Shorting Subprime: Already Over?

Posted by John Carney, Nov 02, 2007, 10:00am

So Paulson & Co is getting out of the subprime trade? It seems like only yesterday that our little babies were almost in a panic about their short play, complaining to the SEC ththat banks were buying up bad loans in order to contain derivative losses. Remember the era when that might have sounded scandalous, rather than smart, heroic or obvious?

Well, whatever the plot to rescue subprime that Paulson thought it saw, it didn't work out. They've doubled their assets this year, and now run $24 billion.

And now they have reportedly cut their subprime positions by 86%.

Paulson Funds Cut Bets Against Subprime Mortgages [Bloomberg]

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Posted in: Subprime Mortgages

Comments

Posted by inIT4the$, Nov 02, 2007 11:17AM

GS is f'd! Thank you.

Posted by DRD, Nov 02, 2007 11:20AM

why is GS f'd? They are still short subprime and the ABX is down huge once again in October. Who knows about there level 3 assets

Posted by , Nov 02, 2007 11:21AM

what makes you think they are still short subprime directional trade

Posted by , Nov 02, 2007 11:38AM

Nice work on changing the time stamp on the post Carney.

Posted by inIT4the$, Nov 02, 2007 11:39AM

let me rephrase, GS and most of the other investment banks are f'd on level 3 assets (which is a whole lot more, or could be, than subprime). Right now GS level 3 (or as of Feb '07) assets are 2x capitalization.

Read "The Bears Liar" Michael Hutchinson on Bloomy

Posted by , Nov 02, 2007 3:24PM

Rumor, GS to announce $18 quadrillion write down on Monday.

Posted by , Nov 02, 2007 4:29PM

Is it possible that some kind of short covering occurs in subprime ? :=)))

Posted by Euro-hedgie, Nov 05, 2007 4:38AM

Not everyones "bonii" were affected negatively by subprime...
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Dear Santa,

Please send me a new Maseratti, 200m2 beach front holiday home, yacht, helicopter, ski chalet, and let me live in a tax friendly country with no crime.

Let my beautiful model wife shop at Bulgari and Hermes and Gucci to her hearts content.

Yours wishingly
Euro- hedgie
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Reply from Santa

Dear Euro-Hedgie

I got your letter, thanks. Whilst my helpers are working their asses off to earn the money to pay my mortgage I note that you shorted sub prime and made a zillion bucks for your firms investors, and took 20% performance fee...

I also note you get paid in Euros....

So in short " Go forth and multiply and buy those things yourself "

yours jealously
Santa

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