Literary Insights

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The introduction provides background on how the author came to discover John Paulson and his astonishing success in betting against the housing market during the financial crisis of 2007-2008. It captures the author’s intrigue in learning how Paulson, as an “outsider” on Wall Street, was able to pull off “the greatest trade in history.”

The prologue introduces John Paulson in the spring of 2005, before the financial crisis had begun. Though successful, Paulson felt unfulfilled compared to younger hedge fund managers achieving greater fame and fortune. He was concerned about not understanding the booming market. The stage is set for how Paulson would go on to anticipate the impending housing meltdown and achieve unprecedented profits through prescient investments.

In summary, the introduction piques interest in Paulson’s story, while the prologue establishes Paulson’s driven character and sets the pre-crisis context for his later historic trade against the U.S. housing market.

Here is a summary of the key points in the passage:

In the early 2000s, hedge funds were gaining notoriety on Wall Street for their swagger and mystique. Many were enjoying large profits during a multi-year bull market.
Hedge funds have existed since 1949 when Alfred Winslow Jones created the first one. He pioneered the strategy of hedging bets by taking both long and short positions.
In the early 1990s, prominent hedge fund managers like George Soros scored huge gains, further raising the profile of the industry.
However, many legendary hedge fund managers suffered significant losses in the late 1990s/2000, showing that not even stars can beat the market indefinitely.
The collapse of Long-Term Capital Management in 1998, which lost 90% of its value, also dampened the hedge fund industry temporarily.
By the late 1990s, there were only around 515 hedge funds managing less than $500 billion, but they were set to grow exponentially in coming years.

So in summary, it outlines the early history of hedge funds and how they were partying on Wall Street in the mid-2000s amid a long bull market, but had faced setbacks in previous decades.

Hedge funds gained popularity in the early 2000s after performing well compared to the stock market during the tech crash of 2000-2002. They used strategies like short selling and exotic investments to limit losses.
As the economy recovered after 2002, lots of money flowed into hedge funds. They charged high fees but still had no shortage of investors wanting to hand over cash.
Hedge funds outperformed traditional mutual funds and drew talent away from Wall Street firms. Running a hedge fund became a prestigious and lucrative career.
By 2005, there were over 2,200 hedge funds managing $1.5 trillion globally. They accounted for a large share of trading in stocks and bonds. Successful founders became billionaire celebrities.
Banks aggressively courted and lent money to new hedge funds, even ones started by inexperienced individuals like Michael Burry who ran his fund from his childhood home. Speculation grew as many investors threw money at traders with elite credentials but unclear strategies.
While some upstarts like Burry and Mindich generated strong returns, questionable traders also entered the field, enjoying lavish lifestyles. There were early signs of excess and risk as the industry boomed through 2004-2005.
The passage provides background on John Paulson, a hedge fund manager who predicted the 2007-2008 financial crisis. It discusses his family history and upbringing.
Paulson’s ancestors experienced difficulties, such as a shipwreck and the deaths of Paulson’s grandparents in Ecuador. His father Alfred worked in accounting.
Paulson showed early interest in business, selling candy as a child. He had an independent personality in high school.
Paulson lost interest in college but found direction after spending the summer in Ecuador with his wealthy uncle in the construction industry. This reignited his interest in business and money.
The passage provides contextual details about Paulson’s family and experiences growing up to set the stage for his later success as a hedge fund manager. It portrays him as independent-minded from a young age with a family history tied to risk-taking.
Paulson grew up in a controlling household in Ecuador where he wasn’t allowed to date without a chaperone and could only date approved women.
He had an early business experience in Ecuador importing and selling children’s clothing. This gave him his first taste of making money on his own.
He returned to NYU to get a degree in finance and graduated at the top of his class. He was inspired by guest lecturers from Goldman Sachs.
At Harvard Business School, he was inspired by Jerry Kohlberg’s story of leveraged buyouts and wanted to get into that kind of lucrative dealmaking.
He graduated in the top 5% of his HBS class but took a job at consulting firm Boston Consulting Group as Wall Street was in a bear market. However, he quickly realized he wanted to be an investor and dealmaker rather than just an advisor.
One experience pointed out to him the relatively low returns of real estate investing over the long run, which stuck with him intellectually. He grew impatient at BCG and wanted to find a way to directly make money, not just advise others.
Paulson wanted to move from consulting to Wall Street but struggled to find a job due to lack of relevant experience. At a tennis tournament he met investor Kohlberg who introduced him to Leon Levy at Oppenheimer & Co.
Levy was looking to expand and hired Paulson. However, Oppenheimer split up shortly after and Levy and Nash started Odyssey Partners, bringing Paulson with them.
At Odyssey, Paulson gained hands-on experience but Levy realized he lacked the skills and experience needed to lead deals.
Paulson struggled to find another job due to lack of experience. He was hired at Bear Stearns where he worked long hours and quickly climbed the ranks, becoming managing director within 4 years.
At Bear Stearns, Paulson worked on M&A deals and was mentored by senior banker Mickey Tarnopol. However, he began to chafe at others taking credit for his deals and shrinking his profit share.
Paulson started his career at Bear Stearns but noticed he couldn’t make as much money there due to profits being spread across many partners.
He joined Gruss & Co., a small merger arbitrage firm, where profits were divided among just five partners. Paulson led a new buyout division but it did not take off.
In the late 1980s/early 1990s, Paulson enjoyed a leisurely lifestyle in New York and the Hamptons with wealthy friends but decided to start his own hedge fund, Paulson & Co., in 1994 to focus on investments.
Paulson struggled to attract investors at first, even with his contacts from Bear Stearns. Potential clients declined or didn’t return his calls. He started the fund with just $2 million of his own money.
It took a full year to attract his first outside investor, an old friend from Bear Stearns. Paulson worked hard to market the fund but faced skepticism due to his limited track record running money independently.
In the early days of his hedge fund in the 1990s, John Paulson struggled to gain clients and performance was uneven. He questioned whether he was cut out for the business.
He had some success investing in distressed real estate. By 1995 he had hired more employees but performance was still solid but unspectacular.
Paulson had a volatile personality and would get agitated when investments lost money. He clashed with employees at times.
By the late 1990s the fund had grown but also lost money in 1998 during the emerging market crisis. Some clients withdrew funds.
Around this time, Paulson began pursuing a relationship with his assistant Jenny Zaharia, whom he saw as cheerful and stable. They married after over a year of her refusing dates.
By 2001 the fund had grown to over $200 million. Paulson’s personal life was more stable with his marriage, though the fund was still not widely recognized as unique in its approach.
Mortgage lenders started lowering their lending standards and offering riskier loan products like subprime, no-down payment, interest-only and adjustable rate mortgages after the Federal Reserve cut interest rates post-9/11 to revive the economy.
This led to a surge in home prices as more borrowers took on loans to buy homes. However, things began going overboard in 2003 as lending became too loose.
Major banks and lending companies like Countrywide, Ameriquest and New Century pursued aggressive growth in riskier subprime lending to boost profits. Countrywide’s CEO Angelo Mozilo initially criticized risky lending but then embraced it as competition increased.
By 2005, risky lending practices were widespread, with 24% of all mortgages requiring no down payment and over 40% having limited documentation. This marked a major shift from more conservative lending standards of just a few years prior.
In the 1990s, Brad Morrice co-founded New Century, a subprime lender focused on borrowers with poor credit who were often ignored by major lenders. They began selling risky subprime loans to investors.
New Century’s business model was successful and they grew rapidly, relaxing lending standards and offering loans with little or no down payment. This allowed more people to buy homes but also increased risks.
By the mid-2000s, subprime and other risky loan products like interest-only loans made up a significant portion of the mortgage market. Lenders like New Century relied on selling these loans off quickly to investors rather than holding them.
Regulators did not crack down on risky lending practices. Alan Greenspan and others saw rising homeownership as a positive. Wall Street firms increasingly bought and bundled subprime loans into complex investment products for global investors.
This system relied on continued rising home prices and borrowers’ ability to refinance. But it set the stage for collapse when housing prices declined and risky borrowers began to default in large numbers.
Wall Street firms securitized mortgage loans by pooling them together and issuing asset-backed bonds or securities with credit ratings. This process of chopping up loans was believed to diversify and spread risk.
Investors were attracted to these mortgage-backed securities due to their high credit ratings (AAA) and steady yields in a low interest rate environment. Many didn’t realize they contained housing risk.
The housing market and prices boomed in the mid-2000s, fueled by easy lending standards, speculation, and the belief that prices would keep rising. Low initial “teaser” rates on loans later reset higher.
A few traders believed a housing bubble was forming but there was little incentive to explicitly bet against housing due to career risks if the bull market continued. Shorting loans, builders, or using credit default swaps were some of the few ways to express a bearish view.
By 2005, subprime loans made up $625 billion or 1/5 of the mortgage market. But most experts still did not see a national housing crash coming.
John Paulson was initially merely interested in the housing boom, as his firm focused on mergers and distressed corporate debt investing.
By 2003, Paulson & Co. had grown to $1.5 billion in assets but still felt smaller than rivals. Paulson wanted to participate more broadly in the industry.
Paulson demonstrated an ability to clearly explain complex trades to potential investors. This helped attract more capital, growing assets to $3 billion by 2004.
However, Paulson began to anticipate a downturn in the housing market. Shorting subprime mortgage bonds seemed a way to bet against housing, but it was difficult to access these securities to establish short positions.
Paulson worked to find a way to structure investments that would allow him to effectively short the overheated U.S. housing market, recognizing it posed risks but also opportunities for large profits if the market turned.

