Here at Dealbreaker, we’re enjoying tremendously The Wall Street Journal series, “The World the Crisis Created,” or: “Where Are The People Who Torpedoed The World Economy (Or Profited Handsomely From It) Now?” There have been some heartwarming tales: John Thain and Alan Schwartz are still at it, Tim Geithner and Adam Applegarth have retreated to the security of private equity, Jimmy Cayne and Ben Bernanke are enjoying retirement, Kyle Bass is still talking about China, Neel Kashkari had a conversion experience and Nouriel Roubini is still neck-deep in babes.
For some, however, the giddy highs of the world economic system crumbling around them were followed by a long, painful withdrawal and sad decline. Meredith Whitney, for example. Today, however, the Journal is checking in with two people with among the darkest post-crisis paths, a pair of hedge-fund managers deranged by the whole experience and still looking for a light at the end of the tunnel that stubbornly refuses to glint: John Paulson and David Einhorn.
Mr. Paulson’s fortunes reversed. His touch has gone frigid in recent years, his firm’s performance crippled by losses in drug stocks, collapsing gold companies, and even a Chinese fraud, forestry company Sino-Forest Corp…. Paulson & Co. has been letting employees go and is moving into smaller New York offices in the headquarters of Steinway & Sons, the piano maker purchased by Mr. Paulson’s firm for more than $500 million in 2013. Recently, Mr. Paulson made a historic $1.5 billion tax payment for gains from the subprime trade that had been deferred for a decade.
Greenlight Capital, has suffered from bets against some of the market’s best performing stocks, including Tesla Inc. and Amazon.com Inc. The benchmark fund lost more than 10% between the end of 2014 and the end of 2017, The Wall Street Journal Reported. The S&P 500 index notched a 38% total return in that period.
This year, the fund lost 13.6% in the first quarter, according to people familiar with the matter, compared with a 0.8% loss for the S&P 500….
At the conference, Mr. Einhorn began discussing the frothy valuations for bond insurers back in 2008 and seemed to get nostalgic.
“Bubbles do pop, you know,” he told the crowd. “Or at least they used to.”
Those sure were the days, weren’t they?
Architect of Greatest Trade Ever Hit by Losses, Redemptions Postcrisis [WSJ]
David Einhorn Finds Victories More Elusive Since Winning Lehman Bet [WSJ]
Where are They Now: Profiles of the Biggest Figures From the Financial Crisis [WSJ]