Having reaped big gains during both of those turns, Greg Lippmann, a former star trader at Deutsche Bank, is now catching the next upswing: buying the same securities built from mortgages that he bet against before the financial crisis erupted.
Mr. Lippmann is joined by other big-money investors — mutual funds like Fidelity as well as hedge funds — in riding a wave of interest in the same complex loan pools that nearly washed away the financial system.
The attraction is the price. Some mortgage bonds are so cheap that even in the worst forecasts, with home prices falling as much as 10 percent and foreclosures rising, investors say they can still make money.
Please consider just how lucrative the Scam of '08 was: The investment banks and others made money on the roll-out of these ticking time bonds--they became the investment industry's best-selling product; then, knowing these bonds were ticking, paced wagers against their redemption, thus cashing in when they detonated; and now they are making money in this new phase when these bonds are selling so far below par that they will now are a worthwhile investment.
This is only possible within a capitalist system.