The passage discusses Paolo Pellegrini’s background and career up until receiving an unexpected phone call from his old friend John Paulson in 2004. It describes Pellegrini’s childhood in Italy, where his father worked in electronics. Pellegrini showed an early interest in business and technology. He studied computer science and engineering in university in Italy before working briefly in Holland.

Pellegrini then attended Harvard Business School, where he excelled academically. During his first summer, he worked at Bear Stearns alongside John Paulson. However, after business school, Pellegrini’s career stalled and he struggled to find work for several years. When Paulson called with a potential job opening at his hedge fund, Pellegrini saw it as a last chance to restart his career. Paulson was blunt about Pellegrini’s resume but said he was smart and offered him an interview for an analyst role.

Paolo Pellegrini was an Italian man who attended Harvard in the early 1980s. He met and later married Claire Goodman, the daughter of a New York senator.
After graduating from Harvard, Pellegrini had a successful career in mergers and acquisitions banking, working at firms like Dillon Read and Lazard. However, he struggled at times due to his Italian background and accent.
Pellegrini divorced Goodman in the early 1990s. His career also hit a setback when he made an inappropriate comment to clients at Lazard.
In 1995, Pellegrini was fired from Lazard after tensions with his boss. He was 38, unemployed, and newly single.
Pellegrini later remarried Beth Rudin DeWoody, but continued to feel insecure financially. He pushed for changes to his prenuptial agreement and sought investments from his wife’s family, without success. Over time, these insecurities put strain on his second marriage as well.
Pellegrini struggled at his previous job at Lazard and in his marriage, getting divorced after his wife DeWoody had enough of his insecurities.
After the divorce, Pellegrini had no net worth at age 45 and felt he had no prospects.
He got a job at a hedge fund called Tricadia Capital where he learned about securitized debt and credit default swaps.
Pellegrini struggled in an interview with Paulson’s company but Paulson still gave him a chance, seeing him as a smart gamble.
Pellegrini worked long hours at Paulson but was having trouble producing good ideas. He lived frugally in a small apartment.
At a party, Paulson expressed concern about rising real estate prices and interest rates to a friend, but a real estate developer dismissed their caution, boasting of high returns.
Pellegrini approached Paulson and suggested buying credit default swaps as a way to protect the firm’s portfolio from risks in the economy, given his background with CDS trading.
Michael Burry was diagnosed with retinoblastoma cancer as an infant and had to have his left eye removed. He struggled socially due to wearing a glass prosthetic eye.
He grew up in California and showed strong academic abilities. He was fascinated by the stock market from a young age after his father explained stock quotes to him.
Burry enrolled in pre-med at UCLA but felt out of place socially. He was seen as cocky by others for criticizing the easiness of classes and laziness of peers.
Burry would later be diagnosed with Asperger’s syndrome, which partly explained his difficulties in social interactions. He rediscovered a passion for investing, drawn to what he saw as the meritocracy of the stock market.

So in summary, Burry struggled socially as a child due to his eye condition, but showed strong academic drive. At UCLA he continued to feel socially disconnected and found more interest in the stock market.

