I just loved this story.
I just loved the part about Grandma.
Hedge Funds Einhorn Goes for Gold, Slamming U.S. Policies October 20, 2009, 5:49 am
David Einhorn has a bone to pick with the Obama administration.
The hedge fund manager, who warned about Lehman Brothers‘ precarious finances before it collapsed, said on Monday that he’s betting on rising interest rates and holding gold as a hedge for what he described as unsound U.S. policies, according to press reports.
Speaking at the at the fifth Annual Value Investing Congress in New York, Mr. Einhorn reportedly likened Treasury Secretary Timothy Geithner’s regulatory reform plan to trying to stop terrorism by “frisking grandma and taking away everyone’s shampoo.”
“If monetary and fiscal policies go awry,” as Mr. Einhorn apparently believes they might, investors should buy physical gold and gold stocks, he said. “Gold does well when monetary and fiscal policies are poor, and does poorly when they are sensible.”
“Over the last couple of years, we have adopted a policy of private profits and socialized risks — you are transferring many private obligations onto the national ledger,” the chief of $5 billion hedge fund Greenlight Capital said.
“Although our leaders ought to be making some serious choices, they appear too trapped in the short term and special interests to make them,” Mr. Einhorn said.
According to a joint analysis by the Center on Budget and Policy Priorities, the Committee for Economic Development and the Concord Coalition, the projected United States budget deficit between 2004 and 2013 could grow from $1.4 trillion to $5 trillion.
Last week when Federal Reserve Chairman Ben Bernanke, Mr. Geithner and White House economic adviser Larry Summers spoke in interviews and on panel discussions, Mr. Einhorn said, “My instinct was to want to short the dollar but then I looked at other major currencies — euro, yen and British pound — and they might be worse.”
Mr. Einhorn added, “Picking these currencies is like choosing my favorite dental procedure. And I decided holding gold is better than holding cash, especially now that both offer no yield.”
IMO Timothy Geithner helped set up this mess and then put in charge to fix it. Maybe we should teach him to use Turbo Tax first. I feel so secure knowing that he is in charge of the reform. Not.