Chronicling Wall Street and its ‘Greatest Trade’

In his new book, The Greatest Trade Ever, Wall Street Journal senior writer Gregory Zuckerman, an Orthodox Jew from West Orange, details how John Paulson, his associate Paolo Pellegrini, and several other relative Wall Street outsiders managed to make billions of dollars betting against the real estate bubble.

There’s no obvious Jewish angle to the book, although Paulson grew up attending the Whitestone Hebrew Centre in Queens. But when an Orthodox Jew writes a story about outsiders versus insiders, and the outsiders win, could the Jews’ long history as outsiders be far from his consciousness?

It’s a question that left Zuckerman scratching his head, and ultimately agreeing.

“I hadn’t thought about the Jewish angle. But maybe that’s part of why they are attractive characters to me,” he said, sitting at his dining room table, surrounded by his children’s artwork. His words race out; his thoughts come two or three at a clip. To say he is enthusiastic about his work, his book, and the personalities he covers doesn’t quite hit the mark; if he were a market, you might call him exuberant.

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“John Paulson, although he is a Wall Street person, is pretty much the last person you would have expected to have pulled off the greatest trade in financial history, because he wasn’t a real estate guy, he wasn’t a mortgage guy, he wasn’t a derivative guy, and he wasn’t a short seller, and that’s what it took to do this trade,” Zuckerman said. “It took outsiders to see this coming. They weren’t caught up in it. They didn’t drink the ‘Kool-Aid’ of real estate.”

Then again, “Jews are no longer outsiders on Wall Street,” he said; the insiders are also Jewish.

The book, based on Zuckerman’s reporting in the Journal, traces how Paulson, a mergers and acquisitions expert, bet against the risky mortgages that were the rage among more experienced real estate investors. When the credit bubble burst and markets headed south in 2007, Paulson earned more than $15 billion for his firm.

Zuckerman takes pride in writing accessibly about complicated trading maneuvers, but dismisses some criticism of the book — including comments from Paulson himself — that it trades in gossip.

It’s a dicey charge for an observant Jew, whose tradition inveighs against “lashon hara,” or hurtful talk.

“There is a halachic issue of my job, and there are some that would say I can’t do my job” according to the rules of lashon hara. But he waves aside such criticism, citing the Torah’s portraits of flawed patriarchs and wayward monarchs.

“Look at the Torah, man, look at the Torah,” he said. “I’m a big believer of warts and all. I have a lot more respect and admiration for the avot, or forefathers, when I see what they have overcome and I see the mistakes they’ve made.”

He views his portraits of Pellegrini and Paulson in a similar light.

“I think you can learn unbelievable lessons from a guy like Paolo Pellegrini. He’s alone in his one-bedroom apartment. He’s got no money. He’s approaching 50. He’s got two kids that he doesn’t want to leave and go back to Italy and not see.

“Two years later he and his new wife are on vacation in St. Barts and she looks at the ATM, and there’s $45 million newly deposited in their account.

“I think it gives encouragement to anybody struggling with questions about their life and their future, and that’s one of the reasons I got excited about this story — because these are a bunch of guys that were overlooked, that were criticized, that were called foolish. And they were all approaching 50, and they never hit a home run in their lifetimes. And then they pull off the greatest trade in history. I think that gives anybody, an accountant, a doctor, anybody — an unemployed person — hope.”

Zuckerman’s own career as a financial journalist was a happy accident.

Growing up in Providence, RI, he attended a now defunct local yeshiva and Camp Yavneh in New Hampshire, and later served as a staff member at Camp Ramah-Ojai in California. He always knew he’d end up on Wall Street. “I was trading stocks at camp between periods, calling my broker up, blowing what money I had,” he said.

He envisioned himself trading, not writing. “There were no shomer Shabbat journalists,” with the possible exception of Ari Goldman, the longtime religion writer at The New York Times. He never considered the field — until he failed to land a job on Wall Street when he graduated from Brandeis in 1990.

After a few unsuccessful attempts at starting a business, he answered an ad for a financial trade publication writer. A few breaking freelance stories later, he landed a job at the New York Post covering media and was eventually courted by The Wall Street Journal, where he has now been for 12 years.

The once confirmed Upper West Side bachelor is now happily ensconced in West Orange with his wife Michelle and their two children, Gabriel, 11, and Elijah, seven. They worship at Ahawas Achim B’nai Jacob and David. Gabriel and Elijah attend Joseph Kushner Hebrew Academy in Livingston.

“I love writing about Wall Street, I love Wall Street — how cool is that?” he said. “I get to do both of them together.”