Michael Burry struggled socially in medical school after his father passed away suddenly. He felt like an outsider among his intelligent and good-looking classmates.
Burry began investing his inheritance money and doing stock research/analysis in his spare time. He started a website to share his investing views and became an analyst columnist.
He finished medical residency in 2000 but had lost interest in medicine. Burry decided to start his own hedge fund, Scion Capital, with $1M from investor Joel Greenblatt.
An early investing success was calling that Avanti Software’s stock would rebound after executives were charged with theft. Burry profited from buying the discounted shares.
Burry resisted buying WorldCom stock despite the discounted price, correctly concluding the company was fudging its accounting. This reinforced his determination to identify problematic companies.
Burry educated himself on credit default swaps (CDS), realizing they provided an alternative way to bet against companies through insurance-like contracts rather than just shorting stock. This understanding would later prove pivotal.
Michael Burry was a hedge fund manager who had identified problems in the U.S. housing market by 2003. He purchased credit default swaps (CDS) protecting against losses from mortgage bonds and companies involved in mortgage lending.

-CDS allowed Burry to place bets that these mortgage-backed securities and companies would decline in value if the housing market slowed down. However, his positions fell in value as the housing boom continued through 2004.

-Burry began researching subprime lending practices and was alarmed by the proliferation of risky mortgages with little underwriting. He wanted to directly bet against pools of subprime mortgages through CDS.

-Greg Lippmann at Deutsche Bank was working to standardize the CDS market to allow bets against specific mortgage pools. Burry told Lippmann’s colleague Angela Chang to call him immediately when this new product became available, believing it would present a big opportunity.

-Burry anticipated these new CDS contracts would allow him to directly short the subprime mortgage market, which he saw as a looming crisis, in what he called his “Soros trade.”

By early 2005, Greg Lippmann was impatient to grow Deutsche Bank’s lagging mortgage bond business. There was high demand from investors but not enough mortgages.

Lippmann had a radical idea - create “synthetic” investments that mimicked existing mortgages, satisfying investor demand without needing new mortgages. In discussions with traders from other banks, they devised standardized credit default swap (CDS) contracts that would insure mortgage-backed securities.

These CDS contracts allowed investors to bet for or against subprime mortgages. They multiplied the bets on mortgages while remaining tied to the underlying loans.

With this financial engineering, the subprime market grew immensely. However, Lippmann and others had no idea of the impact on the global economy. For Burry, the CDS contracts finally provided a way for him to “short” the housing market as he believed it was overvalued. He aggressively bought CDS protection, convinced a collapse was coming.

Michael Burry was a former doctor who taught himself about investing. He believed there were problems in the subprime housing market but had trouble convincing investors.
Burry’s arguments seemed simplistic compared to the complex risk models used by Wall Street. Many investors didn’t read his lengthy letters warning about this view.
When questioned, Burry said the models relied on outdated past data and didn’t reflect recent risky loans. He argued it was just common sense that defaults would rise within 3-5 years.
Finding it difficult to clearly explain his views, Burry grew impatient with investors and fundraising. He couldn’t raise enough money and eventually gave up on launching his fund.
John Paulson was also growing concerned about housing and debt markets in 2005 but didn’t think a crisis was imminent. He bought some CDS protection on lenders but losses mounted from takeover rumors.
Paolo Pellegrini introduced the idea of shorting mortgage securitizations, which intrigued Paulson. After learning more details from Pellegrini and others, Paulson agreed to bet against risky BBB-rated subprime bonds.
In summer 2005, when CDS on subprime bonds launched, Pellegrini urged Paulson to buy protection, which he did to the tune of $100 million. Paulson remained anxious about housing and the frothy markets.
Paulson had shorted bonds of struggling auto-parts maker Delphi but the bonds rose unexpectedly, losing him money on the short. This experience convinced him of the advantages of using credit default swap (CDS) contracts to express a bearish view, where losses are capped.
However, CDS contracts weren’t fully developed. Delphi’s bonds rose because investors with short CDS positions needed to buy the bonds to settle their contracts, despite Delphi’s bankruptcy.
Paulson grew frustrated with the high prices being paid for leveraged buyouts and saw too much liquidity in the market driving deals. He worried banks were overleveraged.
Reports of loose lending standards concerned Paulson. Mortgage analysts assured him and others that home prices wouldn’t decline but Paulson remained skeptical.
Pellegrini took on focusing on subprime and financials at Paulson’s encouragement, seeing an opportunity but risking his career if the bet failed.
After doubting the refinancing assumption, Pellegrini informed Paulson their thesis on rates causing defaults may be wrong. This disappointed Paulson as his funds underperformed in 2005 and faced increased questioning.

This summary is about risk-tolerant investors like Michael Burry in San Jose who anticipated the housing crisis:

