Submitted by Tyler Durden on 09/22/2013 11:05 -0400
In a world in which all the matters is “scale”, the ability to Martingale down on losing bets as close to infinity as possible something which JPMorgan learned with the London Whale may not be the best strategy especially when one cant print money out of thin air, and being as close to the Feds Heidelberg rotary printer as possible, it was expected that that “expert” of government backstops and bailouts, the Octogenarian of Omaha, Warren Buffett, would have only kind words for Ben Bernanke. But not even we predicted that Buffett would explicitly admit what we have only tongue-in-cheek joked about in the past, namely that the Fed is the worlds greatest and most profitable hedge fund. Which is precisely what he did: “Billionaire investor Warren Buffett compared the U.S. Federal Reserve to a hedge fund because of the central bank’s ability to profit from bond purchases while accumulating a balance sheet of more than $3 trillion. “The Fed is the greatest hedge fund in history,” Buffett told students yesterday at Georgetown University in Washington. It’s generating “$80 billion or $90 billion a year probably” in revenue for the U.S. government, he said.
via Warren Buffett: “The Fed Is The Greatest Hedge Fund In History” | Zero Hedge.