> I am only curious if someone is playing against CLO now as "The Big Short" guys did Absolutely they are. The heroes of The Big Short weren't doing anything p

> I am only curious if someone is playing against CLO now as "The Big Short" guys did Absolutely they are. The heroes of The Big Short weren't doing anything particularly unusual or special. They were just using credit instruments to bet that they'd be more foreclosures than the market was predicting. There'll be equivalent hedgies doing the same with corporate debt now. > Isn't this insurance fraud? No because it's not actually insurance as others have said. They're using similar credit instruments to bet against corporates that the Big Short folk used to bet against mortgages. Is what they're doing ethical? Probably not though you have to be careful. If you look at the Windstream example linked in the article, I'd argue that the hedgie is using ethically questionable methods to expose, and take advantage of, ethically questionable corporate practice. Not entirely clear who the villain is with that one. Probably both parties.