The Goldman Age of Telecom

Here’s one of those funny circumstances that a wealth-powered civilization finds itself in when trust turns out to be misplaced. And when I say funny, I don’t mean funny ha-ha, I mean funny the way Vonnegut thought war was funny or Twain thought politics and high society were funny.

As if nothing scandalous had happened since the turn of the millennium in financial markets, as if the crash of 2007 never happened, society has already turned away and eased back into certain routines. One of them is looking in the financial section (paper or website, doesn’t matter) to see what companies are flying high, which are struggling and how stocks are trending. We look to the experts for their expertise. The problem is that valued expertise requires a high degree of trust. And of trust there is no more.

So when I looked to see how CSG Systems was doing before I talked to them the other day and saw that Goldman Sachs has downgraded them from a “neutral" to a “sell," my first reaction should have been … “Hmmm, I wonder if they’re struggling with their Intec integration?" or “Hmmm, is this the first in a string of downgrades for the whole software sector due to delayed orders because of the economy?"

But no. My first thought was, “Who the hell is Goldman Sachs? What credibility do they still have?" The analyst that rated CSG in all likelihood had nothing to do with what went on in the housing market or other double-dealing and fraud the firm has been involved in, but that doesn’t matter. Right or wrong, it’s guilty by association. And that brand association is bad news.  

Maybe CSG deserved to be downgraded. Maybe they didn’t. How are we supposed to tell? If the answer is to go check the numbers ourselves, then what do we need financial analysts for?

Reality dictates we do need them. Without them as a check-and-balance mechanism against the companies they rate, the companies themselves would be emboldened to fudge the numbers and kick the matter of trust farther down the hill. Maybe within the financial markets themselves, or even with private investors, Goldman Sachs and other financial firms are still golden, but those of us standing at the bottom of the hill watching all the crap rolling toward us, look at a company ranking and think, “so what."

What’s wrong with being a private company anyhow?

E-mail me at tmcelligott@vpico.com or click on the comment button below.