August 13, 2007 (LPAC)--Goldman Sachs announced today that it will throw $3 billion into an attempted rescue of one of its hedge funds, which lost 28% (about $1 billion) of its supposed value last week. The bailout of Goldman's Global Equity Opportunities fund will involve $2 billion of Goldman funds, and another $1 billion from outside investors such as Hank Greenberg, formerly of American International Group.

Goldman did not announce any action with respect to two other collapsing hedge funds, Global Alpha and North American Equity Opportunities. The value of Global Alpha, Goldman said, was down about 27% through Aug. 9 compared to a year earlier, with about half of that drop occurring in the past week.

Goldman's collapsing hedge funds are so-called "Quant," or quantitative, funds, which use computer models to make bets without human intervention; but the recent market turmoil has played havoc with these computer models.

Besides Goldman, other investment banks such as Bear Stearns and BNP Paribas have also taken major losses in their hedge funds, with two of Bear Stearns' funds having been wiped out in the current financial crisis.