A Widowmaker Trade Comes Back to Life

Signs of an end to conservatorship for Fannie and Freddie boost Bill Ackman’s Pershing Square, among others.

(Andrew Harrer/Bloomberg)

(Andrew Harrer/Bloomberg)

You might call it the widow maker’s trade — the bet that mortgage giants Fannie Mae and Freddie Mac would eventually be sprung from government ownership and returned to private hands.

For years, investors have been waiting for the trade to pay off, but it has cost them small fortunes, contributing to hard times for several of the brand-name investors with big stakes: Richard Perry, John Paulson, and Bruce Berkowitz, to name the most prominent.


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