[From The Archives] Jim Chanos: The Catastrophe Capitalist

The Solomon-colored pages of the Financial Times are not the place you turn to these days to find good news. But on the morning of November 4, Jim Chanos, President of Kynikos Associates on West 55th Street, the world's biggest short-selling hedge fund, read an article in the paper with irrepressible glee. A colleague has e-mailed him a link. The headline: GOLDMAN FUND LOSES $990M AFTER 10 MONTHS.

Jim Chanos had reason to be happy, and not because he had any stake in the outcome. His East Hampton neighbor, Marc Spilker, managing director of the Goldman Sachs division responsible for the billion-dollar loss, was finally receiving his comeuppance. In June 2007, Spilker decided to widen the rather narrow footpath from his house on Further Lane to the beach. One afternoon, Spilker dispatched a crew to widen the path by bulldozing the hedges between his mansion and Jim Chanos's. Chanos was outraged. “I hope this is not a harbinger of how other Goldman senior executives may act when the markets become “just not lucrative enough for us!” he wrote to friends at the time in an e-mail that just happened to find its way to the NewYork Post. Several months after Post leak, Jim Chanos pulled nearly $3 billion out of his Goldman trading account, costing the bank some $50 million in an annual fees, according to a source, and brought a suit against Spilker. (Goldman disputes these numbers.) Now, a year later, as Chanos sat as his Bloomberg terminal reading the Financial Times' account of Spilker's recent hedge-fund woes, a smile broadened across his face. He sent out another mass e-mail to his friends, staff, and financial journalists, directing them to the news. “Mark [sic] Spilker (Head of GS Internal Hedge Funds, and Horticultural Hater) strikes again!”