Bill Bonner interviews a German friend about markets, hedge funds and Goldman Sachs.
"Goldman is said to be the largest hedge fund in the world, but in fact, it is, the largest collection of hedge funds in the world. It has hundreds of them. It has a great reputation...and it has its hands in more deep institutional pockets than anyone. So, it has got so much money under management that it makes a fortune, even when its results are not spectacular. And in a sense, it is also the bank. It is not just playing in the casino; it is the casino. Goldman is trading so much money for so many people, it makes money no matter which way the markets go."
Goldman, of course, has a different view on how it makes money. As they said on the conference call the other day: "We're not especially good at predicting what will happen but we have the flexibility to react quickly to whatever does happen." Or something like that. We spilled coffee on our notes.
My Simple Investment Formula: Buy Gold, Sell Goldman [LewRockwell.Com]