epilogue
Thursday evening in March 2008, James Chanos walked out of his office in midtown Manhattan and set off to meet Carl Bernstein, one of the journalists famous for breaking the Watergate scandal. Chanos felt some professional affinity with investigative reporters: He ran a hedge fund, Kynikos Associates, that specialized in digging up financial dirt at companies, shorting their stock, and profi ting when the bad news surfaced and the stock cratered. In the bull market of the 1980s and 1990s, short selling had been an unrewarding niche, and Chanos had resembled the investigative newsman who toils in obscurity and seldom lands on the front pages. But the sluggish market of the 2000s had been glorious. Chanos had been among the first to see through the fraudulent energy company Enron. He had shocked the world in 2005 by claiming that the giant insurer AIG had “Enron-like” characteristics. And in 2007 he had returned over 30 percent, largely by shorting fi nancial institutions that were slow ...