Investment banks and hedge fund are profiting from toxic mortgage-backed securities, a sector that was in ruins just 18 months ago. Credit Suisse and Société Générale are among the institutions that have been able to turn losses from toxic assets into gains, thanks in part to federal government support for the mortgage market, as well as deals with no direct backing from the government. In some cases, mortgage loan prices have nearly doubled since they plunged in 2008 following the collapse of Lehman Brothers Holdings and the credit market.

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