The Next "Greatest Trade Ever" the Market is Completely Ignoring

The financial crisis of 2008 produced what many insiders consider the greatest trade ever.

With the economy and stock market buckling under the weight of the worst financial crisis in 70 years, the decline in the housing market that began in the second quarter of 2006 accelerated. No city or neighborhood was safe. High-growth areas such as Phoenix and Las Vegas saw home prices decline as much as 70% -- national home values were decimated, which have yet to fully recover.

 

But three steps ahead of the curve was John Paulson, a little-known hedge fund operator from New York. Years before, Paulson laid the foundation to profit from what he calculated as unsustainable prices: He placed huge, leveraged bets against the housing market.

Paulson and his small team of analysts would score a mind-blowing $15 billion profit, giving birth to what many insiders today call the "The Greatest Trade Ever" and a best-selling book by the same name.

Two key forces enabled Paulson to pull off the greatest trade ever. The first was a massive macro event that led to the boom and burst of the housing bubble. The second: He operated far ahead of the curve, relying on the public's willful ignorance of compelling data that signaled big trouble around the corner.

But if you missed the housing trade, don't worry. (more)

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