Einhorn Trades Swaps for Shorts When Betting on Sovereign Debt
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David Einhorn, the hedge-fund manager who compared the Greek bailout to a surrealist painting, recast a bet against sovereign debt in a way that reduces risks posed by government regulators and big banks.
Greenlight Capital Re Ltd., a publicly traded insurer controlled by Einhorn, held credit default swaps on $667 million of sovereign debt as of June 30. During the third quarter, the company exited about half of those swaps, designed to pay off should a government default, and entered into short sales on non-U.S. sovereign bonds, according to a regulatory filing.