Humorously even Paulson and most of the other people who made a fortune had no idea just how right they were. They were all buying the mezzanine tranches (confu

Humorously even Paulson and most of the other people who made a fortune had no idea just how right they were. They were all buying the mezzanine tranches (confusing lingo for next to worst) of the CDOs, when in reality even the best tranches (called senior) hit 0. They could have made many times more money (and a few people did, though not more than you could count on your fingers) since the credit default swaps were much cheaper on the highly-rated tranches but the risk was effectively the same since the correlation between subprime defaults considered to be about .3 was actually 1. Hindsight is 20/20 though.