UPDATE 3/1/2009 – things have changed…these words don’t taste so good.

Hamptons dollar volume down 66%

Hedge Funds’ Paulson

Trades Up in Hamptons

By CHRISTINA S.N. LEWIS
April 11, 2008; Page W8

Last year, hedge-fund manager John Paulson pocketed billions by betting the housing market would collapse, but in the Hamptons he’s just listed his three-acre retreat for $19.5 million, more than 50% above what he paid for it two years ago.

Hedge-fund manager John Paulson purchased this 10.4-acre Southampton, N.Y., compound for $41.3 million. It sits on Lake Agawam.

The founder of Paulson & Co., managing roughly $32 billion, recently bought a 10.4-acre lakefront compound less than a mile away for $41.3 million. The seller was Rodney Propp, chairman of a Manhattan property firm.

Last year, Mr. Paulson made as much as $3 billion to $4 billion for himself — thought to be a record one-year payday on Wall Street. This year the former Bear Stearns Cos. investment banker bet against the financial sector and profited from weakening among banks, including Bear.

The Southampton, N.Y., house he’s listed is a seven-bedroom “cottage” on three acres with an enclosed pool and sauna and a detached garage. He bought it two years ago from Jurgen Friedrich, a director of clothing company Esprit Holdings, for $12.75 million, records show.

The trader’s 15,000-square-foot new house was built in 1911 and fully renovated, and comes with separate staff quarters, two other houses, a three-car garage and a pool. The property, called “Old Trees,” has about 450 feet on Lake Agawam and ocean views. It was listed for $48 million in 2006.