Gregory Zuckerman, author of The Greatest Trade Ever, is reporting some unbelievable news in the Wall Street Journal this morning about his book’s central subject, Paulson & Co….
As the hedge fund manager suffers through the worst losses of his career, Paulson now is facing a flock of vulture investors who hope he will be forced to conduct a fire sale of stock and debt holdings.
Rival hedge funds, brokers and other firms are combing through Paulson & Co’s investments, trying to anticipate what Paulson might sell if he needs to return cash to investors.
According to traders, some firms have been selling investments they have in common with Paulson, worrying he will have to sell some holdings if clients withdraw cash.
Meanwhile, other firms are approaching Paulson with lowball offers. For example, at least one firm recently offered a below-market price for some of the bonds his firm owns in Lehman Brothers Holdings, according to people close to the matter. Lehman filed for bankruptcy in 2008, but debt issued by the securities firm is still traded.
We know Paulson’s been crushed in the bank stock blow-up and that the last leg of the stool, gold, was kicked out from under him last week. The Sino-Forest debacle earlier this summer was also both costly and embarrassing,
If this liquidation stuff is true – that the once-$37 billion magic-touch hedge fund titan is truly in trouble because of market activity…well, this would be one of the biggest (fastest) Wall Street flameouts of all time. The Greatest Fade Ever.
Head over and read the rest of Zuckerman’s piece below.
Tags: $BAC $GLD