If you thought Goldman Sachs had a crystal ball, boy are you ever wrong.
The Financial Crisis Inquiry Commission today released more interviews and documents backing the 550-page report it released last month on the financial crisis.
Among those documents is a letter Goldman (GS) sent the commission in response to questions the FCIC posed last January and February. The FCIC letter includes a section (see question 22) in which high-profile financial writers ask Goldman their burning questions about the meltdown — such as how Goldman managed to avoid getting crushed like some of its peers.
There are plenty of odd exchanges here, but perhaps the best is this one, between Goldman and newsletter publisher Jim Grant.
Grant: So what’s the next bubble, and how do you intend to profit by it?
Goldman: Goldman Sachs has no special ability to predict the future and, therefore, cannot reliably identify the form, duration and nature of a future asset bubble. We would also add that bubbles are often conclusively identified only in retrospect, after values have definitively fallen.
Alan Greenspan, who also cannot predict bubbles, will be glad to hear he has company.
The rest of the letter — featuring at least four responses that begin, promisingly, “We do not agree with the premise of this question” — is here.
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