Goldman Sachs Turns $1.3 Billion into $25 million

One Of Its Highest Paid Employees Manages Debacle

The Wall Street Journal today reported in depth on the relationship between Investment Banking Giant Goldman Sachs and Libya.  While there are many fine details to the story, the one that caught the attention of The Dismal Political Economist was that in early 2008 the Libyan turned over $1.3 billion to Goldman to manage.  About two years later they got back $25 million. 

The Journal story goes on to say that

To the Libyans, though, the main attraction was Driss Ben-Brahim, Goldman's Arabic-speaking emerging-markets trading chief, who ran one of its most profitable trading desks and was rumored to be among its highest-paid employees.

The results engender mixed feelings.  On one hand we have further proof that in the world of Wall Street high compensation is not tied to performance, but on the other hand, if someone is going to lose 98% of their investment, Libya would a logical choice for that role.