Economics: How Magnetar Made Money by Betting Against Securities It Helped Create

This is a long article which describes how ...

... a few savvy financial engineers at a suburban Chicago hedge fund helped revive the Wall Street money machine, spawning billions of dollars of securities ultimately backed by home mortgages.

When the crash came, nearly all of these securities became worthless, a loss of an estimated $40 billion paid by investors, the investment banks who helped bring them into the world, and, eventually, American taxpayers.

See The Magnetar Trade: How One Hedge Fund Helped Keep the Bubble Going by Jesse Eisinger and Jake Bernstein, April 9, 2010.