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John Paulson, the hedge fund manager who famously bet against the sub-prime crisis, is now betting on the European sovereign debt crisis.  According to Bloomberg he is increasingly concerned about the Euro collapsing as the crisis spreads to larger countries like Spain (via Bloomberg TV):

“John Paulson, the billionaire hedge-fund manager seeking to reverse record losses in 2011, told investors he is shorting European sovereign bonds, according to a person familiar with the matter.

Paulson, 56, said during a call with investors that he is also buying credit-default swaps on European debt, or protection against the chance of default, said the person, who asked not to be identified because the information is private. Spanish banks are of particular concern as their holdings of the country’s debt and client withdrawals make them overly dependent on European Central Bank financing, Paulson told investors.

Paulson, who manages about $24 billion in his New York-based firm Paulson & Co., lost 51 percent in one of his largesthedge funds last year after making an ill-timed bet on a U.S. economic recovery. In February, he said that the euro is “structurally flawed,” and will eventually fall apart, according to a letter sent to investors.”

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