Caging Contagion

The collapse of the subprime mortgage market is putting credit default swaps to their first true test.

From his seat as chief investment officer at Mesirow Advanced Strategies, a $12.5 billion fund-of-hedge-funds manager based in Chicago, Stephen Vogt has a unique view of the still-unfolding crisis in the subprime mortgage sector. While analysts and economists argue about the magnitude of losses and risks associated with the collapse of the sector, Vogt and his fellow fund-of-funds managers are watching some of the market’s biggest winners and losers in something close to real time.

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