John Paulson's Very Bad Year

Photograph by Mike McGregor/Contour by Getty Images

John Paulson, the founder of Paulson & Co., one of the world’s largest hedge funds, has close-cut black hair, dark eyes, and a soft voice. There’s a fuss when he arrives, befitting a man who made one of the biggest fortunes in Wall Street history, as his general counsel and PR consultant jostle for seats next to him. Paulson’s decision to buy credit-default insurance against billions of dollars of subprime mortgages before the market collapsed in 2007 earned him almost $4 billion personally and transformed him from an obscure money manager into a financial legend. Then came the kind of disastrous run that can unmake a career. In 2011 he lost billions.

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