Greg Lippmann was a trader at Deutsche Bank in New York who began doing contrarian research on the housing market in 2005. He asked analyst Eugene Xu to analyze mortgage default data.
Xu found a clear relationship between home price appreciation and default rates. Areas with the highest price growth had the lowest defaults. Lippmann realized defaults would rise sharply if home prices stopped climbing.
Lippmann tried to convince colleagues at Deutsche Bank that defaults would soar in hot housing markets like California once prices stabilized. But most dismissed his view, seeing other economic factors as more important.
In late 2005, Lippmann proposed a $1 billion bet against subprime mortgages by buying credit default swaps. Deutsche Bank reluctantly allowed him $20 million for the trade. If right, Lippmann could earn $80-120 million for the bank.
Like Burry, Lippmann anticipated faint signals that the housing market was moderating and took what seemed like a risky contrarian trade. But he believed the data strongly supported his view of impending problems.
Pellegrini was tasked by Paulson with in-depth research into the US housing market to determine if it was in a bubble.
Through various analyses over months, tracking data back to 1975, Pellegrini discovered that housing prices had climbed much faster than historically after 2000, rising over 7% annually compared to just 1.4% from 1975-2000 after inflation.
He created a “trend line” chart showing prices had surged far above the long-term trend, implying prices would need to drop around 40% to return to normal levels.
When he presented this chart to Paulson, it cemented Paulson’s conviction that there was a housing bubble. The chart became a “Rosetta stone” that guided their bearish thesis.
Further analyses by Pellegrini and analyst Sihan Shu, hired away from Lehman Brothers, suggested even flat home prices could cause losses of 7% for subprime mortgage bonds, making BBB tranches an attractive target to short.
This research provided the foundation for Paulson & Co.’s massive bets against the housing market and subprime mortgage bonds.
Paulson became convinced that the subprime mortgage market was a bubble that would burst. He grew anxious to put on a “big” bet against subprime mortgages by starting a new fund dedicated to shorting them.
However, his views were not widely accepted on Wall Street at the time. Bank analysts disputed Paulson’s analysis and data predicting housing price declines and subprime losses. They were more optimistic about continued appreciation.
Paulson stepped up purchasing credit default swaps (CDS) insurance on subprime mortgages. By 2006 his funds had $10 billion of exposure. However, it was a stretch for his existing funds’ strategies.
Traders selling CDS weren’t necessarily bullish on housing - they did it for fees to create new investment products. This reinforced Paulson’s view to “short as many securities as we can.”
Paulson wanted to start a new fund to make a “really huge score” betting against subprimes, but recalling Michael Burry’s failure to raise money for a similar fund, history was not on his side.
In the late 1990s, George Soros had great success as an investor but suffered major losses of over 20% in a few short months in the early 2000s. This caused him to sever his long partnership with Stanley Druckenmiller and take a more conservative approach going forward.
In 2008, German industrialist Adolf Merckle committed suicide after betting against Volkswagen shares short and incurring hundreds of millions in losses when the shares kept rising contrary to his bet.
John Paulson was determined to profit from what he saw as an ongoing housing bubble despite the past failures of others who had also bet against the housing market.
While many analysts and investors expressed concerns about a housing bubble for years prior to the 2008 crisis, most were unable to successfully profit from their bearish stance on the market. Some who tried suffered major losses for being too early with their predictions and bets against housing.
Negative carry trades, where an investor pays interest upfront for an investment that may pay off later, can be very costly if they don’t work quickly. The accumulating costs can lead to significant losses over time and give competitors an advantage.
Bond and mortgage specialists were especially wary of negative carry trades because their investments typically didn’t generate big gains that could offset the costs. Taking on that risk at home is different than doing so at your job.
When one of Paulson & Co.’s top mortgage traders tried to launch a negative carry fund in 2006 by buying CDS contracts, investors proved unwilling to pay the upfront costs, causing the fund idea to be abandoned. Negative carry is unappealing even to successful investors.
Paulson had a different perspective since he was willing to take on short positions and negative carry if he saw an investment as having huge upside potential. He viewed subprime CDS contracts this way, with minimal downside but almost unlimited potential gains.
Taking a job managing a bearish hedge fund betting against housing was seen as too risky by Wall Street professionals, as it could damage future career prospects in an industry that typically benefits from rising real estate prices.
Despite difficulties finding qualified managers, Paulson ultimately chose Paolo Pellegrini to be co-manager. However, Pellegrini was told to remove his new title from emails as it may confuse investors about who was running the fund.
Pellegrini struggled to clearly explain their analysis and short positions to potential investors. Paulson was much smoother in his pitch.
Many investors were skeptical of their housing bear thesis, citing dissenting views from other experts in the mortgage industry. Some doubted Paulson’s ability to exit the trade profitably.
Paulson was reluctant to provide all the details of their strategy to potential investors out of fear it could disappear if too many competitors caught on. This made raising funds more difficult.
After extensive pitches, most major investors ultimately decided not to invest, citing various doubts and concerns about the fund and its unproven strategy. Raising capital proved a major challenge for Paulson’s new bearish housing fund.
Jeffrey Greene was a longtime friend of John Paulson based in LA who owned over 7,000 apartments valued at $500M. He was concerned about a potential downturn impacting his real estate holdings.
Greene reached out to Paulson for advice. Paulson invited him to NYC to discuss a new fund he was starting that would take short positions on subprime mortgage bonds.
At their initial meeting, Paulson gave a formal presentation about the housing market and his fund, cutting Greene off when he tried to speak. Greene found Paulson’s behavior strange and unlike their usual interactions.
Paulson needed Greene’s investment to help launch the fund but also didn’t want to share too many details of his strategy for fear others would copy him.
Greene had questions about how the fund would work and why he couldn’t just do the trades himself. Paulson said Greene wouldn’t be able to get the necessary documentation to trade CDS contracts directly.
At a follow up dinner, Paulson was friendlier and said the trade could be “huge” for him. But Greene still didn’t fully understand the strategy involving derivatives and tranches.
Greene asked his friend Jim Clark to join them for lunch to help explain Paulson’s strategy, as he was still confused about how it worked.
Jeff Greene grew up in a working class family in Worcester, MA. His father struggled to succeed in business as mills moved south.
Greene showed an entrepreneurial spirit from a young age by shoveling snow, mowing lawns, and caddying to earn money.
In college, Greene discovered a talent for sales working a telephone marketing job selling circus tickets. He excelled and started running his own offices.
Greene made over $100k from the circus ticket business by his early 20s, enough to attend Harvard Business School.
While at HBS, Greene continued running the circus ticket business and saw real estate as an investment opportunity. He bought a three-family apartment building in Somerville using money from the circus business.
This provided Greene an income from rent and introduced him to real estate, which would become a core part of his business activities and source of wealth going forward.
Jeff Greene got bitten by the real estate bug early. While at Harvard, he started buying and renting out properties, eventually owning 18 properties by his second year.
After graduation, he moved to LA hoping to continue investing in real estate. However, the market was different than Boston so he struggled at first. He then branched out into selling tickets for music acts, making over $1 million.
In the 1980s, Greene aggressively bought apartment buildings and other properties in LA as the market soared. His portfolio grew to around $110 million by the early 1990s.
However, the LA real estate market crashed in the early 1990s, leaving Greene with properties worth $50 million but $60 million in debt. He almost lost everything through foreclosures.
By the mid-1990s, the market slowly recovered. Greene was able to sell properties and pay down debt. He then aggressively bought up undervalued properties from others hurt by the crash.
By the 2000s, Greene’s real estate portfolio was worth an estimated $800 million, making him very wealthy. However, he still relied on the volatile real estate market and debt financing.
Greene traveled around the world on his yacht in 2005 and saw extensive real estate development projects popping up everywhere. This made him skeptical of soaring real estate prices.
By 2006, Greene stopped buying real estate himself because he thought prices had gotten unreasonable. He wanted to protect himself from a collapse but wasn’t sure how.
Greene heard about John Paulson’s “subprime short” trade via credit default swaps and wanted to do the same. However, his brokers at Merrill Lynch initially refused because the trades were too complex for an individual.
After much pushing by Greene, his broker Alan Zafran finally got approval from Merrill Lynch for Greene to be the first individual to purchase CDS contracts shorting subprime mortgage bonds.
Greene ended up purchasing over $1 billion in CDS protections in total by finding brokers at both Merrill Lynch and JPMorgan Chase willing to do the trades. He was paying $12 million annually but stood to profit hugely if the subprime market collapsed as he anticipated.
Michael Burry had figured out that the subprime mortgage market was a ticking time bomb. He convinced John Paulson to set up a fund to short the housing market.
