Astute investor makes 3.7 BILLION on foreclosure crisis...

[Virginia Dare]

The subprime mortgage mess that caused massive losses for homeowners and banks was a little kinder to hedge fund manager John Paulson. Betting subprime mortgage securities would sour, Paulson personally earned $3.7 billion last year.

Yes, you read that correctly. That's billion with a "b."

He wasn't the only one with Titanic-size profits. Two other fund managers, George Soros and James Simons, who are notoriously secretive about their investments, earned $2.9 billion and $2.8 billion, respectively, according to Alpha Magazine's annual list of top hedge fund earners.

The numbers left jaws agape across Wall Street and Washington. With his windfall from last year alone, Paulson could have bought troubled Wall Street giant Bear Stearns three times over. Or he could have matched the price Delta agreed this week to pay to merge with Northwest Airlines and still have $600 million left over.

http://www.washingtonpost.com/wp-dyn/content/article/2008/04/16/AR2008041602027.html

[orangerevolution]

1. George Soros!!!!

He earned 2.9 billion betting that people would not be able to pay their house notes? In other words, he made money off of the newly homeless.

If he has any caring bones in his body, he should use that money to help out the people who do not have a home.

This is cold and heartless.

[Sanctified]

2. George took a risk and was rewarded for it, he could have just as easily lost a lot of money. n/t

[gilpo]

4. Right, he did this by taking short positions...

which, unlike long positions have an unlimited loss scenario. At least with a long position, the most you can lose is all of what you invested. These guys took huge risks and it paid off.

I do hope they give a major portion of their profits to charity.

[DFW]

3. I don't blame Soros or any of them

All they did was bet that the situation would sour, and put their money where their mouths were.
None of these guys benefited off the backs of people who lost their homes. All they did was
to think they saw it coming, and took a position on it. If I had had all the numbers in front
of me, and a chunk of someone else's money to play with, I would have taken the same bet. Any
bank who lends out $1 million for a house to people making $50,000 is due to have problems, and
betting on it seems like a sure thing. None of these guys actually took money out of poor home-
owners' pockets.

As for George Soros, he is the type who really would take his gain and put it to charitable
use. I never heard of the other two.

[Dorian Gray]

5. Actually, shorting is sort of problematic

because their selling the borrowing and selling the securities can aid in devaluing the mortgages.

But, I agree that it takes foresight to see that this disaster was headed down the pike.

[KharmaTrain]

6. A Lot Of Smart People Bailed On The Markets Last Year...

Not that I'm smart, but I was one of them. I took a capital gains hit this year, but I feel a lot better knowing the money is sitting in a secured CD than taking the wild downward market ride. Many others saw the same thing...even before the sub-prime mess hit, the writing was on the wall this regime's obscene defecit spending was dragging the dollar into the shitter...and to bail ASAP.

As my late mother once said, for every person who loses money, there are those who win. When the market loses money, it doesn't vanish, it goes somewhere...and now you see where it's going.

[Virginia Dare]

7. I think a lot of us here saw it coming..

anybody who was paying attention and had half a brain did. Some time ago I read where Dick Cheney and Bill Gates were both socking money away in inflation protected bonds, so that's what I did. I figured they knew a hell of a lot more about what was coming than I did. It's doing pretty well for me so far.

[Beetwasher]

8. My Inflation-Linked Bonds Have a 14%+ Return Over The Last Year

n/t