The Greatest Trade Ever

" Million dollars. A day hedge fund manager John Paulson did it by betting that the housing market. Would collapsed indeed it did a new book the greatest trade ever takes us behind the scenes of Paulson. Multibillion. Dollar rise joining me now is Greg Zuckerman books author and reporter for The Wall Street Journal Greg -- you being here. This trade was well known. And the amount of money that Paulson in the firm made billions of dollars with -- number what attracted it to you write a book about it."

" You know what but a year or so ago I realize that these were the winners. I knew that in the other books and other people come analyzing. The people about loss of AIG is the cities of the world. People trying to fix this world Bernanke and Geithner that kind of thing. I think through the winners and that includes John Paulson that a few others. Who saw this coming I you can learn that maybe more lessons from this whole bubble how to prepare for the next one that kind of thing night. Enjoy reading about winners more than losers anyway."

" But great winners because he won and made billions of dollars. Is essentially on the backs of people who made bad decisions with homes and so what is it saying -- people."

" We're facing foreclosure who underwater on their homes well it tells you about risk and he saw that we had gotten into debt his other problems ahead and he said it was a bubble and it's my kind of contention that we've had more financial bubbles in the last few years of -- the body -- energy markets. -- tech bubble obviously. Asian currencies before that I Jeremy Grantham an investor. Accounts about 25 financial bubbles over the past eight years -- so. And I think in some ways you can -- lessons from Paulson and some others that you configure these things out. From the outside this Paulson wasn't mortgage guy who is -- housing I was driven to god and yet he's the one need to greatest trade ever."

" Greg you did some. Fifty hours of interviews with Tom Paulson but he has since come out and said there inaccuracies. In the book. It fails to capture the essence of the credit bubble he equates it with the writings how with a gossip tabloids your responses that."

" Well I spent over fifty hours as you say -- John he has yet to point got any inaccuracies to me I think the way. What happened was that college has a colorful past and he's a private guy now and I'm not sure you want me to write about colorful past but. In my view John Paulson and the others who figured this thing out. Are inching and interpersonal you're missing the motivations are distinct. And I had to get -- that as a writer not sure. He wanted me get those kinds of things you column womanizer before you're married I yeah. I mean I want fluff like a lot of single people now we settled down."

" But no one interesting thing you kind of go into in the book is it seemed fairly easy. To identify one analyst actually identified the problem and counting on appellate -- me covered book."

" Easy to identify difficult to X acute this that that's a really good point -- a lot of people actually who saw this coming on with all that housing action was too high. I think now this is conventional wisdom and we drink the Kool aid and that the case I think a lot of people thought housing at some point was going to drop. But didn't take that next step to figure out how do you make money off of that -- and we're talking but even that do grosses of the world like -- as mortgage expert Soros and Buffett all those kinds of people didn't do what John Paulson and the other people I talk about in the book did."

" But what."

" Paulson and company did it in order to make this bet that housing would collapse was controversial and other self conceit. Which to some firms in -- can you create these collateralized debt obligation so I can then turn around and essentially bet that there going to collapse through insurance."

" It's true in 2006. He was buying insurance left them write -- money this -- CDS contracts are called obviously I derivatives that -- insurance on risky mortgages. And he was buying a lot of anyone even -- so what this Olivia banks and say hey if you create some of these CBO products filled with risky mortgages -- be -- to bet against them. I would argue that it's the bank's responsibility that it wasn't sold -- onto investors -- Paulson is as eager to buy more insurance but there are some people that blame for that."

" Talk about it really quickly -- he's bad on gold yeah right. If that goes badly will that completely removed who've removed their reputation certainly not the money may be that he made on betting on --"

" Pens where I gold goes I don't think so I mean he's bottom but put about 15% of his portfolio in gold which is a big bet because he -- is about. Thirty million dollars now -- he's among the biggest buyers of gold out there. And this criticism of him and those who buy gold. To some extent it's a conventional wisdom that the Fiat currencies than a dollar and other kind of US and and domestic an international currencies are going to have problems and ankle is the answer so you could argue that Paulson right now is doing the conventional -- via unconventional but I would argue that it's actually kind of smart to have some -- your portfolio."

" Greg Oden good to see Greg Zuckerman great to be the book is the greatest trade. Ever and ever period and backed off on Wall Street Journal report. Gregg it is a gripping read and it's not just numbers sent."