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The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History Paperback – December 7, 2010
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"Mr. Zuckerman is a first-rate reporter who is also able to explain the complexities of real estate finance in layman’s terms. At times, The Greatest Trade Ever reads like a thriller."
--The New York Times
“How Paulson and a handful of contrarian investors pulled off this once-in-a-lifetime coup is the subject of The Greatest Trade Ever ... a fascinating and believable counter-narrative to the growing pile of books recounting the disastrous mistakes made by many of the supposedly smartest minds on Wall Street. It is also a surprisingly dramatic work...In The Greatest Trade Ever, Zuckerman skillfully shows how Paulson and a few cohorts anticipated a disaster and figured out a way to profit.”
"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."
"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, Zuckerman 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.”
“A magnificent insider look at how Paulson and others profited off of subprime’s demise, detailing both the formulation and implementation of such a trade…Zuckerman’s work is both insightful and gripping.”
"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, bestselling author of Moneyball and Home Game
"Gregory 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. The story of John Paulson and the few colorful contrarians who made outsized bets and outrageous profits on the subprime implosion, is at once a great page-turner and a great illuminator of the market's crash."
--John Helyar, co-author, Barbarians at the Gate: The Fall of RJR Nabisco
"Greg Zuckerman's book is much, much more than a brilliant account of Paulson's trade of the century; it 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. The book is compulsory reading for those looking for exceptional insights on the complex forces that interconnect Wall Street, hedge funds and Main Street."
--Mohamed El-Erian, Chief Executive Officer of Pacific Investment Management Co. and bestselling author of When Markets Collide: Investment Strategies for the Age of Global Economic Change
"I couldn't put it down. All I can say is, WOW! What a story! Incredibly illuminating."
--Whitney Tilson, hedge fund manager and author of More Mortgage Meltdown: 6 Ways to Profit in These Bad Times
"A wonderful, fast-paced summary of how John Paulson, a hedge fund manager, made billions of dollars."
"The Greatest Trade Ever is aptly titled, for it is possibly the greatest book to come out of the financial crisis of 2007 — 2008, and it’s certainly up there in the top 3."
"...a Tour de Force chronicling the rise of John Paulson from a mediocre merger arbitrage investment manager into a financial titan."
"An astonishingly interesting story."
--David Warsh, EconomicPrincipals.com
From the Hardcover edition.
About the Author
From the Hardcover edition.
Top Customer Reviews
There were two pleasant surprises of the book:
1. Cast of Characters - How different investors, besides John Paulson, also saw the similar trade opportunity and went for it. As the crisis unfolded John Paulson, George Soros and a host of other investors were revealed to have been shorting the housing market. The surprise was learning about the host of other, "unknown" investors from a medical school dropout to a cocky Deutsche Bank trader to wealthy real-estate mogul to a recently graduated MBA, each of whom recognized the crisis before most others and were able to trade against the rest of the investment community.
2. The transformation of John Paulson - He was initially described someone who was smart, but not as someone who always "had to be the best" or a natural leader; in other words he was not the classic alpha male. John Paulson was portrayed as a random i-banker with awkward communication skills, a weak handshake and an affinity for the NYC club scene. Many actually saw his career as stalled and unexceptional. The book is very good at showing how he transformed himself from a run of the mill finance professional to someone whose ambition grew and grew....and once he saw the opportunity he calmly executed his trade and transformed his life.
(A small side note...this is also the one of the best books describing the technical terms of the housing crisis (e.g. CDS, MBS).)
Finally, even though the ending is essentially known (the collapse of the housing market), the description and narrative of the sequence of events is riveting.
A great read for anyone interested in finance, the markets, and the real estate crash.
If "The Big Short" theme was that Wall Street bond traders were corrupt and stupid and it was inevitable that they would blow up, "Greatest Trade Ever" covers the same ground but instead argues that it is nearly impossible to profit from a wildly out of consensus trade. Lewis opens his book with a quote by Tolstoy, which emphasizes that the experts could not be convinced because they know too much. Zuckerman instead opens with the Keynes quote above which explains why there are so few independent thinkers on Wall Street. The amazing thing about the subprime debacle was not that a few smart contrarians figured it out, but rather that so few did, and perhaps most amazing of all, the pain they endured during the process. (Although their massive, deserved riches may be a salve for those wounds).
The Greatest Trade Ever is mis-named. It is not really a story about a trade, but about the fascinating few people that were able to make this trade. Zuckerman, in vivid detail, helps us to understand what drove these men to bet everything they had against the rest of the world. The book succeeds on several levels. It explains the actual mechanics of how traders spotted and profited from the subprime meltdown. On a very subtle level, it gives serious investors some amazing insights in successful investing, but it is no "how-to" book. Most important, it tells the stories of these fascinating people who rode the wave.
The author compares these contrarian investors to people who climb K2 or surf Pipeline in Hawaii. In the investing world, there is no more treacherous challenge than betting against a mania.Read more ›
Zuckerman also looses credibility throughout the book. For example, on page 72, Zuckerman discusses Paulson's first foray into Credit Default Swaps (CDSes). After making a $500k bet, to insure $100 million, he writes "Soon their position faced some small losses. They discovered that the value of CDS protection falls as the underlying debt gets closer to maturity." OK, really? Zuckerman expects me to believe that they didn't know this? Paulson and co had been playing in derivative markets for decades, and this is standard behavior of most, perhaps all, date-based derivatives, and I think I learned this in my undergrad finance course the first week. Zuckerman gradually looses credibility like this the whole book until @ the end we wonder if he really knows what he's writing about.
Another example of the just strange reporting (p.Read more ›
Most Recent Customer Reviews
I just couldn't make myself give a hoot about any of the central characters in this story. All of them struck me as self-centered crybabies. Read morePublished 16 days ago by bigandrew
Well put together. A lot of different angles and it did not get confusing. Better than Michael Lewis any day.Published 1 month ago by Zack
Fun and entertaining book to read that tells the story of John Paulson who bet against the housing market.Published 1 month ago by Fitgirl
This is an excellent book for understanding the events leading up to the financial meltdown of 2008-2009, explaining the key individuals that foresaw the problems and the financial... Read morePublished 1 month ago by Erwin C. Pantel
I was hoping for a discussion of the reasoning of how the imbalance was determined. A subjective look at the thought behind the bet. Instead I get a fairy tale of John Paulson. Read morePublished 3 months ago by jcn