Ohhh, so that’s how you become a billionaire

You just get your buddy the Secretary of the Treasury to give you insider information at the same time that he is telling the public something completely different.

A few participants at the meeting declined to trade on the inside information.  Most of the attendees at the meeting, however, refused comment, so in the world of investment banker ethics we can probably assume we know what that means:

Eton Park’s Mindich, Lone Pine’s Mandel, TPG-Axon’s Singh and Och-Ziff (OZM)’s Och all declined to comment through spokesmen. Reservoir’s Stern didn’t return phone calls. Altman, through a spokesman, confirmed his attendance and declined to comment further.

Brosens confirmed in an e-mail that he had attended and said he couldn’t recall details. A spokesman for Rattner acknowledged he attended and said he didn’t trade in Fannie Mae- or Freddie Mac-related instruments after the meeting. Chanos declined to comment.

A Blackstone spokesman confirmed in an e-mail that GSO’s Goodman attended the meeting. Blackstone doesn’t believe market- sensitive information was discussed, and in any event Blackstone didn’t take any positions in Fannie or Freddie between the luncheon and Sept. 6, he wrote.

I’d be shocked if this is the last of the stories we hear about Paulson feeding inside information to his buddies from which they can profit.  I hope that Congress goes after this (and goes after trading on inside information by members of Congress too).  This is exactly the type of crony capitalism that needs to be stopped.  And even if Paulson didn’t benefit directly at that time it certainly makes you wonder how many of those who benefited from his tips have subsequently hired him as an advisor or have donated to his new academic center at University of Chicago.