Former top Goldman Sachs exec recalls scary days on Wall Street in 2008

Jon Winkelried says he remembers well the dark days on Wall Street in 2008, when the financial markets and some big investment firms were melting down.

Then a senior executive with Goldman Sachs, Winkelried said he was “really scared” that the entire financial system might collapse.

“We were scared because we could see what was going on around us,” Winkelried said Wednesday during an appearance at TCU. “If the U.S. government had not come in and basically recapitalized the top eight to nine institutions by injecting billions of dollars of equity, I don’t think it would have stopped.”

Winkelried, who retired from Goldman in 2009 and lives in Aledo, credited former Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson with guiding the U.S. economy through the Great Recession, saying there was a lot of fear on Wall Street that it couldn’t be done.

“The U.S. economy is strong,” said Winkelried, who worked for the leading investment banking firm for 27 years, the last three as president and co-chief operating officer. “The crisis … was an incredible period of time. If we didn’t have those two people in those two positions at that time, the crisis would have been a lot deeper.”

Winkelried was interviewed by Homer Erekson, dean of the Neeley School of Business, as part of TCU’s Tandy Executive Speaker Series. Winkelried now serves as a financial adviser to investment firms, including TPG Capital, and as CEO of his family-owned JW Capital Partners.

He said that while Goldman Sachs was in “pretty good shape” during the economic downturn, he was concerned about a run by clients for the $70 billion cash it had on hand. In the end, Goldman and JPMorgan were among the financial institutions that the Federal Reserve relied on to help it through the crisis, he said.

Now Winkelried believes that the U.S. is on a “very strong trajectory,” though he said there are some signs of a bubble in the high valuations of technology startups, which are attracting an enormous amount of money.

“I’m optimistic about the U.S. economy,” he said. “The U.S. is on a very strong trajectory. This is rebooting us to become the most productive economy in the world.”

Horses helped draw Winkelried, a New Jersey native, and his wife, Abby, to Texas. They started a cutting horse business in 2004 in Colorado, where they own two ranches, and added the Aledo ranch. But they sold the cutting horse operation two years ago and now have the 343-acre property west of Fort Worth on the market.

This story was originally published February 18, 2015 at 1:32 PM with the headline "Former top Goldman Sachs exec recalls scary days on Wall Street in 2008."