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So Long, and Thanks for All the Fees!
The cachet of Goldman's in-house "privileged" funds (like the Global Equity Opportunities Fund) used to be quite significant, and seriously envied. Perhaps labeling them "vanity investments" is a bit excessive, but probably only a bit.
Trouble in paradise appeared over the last several years, however, and, in the case of the Global Equity Opportunities Fund, a $7 billion crown jewel was flagging in the summer of 2007, forcing Goldman and outside investors to step in with capital to save the entity. Well, this was just delaying the inevitable, though Goldman didn't think so at the time.
The bank had anticipated the fund would rebound and clients could be expected to stay invested.
In a conference call at the time, David Viniar, the bank’s chief financial officer, denied that the rescue was a bail-out.
“This investment reflects our collective belief that the value of this fund is suffering from a market dislocation that does not reflect the fundamental value of the fund’s positions,” said Mr Viniar.
Apparently, the GEO closed in December.
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Yeah thats the ticket .... market dislocation!
Yes. And market dislocation is a risk. Let's say this slowly. R I S K. Whatever color or shape and however the eventual risk manifests it is still just risk.
I know I know. Chatter chatter.
Marla:
umm, err, didn't Bear Stearns contribute capital in a similar fashion to those 2 funds run by Ralphy the real estate wizard at Bear?
good point Andy, thank you. And I do recall reading that about Paulson.
I hope your well, have missed seeing you around. I actually thought of you today when I saw the VIX launch, lol!
How about getting off your lazy ass and writing an article this weekend????
Marla, somehow I don't see either GEO or GS as dolphins
Yeah, I agree... dolphins are too smart.
How about Vogons?
When people talk like this,
“This investment reflects our collective belief that the value of this fund is suffering from a market dislocation that does not reflect the fundamental value of the fund’s positions,” said Mr Viniar.
is the clearest message that someone is blowing smoke up my ass.