Goldman once agains turned market lemons into lemonade. 

The Broad Street bulls did an admirable job keeping the focus off those pesky computer algorithms that last week lost billions of dollars for clients in its Global Equity Opportunities fund. Instead it stressed the decisions by Goldman, along with billionaires Hank Greenberg and Eli Broad, to invest up to $3 billion in the fund.

So in Goldman’s kitchen, a more than 30 percent plunge in a black box fund wasn’t an investor relations nightmare. It became a distressed investment opportunity.

“I think we see this type of event everyday at Goldman Sachs, where we find market abnormalities and total dislocations in price, and Goldman Sachs is prepared to commit their capital in these situations,” said Gary Cohn, one of Goldman’s two presidents and chief operating officers.

Shares of Goldman, after rising as much as 1 percent, were down slightly in late trading. Compared with the beating handed to Bear Stearns shares two months ago, when it announced its bailout plan for two mortgage funds, it was a rally.  The willingness of Goldman and its billionaire friends to step in and buy stocks helped to lift the U.S. stock market earlier in the session.

Goldman stressed that losses at Global Equity and many other quantitative funds were caused by market volatility and the decision by many funds to sell down their positions. Indeed, Goldman executives placed some of the blame on fund managers playing in markets they didn’t fully understand. 

“I do think we are seeing new investors looking at different asset classes today than they have (looked at) historically, based on some of the general market dislocations that have occurred over the last couple of months,” Cohn said.

One caveat: Goldman acknowledged that not all of its fund investors will want to stick around for the ride.

“There always are some redemptions and some inflows,” said David Viniar, Goldman’s always cryptic chief financial officer. “We will have to see what redemptions are in the future.”

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