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 How Paulson Gave Hedge Funds Advance Word 
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Post How Paulson Gave Hedge Funds Advance Word
On the morning of July 21, before the Eton Park meeting, Paulson had spoken to New York Times reporters and editors, according to his Treasury Department schedule. A Times article the next day said the Federal Reserve and the Office of the Comptroller of the Currency were inspecting Fannie and Freddie’s books and cited Paulson as saying he expected their examination would give a signal of confidence to the markets.

At the Eton Park meeting, he sent a different message, according to a fund manager who attended. Over sandwiches and pasta salad, he delivered that information to a group of men capable of profiting from any disclosure.

Around the conference room table were a dozen or so hedge- fund managers and other Wall Street executives — at least five of them alumni of Goldman Sachs Group Inc. (GS), of which Paulson was chief executive officer and chairman from 1999 to 2006. In addition to Eton Park founder Eric Mindich, they included such boldface names as Lone Pine Capital LLC founder Stephen Mandel, Dinakar Singh of TPG-Axon Capital Management LP and Daniel Och of Och-Ziff Capital Management Group LLC.

After a perfunctory discussion of the market turmoil, the fund manager says, the discussion turned to Fannie Mae and Freddie Mac. Paulson said he had erred by not punishing Bear Stearns shareholders more severely. The secretary, then 62, went on to describe a possible scenario for placing Fannie and Freddie into “conservatorship” — a government seizure designed to allow the firms to continue operations despite heavy losses in the mortgage markets.

Paulson explained that under this scenario, the common stock of the two government-sponsored enterprises, or GSEs, would be effectively wiped out. So too would the various classes of preferred stock, he said.

The fund manager says he was shocked that Paulson would furnish such specific information — to his mind, leaving little doubt that the Treasury Department would carry out the plan. The managers attending the meeting were thus given a choice opportunity to trade on that information.

There’s no evidence that they did so after the meeting; tracking firm-specific short stock sales isn’t possible using public documents.

And law professors say that Paulson himself broke no law by disclosing what amounted to inside information.

http://www.bloomberg.com/news/2011-11-2 ... escue.html

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Wed Nov 30, 2011 6:02 pm
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Post Re: How Paulson Gave Hedge Funds Advance Word
There’s no evidence that they did so after the meeting; tracking firm-specific short stock sales isn’t possible using public documents.

Read, they did.


Wed Nov 30, 2011 6:24 pm
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Post Re: How Paulson Gave Hedge Funds Advance Word
Basically, we're not going to prosecute them but they're criminals.

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Here I am Expecting Just A Little Bit Too Much From The Wounded - A Perfect Circle

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Wed Nov 30, 2011 6:30 pm
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Post Re: How Paulson Gave Hedge Funds Advance Word
Wielding one's power is never a crime in today's world. At least one that has a punishment. If anyone ever gets around to enforcing it. And get around to deal out the punishment. And gets past the bribes or personal gain in exchange.

Screw it, legalize crime.


Wed Nov 30, 2011 6:35 pm
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Post Re: How Paulson Gave Hedge Funds Advance Word
Pigeon wrote:
Wielding one's power is never a crime in today's world. At least one that has a punishment. If anyone ever gets around to enforcing it. And get around to deal out the punishment. And gets past the bribes or personal gain in exchange.

Screw it, legalize crime.


Crime is always legal for a few.

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Wed Nov 30, 2011 6:38 pm
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Post Re: How Paulson Gave Hedge Funds Advance Word
Is this news to you?

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Wed Nov 30, 2011 7:12 pm
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Post Re: How Paulson Gave Hedge Funds Advance Word
No, man. It's something to talk about and get indignant over for a few minutes.

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Here I am Expecting Just A Little Bit Too Much From The Wounded - A Perfect Circle

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Wed Nov 30, 2011 7:14 pm
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Post Re: How Paulson Gave Hedge Funds Advance Word
News is simply the current lie being passed around.


Wed Nov 30, 2011 7:20 pm
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