Paulson struggled to raise money for the fund. He was only able to secure $147 million total from friends, family and clients. Even some investors weren’t fully convinced but wanted to hedge against real estate.
Paulson waited for a signal that housing prices were weakening. When data showed home price growth slowing to 1%, he decided to launch the fund.
Brad Rosenberg was tasked with buying as much credit default swap (CDS) protection on subprime mortgage bonds as possible before other hedge funds realized what they were doing.
Rosenberg discreetly called banks to buy CDS contracts. To his surprise, banks were eager to sell protection cheaply, not seeming to recognize the risks. Paulson was able to build up a huge short position.
Over time, banks started wondering how much more Paulson would buy and whether they had taken on too much exposure. But Paulson was able to load up on CDS contracts before prices rose.
Greg Lippmann from Deutsche Bank kept trying to get Michael Burry from Scion Capital and John Paulson from Paulson & Co. to buy more credit default swap (CDS) insurance against subprime mortgage bonds.
Paulson and his team at Paulson & Co. met with Goldman Sachs trader Abhya Birnbaum, who was an expert in the CDS market. Birnbaum urged caution and suggested Paulson rethink his bearish stance, but Paulson decided to keep shorting the market.
Paulson invited mortgage experts from Bear Stearns to challenge his thesis. The Bear Stearns team argued Paulson’s views were misguided. Paulson was not convinced by their arguments.
Initially Paulson’s trade did not work out as hoped and he lost some money in the summer of 2006. But he remained confident in his view and kept adding to his short positions, believing it was a good opportunity.
By the summer of 2006 Paulson’s fund had grown to $700 million as more investors started to see the risks in the housing market. However, Paulson and his team later realized they had been too early in their trade as subprime borrowers from before 2006 were still able to refinance.
Jeff Greene had placed short trades on subprime mortgages a few months before John Paulson launched his fund. By the summer of 2006, Greene was down $5 million on the trades.
Greene emailed Paulson asking to invest in his fund and mentioning he had kept his subprime trades open despite Paulson asking him to close them out. Paulson was angry and no longer wanted Greene in his fund, seeing Greene as dishonorable.
Meanwhile, Michael Burry’s short mortgage bets in his hedge fund were also losing value. His brokers were reluctant to update the marks on his positions, making it hard for him to show gains. Burry pulled the positions out of the fund into a separate “sidepocket” so he could value them himself. This concerned some of his investors.
Both Greene and Burry were struggling with opaque and inconsistent pricing from brokers on their short mortgage market positions, despite signs of trouble in housing. This added to their frustrations.
Greg Lippmann at Deutsche Bank had convinced them to let him buy $1 billion worth of protection on subprime mortgages through credit default swaps (CDS), but the trade was stalled in mid-2006 and they were getting impatient.
To appease them and offset costs, Lippmann tried to get other investors to take the same position, hoping it would drive up prices. But meetings with hedge funds Wesley Capital and GMO LLC were unsuccessful, as their bond experts doubted the trade would work.
Some investors Lippmann pitched directly insulted or ridiculed him, doubting there would be problems. Behind his back on Wall Street, he was given derogatory nicknames like “Chicken Little” for his bearish housing view.
Struggling to find believers, Lippmann started avoiding those most knowledgeable about mortgages, realizing they were stuck believing the models showing everything was fine. He focused on less sophisticated investors who might be open to his perspective.
Greg Lippmann was a trader at Deutsche Bank who believed subprime mortgages were at high risk of default. He pitched this trade to investors over 100 times, with the idea of buying credit default swaps (CDS) that would pay off if subprime loans defaulted.
Some investors were initially skeptical but Lippmann researched differences in default rates between North and South Dakota, confirming his thesis that rising home prices determined default risk.
He slowly began winning over investors in London and the US. The CDS contracts flew out of Deutsche Bank’s office, with Lippmann selling $1 billion of protection per day to over 80 investors.
However, most investors had lost money on the trade by the end of 2006 as defaults had not yet accelerated. Lippmann shared his concerns with John Paulson that the market might not recognize the risks, but remained confident the trade would pay off.
Collateralized debt obligations (CDOs) packaging together risky mortgage bonds fueled the real estate market. Chris Ricciardi of Merrill Lynch was highly successful at creating CDOs, making Merrill the top underwriter of these products backed by subprime mortgages.
Merrill Lynch was a major underwriter of CDOs in the mid-2000s, earning fees of 1-1.5% per deal, or up to $15 million per $1 billion CDO. Their CDO profits topped $400 million annually. Management was optimistic about profits continuing.
However, some Merrill employees grew uncomfortable selling risky CDO products and would lie about client interest to avoid promoting certain deals. Ricciardi, a top CDO producer, left Merrill in 2006 for another firm where he continued promoting CDOs.
By the time Ricciardi left, Merrill was very dependent on CDO profits. They issued $44 billion in subprime CDOs in 2006 alone, earning $700 million in fees. CEO Stanley O’Neal received an $18.5 million cash bonus that year.
Many investors believed the high ratings of CDO tranches ensured their safety. However, the top banks were still accumulating risky super senior tranches in their own accounts, against the advice of some employees. Management felt pressure to issue as many CDOs as possible before the market turned.
Paulson realized the CDO market was bound to collapse and decided to short CDOs by purchasing CDS insurance on the riskiest deals. However, banks grew less cooperative as Paulson’s shorting strategy became known.
Andrew Lahde was unemployed in 2006 and living in a small rented apartment with little savings.
He was convinced he had a sure-fire investment strategy betting against the housing market, but couldn’t find anyone to invest in his new hedge fund idea.
Lahde had been let go from his previous job at an investment firm after clashes with his boss. He tried launching his own fund but only got small offers that demanded a large ownership stake, which he refused.
Lahde remained confident that the housing market was going to collapse despite not having any investors yet. He worked out of a simple desk and chair in his apartment.
Lahde’s surfer-like appearance as a tall, blond man with casual style worked against him in being taken seriously by potential investors at first.
Lahde worked as an analyst at hedge fund Dalton, where he developed bearish views on the housing market and subprime mortgage lenders like New Century in 2005.
Despite Lahde’s warnings, the stocks kept rising in 2005 and Dalton accumulated losses from their short positions. This caused tensions between Lahde and his boss Steve Persky.
By April 2006, Persky had enough of the losses and fired Lahde after deciding to close out all of their bearish housing bets. Lahde was only given 3 months severance of $30k.
However, Lahde remained convinced that a housing market crack was inevitable as subprime lenders faced rising costs. His unpleasant experience at Dalton left him considering giving up on finance altogether.
Andrew Lahde started a small hedge fund called Lahde Capital in his apartment in California to bet against the real estate market.
He struggled to raise funds from investors who did not believe the housing market was in trouble. After many rejections, he was finally able to raise $2 million.
Lahde sweet talked brokers at Lehman Brothers and Bear Stearns to let him trade credit default swaps (CDS), which allow investors to bet on subprime mortgage failures, even though his fund was small.
In late 2006, the brokers agreed to do trades with Lahde and he was even paid an upfront fee to take on CDS contracts, since they were unpopular at the time. Over the next few weeks he accumulated over $17 million in CDS protection.
However, Lahde was stressed as bills were due and he was running low on savings. He worked to improve his marketing materials to try to raise more funds, but time was running out.
Elsewhere, John Paulson’s hedge fund was also accumulating CDS contracts to bet against the housing market. He grew concerned that the subprime issues could topple the whole financial system. He consulted economist A. Gary Shilling, who strongly believed a major crisis was imminent.
In early 2007, a trader at a major bank tried to get Paulson & Co. to sell back their short positions on subprime mortgage bonds at a small profit, worrying the bonds could rebound from a previous dip. Pellegrini suspected the trader was trying to get Paulson out of the trade or discourage buying more protection.
Paulson felt the housing market was cracking and saw signs of weakening underwriting standards and problems at subprime lenders like HSBC. However, investment banks were still acquiring subprime lenders.
Paulson was particularly skeptical of New Century Financial and shorted its stock. When New Century unexpectedly reported losses at the end of 2006, the ABX index dropped sharply, yielding big profits for Paulson.
As the subprime crisis deepened, Paulson’s funds gained enormously in February 2007 alone. Clients were shocked by the 66% monthly return. Panicked calls came in from other investors now desperate to buy CDS protection. Paulson’s bets were finally paying off significantly.
Paulson’s CDS trade against subprime mortgages had become riskier as the ABX index recovered, cutting his gains in half. His associate Pellegrini grew concerned and recommended selling, but Paulson refused.
Bear Stearns analyst Sinha held a call urging investors to buy the ABX index, saying the sell-off was overdone. Paulson disagreed but did not publicly argue.
Other industry figures also defended subprime mortgages, helping the ABX rebound further. Paulson’s gains were sliced in half.
Investor John Devaney went against his past avoidance and bought subprime investments, believing the risk was overblown.
Rosenberg heard concerns from traders that Bear Stearns, through its servicing arm EMC, could manipulate mortgage pools to invalidate Paulson’s CDS contracts. Pellegrini also worried large banks could intervene.

