The Greatest Trade Ever
How John Paulson Bet Against the Markets and Made $20 Billion
The high-wire story of the hedge fund legend who predicted the crash - and made the largest trading windfall in history
Back in 2006, hunched over spreadsheets, hedge fund titan John Paulson realised that the housing market was vastly overstretched. Fuelled by sub-prime mortgages, it was a classic bubble ready to burst. He had waited his whole life for this perfect trade.
Paulson, who had never dealt in real-estate before, struggled to convince bullish Wall Street investors about the coming crash. But as house prices began to falter and the financial system collapsed, he reaped the rewards. He made a now-legendary series of trades, executed with technical skill and perfect timing.
The results were spectacular. In a single morning in late 2007 Paulson made $1.25bn from a five-point fall in the markets. Across the year he earned $15 billion for his fund, including $4 billion for himself - more than the incomes of J.K Rowling, Oprah Winfrey and Tiger Woods put together. It was the largest trading windfall in history by far, securing his place in the history books alongside Warren Buffet and George Soros.
Written with the exclusive co-operation of the highly secretive Paulson, The Greatest Trade Ever tells the full story of his trade for the first time. Like Barbarians at the Gate 20 years ago, it also tells a wider story of staggering wealth accumulation, hubris and financial whizzery. It is essential reading for anyone seeking to understand the inner workings of the markets - and trying to spot the next bubble.
Praise for The Greatest Trade Ever
Greg Zuckerman was the first to tell the world about John Paulson's sensational trade... He's written the definitive account of a strange and wonderful subplot of the financial crisis.Michael Lewis, author of Liar's Poker
Zuckerman takes us to Wall Street's heart of darkness, where mushroomed a $1 trillion subprime mortgage market that only the few, the brave, the smart dared short. This is at once a great page-turner and a great illuminator of the market's crash.John Heylar, co-author of Barbarians at the Gate
Much, much more than a brilliant account of Paulson's trade of the century; this book also provides a highly enjoyable and lucid journey through the analytical and emotional maze that constituted the financial markets on the eve of the Great Recession. Compulsory reading.Mohamed El-Erian, CEO of Pacific Investment Management Co and author of When Markets Collide
A magnificent insider look at how Paulson and others profited off of subprime's demise... insightful and gripping.Marketfolly.com
Zuckerman has a story to tell, a thread to follow, and it just happens to turn out that by following the saga of John Paulson, he reveals all kinds of fascinating perspectives on complex finance, the real estate bubble and Wall Street and Washington's difficulties in putting the two together.TheDeal.com
More than a cinematic narrative of how Paulson and others figured out how to short the market. We're also reminded of how opaque and illiquid some financial instruments are, how little Wall Street executives understood them, and how difficult it was for more knowledgeable bankers to say that the subprime emperor had no clothes.Bloomberg