The idea that we need a big failure to get past a financial crisis has long been out there. That's one reason a lot of people assumed that the Bear Stearns implosion signaled the worst was over. Of course they were wrong. Still, now you have to wonder whether the demise of Fannie and Freddie signals a nadir? No less that star hedge fund manager John Paulson is entertaining the idea. The Financial Times reports that he has informed clients that while he is still bearish, he will also consider long positions in various financial companies. Paulson will launch his Recovery fund next month. He will allow clients to switch money from hugely successful Credit Opportunities funds, which rang up gains of 590 and 352 percent last year. Paulson is known as the $1 billion man for his correct bet against subprime and other mortgage assets.  

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