This probably fits under "What is wrong with the US Economy", but . . . . http://dealbook.blogs.nytimes.com/2009/12/24/banks-bundled-bad-debt-bet-against-it-and-won/ A lot of questionable (read that high risk) debt was rated as AAA, when in fact it warranted 'junk bond' status or equivalent. It would appear some investment bank groups knew this, sold the high risk securities and then bet against their clients who bought that debt! And in some cases, it seems to go beyond risk given that some of the debt seems to have been guarateed to lose based on the rising defaults, foreclosures and bankruptcies, and asset depreciation.