In summary, Paulson’s trade faced mounting challenges as industry players defended subprime assets and Paulson’s associates warned of potential market manipulation, while Paulson held firm in his bearish stance.

Rosenberg at Paulson & Co. receives a document from Bear Stearns reserving the right to adjust mortgages, which concerns him and Pellegrini. They warn Eichel at EMC not to let Bear Stearns manipulate the market.
Pellegrini and Rosenberg bring the issue to Paulson, who asks lawyer Michael Waldorf to review. Waldorf is angry and believes Bear Stearns could take away their profits. He contacts others betting against subprime like Greg Lippmann and Kyle Bass.
Waldorf and former SEC chair Harvey Pitt pressure Bear Stearns, who withdraws the proposal. But Paulson still faces difficulties profiting as traders quote inefficient prices.
Ralph Cioffi’s hedge funds at Bear Stearns suffer losses due to subprime exposure. As markets worsen, Bear Stearns has to bail out one of Cioffi’s funds, raising concerns about its own stability.
By July 2007, the funds collapse,leading to more losses. Investors flee subprime, boosting Paulson’s profits to over $4B on paper. Rosenberg trades from a hospital during his wife’s labor.
Paulson remains focused on the opportunity but privately considers selling part of his very profitable firm.
In the summer of 2007, John Paulson quietly met with two potential investors interested in buying a stake in Paulson & Co. During the meeting, Paulson seemed nervous and impatient, as if waiting for important news.
Paulson stepped out after getting a whisper from Rosenberg. When he returned 10 minutes later, he was grinning widely, holding some secret he wanted to share.
Paulson finally blurted out that the firm had just made $1 billion that day. The investors were stunned and realized they could no longer afford to buy into Paulson & Co.
Some investors grew worried about the huge and rapid gains, pressing Paulson to lock in profits before the trade reversed. But Paulson stayed confident in his analysis of the deteriorating housing market.
Even Paolo Pellegrini, an architect of the trade, started having doubts and thinking Paulson should sell more positions in case the market recovered. This began causing a rift between them.
At Goldman Sachs, trader Josh Birnbaum’s team had also turned bearish on subprime mortgages and was profiting from short positions, like Paulson.
Paulson was resisting selling positions from his two credit funds where Pellegrini worked, even as Pellegrini urged trimming positions to lock in gains. Paulson had already profited by selling from his other older funds.
Pellegrini was worried that a bank like Bear Stearns could manipulate mortgage pools and undermine Paulson’s bets if losses stayed under 5%. He continued urging Paulson to trim positions.
Jeffrey Greene, who had bet against subprimes with Merrill Lynch, was also getting impatient as his bets weren’t paying off yet. He was calling his broker Alan Zafran frequently for updates, sometimes for hours.
Greene had significant debts and assets tied up in real estate that was falling in value. A failure of his subprime bet threatened his financial position. He was relying heavily on his brokers at Merrill to understand why his bets weren’t producing gains yet.
Greg Greene outbid billionaires to purchase an unfinished mansion in Beverly Hills for $35 million, hoping to finish it and sell it for a profit. He named it “Palazzo di Amore” and furnished it lavishly.
However, Greene was growing increasingly concerned about the real estate market. He had invested heavily in credit default swaps that would pay off if subprime mortgage bonds defaulted.
As 2007 progressed, housing prices continued to fall but Greene’s trades were not gaining value as quickly as expected. He pressed his broker Zafran for explanations but did not understand why similar subprime mortgage pools were trading differently.
Jeffrey Libert, Greene’s friend and a real estate developer, also anticipated problems with subprime mortgages but was hesitant to sell more of his company’s properties due to staff concerns. He watched the unfolding housing issues with growing frustration.
Greene became very agitated as the markets did not move as he predicted. He verbally lashed out at Zafran, demanding to know why his trades were not as profitable as he felt they should be given the decline in the housing market.
Jeffrey Libert attended a real estate conference in 2006 where people were already seeing signs of defaults on 2006 mortgages.
When Greg Greene told Libert about shorting the subprime mortgage market, Libert struggled to get brokers to let him buy credit default swap (CDS) contracts to bet against subprimes. He lost interest after multiple rejections.
In early 2007, after more signs of problems, Libert finally got approval from JPMorgan broker John-Paul Tomassetti to buy CDS contracts, just like Greene had.
Libert began uncomfortably rooting for more homeowners to default, as that would profit his bet, but also felt guilt over it. His friends critiqued him for seeming happy about people’s misery.
Libert converted his CDS contracts to insure AA-rated slices of mortgage bonds, which were still inexpensive despite being perceived as safe.
Libert recommended Greene do the same, and while Greene briefly followed his lead, he got distracted planning an expensive wedding as the housing crisis continued unfolding.

