That quote makes it seem like the short sellers were betting on economic downturn due to Covid, which they didn't. The trade was made long before in 2018/19 and

That quote makes it seem like the short sellers were betting on economic downturn due to Covid, which they didn't. The trade was made long before in 2018/19 and the economic pressure due to Covid was a lucky coincidence that acted in their favor. It's not like the CFDs in the article would have stayed up if they hadn't made the trade or made it long. > "COVID-19 also revealed a dirty secret hidden in the crawlspace upon which many commercial mortgage-backed securities were built. A University of Texas at Austin study published in August claimed that banks knowingly inflated underwriting income for $650 billion worth of commercial real estate mortgages issued between 2013 and 2019, including by 5 percent or more for nearly a third of the roughly 40,000 loans. “A well-documented historical pattern is that fraud thrives in boom periods and is revealed in busts,” the university researchers wrote, adding that end investors were unaware of this hidden risk, a deception akin to buying a Ferrari secretly outfitted with a rusted-out Kia engine. It could be argued that CMBS had been a magic trick all along, with big banks one step ahead, luring investors to pick a card from a rigged deck. It took a global pandemic—an act of God—to reveal this financial sleight of hand." Isn't that the real scandal?