Before he made his multi-billion dollar score on that totally rigged subprime bet, John Paulson was an aging, unknown, money manager with nothing more than a little pittance of money under management. Now it appears he is wasting no time going back there.
Back in April I wrote about Paulson's disastrous and highly misinformed "post-rigged-bet" market exploits, like buying gold because he feared hyperinflation from Fed "money printing" or, shorting US Treasuries because he feared hyperinflation from Fed "money printing" (or US bankruptcy...who the hell knows?) or losing half a billion dollars in less than 24 hours on some crappy Chinese stock. All told, this market "genius" lost about 50% of his clients' money last year (which he called an aberration!) and he's adding to those losses as we speak.
It now can be revealed that he is down about another 8-percent in June alone on bets against the euro and European bonds.
Here was Paulson's rationale for this trade
|“The plans announced at the end of June will prove insufficient in solving the structural problems of the euro zone,” Paulson wrote in the letter. “Like the passage of the Greek bailout plan in March, the plans’ impact on the markets will prove temporary and short-lived. These plans do not solve the productivity gap among euro-zone countries, current account deficits, government deficits, unemployment, and capital outflows.”|
This is some of the most naive and unsophisticated "analysis" (and I am even making a stretch to use that term) I have ever heard. "Solve the productivity gap?" "Capital outflows?" Hilarious. No clue about the ECB buying bonds or supplying liquidity to banks. Basically just throwing around a bunch of buzzwords to hide his ignorance, while at the same time I can envision so many of these self important pension fund officials nodding their heads in agreement and believing that their Wonder Boy will get back on track and perform again as the market genius he really is. At least that's their hope. At the very least I'm sure they're thinking Paulson better do something soon because the pensioners who these guys represent have just lost a big chunk of their savings thanks to this guy.
Let us not forget, too, the fact that Paulson ripped into Occupy protesters last year for even suggesting that a guy like him shhould be taxed at a higher rate than, let's say, some secretary, because he...JOHN PAULSON...is a Job Creator who hired 100 people. That's right...100 people!! Do the math: he made a $20 BILLION profit and he hired 100 people. That breaks down to one hire for every $200 million in profit. Now THERE'S a job creator if I ever saw one!!
Bottom line...Paulson and others like him are more lucky than smart. The irony is, he could have saved himself and his clients a ton of money, billions in fact, if he took just five minutes a day to read Warren Mosler's FREE blog. Warren and MMT got everyting right...EVERYTHING. Or he could have read this blog, which I am sure he would never do. Too much arrogance. They're all the same, this crowd. They can only make money by cheating, by rigging the game. No wonder the public is fed up, but the public will continue to be powerless as long as these guys own the system, which they do.