Here are summaries of the key parts:

Greg Lippmann was a Deutsche Bank trader who made large profits in early 2007 by shorting subprime mortgage bonds via credit default swaps (CDS). As the ABX index tracking subprime mortgages fell, Lippmann made over $100 million in profits in one week. However, his superiors pressured him to reduce his positions, worried he could lose the gains.
Andrew Lahde was a small hedge fund manager who also bet against subprime mortgages by buying CDS protection. In early 2007 he barely had enough money to keep his fund afloat. However, he convinced investor Norman Cerk to invest $6.5 million with him by explaining his dire view of the housing market. This allowed Lahde to fully implement his bearish subprime mortgage trade.
By mid-2007 it was clear the US housing market and subprime mortgages were in deep trouble. The ABX index had fallen significantly and ratings agencies were downgrading billions of dollars of mortgage-backed securities. While Wall Street was still optimistic about the broader economy, the subprime bets of Lippmann, Lahde and others were hugely profitable.
Group raised nearly $5 billion in its IPO, making Schwarzman’s stake worth almost $8 billion. Earlier, Schwarzman had thrown an extravagant $3 million 60th birthday party.
In mid-2007, financial leaders played down concerns about the subprime crisis. Bernanke said troubles were unlikely to seriously impact the broader economy. Gross of Pimco also predicted the US would avoid recession.
Cassano of AIG said it was hard to envision losing $1 on subprime transactions. Stock indexes rose as confidence grew the worst was over.
However, Paulson had a secret insight - he realized the subprime domino had fallen and more were set to follow. He was betting big that housing prices would decline further.
Meeting on a train, Paulson told his friend Tarrant that major banks like Merrill Lynch and Countrywide were overly exposed since they held significant subprime assets like CDOs on their own books. Paulson believed this would lead them to report major losses as the crisis unfolded.
Paulson’s hedge fund had realized that debt issues were not confined to subprime mortgages, and that many financial companies and banks were exposed through credit cards and other risky loans.
Paulson shorted shares of banks exposed to credit cards and commercial real estate loans. He also shorted Fannie Mae and Freddie Mac based on advice that subprime issues would spread to the broader housing market.
By late 2007, mortgage securities were being downgraded en masse as the risky nature of subprime debt became clear. Banks wrote down over $70 billion in losses from CDO exposures. Several bank CEOs lost their jobs.
Paulson was concerned about being able to exit all their short positions without pushing prices down further. But when they tested demand, banks and investors were eager to take over the CDS insurance contracts, allowing Paulson to realize much of their profits from correctly betting on the housing collapse.
Paulson managed to sell about 40% of his CDS insurance in 2007 as the housing market troubles became clearer. But the rest was harder to unload, frustrating him at times.
Surprisingly, some traders at Bear Stearns were eager to buy Paulson’s CDS protection, realizing the severity of the problems. They made $2 billion profit from taking on the protection that Paulson discarded.
At Bear Stearns, there was tension as executives argued over how to stabilize the firm, which held too many risky mortgages. Some urged urgent action to cut positions, while CEO Alan Schwartz urged caution, worried that fire sales would cause huge losses.
Jeffrey Greene’s CDS protection climbed in value to as much as $300 million by October 2007. Friends urged him to take some profits, but he refused, convinced further troubles were ahead. It was difficult to find buyers or prices for his unique mortgage-backed CDS positions.
Greg Lippmann at Deutsche Bank also scored huge gains in 2007 from his short mortgage bets. But Deutsche Bank executives hinted he should take some profits, which he resisted.
Lippmann fought to hold on to his subprime short positions at Deutsche Bank even as others wanted to exit the trade. He argued the housing market was getting worse and convinced bosses to let him keep most of his positions.
As the market began to panic in late 2007, Lippmann’s team racked up large daily gains from their shorts while many other Deutsche traders lost money on long positions in the same investments.
At year’s end, Lippmann received a $50 million bonus from Deutsche, a large sum even by Wall Street standards. However, he argued it was too low given how much money he made the bank.
Lippmann briefly explored other job options but ultimately stayed at Deutsche partly out of loyalty, though still unhappy about his bonus amount. He fought to hang on to his investments and profit from the subprime crisis.
Pellegrini worked at Paulson & Co. and helped manage large credit hedge funds during the financial crisis. However, he felt Paulson did not fully trust him or give him enough responsibility.
Pellegrini proposed returning half the money in one of the funds to investors and extending the lockup period. Paulson seemed taken aback by the suggestion and questioned what Pellegrini had accomplished. This hurt Pellegrini.
Despite the tension, Pellegrini earned a $175 million bonus for 2007 from his work at Paulson & Co. He saw a balance of $45 million in his bank account from the bonus.
Paulson invited hedge fund managers to a lunch at Bear Stearns in early 2008 to convince them to return client money to Bear Stearns. During the lunch, Paulson raised concerns about Bear Stearns’ financial positions and level 3 assets. This questioning planted doubts and led other hedge funds to pull money from Bear Stearns.
Bear Stearns’ financial position deteriorated and it had to be rescued in an emergency sale to JPMorgan arranged by the Fed a month later. This highlighted Paulson’s prescience in betting against Bear Stearns.

