Two hedge fund firms that racked up huge gains betting on the subprime mortgage meltdown have begun winding down those trades and looking elsewhere. They're now betting against corporate debt using derivatives.
Paulson & Co. has generated returns of up to 435% in the first nine months of 2007 thanks to short positions on securities backed by subprime home loans, according to an update the $24 billion hedge fund firm sent to investors recently. Short sales rise in value when the securities in question fall....MORE
