In2006,hedgefundmanagerJohnPaulsonrealizedsomethingfewotherssuspected--thatthehousingmarketandthevalueofsubprimemortgagesweregrosslyinflatedandheadedforamajorfall.Paulson'sbackgroundwasinmergersandacquisitions,however,andheknewlittleaboutrealestateorhowtowageragainsthousing.Hehadspentacareerasanalso-ranonWallStreet.ButPaulsonwasconvincedthiswashischancetomakehismark.Hejustwasn'tsurehowtodoit.Colleaguesatinvestmentbanksscoffedathimandinvestorsdismissedhim.EvenprosskepticalabouthousingshiedawayfromthecomplicatedderivativeinvestmentsthatPaulsonwasjustlearningabout.ButPaulsonandahandfulofrenegadeinvestorssuchasJeffreyGreeneandMichaelBurrybegantobetheavilyagainstriskymortgagesandprecariousfinancialcompanies.Timingiseverything,though.Initially,Paulsonandtheotherslosttensofmillionsofdollarsasrealestateandstockscontinuedtosoar.Ratherthanbackdown,however,Paulsonredoubledhisbets,puttinghishedgefundandhisreputationontheline.
Inthesummerof2007,themarketsbegantoimplode,bringingPaulsonearlyprofits,butalsosparkingeffortstorescuerealestateandderailhim.Byyear'send,though,JohnPaulsonhadpulledoffthegreatesttradeinfinancialhistory,earningmorethan$15billionforhisfirm--afigurethatdwarfedGeorgeSoros'sbillion-dollarcurrencytradein1992.Paulsonmadebillionsmorein2008bytransforminghisgutsymove.Someoftheunderdoginvestorswhoattemptedthedaringtradealsoreapedfortunes.Butotherswhogotthetimingwrongmetdevastatingfailure,discoveringthatbeingearlyandrightwasn'tnearlyenough.
WrittenbytheprizewinningreporterwhobrokethestoryinTheWallStreetJournal,TheGreatestTradeEverisasuperblywritten,fast-paced,behind-the-scenesnarrativeofhowacontrarianforesawanescalatingfinancialcrisis--thatoutwittedChuckPrince,StanleyO'Neal,RichardFuld,andWallStreet'stitans--tomakefinancialhistory.