 Brought to you by Penguin. The Greatest Trade Ever. The behind-the-scenes story of how John Paulson defied Wall Street and made financial history. By Gregory Zuckerman. This is Mark Cashman. Introduction. The tip was intriguing. It was the fall of 2007. Financial markets were collapsing. The Wall Street firms were losing massive amounts of money, as if they were trying to give back a decade's worth of profits in a few brutal months. But as I sat at my desk at the Wall Street Journal tallying the pain, a top hedge fund manager called to rave about an investor named John Paulson, who somehow was scoring huge profits. My contact, speaking with equal parts envy and respect, grabbed me with this. John's not even a housing or mortgage guy. And until this trade, he was run of the mill, nothing special. There had been some chatter that a few little-known investors had anticipated the housing troubles and purchased obscure derivative investments that were now paying off. But few details had emerged, and my sources were too busy keeping their firms afloat and their careers alive to offer very much. I began piecing together Paulson's trade, a welcome respite from the gory details of the latest banking fiasco. Cracking Paulson's moves seemed at least as instructive as the endless mistakes of the financial titans. Riding the bus home one evening through the gritty New Jersey streets of Newark in East Orange, I did some quick math. Paulson hadn't simply met with success. He had rung up the biggest financial coup in history, the greatest trade ever recorded, all from a rank outsider in the world of real estate investing. Could it be? The more I learned about Paulson and the obstacles he overcame, the more intrigued I became, especially when I discovered he wasn't alone. A group of gutsy, colorful investors, all well outside Wall Street's establishment, was close on his heels. These traders had become concerned about an era of loose money and financial chicanery, and had made billions of dollars of investments to prepare for a meltdown that they were certain was imminent. Some made huge profits and won't have to work another day of their lives, but others squandered an early lead on Paulson and stumbled at the finish line, an historic prize just out of reach. Paulson's winnings were so enormous they seemed unreal, even cartoonish. His firm, Paulson & Company, made $15 billion in 2007, a figure that topped the gross domestic products of Bolivia, Honduras and Paraguay, South American nations with more than 12 million residents. Paulson's personal cut was nearly $4 billion, or more than $10 million a day. That was more than the earnings of JK Rowling, Oprah Winfrey and Tiger Woods put together. At one point in late 2007, a broker called to remind Paulson of a personal account worth $5 million, an account now so insignificant it had slipped his mind. This is impressive, Paulson managed to transform his trade in 2008 and early 2009 in dramatic form, scoring $5 billion more for his firm and clients, as well as $2 billion for himself. The moves put Paulson and his remarkable trade alongside Warren Buffett, George Soros, Bernard Baruch and Jesse Livermore in Wall Street's Pantheon of Traders. They also made him one of the richest people in the world, wealthier than Steven Spielberg, Mark Zuckerberg and David Rockefeller Sr. Even Paulson and the other bearish investors didn't foresee the degree of pain that would result from the housing tsunami and its related global ripples. By early 2009, losses by global banks and other firms were nearing $3 trillion, while stock market investors had lost more than $30 trillion. A financial storm that began in risky home mortgages left the world.