Party Like It Isn't 2008

Morgan Stanley, Merrill Lynch, Lazard and others may have canceled their holiday parties, but someone in finance still knows how to have a very good time. (And, yes, I will have that glass of 1999 Chateau Lafite-Rothschild, thank you very much.)

DealBook has a detailed report on a dinner celebrating the spectacular success of John Paulson's $36 billion hedge fund. More than 100 investors gathered in a dining room at the Metropolitan Club in Manhattan on Monday night.

The meal: "Jumbo crabmeat and avocado, paired with 1999 Haut-Brion; and Colorado rack of lamb with tarragon jus and parmesan polenta cake, paired with 1999 Chateau Margaux and 1999 Lafite-Rothschild (which can fetch more than $500 a bottle)."

In the case of Paulson, this is hardly excess. His funds have reaped huge gains betting against mortgages and mortgage-backed securities over the last two years. The Paulson Advantage Plus fund is up 29 percent for the year. Paulson himself is estimated to have made some $3.7 billion in compensation last year.

There is a rich irony in the dinner's guest speaker: Alan Greenspan, who is a senior adviser to the firm.

The former Federal Reserve chairman is held by many to have helped create the crisis that Paulson profited richly from.

John Cassidy laid out the case against Greenspan more than a year ago:

"By keeping interest rates too low for too long, he encouraged a borrowing-fueled speculative binge, which has now given way to a credit squeeze. By failing to crack down on the mortgage industry, he allowed subprime hucksters to peddle dubious loans, which the financial industry's math whizzes packaged for investors. Coming on top of his role in creating the internet-stock mania a decade ago, the mistakes Greenspan made--now playing out in home foreclosures and hedge fund collapses--will surely color historians' views of his long tenure, if not his own account of it."

Last month, before Congress, Greenspan acknowledged that some mistakes were made. "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity (myself especially) are in a state of shocked disbelief."

"This crisis, however, has turned out to be much broader than anything I could have imagined."

Yet the crisis has also made Greenspan rich: the speaking fees, the book, the advisory work. While millions of others are suffering, he is feeling no pain.

Another round of drinks, please. Someone else is picking up the tab.