To Err is Paulson

John Paulson has become an old school Wall Street rock star over the past few years. He made a killing shorting MBS when every fool and his pension fund manager was gobbling them up quicker than Brett Favre in a Percocet factory.

At a time when bankers and traders of all shapes and sizes were taking it on the chin, Paulson reminded the young enterprising financier that he was always really just one directional bet away from fame, power, stardom and wealth beyond his wildest dreams.

This is precisely why many of us were shocked to hear about Paulson losing over $500 million dollars on Sino Forest. It just didn’t seem right that a guy who made a ton off the careful nitpicky analysis of real estate mortgage bundles, would get taken to the cleaners buying into a company which has largely been exposed as a Ponzi Scheme.

Furthermore, Paulson is sticking to his guns in claiming that he actually made the right call on Sino Forest. I find these claims quite comical and infantile. Daily loses in the hundreds of millions do not occur without tectonic market shifts or evidence of fraud. In this particular case it was Sino Forest’s duping of ignorant investors (like Paulson) which led to their stock’s plummeting price.

This leads me to wonder if any big money manager is really as good as we like to think they are. There are a great many analogies made between Wall Street and the world of professional sports. This particular situation is the reason why I find those comparisons inadequate. The best professional athletes lay it all on the line against top competition every day, without information asymmetry. They have no major advantages over each other. Big money managers like Paulson, however, have armies of analysts beneath them, seas of secretive data streams around them and a mountain of wealth behind them. Yet when these superstars screw up, the fallouts are monumental.
That is why I ask you all the following: Isn’t it time we took men like John Paulson of the mantle?

Isn’t it time to address the reality of their glaring fallacies and treat them like humans?

Isn’t it time to ask questions such as why are you investing money in a Ponzi

Scheme and then saying it was a smart play?

I get that we all want to make money and be the big swinging dick masters of the universe, but at what price? Read between the lines here folks. There’s a lot of fucked up shit going on and we are co-signing too much of it.