This is a must read article by the Wall Street Journal. Let's take a look
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The Busted Homes Behind a Big Bet
ABERDEEN TOWNSHIP, N.J.—The government's civil-fraud allegation against Goldman SachsGroup Inc. centers on a deal the firm crafted so that hedge-fund king John Paulson could bet on a collapse in U.S. housing prices.
It was a dizzyingly complex transaction, involving 90 bonds and a 65-page deal sheet. But it all boiled down to whether people like Stella Onyeukwu, Gheorghe Bledea and Jack Booket could pay their mortgages.
They couldn't, and Mr. Paulson made $1 billion as a result.
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