal on Goldman's importance to society.

If Blankfein only tried this more often, he might nail some of those finer points. Meanwhile, Kaminsky, a veteran of CNBC appearances as a money manager for decades actually but an upstart on the premium-interview circuit, might be able to open significant doors for CNBC, whose veterans are in a rut. The network hasn't given its fresh faces enough of a chance and is overloaded with reporter-types fighting for the limited airtime of reading breaking-news headlines.

Ideally, this is how it should work — a comprehensive, assertive, news-making interview is conducted, good questions are asked, and then even people named Tim Cook, Dick Fuld, Mark Hurd, Larry Page, Chuck Prince, Jeff Bezos and Steve Ballmer say, "I wouldn't mind doing that." Those types of names have eluded even network standard-bearer Maria Bartiromo, whose repertoire is way too conference-centric, and longtime premier Wall Street reporter David Faber and colleague Kate Kelly, whose job descriptions seemingly veer far more into IPO and M&A scoops and less on scoring headline-making interviews. Faber was turned down by Blankfein after a tentative OK for a CNBC Goldman special in late 2010; Kelly, who took a large amount of maternity leave recently, seems yet to reach the radar screen for a get such as this.

Not only did Kaminsky start his day with Blankfein (as well as Goldman's Jim O'Neill and Jonathan Beinner), he wrapped up the afternoon (during Maria Bartiromo's show, no less) with Meredith Whitney, someone even more polarizing than the Goldman Sachs CEO who last year was on the receiving end of a what-happened-to-that-muni-call commentary by Kaminsky. Sure enough, that subject came up again, as Kaminsky leapfrogged Bartiromo's questioning to politely pin down Whitney as to whether she still believes in the looming muni meltdown. Yes, she told Kaminsky, and as the influence of Citigroup's most famous critic wanes quicker than the New England Patriots' Super Bowl window, one wonders if these 2 couldn't someday parlay their disagreement into a smashing he-said/she-said CNBC production.



Other reviews:

New York Times I: "The fact that he is doing on-camera interviews at all may portend a change in Goldman’s famously tight-lipped media policy"

New York Times II: "Did Blankfein Snub Paulson?"

Business Insider: "He told everyone watching what the greatest threat to Goldman Sachs was — and ears on the Street are probably still ringing"

The Atlantic Wire: "Lloyd Blankfein Has 30,000 Workers Who Think Goldman Sachs Is Just Fine"

Dealbreaker: "LB also noted that the major mistake made by Goldman running up to the financial crisis was working with imbeciles"

Alec Baldwin Twitter: "Watching Gary Kaminsky on CNBC interview Lloyd Blankfein. He did everything but wash Blankfein's socks"

Charles Gasparino Twitter: "analysts give lloyd's attempt to act like an 'average joe' before freindly (sic) media outlets a tentative 'A' but more work to do"

Zero Hedge: "A grand collection of ducking-and-weaving as Erik Schatzker peppered the CEO with questions"


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