John Paulson made $1 billion from Goldman’s 2007 Abacus deal according to SEC documents related to fraud charges filed against Goldman last week. That’s a lot of money and an outrageous loss for the counterparties if in fact they were treated unfairly.
But for Paulson, this deal’s profit was a drop in the bucket relative to the $15 billion his funds made in 2007 across a variety of smart trades according to Portfolio.com.
So his guru status should stand the test of time regardless of how Goldman may or may not have helped him out. That’s why his negative press right now is so unfortunate for him.
(In the chart below we assume that the full $1 billion earned on Abacus was completely realised in 2007 as part of his $15 billion in total, which is the most conservative measure. Some or all may have been realised in early 2008, the SEC documents don’t specify this, which would only make the red slice even smaller)
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