I spent the past few nights reading the book about how John Paulson made his billions, The Greatest Trade Ever. What amazed me the most was how little he had to lose. The CDS insurance he was buying was only costing him 8% of the funds assets a year. Had the trade not worked out all he would have lost was 8% a year.
The other thing I learned was that the reason he bought CDS protection on the banks the following year was because he realized the major banks were his counterparties and they were losing what he was winning. The major banks did not lose money lending. They lost money in a casino, betting against John Paulson and the likes. That is why they had to be bailed out and that is what took down the system.
The book is pretty entertaining and an easy read but there is not much one can learn from it, except how screwed up the system is.