Subprime woes? No, easy money

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Farsighted players predicted the current housing malaise and are reaping the benefits.
By Carolyn Sargent



Last August, when friends and fellow hedge fund managers Kyle Bass and Mark Hart began marketing a special-purpose fund dedicated to shorting the market for high-risk mortgages, it required lots of explanation. Housing prices were still on an upswing, defaults were only starting to pick up and the strategy itself was a bit exotic.

And yet, says Hart, the founder of Fort Worth, Texas-based Corriente Advisors, "We saw the risk/reward tradeoff as extremely compelling because the cost of insurance was as