# Paulson gave select hedge-fund managers advanced warning of Fannie-Mae and Freddy-Mac bailouts **URL:** \ **Category:** The BBQ Pit\ **Created:** [November 29, 2011, 7:46pm UTC](https://boards.straightdope.com/t/paulson-gave-select-hedge-fund-managers-advanced-warning-of-fannie-mae-and-freddy-mac-bailouts/604483 "2011-11-29T19:46:36Z")\ **Posts on this page:** 10\ **Page:** 1
**Author:** ![Capt.Ridley\_s\_Shooting\_Party](https://avatars.discourse-cdn.com/v4/letter/c/cc9497/32.png) [@Capt.Ridley\_s\_Shooting\_Party](https://boards.straightdope.com/u/Capt.Ridley_s_Shooting_Party)\ **Post date:** [November 29, 2011, 7:46pm UTC](https://boards.straightdope.com/t/paulson-gave-select-hedge-fund-managers-advanced-warning-of-fannie-mae-and-freddy-mac-bailouts/604483/1 "2011-11-29T19:46:36Z")
Link [here](http://www.bloomberg.com/news/2011-11-29/how-henry-paulson-gave-hedge-funds-advance-word-of-2008-fannie-mae-rescue.html). Extract: > [@](#): > > 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. ---
**Author:** ![Trom](https://avatars.discourse-cdn.com/v4/letter/t/958977/32.png) [@Trom](https://boards.straightdope.com/u/Trom)\ **Post date:** [November 29, 2011, 7:53pm UTC](https://boards.straightdope.com/t/paulson-gave-select-hedge-fund-managers-advanced-warning-of-fannie-mae-and-freddy-mac-bailouts/604483/2 "2011-11-29T19:53:48Z")
It is infuriating that is completely legal. ---
**Author:** ![Rachellelogram](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rachellelogram/32/8689_2.png) [@Rachellelogram](https://boards.straightdope.com/u/Rachellelogram)\ **Post date:** [November 29, 2011, 7:59pm UTC](https://boards.straightdope.com/t/paulson-gave-select-hedge-fund-managers-advanced-warning-of-fannie-mae-and-freddy-mac-bailouts/604483/3 "2011-11-29T19:59:54Z")
Who is surprised by this, really? ---
**Author:** ![Simplicio](https://avatars.discourse-cdn.com/v4/letter/s/c37758/32.png) [@Simplicio](https://boards.straightdope.com/u/Simplicio)\ **Post date:** [November 29, 2011, 8:08pm UTC](https://boards.straightdope.com/t/paulson-gave-select-hedge-fund-managers-advanced-warning-of-fannie-mae-and-freddy-mac-bailouts/604483/4 "2011-11-29T20:08:38Z")
> [@Trom](#): > > It is infuriating that is completely legal. For Paulson it is. I imagine if the managers acted on the information they’d be guilty of insider trading. ---
**Author:** ![mhendo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mhendo/32/3159_2.png) [@mhendo](https://boards.straightdope.com/u/mhendo)\ **Post date:** [November 29, 2011, 9:06pm UTC](https://boards.straightdope.com/t/paulson-gave-select-hedge-fund-managers-advanced-warning-of-fannie-mae-and-freddy-mac-bailouts/604483/5 "2011-11-29T21:06:18Z")
> [@rachelellogram](#): > > Who is surprised by this, really? In the world of corporate and government financial perfidy, i’m actually not sure what it would take to surprise me these days. If it were disclosed that Goldman Sachs was paying Kim Jong Il to kill North Koreans and ship their bodies to America, and that GS was then selling the parts to American hospitals for use in organ transplants, and that the Fed and the FDA had signed off on the transaction, i _might_ raise an eyebrow. Other than that, though, there’s almost no level of self-interest and venality from these people that would surprise me. ---
**Author:** ![silenus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/silenus/32/166_2.png) [@silenus](https://boards.straightdope.com/u/silenus)\ **Post date:** [November 29, 2011, 9:41pm UTC](https://boards.straightdope.com/t/paulson-gave-select-hedge-fund-managers-advanced-warning-of-fannie-mae-and-freddy-mac-bailouts/604483/6 "2011-11-29T21:41:54Z")
Who’s got a rope? ---
**Author:** ![Nawth\_Chucka](https://avatars.discourse-cdn.com/v4/letter/n/c57346/32.png) [@Nawth\_Chucka](https://boards.straightdope.com/u/Nawth_Chucka)\ **Post date:** [November 29, 2011, 9:53pm UTC](https://boards.straightdope.com/t/paulson-gave-select-hedge-fund-managers-advanced-warning-of-fannie-mae-and-freddy-mac-bailouts/604483/7 "2011-11-29T21:53:13Z")
> [@silenus](#): > > Who’s got a rope? Four ropes, and four horses. ---
**Author:** ![detop](https://avatars.discourse-cdn.com/v4/letter/d/bcef8e/32.png) [@detop](https://boards.straightdope.com/u/detop)\ **Post date:** [November 29, 2011, 10:18pm UTC](https://boards.straightdope.com/t/paulson-gave-select-hedge-fund-managers-advanced-warning-of-fannie-mae-and-freddy-mac-bailouts/604483/8 "2011-11-29T22:18:39Z")
> [@silenus](#): > > Who’s got a rope? Why waste a good rope ? Eviscerate them and hang them with their own bowels. ---
**Author:** ![marshmallow](https://avatars.discourse-cdn.com/v4/letter/m/df705f/32.png) [@marshmallow](https://boards.straightdope.com/u/marshmallow)\ **Post date:** [November 29, 2011, 11:24pm UTC](https://boards.straightdope.com/t/paulson-gave-select-hedge-fund-managers-advanced-warning-of-fannie-mae-and-freddy-mac-bailouts/604483/9 "2011-11-29T23:24:11Z")
Also known as doing his job. ---
**Author:** ![Tom\_Tildrum](https://avatars.discourse-cdn.com/v4/letter/t/e95f7d/32.png) [@Tom\_Tildrum](https://boards.straightdope.com/u/Tom_Tildrum)\ **Post date:** [November 29, 2011, 11:45pm UTC](https://boards.straightdope.com/t/paulson-gave-select-hedge-fund-managers-advanced-warning-of-fannie-mae-and-freddy-mac-bailouts/604483/10 "2011-11-29T23:45:58Z")
Note that this is based on one anonymous source, and there’s at least one other source who seems to say that it didn’t happen. It’s an ironic strategy, if in fact it did happen. By telling those people, Paulson in theory ensured that none of them could dump their shares in Fannie and Freddie without risking prosecution.