Dear Goldman Clients

Dear Goldman Sachs Clients, I know there are about 2000 of you (as Mr. Blankfein mentioned) but what is increasingly disconcerting is the lack of public opposition to the overwhelming evidence that you are being taken advantage of on a daily basis. There has been much speak about VWAP reversion algorithms via SIGMA X (which began in August 2007- a good read) and since then we have had historic volatility (never before seen in U.S. history-yet another random walk), along with Goldman’s statistically impossible trading success, not to mention record trading revenues quarter after quarter. There are literally billions upon billions of dollars being made with unprecedented returns and there is still silence from the institutional clientele that trade through Goldman. Kind of reminds me of the Saturday Day Night Live skit “Really” with Seth and Amy. There are many smart professionals, like Whitney Tilson, who admittedly didn’t know much about HFT and unregulated dark pools like SIGMA X but I have to hand it to him because I have not seen anyone in recent years put their ego’s aside and honestly advocate on behalf of the best interests of their clients and take their fiduciary duty seriously to protect and preserve their client’s capital. At least he is starting to ask ‘the right’ questions. What is amazing, judging from his posts, is that he has stumbled upon a rabbit hole which goes much deeper than he thought. I am not promoting Whitney, as I don’t even know the man personally, but I have followed him for many years now and I respect him even more now because he has been brave enough to stand up for his clients and at least started to recognize the risks and dangers involved. I know that sounds crazy even Paleolithic but we have seen a serious lack of leadership within the financial community (especially regulation) and Whitney’s efforts made me realize that not all is lost. Hell even Mr. Buffet has let us down. Too often the media plasters the headlines of the crooks and thieves of Wall Street but I thought I would provide at least one example of someone who did not wither like a flower and certainly did not kiss the “gold” ring which was my point on including him in this post. As a capital manager, I can also understand your predicament. In Washington when a senator started to “ask questions about Goldman” and subsequently circulated a memo “amongst the members”, a former Presidential candidate showed up in his office the next day. What was he doing there? Well he was the “official lobbyist” of guess who? [Rhetorical really] The young senator was quickly put back in his place. You can hear it described here in greater detail. So with regards to Sir Blankfeins benevolent community outreach program, to come kneel at the Goldman altar for a night of upscale banter on how they are smarter than you, may I politely suggest several alternatives? 1) Make a formal request via your board/investment committee (to at least provide you political cover against Goldman when they get furious at the request) and ask that these questions be addressed in detail as it will weigh heavily on your decision to move forward with the firm. In all honesty I would NOT recommend this course of action, as you will get the same answers that Zero Hedge receives (which is nothing) on SIGMA X, Robot Trading Bot 9000, NYSE collusion… the list is endless. Even worse you will probably perhaps get the same treatment as our junior senator in D.C., who knows perhaps some public ridiculed or maybe a personal email report to [email protected] sick Rahm on your ass. Either way there is no substantive debate when it comes to Goldman, you either fall in line or you are out, their lack of response on these critical issues is not only unconscionable but totally unprofessional and another blatant example of massive regulatory failure. Even worse than Madoff.

2) Another alternative perhaps when you get the call (and believe me you will get one shortly) you can politely smile with the same shit eating, condescending grin (the same grin they gave you when you signed away your rights to be front run) and tell them “all is good and that we are all just conspiracy theorists.” Maybe you can cap it off with a “they are all just jealous,” as Rome inevitably burns. After all,mirroring is the best form of flattery. Just make sure your GC isn’t a first year law student when you sign your next agreement and don’t forget to switch exchanges, and in true Keyser Soze fashion call them up out of the blue one day and tell them their services are no longer required and disappear. 3) Your final alternative is that you could ignore this warning and continue to pretend that this problem doesn’t even exist (much like our politicians regarding our fiscal deficits) but that is very dangerous as people are waking up in mass. The ball is clearly in your court, and because the issue is gaining traction (actually it is everywhere now) the high water line has receded. This tidal retreat will be followed by an even greater tsunami’s that will assuredly come ashore and you will be in one of two places. Either you will be on the high ground (pun intended) or you will be tanning yourself on the beach in total comfort and arrogance much like Goldman Sachs as it refuses to answer any of these questions. This wave will not spare you, Goldman or any other politician that comes back to their districts thinking that the people are just going to bend over and take it. I think Washington is learning quickly things are definitively changing and it is no longer a debate of political persuasion. These issues are being raised daily and the only question that will be asked of you is what did you know about it and when did you know? Clearly the window is opened for you to do something but at some point in the very near future that window of ‘plausible deniability’ will close. The burden will fall on you to defend your actions, or lack thereof, and judging by most performance metrics I can honestly say most managers have very little political capital to spare. As the market’s gas pedal gets jammed to the floor and 150% changes in upgrades and revisions are made, doubling of estimates are called on GDP, upward revisionson just about every piece of bovine scatology imaginable please keep in mind that these are the same people which “had your back” last year. It is almost hilarious that they think they have any credibility left and I assure that the only purpose is to transfer their bloated over-valued shares onto your balance sheet before the music stops. Remember wealth is never destroyed it is merely transferred. No longer will the Goldman stamp on the resume be something to be proud of a once great firm, but rather it should be viewed as a scarlet letter with ulterior motives and a hidden agenda which has proven time and time again that it can’t be trusted. Trust is everything in this business, and any other business for that matter, and there is only one simple truth regardless of which direction you ultimately take and that is without you none of this would be possible. FINALLY THE MOST IMPORTANT PART As many of you have watched this go on now for many weeks and months it is time to demand more from you pension advisors, fund managers and institutions not just Goldman Sachs. The people who work day in and day out who put money into these funds must DEMAND that these questions be answered by your fund managers and investment committees especially Goldman. The games are over and as people around the country are uniting, the likes of which this country has not seen in 200 years, I can assure you change is indeed coming. It is time to demand accountability from those running your funds. This has gone on far too long and is totally out of control. If your demands are not met then ask to be cashed out and be switched to another fund that does not use Goldman Sachs because the funds, especially its

managers, are CLEARLY not running it in your best interest. Finally if they give you ANY shits please remind them that it is YOUR MONEY and they WORK FOR YOU.

“The greatest trick the devil ever pulled is convincing the world that he didn’t exist” Keyser Soze