Paulson & Co. Ready to Consider Going Long Financials -FT

A Financial Times article published this weekend discusses Paulson & Co.'s recent announcement to investment bankers that it will consider backing rescue recapitalizations of certain financial institutions.

Appearing at a conference call last week, John Paulson, the founder of the $35 billion hedge fund, told investors that he is still "extremely bearish", but "is prepared to take long positions across mortgage securities, banks and finance houses" as prices continue to fall. The move is substantial as it is Paulson's first signal that the markets could be nearing an opportunity to go long in these names without huge risks.

Paulson & Co. plans to launch its Recovery fund October 1 and will allow investors the chance to immediately switch investments from Paulson's $11 billion Credit Opportunities funds to the new fund. Previously, clients of Paulson would need to wait until year-end to transfer cash between the funds.

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