Paulson Says Euro Will Probably Unravel
By Saijel Kishan - Feb 15, 2012 12:12 PM ET
Bloomberg.com
Paulson & Co., the $23 billion hedge fund run by John Paulson, said the euro is “structurally flawed” and will eventually fall apart, according to a letter the firm sent to its investors.
The collapse could be triggered by a Greek default, which would throw the world into recession and financial disorder, the New York-based firm said in the letter, a copy of which was obtained by Bloomberg News.
“We believe a Greek payment default could be a greater shock to the system than Lehman’s failure, immediately causing global economies to contract and markets to decline,” the firm said.
Two years after pledging to pull Greece back from the brink, European leaders are torn between pouring more aid into Greece or risking an unprecedented national bankruptcy that might force the country out of the euro and prompt renewed market tumult.
Paulson, who became a billionaire in 2007 by betting against the U.S. subprime mortgage market, endured his worst year on record in 2011 after his wagers on a U.S. economic recovery went awry. He sold his entire stakes in Citigroup Inc. and Bank of America Corp. last quarter before the shares started rallying this year. The holdings, which he began aggressively building in 2009, were among his largest last year.
Full story: http://www.bloomberg.com/news/2012-02-15/paulson-says-euro-will-probably-unravel.html
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