Here is a summary of the key events:

In March 2008, John Paulson and Paolo Pellegrini visited Harvard to explain how they anticipated the credit crisis, but Paulson spoke alone while Pellegrini watched from the back, which humiliated Pellegrini.
By summer 2008, as financial firms kept collapsing, Paulson and Pellegrini were able to sell off the last of their short positions on subprime investments at high prices. This allowed them to exit almost every trade and cash in the remaining profits of their prediction of the housing crisis.
Paulson’s funds invested $1.2 billion total and generated almost $10 billion in gains over two years by shorting subprime mortgage investments and buying credit default swaps that profited when firms like Bear Stearns and Lehman Brothers collapsed.
The collapse of Lehman Brothers in September 2008 triggered a wider financial crisis and global market plunge. This validated Paulson’s crisis prediction, though even he did not fully anticipate the severity of the economic fallout.
Greg Lippmann, a trader at Deutsche Bank, correctly bet against the mortgage market in 2007-2008. Despite his success, Lippmann’s bosses remained skeptical and pushed him to sell some positions. By late 2008, Deutsche Bank was struggling with major losses and could only pay Lippmann a few million bonus despite his gains.
Andrew Lahde raised larger funds in late 2007/early 2008 to short commercial mortgages and banks/brokerages, believing the financial system was a “complete disaster.” By end of 2007 he had $1B in subprime protection. In 2008 he began selling some positions as he became worried about the fragility of the system. In March 2008 he tried to relax in Miami but couldn’t stop thinking about cashing out his positions before it was too late.
Jeffrey Greene made around $500M profit shorting the mortgage market through credit default swaps. By late 2008 he was worried about the health of his broker Merrill Lynch and pushed to sell his remaining positions, finally doing so for 93 cents on the dollar.
Pellegrini, a portfolio manager at Paulson & Co, remained skeptical of buying cheap mortgage investments in 2007-2008 despite pressure from Paulson to do so. By late 2008 he was preparing to leave Paulson.
John Lahde made $75 million in profits from 2006-2007 by investing in funds that bet against subprime mortgages. As the financial crisis unfolded in 2008, he worried about not being able to cash out his winnings. He instructed his associate to slowly exit all positions before others realized what they were doing.
John Devaney had large losses on subprime bonds in 2008 after dismissing concerns in 2007. He was forced to sell luxury assets like a yacht and mansion to raise cash but still lost over $150 million personally when his fund collapsed.
Michael Burry struggled in 2008 as investors withdrew money, forcing him to sell positions. He was disgruntled about not receiving more recognition for his early subprime bet. By late 2008 his fund was much smaller and he decided to close it down, feeling burnt out.
Paulson avoided publicity in 2008 but held a lavish dinner for investors. He was subpoenaed by Congress to provide information about his hedge fund but wasn’t accused of wrongdoing. He was already planning a new controversial trade for early 2009.
Greg Lippmann, a star trader at Deutsche Bank, helped introduce synthetic mortgage products that enabled more investors to bet against subprime mortgages. His clients profited enormously from these trades.
However, Lippmann and Deutsche Bank were also involved in creating and selling subprime mortgage products. This led to an investigation and criticism that Lippmann profited by betting against products his firm created.
Other hedge fund managers like Jeff Greene and Andrew Lahde also made hundreds of millions or billions correctly betting on the housing collapse. However, Lahde in particular grew disillusioned with the financial system and politics. He retired to an island seeking escape.
The letter describes how these hedge fund managers were able to profit by realizing the flaws in mortgages and the financial system, even as many policymakers ignored warnings. It criticizes the systemic issues and corrupt influences that led to the mistakes.
John Paulson started making money from long positions again in early 2009 as financial markets showed signs of recovering. He believed prices of financial companies he had shorted had fallen too far.
Paulson gradually accumulated over $20 billion worth of long positions in debts of troubled companies, mortgage and commercial backed securities, bank stocks, and other investments by August 2009.
This paid off as his firm earned about $3 billion in the first half of 2009 from the recovering financial markets.
Paulson was never fully comfortable as a short seller and preferred making money over any particular strategy. As company balance sheets improved, he saw an opportunity to profit from long positions again.
While very successful from his historic short against subprime mortgages, Paulson recognized another financial bubble was inevitable given past trends. Future bubbles may stem from public debt increases, low interest rates, or dissident views need to be encouraged rather than scorned to help identify new bubbles.
Paulson began worrying that the massive increase in money supply from government spending to rescue the economy would lead to high inflation in the future. He believed that only gold would hold its value.
Despite having no prior experience with gold, Paulson invested over $1 billion in gold mining companies and started gold-backed investment funds. He believed the dollar would lose value and inflation would rise significantly in the coming years.
Some investors were skeptical, noting factors that would limit inflation like high unemployment. Some withdrew money from Paulson’s fund, reducing its assets.
Paulson acknowledged the criticism but was confident in his view. He saw betting against the dollar as his new major trade, similar to his earlier subprime mortgage bets. He was passionate about making another large profitable trade.
In the summer of 2009, Paulson said people would soon regret not buying gold earlier. He was confident that over time, the currency would lose value and inflation would rise as he predicted.

Here is a summary of the article “The Hedges,” from CityFile published on February 11, 2009:

The article profiles three wealthy hedge fund managers who own large mansions in the Greenwich, Connecticut area known as “the Hedges.”
John Paulson paid $22 million in 2007 for a 9-acre estate called Lysander. He made billions betting against the subprime mortgage market and his hedge fund returned around 600% in 2007.
Daniel Och paid over $20 million for an 11-acre property called Chestnut Hill Farm. He founded Och-Ziff Capital Management which returned over 30% annually.
Larry Robbins paid over $30 million for a 12-acre estate called North Rye. He founded Glenview Capital Management which returned over 30% annually.
All three homes have pools, tennis courts, and barns converted into guest houses. The area is known locally as “the Hedges” because of the dense plantings of shrubs and trees around the large properties.
The article profiles the success and lavish lifestyles of these three billionaire hedge fund managers living in Greenwich, Connecticut. It provides details about the mansions they purchased known collectively as “the Hedges.”

#book-summary

The Greatest Trade Ever The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History - Gregory Zuckerman